Parabolica v Tesla Holding A.S.: the correct date for assessing bad faith in Brexit-derived trade mark applications

In Parabolica Limited v Tesla Holding A.S. [2026] EWHC 386 (Ch), the High Court has resolved a significant point of principle arising from the UK's exit from the European Union: when assessing bad faith under s.3(6) of the Trade Marks Act 1994, what is the relevant date for a UK trade mark application derived from a pending EU application under Article 59(1) of the Withdrawal Agreement?

Parabolica had filed an EU trade mark application for TESLA in 2007, with a priority date of October 2006. When the mark remained pending at IP Completion Day, Parabolica exercised its right under Article 59(1) to file a comparable UK application in September 2021. Tesla Holding A.S. opposed the application, and the Hearing Officer upheld the opposition on bad faith grounds assessed as at the UK filing date of September 2021. Parabolica appealed, arguing that the EU priority date of October 2006 was the correct reference point.

Tom Mitcheson KC, sitting as Deputy Judge, dismissed that argument without difficulty. Consistent with established CJEU authority — including the Supreme Court's analysis in Sky v SkyKick [2024] UKSC 36 — bad faith must be assessed as at the date of filing of the application, not the priority date. The substantive question was therefore whether the correct filing date was the EU filing date of April 2007 or the UK filing date of September 2021.

The court found firmly in favour of the EU filing date. The decisive provision was Article 59(1) of the Withdrawal Agreement itself, which expressly states that a UK application made pursuant to it "shall be deemed to have the same filing date … as the corresponding application filed in the Union." The Deputy Judge held that this deeming provision was clear in its intention and applies to all relevant purposes — including absolute grounds such as bad faith — not merely to questions of relative priority between competing marks.

This conclusion found support in the parallel treatment of registered designs under Schedule 1A to the Registered Designs Act 1949, which explicitly adopts the EU filing date as the application date "for the purposes of this Act" without restriction. The trade mark provisions in Schedule 2A of the 1994 Act, which refer only to "establishing which rights take precedence," were found to be an incomplete implementation of the Withdrawal Agreement, their narrower language likely a vestige of the earlier draft of what became Article 59. Where Schedule 2A falls short of the full scope of the Withdrawal Agreement, s.7A of the European Union (Withdrawal Agreement) Act 2020 gives the Agreement direct effect to fill the gap.

The Deputy Judge also engaged with the policy arguments that had led hearing officers below to reach the opposite conclusion. The concern that registering marks which had become non-distinctive by the UK filing date would be contrary to the public interest was answered directly: such marks remain vulnerable to revocation or invalidity proceedings under ss.46 and 47 of the 1994 Act, precisely as they would be for any other registered mark whose distinctiveness later erodes. There is no principled justification for placing applicants with pending EU applications in a materially worse position than those whose EU marks had already been registered and automatically converted to comparable UK rights on IP Completion Day.

The appeal was allowed and the matter remitted to the Registry for reassessment of the bad faith allegation using the EU filing date of April 2007. The Comptroller General, intervening, ultimately supported this outcome, acknowledging that the TM Regulations had not fully implemented the Withdrawal Agreement and that direct effect under s.7A supplied the necessary correction.

The case is likely to affect a number of pending proceedings in the Registry where the same issue has arisen, and any further appeal lies only with permission from the Court of Appeal, this being a second appeal.

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