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A recent decision: The road to Section 10(7) is paved with bad intentions

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Published Date: June 18, 2024

“The road to hell is paved with good intentions” is an old English proverb, meaning that well-intentioned actions may have unintended consequences. One might say that the road to section 10(7) of the Trade Marks Act is paved with bad intentions, as it provides that trade mark applications filed mala fide are considered unregistrable. 
 
In the recent judgment of Lee Riders Motorcycle Club v Nigel Jacobs & Registrar of Trade Marks, the Court was faced with an opposition on the basis of, inter alia, section 10(7) of the Trade Marks Act. Despite the opposition being unsuccessful on this ground, this case sheds some light on what might (or might not) be considered a mala fide trade mark application.

Lee Riders Motorcycle Club v Nigel Jacobs & Registrar of Trade Marks:

Lee Riders Motorcycle Club (“the Club”) is a voluntary association of motorcycle enthusiasts established in 1984. The Club is the common law proprietor of the LEE RIDERS (word) trade mark and a distinctive logo which has changed very little since first being adopted in 1984. In 2015, a number of disgruntled club members, including Mr. Jacobs, left the Club and started a new club under the same name. The new club was to be owned and operated by a non-profit company named Lee Riders NPC (“the NPC”), and it adopted exactly the same logo trade mark used by the Club. Mr. Jacobs subsequently applied to register the LEE RIDERS logo trade mark in his own name. In his affidavits, he explained that he had applied to register the logo trade mark on behalf of the NPC. However, no steps were taken to assign the trade mark application to the NPC prior to the hearing of the opposition. Mr. Jacobs appeared to be of the view that the trade mark belonged to the NPC by virtue of the fact that the group of disgruntled members outnumbered the remaining members of the Club, and included several of the founding members of the Club.  

The Club lodged an opposition to Mr. Jacobs’ trade mark application on the basis of several sections of the Trade Marks Act, including sections 10(3), (4), (7), (12), (13) and (16). The applicant was successful on all grounds, save for section 10(7). The Judge noted that the first respondent was not necessarily motivated by mala fides in applying to register the trade mark, but that he and his cohorts were merely ill advised in the matter, in that they truly believed that they could appropriate the trade marks for the NPC.

Mala fide

Our Courts have previously considered the meaning of “mala fide” in the context of section 10(7) of the Trade Marks Act. Section 10(7) goes to the motive or intention of the trade mark applicant and has been interpreted to exclude applications made mala fide where the conduct of the applicant is contra bonos mores, i.e. where the conduct does not meet the standards of acceptable commercial behaviour in the relevant trade or industry. For example, where a furniture shop sold furniture identical to that of a competitor, but at a significantly reduced price, in order to cripple the competitor, such conduct was considered contra bonos mores (see Bress Designs v G Y Lounge Suite Manufacturers). Furthermore, where a party used a mould which was designed by another and dishonestly lodged a design registration application in its own name, this was considered mala fide (see Schultz v Butt).

On the contrary, where an applicant applies to register a trade mark despite knowing that third parties are already using the identical/similar mark in relation to identical/similar goods or services, this does not constitute bad faith if the applicant believes that it has a stronger right to registration and use of the mark.
The Lee Riders decision illustrates that some form of malicious or dishonest motive or intention is required on the part of the applicant for a trade mark application to be considered mala fide. This is a subjective factor which must be determined by the Registrar or the Court, taking into account all the circumstances of the case. This most recent case suggests that an applicant who labours under a misapprehension when applying to register a trade mark, will not necessarily be considered to be acting mala fide in terms of section 10(7). Indeed, the road to section 10(7) is paved with bad (faith) intentions and merely being misguided or ill-advised will not necessarily place the applicant on the wrong path.

Source: Article by Steven Yeates, Michelle Langeveld and Robyn Broodryk

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