Following the recent and noteworthy case of Sky v Skykick, the European General Court has issued a further decision regarding what constitutes “bad faith”, in its 21 April decision relating to the MONOPOLY brand.

In this case, Hasbro, the current publisher of the popular board game MONOPOLY had its European trade mark rights in the word MONOPOLY partially invalidated by Croatian board game seller Kreativni Događaji d.o.o.

Background

In March 2011, Hasbro registered the word MONOPOLY for various goods and services including electronic games, toys, games, playthings, printed matter and entertainment services in classes 9, 16, 28 and 41. Before filing this application Hasbro registered other trade marks covering the word MONOPOLY in 1998, 2009 and 2010.

The 1998 mark covered a number of goods including electronic games, toys, games and playthings in classes 9, 25 and 28; the 2009 mark covered entertainment services in class 41; and the 2010 mark covered a broad range of goods including printed matter in class 16.

Kreativni Događaji sought to cancel Hasbro’s 2011 registration on the basis that the registration was filed to avoid the requirement of having to demonstrate genuine use of the MONOPOLY mark. After five years on the register in the EU, registrations can be cancelled if the mark concerned has not been put to genuine use, and it is usually necessary to provide evidence of genuine use, if relying on a registration which is over five years old, in infringement and opposition proceedings.

Collating evidence of genuine use is time-consuming and adds to costs for brand-owners. As a consequence, some businesses employ a strategy known as “evergreening” which involves repeatedly refiling trade marks for the same or similar lists of goods and services, so that in any dispute scenario, they can rely on a registration which is less than five years old.

Decision

In the first instance, the EUIPO’s Cancellation division rejected Kreativni Događaji’s arguments of bad faith. It was only on appeal that the EUIPO’s Board of Appeal found that Hasbro had acted in bad faith by filing a new application for goods and services which were largely identical to those already covered in their earlier registrations, and the registration was partially cancelled.

The case was then appealed to the General Court where the findings of the Board of Appeal were upheld. The General Court found that there was sufficient evidence to demonstrate bad faith even though repeat trade mark filings will not automatically lead to a finding of bad faith. The Court took into account all the factors at the point of filing of the application, including the applicant’s intention and commercial logic, the chronology of events leading up to the filing and whether the applicant’s conduct departs from accepted principles of ethical behaviour or honest commercial practices.

In this case, the Court was clearly swayed by Hasbro’s own admission that the rationale for the 2011 MONOPOLY filing was partially to avoid the need to provide proof of use. Hasbro provided submissions in support of the repeat refiling strategy arguing that it was a common and accepted commercial practice. The General Court firmly rejected these arguments, stating that no evidence whatsoever had been provided in support of this claim.

Summary

This decision has strong implications on trade mark holders as it has opened the floodgates for bad faith challenges against refiled trade mark applications. In addition, trade mark rights holders may have to rely on older marks when enforcing their rights and therefore may have increased costs of having to prove use, or risk the prospect of a counter challenge based on bad faith.

Nonetheless, this case will not spell an end to refiling practices altogether, since the Court clearly stated that a refiled trade mark will not automatically be presumed to be filed in bad faith. However, rights holders may have to be careful and selective in the marks they choose to rely on when enforcing their rights and should be conscious of appearances when adopting a new filing strategy.

It is important to note that this case represents one of the first major European cases which will not bind the UK Courts, and so there is the possibility that UK law may diverge from the EU on this point.

If you require advice in the light of this important development either, in respect of new or ongoing filing programs, or enforcing your trade marks, please get in touch and speak to one of our attorneys.