Hasbro, the publisher of popular board game MONOPOLY, has had one of its re-registered EU trademarks partially invalidated for bad faith on the grounds that it constitutes “evergreening”.
The rather nebulous concept of ‘bad faith’ is not defined in applicable EU trademark law and is therefore a hot topic following a recent series of cases which have sought to develop the doctrine. It aims to prevent abuse of the trademark system.
This case concerned the practice of “evergreening”, which consists of re-filing a trademark in order to continue to benefit from successive grace periods of 5 years during which the registration is not subject to challenge on the grounds of non-use. .
Kreativni Dogadaji, a Croatian board game company, has filed a European designation for a DRINKOPOLY logo for various Class 28 games.
Hasbro opposed this application based on its rights to MONOPOLY, including an EU registration that was filed in 2010 and registered in 2011. As of the relevant date, this registration (which is one of many held by Hasbro for MONOPOLY in the EU, some dating back to 1996) was within the 5-year “grace period”, which meant that Kreativni Dogadaji could therefore not (i) ask for proof of authenticity in the context of the opposition and/or (ii) file a retaliation action based on non-use.
However, Kreativni Dogadaji filed an invalidity action in retaliation against the 2011 recording on the grounds that it was filed in “bad faith”. It argued that in applying for this trademark, Hasbro’s objective had been to improperly and artificially extend the grace period applicable to its trademark MONOPOLY, in order to avoid having to justify the use of its recordings more elders in action against conflicting trademark applications with the ‘-opoly’ suffix. In defence, Hasbro argued that it had filed the 2011 application to cover an expanded range of products to reflect the evolution of its business and, even if use had to be proven with respect to goods and services also covered by his earlier MONOPOLY recordings, he has no problem doing so.
EUIPO initially sided with Hasbro, with the Cancellation Division finding that the evidence produced by Kreativni Dogadaji, primarily registry excerpts showing the filing pattern and unilateral statements made by Hasbro, were not insufficient to discharge its burden of proving bad faith and, therefore, dismissed the invalidity challenge.
Kreativni Dogadaji appealed and, exceptionally, the Appeals Chamber held an oral hearing to better understand the circumstances and business logic behind Hasbro’s filing strategy.
The Board of Appeal held that the objective circumstances of a case, based on the evidence and arguments put forward by the party contesting the registration, may lead to the rebuttal of the holder’s presumption of good faith. If so, then it is up to the trademark owner to provide a plausible explanation of its objectives and the business logic behind the reasons for applying for that trademark.
In this case, Hasbro’s evidence cites several factors driving its filing strategy, including, but not limited to, seeking protection for new product offerings (such as board games physical to software games), licensing opportunities, filling gaps in its portfolio resulting from audits, and updating its specifications in light of changing practices. However, he accepted that his decision to also include the same goods and services as older registrations in the subsequent filing process to resolve these issues – which he said was common industry practice – was taken in the knowledge that this gave rise to the additional benefit of reducing the administrative burden, such as being able to rely on a single registration in licensing and disputes and, above all, not having to prove use in disputes between parts.
The Appeals Chamber compared the refiled MONOPOLY registration to Hasbro’s old portfolio of registrations and found that the marks were identical and covered certain “new” goods and services, as well as certain goods and services already protected by trademarks. previous recordings. She concluded that the 2011 MONOPOLY filing was legitimate insofar as the registration covered new goods and services because it followed clear and acceptable business logic to reflect new products or services of interest to Hasbro.
However, she was clearly concerned about persistence via the “back door” and the risk of trademark holders disguising a refiled application in an effort to circumvent the use requirement after a grace period of 5 years by the simple addition of goods or services to those already covered by a previous registration. The Board of Appeal found that, to the extent that the refiled registration includes goods and services covered by existing MONOLPOLY registrations, it was requested in bad faith because Hasbro’s intention at the time of filing was, at least partially, to circumvent the “use” provisions that applied to its existing portfolio of MONOPOLY trademarks dating back more than 5 years. The argument that the inclusion of the same goods and services was intended to reduce the administrative burden was rejected on the grounds that none of the oldest registrations had been abandoned or had lapsed by non-renewal and, in fact, had already been invoked in the proceedings. She also wasn’t convinced by the statement that Hasbro’s approach to its new filing was standard industry practice, noting that this couldn’t make the practice legal or acceptable, particularly if it didn’t. hadn’t been tested and approved by the courts. Accordingly, the Board of Appeal granted the request for a declaration of invalidity with respect to the aspects of the 2011 recording which were found to have been requested in “bad faith”.
Hasbro appealed the decision to the Court.
The Court described Hasbro’s evidence on the intent behind the repeated filing as “in particular, by his own admission, that of not having to prove the use of the contested mark, thus extending, with regard to the earlier marks, the grace period of five years“. Based on this evidence, she concluded by concluding that Hasbro’s filing strategy, which sought at least in part to circumvent the proof of use rule, was inconsistent with the goals of the trademark system. , but also “raises a case of abuse of rights“. Accordingly, the Court upheld the decision of the Board of Appeal that the registration had been sought in bad faith (and therefore invalid) for the goods and services covered by Hasbro’s prior MONOPOLY registrations.
A number of key points emerge from the Tribunal’s decision that are of interest to trademark owners.
- The Tribunal seems to be trying to send a clear message that any repeated filing for identical marks for identical goods/services will, prima facie, constitute bad faith. However, the risk is arguably limited by the partial nature of the invalidity decision, which only applied to duplicate goods and services and therefore did not invalidate the entire contested mark (which is consistent with the approach of the CJEU in the case SKYKICK Case)
- If the initial burden of proof has not shifted in itself (i.e. the EUTM proprietor is presumed to act in good faith and it is up to the cancellation applicant to prove his bad faith), it seems that it will be relatively easy to rebut the presumption of validity in cases of “permanent renewal” on the basis of evidence of only the trademark owner’s filing model.
- The treatment of Hasbro’s evidence by the General Court and the Board of Appeal was very black and white, and the admission that a perceived advantage (although not the only motivation) of its approach Refiling’s strategy was to avoid the need to prove use in proceedings proved essentially fatal. The fact that Hasbro also pointed out various other goals, such as avoiding the “fracking” of wallets, was of no help.
- Care should therefore be taken when including the same goods and services in repeated filings, particularly if older registrations are not intentionally abandoned. To the extent that these goods and services are included, it would be wise to document the rationale for this decision, despite the Tribunal’s directions in this case.
- This decision reassures those who receive a complaint from the owner who has obviously not used his mark for an extended period. However, this may well result in a greater burden for trademark owners seeking to enforce their rights, since older trademarks may be subject to the requirement to prove use when deployed and Newer marks for the same goods/services may be vulnerable to attack based on bad faith.
(T-663/19 Hasbro, Inc./EUIPO EU:T:2021:211 (April 21, 2021) — to read the judgment in its entirety, click on here).
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.