November 15, 2021
Recovering a Trademark after a Bad-Faith Registration: Recent Decision Offers Hope to Legitimate Brand Owners

A frequent problem with first-to-file trademark systems is that bad-faith applicants may be able to file and obtain a registration prior to the legitimate owner seeking to file their own application. In such a case, the existing trademark registration enables the bad-faith trademark owner to use the mark in the country and produce and sell products there without being deemed a counterfeiter. This “legal fakes” situation bars the legitimate brand owner from commercializing their highly desired products in the country. However, a recent court decision in Thailand affirms that there is solution for this problem.

The case involves a world-renowned American clothing company that decided to secure their brand in the Thai market, only to find that there were already several registrations of their mark by a single Thai applicant. Not only was the word the same, but the trademarks used identical fonts, colors, and designs. Not surprisingly, additional research revealed that the registrant had filed Thai trademark applications for various other globally recognized brands, indicating an ongoing record of bad-faith intent. The American brand owner was confident of being able to prove its case in court and decided to regain its trademark rights in the country by filing a cancellation petition with Thailand’s Intellectual Property and International Trade Court (IP&IT Court).

The country’s Trademark Act allows legitimate owners to sue for cancellation of a trademark registration based on better right grounds, provided that the trademark has been registered for less than five years. The concept of better right grounds is a simple one, referring to the assertion that the genuine brand owner has a more legitimate right to use their own trademark than does the prior registrant.

However, it was still challenging for the American clothing brand to prove that it had a more legitimate right in Thailand. While the brand had a strong international presence, they do not have brick-and-mortar stores or authorized distributors in Thailand. The brand instead pointed to its online sales and extensive marketing over the past decade, and proved its better rights to the trademark by showing use of their mark on websites and social media, including online articles from well-known publishers.

Importantly, the American brand owner presented back issues of Thai magazines showing Thai people using its products a decade ago—that is, before the filing of the trademark by the Thai registrant. The extensive evidence was especially compelling in light of the registrant’s history of registering the marks of other famous brands.

The IP&IT Court deemed it unlikely that the Thai registrant could have created the same trademark and instead reasoned that the Thai registrant, who claimed to be in the business of manufacturing and selling the same products, had to have seen the legitimate American-branded products prior to filing for the trademark registrations. Accordingly, the court ruled that the American brand owner has a better right to the trademark and ordered the cancellation of the Thai trademark application.

When the registrant appealed, the Court of Appeal for Specialized Cases affirmed the IP&IT Court’s decision, pointing out that the Thai registrant could not give evidence of its prior use of the mark when that should have been easy to do if its claim of already having been in the business of manufacturing and selling the products were true. The American brand owner thus overcame the challenges and the cancellation order was upheld.

The decision of the Court of Appeal for Specialized Cases is not yet finalized, as both parties may still opt to appeal further to the Supreme Court. However, this decision illustrates a promising solution for legitimate brand owners to secure their branding and regain their business in Thailand.

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Ploynapa Julagasigorn
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