Section 62A provides:

Application made in bad faith

The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

This provision was added to the TMA in 2006.  The Explanatory Memorandum stated:

The Act allows removal of a trade mark on the basis that there was no intention in good faith to use, authorise use of, or assign the trade mark. However, current opposition grounds do not cover instances in which a person has deliberately set out to gain registration of a trade mark, or adopted a trade mark in bad faith. There have been several instances in which trade mark applicants have deliberately set out to gain registration of their trade marks, or have adopted trade marks, in bad faith. Some examples of these include:

  • a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;
  • a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and
    business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.

When such situations occur, there is very little third parties can do to prevent registration of this type of trade mark, because existing grounds for rejection and opposition do not allow the Registrar to take these facts into account.

The seriousness of an allegation of bad faith that “impugns the character of an individual or collective character of a business…” requires correspondingly cogent evidence (statement of the Hearing Officer in Maslyukov v Diageo Distilling Ltd [2010] EWHC 443 (“Maslyukov”), quoted with approval by Arnold J at [36] and [37]), the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt: Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81.

The test of bad faith is both subjective and objective.  It is subjective in the sense that the actual knowledge of the applicant is taken into account.  It is objective in the sense that the conduct is measured through the eyes of “persons adopting proper standards“.

Bad faith does not “require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.

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