Background
Economic competition is well established in many economies and provides consumers with an increased selection of goods and services along with improved quality and lower prices. This is because competition between companies offering the same or similar goods and services causes those companies to compete for market share to remain profitable. All things being equal, consumers will typically purchase the cheapest product or service. Market share is typically won through a combination of one or more of the following qualities that provide consumers with more than just cost to compare: choice of payment method, higher quality, more features, better branding and quicker delivery.
Branding is becoming increasingly important as brand awareness allows companies to imply brand qualities to a product or service. Through brand education, consumers begin to associate characteristics with goods or services even if they have no specific knowledge of those particular goods or services but have knowledge of the brand in general.
Comparative advertising, in which a brand compares itself directly to another competing brand, is common and generally considered as an acceptable business behaviour. However, what is the consideration if a brand tries to register another brand’s trade mark as their own?
The facts
The decision detailed in 2019 ATMO 77 involves two direct competitors Airtasker Pty Ltd (Airtasker) and Freelancer Technology Pry limited (Freelancer). Both companies offer online platforms that allow people who are outsourcing tasks to connect to people to perform those tasks, typically for payment. As such, the companies are direct competitors.
Freelancer (the Applicant) applied for Australian trade mark application 17997549 on 19 September 2016 for the trade mark “LIKE A BOSS.” The goods and services applied for were:
Class 9: Mobile app for freelance jobs; mobile app for hiring online; mobile app for local jobs; mobile app for crowdsourcing; mobile app for online job seeking
Class 35: Provision of information about freelance jobs via a website; provision of an online marketplace in respect of freelance jobs, namely provision of an online marketplace facilitating the purchase and supply of freelance services; provision of information relating to online and local job postings through searchable database on an online and local jobs website; facilitating the purchase and supply of goods and services via a crowdsourcing website
Class 41: Online videos related to educational content and tips for small businesses including but not limited to hiring online, building a business online, crowdsourcing online and hiring and managing freelancers for both online and local jobs
Airtasker (the Opponent) opposed the application. The evidence lodged by Airtasker comprised a declaration from the Vice President of marketing and showed that they commenced advertising services under the trade mark “LIKE A BOSS” from 14 September 2016. An example of that use is shown in the image above.
A press release on 15 September 2016 provided further details on the campaign as shown in the extract of that release below.
Screen capture from CampaignBrief.com
Although three grounds of opposition were raised, the hearing officer decided the matter on Section 62A only. Section 62A states:
62A 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.
There is no definition of bad faith in the Trade Marks Act 1995, so it is necessary to refer to case law to determine what bad faith means.
What is bad faith?
Bennett J in DC Comics v Cheqout Pty Ltd refers to Kenny J’s decision in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 1) where certain examples are given in the Explanatory Memorandum to s62A:
- 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.
Dodds-Streeton J observed that these examples do not deal with the full breadth of bad faith and should be considered as inclusive and non-limiting and stated that:
“Bad faith must be at the time of the application, that the onus is on the opponent seeking to establish bad faith and that the standard of proof is on the balance of probabilities.”
Due to the limited number of Australian cases, Dodds-Streeton J also considered relevant cases from the United Kingdom that provided some additional guidance in which the cases stated the following:
- Bad faith is a serious allegation and the more serious the allegation, the more cogent the evidence required to support it.
- Bad faith does not require dishonesty.
- Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fa lls short of acceptable commercial standards.
- The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.
- It is difficult to see how a person who applies to register, in his own name, a mark he has previously recognised as the property of a potential overseas principal can be said to be acting in accordance with acceptable standards of commercial behaviour. Combining the mark with the applicant’s own name is no answer to that criticism.
- The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading.
- All the circumstances surrounding the application to register the mark are relevant.
- An act of bad faith cannot be cured by an action after the date of application.
In considering these cases, Dodds-Streeton J came to the conclusion that:
- bad faith does not require dishonesty or fraud (but does include it);
- the mere awareness that an overseas company owns the mark and may operate or intend to operate in Australia does not automatically amount to bad faith;
- the applicant’s mental state at the time of application is relevant.
Taking into account the above, Dodds-Streeton concluded that bad faith in the context of s 62A should be considered as “conduct falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons”.
Kenny J in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 1) supported the view of the UK Hearing Officer’s formulated by Arnold J in Maslyukov v Diageo Distilling Ltd:
Bad faith includes dishonesty and ‘some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular field being examined’. Certain behaviour might have become prevalent, but this does not mean that it can be deemed to be acceptable. It is necessary to apply what is referred to as the ‘combined test’. This requires me to decide what Mr Maslyukov knew at the time of making the application and then, in the light of that knowledge, whether his behaviour fell short of acceptable commercial behaviour. Bad faith impugns the character of an individual or collective character of a business, as such it is a serious allegation. The more serious the allegation the more cogent must be the evidence to support it. However, the matter still has to be decided upon the balance of probabilities. The issue has to be considered as at the date of application for registration. An act of bad faith cannot be cured by an action after the date of application.
As such, the tests by the courts have determined that bad faith is determined on the balance of probabilities and on the basis of whether the conduct of applying for the trade mark fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.
Decision
In making his determination, the hearing officer considered that: the parties are direct business competitors; that the trade marks of each party were identical; Freelancer applied for the trade mark just four days after Airtasker started publicly using the trade mark; that the Freelancer trade mark covered the services offered by Airtasker; and that Freelancer had the opportunity to file evidence but failed to do so.
As such, the hearing officer considered that, on the balance of probabilities, the filing of the “LIKE A BOSS” trade mark by Freelancer was conduct falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons. He therefore determined the opposition was successful and refused Freelancer’s application.
Implications
From this decision, we can see that the intention of why a trade mark is filed is important in determining whether it is a valid application or not. Filing an application with the intention of trying to disrupt, embarrass, hold to ransom or otherwise preclude its use from a competitor when it belongs to that competitor will result in the application being invalid.
Registering a trade mark is a complex procedure that requires sound knowledge of trade marks law and regulations. As such, applicants are recommended to seek professional advice on trade mark applications. At Baxter IP, our trade mark attorneys are delighted to assist you in assessing your proposed trade marks and advising you on the best trade mark filing strategy.
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