For the first time in Australia, the registration of a trade mark has been refused on the ground that the application was made in bad faith. The decision of the Australian Trade Marks Office in Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited  ATMO 26 is the first successful opposition pursuant to s 62A of the Trade Marks Act, which applies to all trade marks accepted on or after 23 October 2006, and reads: “The registration of a trade mark may be opposed on the ground that the application was made in bad faith“.
From 1996, the opponent had established a series of coffee shops in Queensland using the (unregistered) trade mark HARD COFFEE. In 2004, the coffee shop business at Main Beach on the Gold Coast was sold. Under the sale agreement the purchaser agreed that the vendor retained all rights, including intellectual property rights, in the business names “Hard Coffee” and “Hard Coffee Main Beach”. The contract of sale was signed by M B Raymond, a director of the purchaser, who was also a director of the applicant for the trade mark registrations.
The Trade Marks Act provides no guidance as to the meaning of the term “bad faith”. The Delegate considered that there would need to be some element of intentional dishonesty or deliberate attempt to mislead the Registrar. The Delegate referred to a previous decision in which an applicant’s silence as to its reasons for adopting a particular trade mark went toward a failure to address an allegation of “bad faith” (although that decision was not made under s 62A). In the present case, it was clear that the applications were made with the knowledge of the sale agreement. This was sufficient evidence to meet the opponent’s onus of proof. The applicant had failed to file any evidence, and so the ground of “bad faith” was made out and the registrations were refused.
The Delegate commented that in order to establish “bad faith”, there is no formal requirement for the opponent to use a similar mark. However, where the opponent alleges “bad faith” in that the applicant is attempting to appropriate its mark, the conflicting trade marks would need to be sufficiently similar to deceive or confuse (to be assessed in the same manner as under s 44).