In the appeal, the Lord Justices considered that the High Court judge did not take account of the fact bad faith is a developing area of law, although this was not sufficient by itself to overturn the decision.
The Lord Justices allowed the appeal on the basis that the High Court judge failed to properly consider the facts and inferences of the bad faith counterclaim, especially considering no response had been given by Lidl yet, regarding their intentions when they registered the mark.
The Lord Justices concluded the following:
- Bad faith constituting an abuse of the trade mark system can occur where an applicant seeks an unjustifiably broad scope of protection, depending largely on the applicant’s intentions.
- Tesco’s pleading shows a real prospect that the presumption of good faith could be overcome and therefore, shift the burden of proof onto the applicant to show they did not register in bad faith.
- It was considered Tesco’s bad faith claim did have a real prospect of success and therefore, the counterclaim should be allowed to be argued at trial, where Lidl will have the opportunity to explain their intentions when filing the trade marks.