Challenging Bad Faith Trade Mark Filings Under Section 62A

Trade mark squatting — the practice of registering another party’s brand with no legitimate commercial purpose — is a growing concern in Australia. Since 2006, the Trade Marks Act 1995 has included a dedicated provision to address this problem: Section 62A, which allows the registration of a trade mark to be opposed on the ground that the application was made in bad faith. This provision, added by the Trade Marks Amendment Act 2006, has become an important tool for brand owners confronting opportunistic or predatory filings.

What Section 62A Provides

The statutory provision is brief: “The registration of a trade mark may be opposed on the ground that the application was made in bad faith.” The Act does not define “bad faith,” leaving its interpretation to the courts and Trade Marks Office hearing officers. This deliberate open-endedness gives the provision flexibility to address a wide range of exploitative conduct.

The Legal Test

The leading judicial articulation of the bad faith test comes from Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81, where Dodds-Streeton J defined the standard as whether “persons adopting proper standards would regard the decision to register as in bad faith, or that reasonable and experienced persons in the field would view such conduct as falling short of acceptable commercial behaviour.” This formulation was cited with approval in DC Comics v Cheqout Pty Limited [2013] FCA 478 and has been consistently applied since.

The test has both subjective and objective elements:

• Subjective element: What did the applicant know at the time of filing? The applicant’s mental state, awareness of the prior mark, and intentions are all relevant.
• Objective element: Would reasonable and experienced persons in the relevant field consider the applicant’s conduct to fall below acceptable commercial standards?

Importantly, bad faith does not require dishonesty or fraud in the strict legal sense — though it encompasses both. Conduct that falls short of acceptable commercial behaviour can constitute bad faith even without a finding of deliberate deceit. Conversely, mere awareness that an overseas company owns the mark does not automatically amount to bad faith; the applicant’s purpose and the surrounding circumstances must be assessed.

Examples of Bad Faith Conduct

The Registrar has identified and the courts have confirmed several patterns of conduct that constitute bad faith:

• Monitoring and pre-emptive registration: Persons who monitor new property developments, product launches, or foreign brand entries and register those names as trade marks before the legitimate owner files, then demand payment or licensing fees.
• Deliberate misspellings: Applicants who file trade marks that are deliberate misspellings of other registered marks to circumvent Section 44 objections while trading on the earlier mark’s goodwill.
• Foreign brand snatching: Persons who identify trade marks used overseas but with no Australian presence yet, then file applications in Australia for the express purpose of selling them to the overseas owners.
• Pattern of serial filings: Applicants with a history of filing marks that correspond to well-known third-party brands across multiple classes, with no evidence of genuine commercial use for any of them.
• Former agents or business partners: Persons who, through a business relationship, become aware of another party’s brand and register it in their own name without authorisation.

Timing: Bad Faith at Filing Date

The relevant time for assessing bad faith is the date of the application. The question is whether the application was made in bad faith at the time it was filed. However, the courts have acknowledged that conduct after the filing date — such as a failure to use the mark, attempts to sell the registration to the legitimate owner, or a pattern of further similar filings — may support inferences about the applicant’s state of mind at the time of filing.

Procedural Pathways

Opposition (Section 62A)

Any person may oppose the registration of a trade mark on bad faith grounds within two months from the date the application is published as accepted. The notice of opposition must set out the facts and circumstances that give rise to the belief that the application was made in bad faith — a bare assertion without supporting particulars is insufficient. The onus is on the opponent to establish a prima facie case of bad faith on the balance of probabilities.

Cancellation (Section 88)

If a bad faith application has already proceeded to registration, Section 88 allows the registration to be cancelled on the ground that the application was made in bad faith. This provides a post-registration remedy for marks that slipped through the opposition window.

Evidence Required

To succeed in a bad faith opposition or cancellation, the opponent typically needs to demonstrate:

• The opponent’s prior use or reputation in the mark (in Australia or internationally).
• The applicant’s knowledge or awareness of the opponent’s mark at the time of filing.
• Circumstances suggesting improper purpose: Pattern of filings, demands for payment, failure to use, copying of trade dress, use of corporate structures to obscure identity, or filing immediately after learning of the opponent’s mark.

If the opponent establishes a prima facie case, the applicant’s silence can be damaging. In several Trade Marks Office decisions, applicants who failed to file evidence or submissions in response to a bad faith opposition had the inference drawn against them that the opponent’s evidence was unchallenged.

Strategic Recommendations

• Monitor the Australian Trade Marks Register: Watch for third-party filings of marks identical or similar to yours. The two-month opposition window is your first line of defence.
• File your marks in Australia promptly: Prevention is more effective than cure. Register before entering the market to reduce the window of opportunity for squatters.
• Preserve evidence of prior use and reputation: Maintain records of your brand’s use and recognition both in Australia and internationally. This evidence is essential for any bad faith claim.
• Document business relationships carefully: If you share brand information with agents, distributors, or partners in Australia, ensure contractual protections are in place to prevent unauthorised registration.
• Act promptly if you discover a squatter: File an opposition within the two-month window if possible. If the mark is already registered, pursue cancellation under Section 88.

Key Takeaway

Section 62A provides Australian brand owners with a flexible and effective tool to combat trade mark squatting and other forms of bad faith filing. The test focuses on whether the applicant’s conduct fell below the standards of acceptable commercial behaviour, assessed at the time of filing. While the onus is on the opponent to prove bad faith, a strong evidentiary record of prior use, the applicant’s knowledge, and circumstances suggesting improper purpose can be decisive. As with most trade mark disputes, early action and thorough evidence gathering are essential.