Clarification on bad faith challenges to trade mark registrations before the EUIPO.

The MONOPOLY board game is well-known. Hasbro, Inc.  is the current owner of the EU registrations for the MONOPOLY trade mark for “games” and other goods and services.

A dispute arose in which Kreativini Dogadaji d.o.o. (a Croatian company) sought to invalidate Hasbro’s MONOPOLY trade mark registration (which Hasbro had filed in 2010) under Article 52(1)(b) of the EU Trade Mark Regulation on the grounds that this was a repeat filing of Hasbro’s existing earlier EU registrations for MONOPOLY (filed in 1998 and 2009) covering either identical or overlapping goods. The 2010 registration included the term “games” in class 28 as well as a wide range of other goods and services in classes 9, 16, 28 and 41. Several of the terms in the specification of the 2010 registration had been included in the 1998 and 2009 registrations.

Kreativini’s argument was that Hasbro’s repeat filing in 2010 had been made in bad faith since Hasbro’s intention was to, in essence, illegitimately avoid the proof of use requirements of the legislation.

By way of background, the proprietor of every EU trade mark registration is granted a grace period of five years from grant in which it is not obliged to provide proof of use of its mark. After the end of the grace period, the proprietor may be called upon to provide evidence of use of its mark particularly in circumstances where it seeks to assert its rights in, for example, an opposition to a later third-party trade mark. The refiling of a trade mark may, it is argued, be a tactic to “restart the clock” on the grace period since the latest registration obtained for the trade mark will not be subject to the proof of use requirements for a further five-year period.

Kreativini’s argument in this case was that Hasbro was illegitimately extending the non-use grace periods which applied to its 1998 and 2009 registrations by re-filing in 2010 (since its 2010 registration would not be subject to any third-party proof of use challenge for a new and later five-year period).

At first instance, the Cancellation Division rejected Kreativni’s application for invalidity on the basis that protecting a mark in three applications over 14 years or so was not per se, an indication of bad faith. Furthermore, it also held that Kreativini’s allegations were not supported by evidence that proved there was bad faith on Hasbro’s part when it filed its 2010 registration for the mark.

Kreativini appealed. At the Second Board of Appeal, Hasbro’s witness gave evidence that there were a number of reasons for its new filings: new product offerings, strategic initiatives, licensing relationships or opportunities, enforcement matters, administrative reasons, periodic audits or ‘filler filing programs’.

The Board nevertheless held that “the applicant had admitted that the advantage of that [re-filing] strategy was that it would not have to prove genuine use of the contested mark in opposition proceedings”.

On that basis, the Board overturned the Cancellation Division and held the MONOPOLY registration to have been filed in bad faith for the “repeat” goods and declared the registration partially invalid for those goods.

The General Court’s Decision

Hasbro appealed this decision to the General Court (reported here) running a number of arguments including that the “Board of Appeal improperly focused on one aspect, namely the administrative advantage of not having to prove genuine use of the re-filed mark, and ignored the many other good reasons that it [Hasbro] had put forward in order to justify its trade mark filing strategy.”

None of these arguments found favour with the court which held that:

“…it must be stated there is no provision in the legislation relating to EU trade marks which prohibits the re-filing of an application for registration of a trade mark and that, consequently, such a filing cannot, in itself, establish that there was bad faith on the part of the trade mark applicant, unless it is coupled with other relevant evidence which is put forward by the applicant for a declaration of invalidity or EUIPO. However, it must be stated that, in the present case, it is apparent from the Board of Appeal’s findings that the applicant admitted, and even submitted, that one of the advantages justifying the filing of the contested mark was based on the fact that it would not have to furnish proof of genuine use of that mark. Such conduct cannot be held to be lawful conduct, but must be held to be contrary to the objectives of Regulation No 207/2009, to the principles governing EU trade mark law and to the rule relating to proof of use…”

The Court accordingly dismissed the action and ordered Hasbro to pay the EUIPO’s and Kreativini’s costs.

The Case and its Significance

The colloquial term for the refiling of trade mark registrations to restart the clock on non-use grace periods is “evergreening” – since the registrations are kept continually “green” and fresh. It is arguably a fairly common practice in European trade mark law. (Hasbro submitted that that was the case in support of its position. The Board noted that even if it was common practice, that did not make it acceptable.)

But, as Hasbro also noted, the practice of re-filing has a number of other benefits outside of a wish to re-start the five-year grace period, namely where there are other developments within an applicant’s business that justify re-registration. Examples of these may be where a logo or other visual representation of a mark changes over time or where commercial plans change or develop.

Nevertheless, this case is a warning to applicants that they need to think carefully about refiling a repeat application for registration of a mark where that application covers, or even merely includes, goods or services which are the subject of protection in the applicant’s existing registrations.

If, after consideration, an applicant believes that it has a commercial justification for that re-filing, it may also wish to consider whether it would be prudent to surrender (or partially surrender) existing registrations so that there is no overlap in registered protection. This is a possibility explicitly referenced by the court.

The General Court’s decision may potentially be appealed further to the Court of Justice of the European Union but, if not, it will be interesting to see whether this leads to an increase in bad faith challenges to trade mark registrations before the EUIPO.

Author:

Georgina Daly

Legal Support
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