Bad Faith in Trademark Law: From Allegation to Proof In Indian Jurisprudence

Introduction

In Trademark Law, the concept of ‘bad faith’ is examined through the registration of a mark that was registered or used with dishonest or insincere intentions rather than actual commercial reasons. Even though the ‘Trade Marks Act’, 1999 (the ‘Act’) does not explicitly define the term ‘bad faith’, it does exist as a basis for an opposition or revocation petition. In India, allegations of ‘bad faith’ typically arise in opposition to or within revocation petitions based on such claims as non-use or the wrongful exploitation of a registered mark. The Courts in India have stated that the creation of Trademark Rights is based on the Good Faith use and reputation on the mark, and therefore registration does not give rise to an indeterminate monopoly over the use of the mark where the mark is proven to have been fraudulently or unjustifiably registered. The Blog will analyse the statutory framework relating to the definition of ‘bad faith’ in India and how the Courts assess ‘bad faith’ as part of a determination to the leading cases. There will be a comparative analysis between the Jurisprudence in the UK and EU jurisdictions. The Blog will end with a list of practical points for businesses and Legal Practitioners.

Statutory Framework

The Trade Marks Act does not specifically define the term “bad faith,” but it provides for the concept in various sections of the Act. Section 11(10)(ii) of the Act requires the Registrar to consider both the bad faith of the Applicant and the Opponent as part of the determination of an application or opposition. Thus, bad faith is a relevant issue when an application for trademark registration is approved or refused. The Act’s revocation provision (Section 47(1)(a)) allows for cancellation of a registration if the mark was registered without an intention to actually use the mark. The provision in the Act that provides a saving for prior users, Section 34, provides some protection from removal by a later registration. It is clear from these provisions that a Trade Mark should only remain valid if the applicant filed the application in good faith and used the Trade Mark.

Bad Faith in Practice: No Definition, High Burden

Indian law does not define “bad faith” in a closed formula. Bad faith has been interpreted in several case laws to mean dishonest/fraudulent intent. No standards of adjudging bad faith have been laid out, but it is to be judged concerning all material circumstances. The plea of bad faith will not be upheld unless distinctly proven”. In practice, this means the claimant must establish clear evidence of deceit. For instance, any allegation of bad faith in opposition or rectification must be explicitly pleaded and “proved by way of documentary evidence”. Courts, therefore look beyond mere suspicion: it is not enough to show a delay in use or a broad specification by itself. Rather, there must be objective indicia (e.g. false statements to the Registrar, unexplained non-use, or other facts) from which dishonest intent can be inferred.

Judicial Precedents on Bad Faith and Good Faith

Indian courts have treated bad faith cases under the aspect of prior use, honest adoption and non-use. Key decisions include:

• Neon Laboratories Ltd v Medical Technologies Ltd (2016): Section 34 of the Act confirmed the “First user Rule” by stating that the owner of a trade mark that has been used or registered under Section 34 is not able to stop someone else from using an identical or similar trade mark as long as that person started using the trade mark before the owner registered it. The Act also states that an owner cannot “load up” a trade mark and never use it. In the particular case in question, A trademark Applicant cannot hold onto a registered trade & remain inactive for many years, allowing the competitor to use. Therefore, the Court found that “an applicant for a trade mark does not obtain an indefinite right simply by applying for it; the right disappears when the applicant fails to use it within a reasonable timeframe.” Accordingly, it is clear that an applicant for a trademark who has an intent to deceive, while not actively using the mark, may be guilty of bad faith in their registration.
• Syed Mohideen v Sulochana Bai (2016): The Supreme Court ruled in this case that “under the Act, prior use overrides registration.” A registered owner cannot disrupt or interfere with the rights of prior users. The Court has made it clear that this stems from bad faith: a later registrant who tries to cancel or invalidate the earlier user’s right is acting in contradiction to the structure of the Act that supports first use. This decision has been viewed as an absolute statement that trademark rights arise from use (establishment of common law goodwill), not solely from registration. Therefore, a registrant who seeks to enforce its mark against a legitimate prior user will be treated as acting with inequitable conduct.
• N. R. Dongre & Ors. v Whirlpool Corp (1996): The Supreme Court ruled that a global prior user (in this case, Whirlpool having global recognition) is prevented from using a similar mark, even though that similar mark was registered by someone else in India. The ruling is based on the conclusion that the registration of a mark is not necessarily an indefeasible right and “neither Section 28 nor any other statutory provision prevents a prior user from bringing a passing off action against a subsequent user”. Furthermore, “first in the marketplace” holds priority in order to prevent the abuse of registrations by users who have only registered marks.

