You've Gotta Have (Good) Faith

09 May 2023

The fundamental function of trade marks is as an indicator of origin – that is, to enable consumers to easily distinguish the goods and services of one business from another. This central objective is supported in the UK by the ability for a trade mark application to be refused, or subsequently invalidated, if it was applied for in bad faith.

This issue of bad faith arose in Lidl’s recent trade mark infringement claim against Tesco in the High Court. Judgement on the decision was handed down on 19 April 2023.

The dispute centred over Tesco’s use of a wordless yellow circular logo, which Lidl alleged infringed its trade marks, including its yellow circular “Lidl” logo and a wordless yellow logo (which had never been used as a standalone brand in the UK but had been subject to various UK registrations between 1995 and 2007, as well as a pending application filed in 2021).

Although not the primary focus of the case, in its counterclaim Tesco asserted that Lidl’s wordless trade marks were invalid on the basis that their applications had been filed with no bona fide intention to use the mark in the form registered, and solely as a weapon to be used in legal proceedings. In other words, Tesco argued that these trade marks were registered by Lidl in bad faith and therefore should be invalidated.

Tesco also pointed to Lidl’s repeated filing of the same wordless mark in respect of the same classes of goods and services, as evidence that Lidl had been “evergreening” – the practice of re-filing a mark every 5 years to protect against third parties challenging the mark on the basis of the owner’s non-use.

Under UK case law, the party alleging bad faith is required to prove it. The Court was satisfied that Tesco had produced sufficient evidence of bad faith to shift the evidential burden on to Lidl to show that the marks had not, at the time of filing, been filed in bad faith. Unsurprisingly, given the passing of time, Lidl was unable to submit substantive evidence establishing the subjective intentions and rationale of the company at the time of making the applications between 1995 and 2007. Accordingly the Court was persuaded that these registrations were filed only for use as a legal weapon, and so invalid on the ground of bad faith.

In respect of Lidl’s 2021 trade mark application, however, the Court found that the trade mark had not been filed in bad faith. Here, Lidl was able to provide evidence to the Court’s satisfaction of its subjective intentions behind its 2021 filing. The extended gap between the applications up to 2007 and the more recent 2021 application also appeared to persuade the Court that Lidl’s motivation in making the 2021 application was not evergreening.

Further authority on the concept of bad faith in filing trade mark applications is expected later this year when the Supreme Court is due to hear the Sky v Skykick case. In that case, amongst other things, Skykick is counterclaiming that certain of Sky’s registered trade marks (which Sky claims Skykick has infringed) were filed in bad faith as they were applied for with only a genuine intention to use them in relation to some, but not all, of the goods and services within the registrations. Until then, brand owners should take care to ensure that they retain records of their trade mark filing strategies and rationale when filing trade mark applications.