Trade marks: non-use and bad faith

By Audrey Horton



The Patents Court has held that UK and EU trade marks for financial and insurance services were partially invalid and not infringed.


An application for registration of a trade mark must state that the trade mark is being used by the applicant or with their consent in relation to the goods or services for which registration is sought, or that the applicant has a bona fide intention that it should be so used (section 32(3), Trade Marks Act 1994) (TMA). 

In Sky Plc v Skykick UK Ltd, the High Court referred questions concerning the clarity and precision of the specification of services, and the registration of marks in bad faith, to the European Court of Justice (ECJ) ([2018] EWHC 155 (Ch)).

Signs are unacceptable for registration as a trade mark if they lack distinctive character (Article 7(1)(c), Regulation 2017/1001/EU; Article 4(1)(c), Directive 2015/2436/EU) (EUTM Regulation) (Articles 7(1)(c) and 4(1)(c)).

A registered trade mark owner of an EU trade mark (EUTM) or UK trade mark has the right to prevent unauthorised third parties from using, in the course of trade, an: 

  • Identical or similar sign for identical or similar goods or services to those for which the EUTM is registered, where there exists a likelihood of confusion or association on the part of the public (Article 9(1)(b), EUTM Regulation) (Article 9(1)(b)); Article 10(2)(b) of the Directive 2015/2436/EU (Article 10(2)(b)).
  • Identical or similar sign to the EUTM where the EUTM has a reputation in the EU, and where the use of the sign is without due cause and takes unfair advantage of, or is detrimental to, the distinctive character or repute of the EUTM (Article 9(1)(c), EUTM Regulation) (Article 9(1)(c)); Article 10(2)(c) of the Directive 2015/2436/EU (Article 10(2)(c)).


FI owned EU and UK trade marks for FIDELITY registered in respect of financial, insurance and investment services, and had provided financial services under the FIDELITY brand in the UK since 1979. FU operated in the UK and Bermuda under the FIDELIS name as underwriters of specialty insurance and reinsurance for commercial undertakings. 

FI alleged that FU had infringed trade marks containing the word FIDELITY by their use of the sign FIDELIS. FI argued that FU had infringed the EU marks under Articles 9(2)(b) or 9(2)(c), and the UK marks under Articles 10(2)(b) or 10(2)(c).

FU counterclaimed for a declaration that the marks were wholly or partially invalid and an order that the marks be revoked for non-use. FU argued that:

  • The marks were invalid for descriptiveness contrary to Articles 7(1)(c) and 4(1)(c), insofar as they were registered for "fidelity insurance" since that term described a recognised type of insurance.
  • The marks were invalid insofar as they were registered for "financial services" since that term was lacking in clarity and precision.
  • Certain marks should be revoked for non-use insofar as they were registered for "insurance services".
  • Certain marks had been registered in bad faith because FI had not intended to use them in respect of "insurance services".


The ECJ directed that the marks' specifications of services be amended to replace "insurance services" with "insurance services except fidelity insurance". "Fidelity insurance" was an established and recognised term denoting insurance taken out by an employer to indemnify it against losses incurred through the dishonesty or non-performance of an employee. So the marks were invalid in so far as their specifications of goods and services covered "fidelity insurance". 

Terms in specifications of goods and services should be given their ordinary and natural meaning, subject to two overlapping qualifications: as specifications of services were inherently less precise than specifications of goods, they should be interpreted in a manner which confined them to the core of the ordinary and natural meaning rather than more broadly; terms should not be interpreted so liberally that they became unclear and imprecise. The ordinary and natural meaning of the term "financial services" covered "insurance services". Here, it was arguable that the marks were invalid insofar as they were registered for "financial services", but that would depend on the answers to the questions referred in Sky Plc.

The term "insurance services" covered a broad range of services which could be divided into a number of different categories. FI had not used some marks in relation to certain categories of insurance such as car insurance, home insurance, and travel insurance. The extent of that use did not justify the marks remaining registered for "insurance services". A fair specification was "pension-related insurance services". So those marks had to be revoked for non-use in relation to "insurance services" other than "pension-related insurance services". The revocation would take effect from five years after the marks' respective registration dates.

It was arguable that applying to register a trade mark without any intention of using it in relation to specified goods or services amounted to bad faith. There was no basis for suggesting that FI had not intended to use the marks in relation to "pension-related insurance services"; the issue was whether they had acted in bad faith in relation to "insurance services" other than "pension-related insurance services". The ECJ's provisional conclusion was that FI were unlikely to be found to have acted in bad faith. In the current uncertain state of law, however, the resolution of that issue would have to await the outcome of the reference in Sky Plc.

FU had not infringed the marks. Taking account of the high degree of attention of the average consumer of specialist insurance services, there was no likelihood of confusion, FU's' use of FIDELIS had not damaged the distinctive character of FIDELITY, and FU had not taken unfair advantage of FIDELITY's reputation.


Case: FIL Ltd v Fidelis Underwriting Ltd, [2018] EWHC 1097 

First published in the July issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.