In landmark “MONOPOLY” case, EU vetoes re-filings of trademarks to prevent circumvention of the proof of use requirement.

SUMMARY

Hasbro, the American toys and board games conglomerate, famous for its board game MONOPOLY, has recently lost a landmark EU case. A decision by the European Union Intellectual Property Office (EUIPO) was upheld, leaving Hasbro’s EU trademark for “MONOPOLY” partially invalidated on the grounds of bad faith. The ruling is a major development concerning bad faith within trademark law.

THE EU LAW IN QUESTION

Within trademark law, an owner of a trademark must be able to prove that he or she has actually used the trademark within a certain period of years. If this cannot be proved, the owner may risk having the trademark invalidated. If the owner has re-registered a trademark in bad faith, the registration may get invalidated.

THE CASE

In 2011, Hasbro registered an EU trademark for the word “MONOPOLY”. Years before, Hasbro registered three other EU trademarks for the same word in the same classes for goods and services.

In 2015, a Croatian board game company, which owns a board game called “DRINKOPOLY”, filed a cancelation case against Hasbro’s 2011 registration of “MONOPOLY”. This on the basis that the mark “MONOPOLY” was invalid because Hasbro had acted in bad faith when filing the 2011 application. The Croatian company claimed that Hasbro’s application was a so-called “re-filing” of earlier registrations from 2009 and 2010 and that the main purpose of this re-filing was to circumvent the requirement of proof of use. The re-filing was therefore made in bad faith, the company claimed.

At first, EUIPO rejected the cancellation request from the Croatian company. However, after the company appealed the decision, the Board of Appeal decided that Hasbro had indeed acted in bad faith. The Board of Appeal therefore partially cancelled the 2011 registration. Hasbro appealed to the EU General Court.

THE FINAL OPINION OF THE GENERAL COURT

The Court firstly reminded on a general note that the aim of trademark law is to facilitate a system of free competition. Secondly, that in order to determine bad faith, account must  be taken of: i) whether a trademark registration is abusive or contrary to honest commercial practices, ii) the commercial logic underlying the filing of the application and iii) the chronology of events leading up to the filing.

The Court confirmed that repeat filings of the same trademark is not in itself prohibited, but if a trademark is re-filed to avoid having to prove use of an earlier trademark, it will constitute bad faith. This because it abuses the trademark system.

Hasbro claimed that the re-filing of the “MONOPOLY” trademark was made to make its portfolio management easier in terms of administration. A re-filing practice also commonly known as ”evergreening”. In addition, Hasbro claimed that the strategy was commonly practiced by many brand owners. (Hasbro basically excused itself by saying that everyone else was doing it as well).

The Court found that Hasbro had acted in bad faith. Hasbro’s filing strategy had deliberately taken advantage of the rules by creating a situation in which it would not have to prove genuine use of its trademarks. In addition, the Court rejected the argument that evergreening is widespread, the argument not being substantiated by any evidence.

HOW WILL THIS AFFECT YOU AND WHAT SHOULD YOU DO?

The decision has opened the door for attacks on re-filings of the same trademark on grounds of bad faith. You as a brand owner will therefore most likely have to rely on older trademarks more often and prove use of these older trademarks. This will increase costs. In addition, you as a brand owner will have to be more alert and strategic when deciding which prior rights to cite against third parties in order to avoid counterclaims based on bad faith. This goes both for EU trademark cases as well as for post Brexit UK cases, the UK courts presumably being inclined to follow a similar approach. A clear trademark strategy and portfolio management are therefore recommended.

Feel free to reach out to us should you have any questions or wish a discussion concerning your trademark strategy and brand protection.

FURTHER INFORMATION

Case T-663/19 (21 April 2021 Hasbro, Inc. v European Union Intellectual Property Office)

This news article does not intend to cover all trademark related issues to the case, bad faith, EU or UK law.  The above is only a brief summary of some issues covered and not to be regarded as actual legal advice.  Concrete and detailed legal advice should be obtained if you have any questions on the impact the case will have on your trademark situation and strategy.