Insights | September 4, 2019

Re-filing of existing trademarks may constitute an act of bad faith

The Second Board of Appeal of the EUIPO has declared an EU trademark for MONOPOLY partially invalid on the grounds that the same mark had already been registered for the same goods and services. This re-registration was seen as an act of bad faith.

In an important decision from the Second Board of Appeal of the EUIPO, R 1849/2017-2 issued on 22^nd July 2019, the Board declared an EU trademark (EUTM) for MONOPOLY partially invalid on the grounds that the same mark had already been registered for the same goods and services. The new registration was regarded as an attempt to circumvent the use requirement and it was considered an act of bad faith in accordance with Article 59(1) (b) of the EU Trade Mark Regulation 2017/1001.

Background

Hasbro, Inc., the proprietor of the EUTM “MONOPOLY”, had registered the mark in 1998 for goods in classes 9 (e.g. computer games and software), 25 (e.g. clothing, footwear and headgear) and 28 (e.g. toys, games and playthings) according to the Nice classification. Throughout the years, it broadened the scope of protection with new applications covering services in class 41 (entertainment) and goods in class 16 (e.g. printed matter and stationery).

In 2011, Hasbro registered the MONOPOLY mark again in the same classes, but for a wider list of goods and services, some of which were identical and some closely related to the goods and services of the earlier marks.

The Contested Decision

In August 2015, Kreativni Dogadaji d.o.o. (the Intervener) filed an application for a declaration of invalidity against the above trademark and argued that the contested sign was a repeat filing of the trademark proprietor’s earlier registrations. If an EUTM has not been put to genuine use in the EU in connection with the goods/services in respect of which it is registered within a period of five years following registration, the EUTM shall be subject to sanctions such as cancellation on the basis of non-use. According to the Intervener, Hasbro had a dishonest intention when it filed the contested sign, because it sought to extend this five-year grace period indefinitely in order to avoid the obligation of genuine use.

The Cancellation Division rejected the Interveners request for a declaration of invalidity and found that it is not per se an indication of the existence of bad faith that the mark is protected over a period of fourteen years. Further, it stated that the claim that Hasbro would be trying to evade the use requirement and its sanctions was unfounded because the Intervener could not provide sufficient evidence of the existence of bad faith.

An appeal was filed against the decision and it was requested that the decision would be entirely set aside. Oral hearings were held and two additional witnesses were heard in order to better understand the particular circumstances underlying the filing strategy of the EUTM proprietor.

The Decision of the Board

Hasbro claimed that it had good commercial reasons for repeat filings, as the lists of goods and services were broader than those of the earlier marks. Furthermore, Hasbro claimed repeat filings were a normal industry practice, and its filing strategy was motivated by reduced administrative burden. It admitted that not having to prove use in opposition proceedings was a benefit, but it was not the sole motivator of these filings. The Board considered that it is as such common practice, and in accordance with accepted principles of ethical behavior and honest commercial and business practices, of companies to apply trade mark protection for a large variety of goods and services. However, the new registration contained many goods and services that were already covered by the existing scope of the earlier marks, and the Board considered that it is not acceptable for the proprietor to circumvent the use requirement by disguising a re-filing through merely adding additional goods to the existing scope.

In order to determine whether the application had been filed in bad faith, the Board viewed that the applicant’s intention at the time of filing was to be considered by reference to the objective circumstances of the case. The burden of proof relies on the proprietor to show plausible explanations on the objectives and commercial logic pursued by the application for registration of that mark.

The Board did not find Hasbro’s argument on reduced administrative burden very convincing since none of the prior registrations had been surrendered, and they had, in fact, quite recently been renewed. As regards Hasbro’s argument that the filing was not solely motivated by the advantage of not having to prove the genuine use of the mark, this was not in itself sufficient to make the strategy acceptable. Furthermore, the fact that the proprietor defended itself by referring to an industry practice implied to the Board that the strategy was intentional.

Considering all of the above, the Board came to the conclusion that the contested EUTM, in so far as it included goods and services already covered by earlier registrations, was made in bad faith and was to be declared invalid.

Final remarks

It should be noted that the decision did not only apply to goods and services identical to the goods and services covered by Hasbro’s earlier marks, but to all goods and services regarded as falling within the scope of protection of existing registrations. This decision may require special consideration especially from trademark holders who operate in evolving business fields and need to update the scopes of protection of their marks on a continuous basis.