Comparative Perspectives: EU and UK

Bad faith is an explicit ground for invalidating a trademark under the EU and UK laws, specifically as defined by Articles 51(1)(b) of the EU Trademark Regulation and 3(2)(d) of Directive 89/104, respectively. The ruling of the CJEU has provided guidance that, at the time of filing, a trademark applicant who intends to secure exclusive rights outside the field of trademarks registered for goods or services as a trademark is bad faith. In the case of Lindt, the Court considered whether applying for registration of shape marks contrary to the principles of good faith constitutes bad faith. The UK Supreme Court recently addressed these principles in SkyKick v. Sky; Lord Kitchin stated that the determination of whether there has been bad faith must be based on the date of the application. For example, registering a trademark in relation to goods the applicant/owner knows will never be manufactured could be bad faith. However, the mere fact that the applicant has no immediate intention of using the trademark does not mean the applicant acted in bad faith. Further, the UK court has concluded that while a broadly defined list of goods may raise suspicion about bad faith on its own, bad faith will not be presumed unless the applicant can show a lack of legitimate reason for applying for registration of the goods. Once any doubt arises regarding the reasons for seeking to secure a trademark, it is then for the registrant to demonstrate and provide justification as to why they acted in good faith in seeking to secure exclusive rights to the goods or services in question.

For example, if a trademark applicant states that the mark will be used in class X on the application form but never actually uses the mark in that class, the court will expect to receive a reasonable explanation as to why it did not. In addition, the Supreme Court of London has expressed that “registration without any intention to use the mark is indicative of bad faith” under EU/UK law unless there is a valid reason for doing so; filing an excessively large number of specifications can constitute an abuse of process under EU/UK law due to a failure to adhere to honest practices. These concepts closely resemble the principles established by Indian case law, as both the EU/UK Case Law and Indian law seek to curb “trademark trafficking” and to protect the rights of those to whom marks were first used.

Takeaways

1. Bona Fide Use by the proprietor, in India, however, even long gaps after application and use can cast doubts.
2. Specific and narrow class listings. Some Companies try to have a diverse class selection, even in aspects where they are not applicable.
3. Anti-trafficking rule, wherein the proprietor intends to sell or license to the masses.
4. Prior use under Section 34 of the Act can also be used as leverage, even if the mark is unregistered but the person can showcase long and continuous prior use of the mark.
5. The majority of jurisdictions today look at the applicant’s intent when assessing the validity of an international application. For example, under EU Law, the Lindt Case and UK Law (SkyKick Ltd v. Mastercard Incorporated) prioritise honesty in filing international applications. When you are filing internationally, the international filing strategy should align with the applicant’s global marketing strategy for their brand.

Conclusion

The Trademark system in India has the same requirements as the Global system, i.e., good faith at the time of adoption. The Courts have held that the first to use a trademark in good faith under Section 11(10) will have priority over the registrant’s rights. If bad faith is alleged under both Section 11(10) and Section 47 of the Trademarks Act, the standard for proving bad faith is a clear intent to deceive. A more significant trend is the combination of Domestic and International principles. The UK Supreme Court observed that bad faith must be judged objectively, with reference to honest commercial practices. It is advisable that both trademark owners and trademark challengers maintain honest and consistent filings and use their trademarks in a manner consistent with their legitimate business goals. In practice, good records and a controlled trademark strategy have been shown to assist in successfully navigating the bad faith process in India. These will help ensure a reasonable and logical chain of evidence between the bad faith allegation and actual proof of bad faith.

Author:– Shobit Goel,  in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

Endnotes

1. Trade Marks Act, 1999 (India) ss 11(10)(ii), 47(1)(a).
2. Neon Laboratories Ltd v Medical Technologies Ltd (Supreme Court of India, (2016) 2 SCC 672.
3. S Syed Mohideen v P Sulochana Bai (2016) 2 SCC 683.
4. N R Dongre & Ors v Whirlpool Corp (1996) 5 SCC 714.
5. Amritdhara Pharmacy v Satyadeo Gupta AIR 1963 SC 449.
6. American Home Products Corp v Mac Laboratories Pvt Ltd (1985) Supp SCC 269.
7. SkyKick UK Ltd v Sky Ltd [2024] UKSC 36.
8. IPO, “Trademark Law – Bad Faith Filings” (2013) (Q&A).
9. Jones Day, “SkyKick v Sky: UK Supreme Court Confronts Bad Faith” (Dec. 2024).
10. WIPO’s analysis of Lindt & Sprüngli v Hauswirth (CJEU 2013).