Understanding Parodic Use and Bad Faith under Trademark Laws

By

Sakshi Shairwal

Shalini Bhatt

A trademark is a symbol, word, or phrase which is used by a particular seller or manufacturer to identify its product and to distinguish it from the other product. Sometimes it extends beyond symbol, word, or phrase and may include the color or packaging of a product.

Parodies have long provided many of us with entertainment, amusement, and even sometimes information. Many effective parodies can convey many messages with powerful effects. The message may be a social commentary, political statement, commercial speech, and ridicule of a brand name, criticism of commercialism, a bawdy joke, or just plain humor for its own sake. With this often someone feels that their property right is being infringed. Many a time people files lawsuit against those person making parodies.

The term bad faith is not new to the trademark law. Trademark crowding and squatting of trademark registers have become an international issue now. Cases, where the concept of monopoly is involved applications of bad faith with an aim to free ride upon the reputation and credit of another person's trademark, are inevitable.

In simple words, we can define bad faith as including dishonesty and behavior which falls short of the standards of acceptable commercial behavior observed by reasonable and experienced men in the particular area being examined.

What Constitute Bad Faith?

In the case of Lindt & Sprüngli vs Franz Hauswirth the European court of justice held that the question of bad faith is to be assessed in its entirety; considering all of the factors of significance in each case.

Some factors constitute bad faith:

i.) Knowledge of the prior user’s use of an identical and/or deceptively similar mark for identical and/or deceptively similar goods or services:

ii.) Dishonest intention to trade upon the prior user’s goodwill.

iii.) Choosing a similar well-known trademark for identical goods.

iv.) Filing multiple trademark applications at the five-year interval.

v.) Applicants filing other trademark applications may also constitute bad faith.

Something similar happened in the case of the Swatch vs Apple case.

Background of the case

Swatch submitted international registrations which include a designation in the UK for the signs: ‘SWATCH ONE MORE THING’ and ‘ONE MORE THING’ for goods in classes 9 and class 14, including watches and consumer electronic products.

The phrase ‘ONE MORE THING’ had notably been used by Steve Jobs in promotional launches of APPLE since 1998 when, at the end of his speeches, he would turn to leave the stage before coming back with the words “…but there’s one more thing”, typically to introduce a new product. The same phrase was revived later by Tim Cook in 2015 with the introduction of the Apple Watch (shortly after which Swatch had filed their ONE MORE THING applications).

Reacting to the application, Apple submitted its objection to the trademark based on section 5(4)(a) TMA 1994 within the UK claiming that Apple could rely on passing off to oppose the mark, on the goodwill that Apple had in connection with the phrase. However, the claim of Apple was rejected on the basis that it was not sufficient for it to be a distinguishing sign which indicates the trade origin of goods and services provided by Apple, such that the public would not be deceived by the use of the phrase to pass off, even though Apple's usage of the phrase is recognizable to a small number of people.

Under section 3(6) TMA 1994 and opposition of bad faith was also submitted. On this point, the hearing officer had noted that whilst it is well-established fact that an application made for trademark, not to use it, but to prevent others from using it, would be considered to be made in bad faith, such an argument of 'blocking' had not been pleaded by Apple. Rather, Apple had only pleaded purpose to do with the intended use of the mark, not the intended use of the registration, as such a ‘blocking’ objection would.

Swatch submitted three points on its appeal:

i.) The plea of bad faith depended on Apple owning enforced rights by way of goodwill [since this plea was rejected, so this will not be addressed];

ii.) The hearing officer had inadequate evidence regarding parody plea;

iii.) The intention of parodic use was not sufficient to constitute bad faith.

The England and Wales High Court Decision:

The deputy judge while addressing the second and third point of appeal agreed to the point that the timing of the application would support that the application was designed to the same extent to ‘upset’ or ‘cock a snook’ at Apple”. However, he did not think that this was enough to find a case of the intention of parody apple at prima facie. This decision was based on the conclusion that the evidence present as online comments was merely speculative and had no knowledge and does not reflect the intention of Swatch. Also, there was no evidence present that Swatch had practiced parodic advertisement in past too and also it was not very clear to him how the parodic use would be effective when only a small number of people know about the phrase associated with Apple.

Hence it can be concluded that the motivation of Swatch to annoy Apple is not sufficient to constitute bad faith.

In the end, the deputy judge found that it was not inherently dishonest business practice to use a sign that would bring another trader to mind in an amusing but inoffensive way. And to determine whether the boundary was crossed would depend on, the intensity of the use, nature of the humor, and its consequent impact on the business interests of the recipient. Hence he found that the mark was not offensive and it did not amount to bad faith.

Parodic use and bad faith is always a problem with trademark law. However, this judgment somehow helped in reducing this problem.

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