Application to register mark by co-owner deemed to be in bad faith


In Neumann v Sons of the Desert SL (CIV 2007-485-212, November 5 2007), the High Court has confirmed that where there are co-owners of a trademark, an application to register the mark by only one of the owners without the co-owner's knowledge is deemed to have been made in bad faith.

In 1998 Herbert Neumann and two others incorporated a company in Spain with the purpose of marketing clothing using the mark EL NINO TARIFA and a logo of a seated boy.:

There was allegedly an oral agreement that the mark and logo would be jointly owned by all three parties worldwide.

Neumann's submitted evidence was that, over time, he and a certain Mr Galdeano became worldwide co-owners of the mark, two of the original three owners having withdrawn from the business. Galdeano's company, Sons of the Desert, subsequently sought to register the mark in New Zealand without Neumann.

Neumann argued that:

  • Sons of the Desert's attempt to register the mark in New Zealand was contrary to the agreement made in Spain in 1998; and
  • the application had been made in bad faith.

At opposition level, the assistant commissioner found that bad faith had not been established and allowed the application. Neumann appealed to the High Court and brought new evidence of the relationship between the parties.

On appeal, the High Court applied Justice Aldous's test for bad faith as set out in Harrison's Trademark Application ([2005] FSR 177) - that is, the court must decide whether the knowledge of the applicant was such that its decision to apply for registration would be regarded as bad faith by persons adopting proper standards.

The court found that Galdeano and Neumann were co-owners of the mark. Galdeano controls Sons of the Desert, the applicant for the trademark, and thus Sons of the Desert had knowledge of the co-ownership agreement. The attempt to register the mark without Neumann's knowledge would deprive Neumann of the benefit of registration, and ultimately use, of the mark in New Zealand.

Therefore, the appeal was allowed and the trademark application filed by Sons of the Desert was cancelled.

This article was published in World Trademark Report - February 4, 2008