Doctrine of Bad Faith in Trade Mark Law

The doctrine of bad faith is rooted in the common law principle- no man shall reap that which he has not sown. In the Trade Marks Act, 1999 (the Act), bad faith is an ex office ground for refusal of a mark. The Act also casts a duty on the Registrar to take into consideration party’s bad faith in contentions trade mark proceedings. Bad faith can also be successful rebuttal to a defense of acquiescence. In cancellation action, registrant’s bad faith can be a sole ground for removal of a registered mark. A mark is considered to be infringed by an advert when such advert is contrary to honest practices in commercial matters. Here too, bad faith is a decisive ground. The Paris Convention stipulates that no time limit be fixed for cancellation or the prohibition of use of a mark if it has been registered or used in bad faith. Under the Uniform Domain Name Dispute Resolution Policy, bad faith is an essential element to be proved by the complainant. So what exactly does ‘bad faith’ mean and how does one prove it?

Indian jurisprudence is fairly clear that the term “bad faith” does not simply mean bad judgment, but it implies the conscious doing of a wrong with a dishonest purpose. Bad faith contemplates a dishonest state of mind and intention. Bad judgement or negligence is not bad faith which imports a dishonest purpose. Therefore, ‘innocent’ misunderstanding or ignorance of the law or facts or even lack of genuine use of the mark is not in itself definitive of bad faith.

The Act having not defined ‘bad faith’ has left it to the courts to decide in a particular case what amounts to bad faith. The essential requirement for finding bad faith of a party is that it knew of the right holder’s interests/ rights in its mark which is identical/similar to the party’s mark. Such knowledge can be actual or circumstantial. Next, it needs to be shown that the party’s conduct in applying/using the mark is inconsistent with norms of reasonable, honest, and fair commercial behaviour. Presenting affirmative answers to the below non-exhaustive list of questions can establish this.

A dishonest applicant can offer little justification for applying or using a mark identical to the right holder when its mark is a coined or arbitrary mark. In asserting that a mark is applied/used in bad faith, the onus rests on assertor. However, this does not preclude the insertion of rebuttable presumptions. Proof of existing bad faith can be difficult if the party acting in bad faith denies any knowledge of a prior mark, or can be more difficult if the mark (applied in bad faith) is only similar but not identical. In such cases, the distinctiveness of the mark weighs in.

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