The Singapore High Court has, in its recent decision in Triple D Trading Pte Ltd v Fanco Fan Marketing Pte Ltd [2022] SGHC 226 (“Triple D”), affirmed that confusing similarity of marks is not a prerequisite for a finding of bad faith to be made. Rather, the court will examine all the circumstances of the case in considering whether there is a nexus between the parties based on which a finding of bad faith may be made. If there is some similarity between the marks, this can be taken into account in establishing the requisite nexus.

Triple D concerned a claim for infringement of the Plaintiff’s trade mark “ ” (the “COFAN mark”) which was registered, inter alia, in Class 9 for goods including ceiling fans. The Defendant used the mark “CO-FAN”, and its main argument was that the COFAN mark was invalid for having been filed in bad faith. This was on the basis that the Plaintiff’s director, Phua, who was the Defendant’s former employee, knew of the Defendant’s plans to launch fans under “CO-FAN”. Alternatively, the Defendant argued that in applying to register the COFAN mark, the Plaintiff was seeking to free ride on the goodwill in the Defendant’s brand name “FANCO”.

The first ground was found not to have been made out on the facts, but the Defendant succeeded on the second ground. The Judge found that “FANCO” and “COFAN” bore some similarity in that both comprised of the same letters and were merely reversals of the syllables of the other. This was one of the factors which ultimately led to an inference of bad faith being drawn. The Judge stressed that this should not be construed as a finding that the marks are “confusingly similar, in the sense set out in s 8(2) [of the Singapore Trade Marks Act (Cap. 332) (“TMA”)]”. In fact, he took the provisional view that this was not the case. Nevertheless, this did not detract from his ultimate conclusion that the application for the COFAN mark had been filed in bad faith.

The Judge also took into account a number of other factors in arriving at this conclusion. The Defendant had registered “FANCO” since 2013. Phua had worked for the Defendant for seven years before he left to incorporate the plaintiff, and so must have been aware of the Defendant’s goodwill in its business under “FANCO”. Phua testified that it did not occur to him that “COFAN” was a reversal of the syllables of “FANCO”, which the Judge found to be incredible given his employment history. Further, the product which the Plaintiff launched under the “COFAN” brand name bore a model name, packaging and brochures which bore uncanny similarities to those used by the Defendant for its earlier launched “CO-FAN” ceiling fans, and the Plaintiff failed to provide a credible explanation for these similarities. Finally, the Plaintiff sought to undercut the Defendant by retailing its fans at a discount.

The Judge concluded that the circumstances, considered in their totality, led to the unmistakable impression that the Plaintiff had indeed intended to capitalise on the Defendant’s goodwill in “FANCO” at the time it filed the application for the COFAN mark. He therefore ordered the mark to be expunged from the register.

Notably, the Judge had placed some emphasis on the fact that the Plaintiff, through Phua, had knowledge of the similarities between the two marks at the point the application for the COFAN mark was made. Indeed, this is consistent with the fact that the test for bad faith comprises both a subjective element (viz, what the applicant knows) and an objective element (viz, what ordinary persons adopting proper standards would think). The Plaintiff’s knowledge was said to be relevant to the subjective element of the test. It therefore appears that the similarity of marks may well only be considered in the assessment of bad faith if the applicant is shown to have knowledge of the similarities.

This is not the first time the High Court has taken the position that a likelihood of confusion is not necessary for a finding of bad faith to be made. The High Court had arrived at the same conclusion in a number of its previous decisions – e.g., in Rothmans of Pall Mall Ltd v Maycolson International Ltd [2006] SGHC 51, Valentino Globe BV v Pacific Rim Industries Inc. [2009] SGHC 150, and Festina Lotus SA v Romanson Co Ltd [2010] SGHC 200. As noted in the Judgment, this position is also consistent with that taken in Europe. However, this is a timely reminder that bad faith is ultimately an inquiry into the applicant’s state of mind and an assessment of whether the applicant’s behaviour meets the standards of acceptable commercial behaviour, and is not so much concerned with consumer perception of the competing marks.

*The authors acted for the Defendant in the proceedings.