Stop press – new bad faith trade mark examination practice at UKIPO

This heralds a significant change to current examination practice and will impact those filing UK trade mark applications (and international registrations designating the UK) going forward: 

PAN 1/25: Required behaviour, and the impact on examination practice, following the Supreme Court’s judgment in SkyKick UK Ltd and another v Sky Ltd and others - GOV.UK

Guidance for trade mark applicants following judgment in SkyKick v Sky - GOV.UK

Background and impact of SkyKick

The SkyKick case is one of the most important trade mark cases in recent years, primarily because of the issues it raised regarding what can constitute bad faith when filing a trade mark application. Section 3(6) of the Trade Marks Act 1994 prohibits registration of a trade mark “…if or to the extent that the application is made in bad faith”. In SkyKick, the Supreme Court held that bad faith can be inferred from the length and breadth of trade mark specifications (the list of goods and services covered by an application), and can also be inferred from broad terms which could be broken down into categories or subcategories, such as "computer software".  We previously blogged about this decision here: Supreme Court rules in Sky v SkyKick | Fieldfisher, and very recently on the first two decisions issued by the UKIPO in oppositions which had been stayed pending SkyKick: All Unite for bad faith rulings | Fieldfisher.

New practice

The UKIPO has now made it clear that this decision will significantly change examination practice and procedure with immediate effect. Going forward, the UKIPO intends to examine trade mark applications for bad faith, and will actively raise objections to applications on this ground.

PAN 1/25 provides that certain applications will automatically trigger objections, for example specifications which cover all 45 classes, or all goods in Class 9 (which is a broad class covering diverse and disparate goods). The PAN also envisages other situations where examiners may raise bad faith objections, although at this stage they will not automatically object to broad terms such as "computer software" or "clothing". Other than these specific examples, there is little guidance for applicants and examiners and it remains to be seen how these new rules will be applied and interpreted in practice. It is impossible to define precisely what constitutes bad faith in any given scenario - this is likely to turn on a number of factors including the nature of the applicant’s business and their motivations for filing for the goods and services covered by the application. It is therefore conceivable that the same specification could constitute a good faith filing for one applicant, but bad faith for another. The guidance note states that the UKIPO's aim is to "strike a pragmatic balance, and the focus will be on manifestly and self-evidently broad specifications".

Dealing with a bad faith objection

Applicants facing a bad faith objection at the examination stage will be given two months in which to respond to the objection. Response options include:

• providing an explanation of their commercial reasons for the broad specification (as set out in the SkyKick judgment, an appropriate commercial rationale can justify a broad specification), or 
• restricting the goods/services to reflect their business more appropriately

If the examiner is not persuaded to waive the objection, the applicant will have an opportunity to be heard and/or to appeal.

Wider implications

Whilst PAN 1/25 is primarily aimed at trade mark applications, it is expected to have broader implications. In particular, opponents and cancellation applicants involved in proceedings before the UKIPO’s tribunal may be affected. Relying on earlier rights with broad specifications in opposition and cancellation proceedings may open the door to potential counterclaims against those rights on bad faith grounds, which could result in a loss (or at least a reduction) of rights.   

Comment

The publication of PAN 1/25 marks a significant change in UK trade mark practice and procedure, with the introduction of bad faith examination. This means that examiners themselves will be able to refuse applications on the grounds of bad faith, rather than bad faith claims needing to be brought by a third party.

As highlighted by the UKIPO, trade mark applicants should:

• ensure specifications represent fair and reasonable claims for their business (even if class headings wording is used);
• be cautious when filing for large numbers of goods and services across multiple classes;
• consider whether broad terms like “computer software” or “clothing” truly reflect intended use, or whether sub-categories are more appropriate; and
• be ready to explain their commercial reasons if challenged on the scope of an application.

The concept of bad faith can be subjective and inexact, usually turning on the particular facts of a case. It therefore remains to be seen how consistently the new examination procedure will be applied, and (aside from the specific examples provided in the PAN) what types of specification are likely to give rise to an objection. Finally, it will be interesting to see how the examiners respond to explanations justifying broad specifications, and what kinds of justification will be acceptable. If you have any questions or concerns about the new practice, please get in touch with your usual Fieldfisher IP contact, or contact us at ip@fieldfisher.com.