This decision, which was published on January 26, 2023, shows that to cross the high threshold of proving a claim in bad faith, an opponent must properly substantiate its arguments.

Chuan Hong Seng Pte Ltd (applicant) is a company involved in the importation, distribution, and wholesaling of food products. Yap Fei Fei (opponent) was the director and shareholder of So Fei Pte. Ltd. (SFPL). SFPL imported and distributed various products from South Korea, including a citron tea that was sold, since 2014, under the brand name SOFEI GOLD CITRON TEA. SFPL owned two registered marks, namely: (SOFEI goods mark) and  (SOFEI services mark) (collectively, the registered SOFEI marks).

In December 2018, as SFPL neared insolvency, the opponent transferred her entire business, through a sale and purchase agreement (SPA), to the applicant, including the sale of the registered SOFEI marks.

As their working relationship soured, the opponent opposed the applicant’s trademark application number 40202001309U(application), alleging that it was filed in bad faith. The opponent contended that the SPA should be interpreted as a three-year distribution agreement, giving temporary rights to the applicant to use the registered SOFEI marks during this three-year period; and that the SOFEI goods mark was undervalued, and could not have been intended to be transferred permanently.

Regarding the contention of undervalue of the SOFEI goods mark, the adjudicator held that this was to be determined by the court, and there was no evidence of any court order that rendered the SPA nugatory. There was no express stipulation in the SPA either to support the argument that the applicant’s right to use the SOFEI goods mark only lasted three years.

Furthermore, considering the opponent did in fact record the transfers of the registered SOFEI marks, the adjudicator held that the applicant genuinely believed that the transfer was legitimate, and that it had legal title to the same when it commenced the application process.

The opponent thus failed to establish even a prima facie claim of bad faith, given that there was no impropriety on the applicant’s part. Accordingly, the Registrar allowed the application to proceed to registration.

This article was first published by the International Trademark Association on inta.org.