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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Harrison v Teton Valley Trading Co [2004] EWCA Civ 1028 (27 July 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/1028.html Cite as: [2004] 1 WLR 2577, [2004] EWCA Civ 1028, [2004] WLR 2577 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
MR JUSTICE PUMFREY, CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
THE RIGHT HONOURABLE LADY JUSTICE ARDEN
and
THE RIGHT HONOURABLE SIR WILLIAM ALDOUS
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Harrison |
Appellant |
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- and - |
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Teton Valley Trading Co |
Respondent |
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Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Mark Vanhegan (instructed by Field Fisher Waterhouse, London EC3N 2AA ) for the Respondent
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Crown Copyright ©
Sir William Aldous:
"3(6). A trade mark shall not be registered if or to the extent that the application is made in bad faith."
The Facts
"All this coverage would in my view would have done more than establish a reputation amongst those who had visited the club CHINAWHITE. It seems to me that such consistency and presence in the press, including articles which make it clear that a celebrity has attended the nightclub 'CHINAWHITE', and those that are specifically about the club would have resulted in a wider reputation and goodwill for the nightclub CHINAWHITE."
In view of that evidence, the applicant accepted that at the date of his applications to register the trade mark the opponents enjoyed a reputation in a nightclub under the name "CHINAWHITE".
"102. … On the basis of the evidence before me, I find that the opponents have shown that Matt Rymer and others in employment at that time were told to develop a cocktail to be called CHINAWHITE which was to be served at the opponent's nightclub. This was as part of their employment. As such, I find that the idea to use CHINAWHITE as the name for the cocktail was that of the opponents. There is no evidence from Mr Rymer to contradict this. He is the only person who could have provided a different version of events. That is not to say that I question Mr Harrison's evidence. I accept that Matt Rymer represented to Mr Harrison that he, Matt Rymer, was the sole proprietor of the name and recipe, but on the evidence before me that was not in fact the case.
103. Whilst, Mr Rymer's bad faith is not strictly an issue before me, I think that his actions and the facts that lay behind them are important. He is the vital link between the opponents and the applicant. I cannot in my view consider the actions of Mr Harrison without considering the actions of Mr Rymer. Whilst I can only take a view on the evidence before me and that evidence is incomplete since I do not have any evidence from Mr Rymer himself, I can state that if the applicant had been Mr Rymer or if the applicant had been the company of which Mr Rymer was a director (or co-director) I would, on the basis of the evidence before me, have had no hesitation in finding that the application for this trade mark was made in bad faith. It seems to me that Mr Rymer was aware of his employer's interest in the name CHINAWHITE as a nightclub, he had been instructed to develop a cocktail of that name for use in that club, he was aware that the appellants intended to exploit the drink further by bottling it.
104. Even if he believed that the drink and name belonged solely to him, that was not the case, I have the applicant's own evidence that the drink was the result of a collaboration with at least one other person, Mr de Fort, and from the opponent's evidence, possibly others (Mr Gouty). Mr de Fort's name is alongside Mr Rymer's on the confidentiality agreement that other bar staff were required to sign. They agreed to keep the confidence disclosed to them by Mr Rymer and Mr de Fort. Even if the drink and name did not belong to the opponents, it was not in the sole proprietorship of Mr Rymer."
"I have little or no knowledge of Mr Keegan and his company and recognised no bad faith in my decision to develop and market the drink CHINA WHITE. Indeed, even though I am a director of a company with a bar and restaurant interests at no stage did I intend using the CHINAWHITE name in relation to any such operations.."
The hearing officer concluded that at the date of the applications the applicant believed what he had been told by Mr Rymer and "saw nothing wrong in his own behaviour".
The Judgments
"112. Taking account of the facts which he was aware, should Mr Harrison have accepted Mr Rymer's assurances at face value? Was that the action of a reasonable and experienced men in the particular area being examined? I think the answer to both those questions must be no.
114. … I have before me a number of facts from the applicant's own evidence that allow me to find that the application was made in bad faith. Mr Harrison states that he was aware of the fact that Mr Rymer was a barman at the club to be called CHINAWHITE, that he had developed a drink called CHINAWHITE, a derivative of which was to be served at the club when it opened. These three facts should in my view, have led a reasonably informed businessman in the relevant field to question Mr Rymer further about his assertions and to make further enquiries. He should not have 'deliberately not asked questions, lest he learn something he would rather not know and then proceed regardless'; ( Royal Brunei.) It was not sufficient in my view to have carried out a search of the Companies register and the Trade Marks register. As Mr Harrison himself acknowledges, he did not file an application for nightclub services because he was aware of the opponent's use of the name CHINAWHITE in that field.
