Bad-Faith Trademark Registrations and Their Impacts on Brands

Bad-Faith Trademark Registrations and Their Impacts on Brands

Not every registration of a trademark is filed for genuine purposes. In certain situations, an applicant might have dishonest intentions when filing the trademark. Such dishonest applicants may do so to abuse another trademark’s positive reputation for their own benefit. This type of trademark registration is known as a bad-faith trademark registration. Bad-faith trademark registrations are blatant violations of accepted ethical standards in the corporate and intellectual property fields.

Most intellectual property authorities around the world have attempted to eliminate the practice of bad-faith trademark registrations. Although each jurisdiction has its own regulations regarding bad-faith trademark registrations, all such laws protect the integrity of the registration process. They also guard law-abiding brands from the negative effects of these bad-faith registrations.

Evidence of a Bad-Faith Trademark Registration

In the context of trademark registration, bad faith refers to the dishonest intent of one who attempts to register a trademark. Bad faith can be evidenced in several different ways. If the trademark registration would use the Nice Classification in a manner incompatible with the applicant’s intent for the trademark, bad faith is likely in play. Trademarks which are either similar or identical to highly distinctive and recognizable trademarks in the relevant jurisdiction are also usually filed in bad faith.

The track record of the applicant may also indicate the possibility of a bad-faith registration. If the applicant has been known to hoard many trademarks without any true intention to use them, it is likely that some of the applicant’s future registrations will be made in bad faith. Applicants who have previously made nuisance filings are more likely to register trademarks in bad faith. Similarly, applicants who have a track record of domain name squatting or copying of trade dress will be seen as probable bad-faith offenders.

Categories of Bad-Faith Trademark Registrations

There are two primary categories of bad-faith trademark registrations. The first category includes those which misappropriate the rights of third parties which conduct commercial activities. These registrations can be defined by the intent to deny third parties from selling and marketing their products or services. Some of these registrations may also be intended to allow the applicant to illicitly benefit from a third party’s positive reputation.

The second category of bad-faith registrations includes those intended to abuse the legal system. Most such registrations are re-filings. After a trademark is registered, the applicant must use it within a given time period of time before others may request the trademark’s revocation. If the applicant does not use this trademark within the time period but attempts to register the same trademark after it, the new registration is known as a re-filing and is an act of bad faith.

How Bad-Faith Trademark Registrations Harm Brands

Bad-faith trademark registrations may cause non-offending brands to suffer. One reason how such registrations might harm non-offending brands is by blocking the trademark registrations of these brands. This could cause non-offending brands to expend much money and time to navigate the challenges imposed by bad-faith registrations. Standards of proof often make it difficult to legally overcome the effects of these registrations.

The registration of a trademark in bad faith could also harm the non-offending brand’s financial value. When a non-offending brand’s trademark cannot be used after it is revoked due to its bad-faith registration by an offender, the brand in question will not be able to use the trademark to market its products. This could then cause the offender’s revenue to be more likely to increase at the expense of the wronged brand. Additionally, the offender’s reputation in the market might unjustly improve, allowing it to continue to build financial capital while the non-offending brand which should have profited might not. 

Laws and Measures Against Bad-Faith Trademark Registrations

To protect non-offending brands and business owners from the effects of bad-faith trademark registrations, almost all jurisdictions impose laws against such registrations. Many intellectual property authorities prohibit the registration of any trademark which will not be used. Trademarks which would inhibit fair market competition or violate others’ rights will also usually be denied registration.

The International Trademark Association (INTA) recommends that intellectual property courts maintain a database of bad-faith filers. Doing so serves as further action against bad-faith registrations because this database deters repeat offenses while also providing authorities with information about prior offenders. Additionally, INTA recommends that fines and other punishments levied against offenders should be intensified, especially if a repeat offender is involved.

This article is brought to you by Exy Intellectual Property Malaysia and Singapore.