115. Taking all these facts together, I find that in filing an application for the trademark CHINA WHITE for goods in class 32 and 33, Mr Harrison fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined. The application was filed in bad faith and the opponents ground of objection under section 3(6) is made out."
"I shall not attempt to define bad faith in this context. Plainly it includes dishonesty and, as I would hold, includes also some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined. Parliament has wisely not attempted to explain in detail what is or is not bad faith in this context: how far a dealing must so fall-short in order to amount to bad faith is a matter best left to be adjudged not by some paraphrase by the courts (which leads to the danger of the courts then construing not the Act but the paraphrase) but by reference to the words of the Act and upon a regard to all material surrounding circumstances."
"… it seems to me that the hearing officer correctly instructed himself as to the law. His analysis of the facts was extremely careful and the summary of his findings which I have quoted above was in my judgment a series of findings which were amply justified by the evidence which was before him. I am also satisfied that he was wholly conscious of the dangers of coming to any conclusion adverse to the applicant in the absence of cross-examination and that the ultimate conclusion to which he came was a conclusion which was sufficient to make good the objection of want of good faith in this context and was entirely supportable on the evidence.
…
The words 'bona fide' or 'good faith' are what are sometimes called 'chameleon words' and take their content from the colour from their surroundings. Once the hearing officer decided that the correct approach was that which I think he may well have been bound to accept, it was open to him to find that objectively the behaviour of the applicant did not satisfy the second half of the formulation ... this was not a question of drawing inference at all. It was a question of coming to a secondary finding of fact on all the materials. I do not consider that the hearing officer's decision is open to challenge on this ground and the appeal must accordingly be dismissed."
The Appeal
"27. … There are three possible standards which can be applied to determine whether a person has acted dishonestly. There is a purely subjective standard, whereby a person is only regarded as dishonest if he transgresses his own standard of honesty, even if that standard is contrary to that of reasonable and honest people. This has been termed the "Robin Hood test" and has been rejected by the courts. As Sir Christopher Slade stated in Walker v Stones [2000] Lloyds Rep PN 864, 877 para 164:
"A person may in some cases act dishonestly, according to the ordinary use of language, even though he genuinely believes that his action is morally justified. The penniless thief, for example, who picks the pocket of the multi-millionaire is dishonest even though he genuinely considers that theft is morally justified as a fair redistribution of wealth and that he is not therefore being dishonest."
Secondly, there is a purely objective standard whereby a person acts dishonestly if his conduct is dishonest by the ordinary standards of reasonable and honest people, even if he does not realise this. Thirdly, there is a standard which combines an objective test and a subjective test, and which requires that before there can be a finding of dishonesty it must be established that the defendant's conduct was dishonest by the ordinary standards of reasonable and honest people and that he himself realised that by those standards his conduct was dishonest. I will term this "the combined test"."
"36. … Therefore I consider … that your Lordships should state that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct."
"10. Bad faith is a narrow legal concept in the CTMR system. Bad faith is the opposite of good faith, generally implying or involving, but not limited to, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a "dishonest intention". This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing.
11. Bad faith can be understood either as unfair practices involving lack of good faith on the part of the applicant towards the Office at the time of filing, or unfair practices based on acts infringing a third person's rights. There is bad faith not only in cases where the applicant intentionally submits wrong or misleading by insufficient information to the Office, but also in circumstances where he intends, through registration, to lay his hands on the trade mark of a third party with whom he had contractual or pre-contractual relations."
"17. Bad faith is a narrow legal concept in the CTMR system. Bad faith is the opposite of good faith, generally implying or involving, but not limited to actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a "dishonest intention". This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing. Example: if it can be shown that the parties concerned had been in contact, for instance at an exhibition in the respective trade, and where then one party filed an application for a CTM consisting of the other party's brand, there would be reason to conclude bad faith. In this case, however, according to the meaning of the term "bad faith", there is no evidence that Senso di Donna Vertribes - GmbH was acting dishonestly or that they intended any similar act, or were involved in unfair practices or the like."
"The fact that "bad faith" has been considered in a number of cases involving CTMs means that a body of coherent doctrine is building up. In contrast the doctrine on "bad faith" under the Directive is inevitably going to be, at least initially, less coherent since it is derived from a variety of different tribunals in different countries."
Even so, there appears to be a consensus that seeking to monopolise another's trade mark and other unfair practices would render an application invalid for bad faith.
Lady Justice Arden:
Lord Justice Pill:
ORDER: Appeal dismissed with costs. One outstanding issue which is to be dealt with in writing as to whether the costs for one period of time will be standard or indemnity costs.