No 'Monopoly' rights for re-filed trademarks

Published 04 November 2019 by Mishcon de Reya

A recent EUIPO Board of Appeal decision could impact the validity of countless EU and EU national trademarks, following what we understand to be only its third oral hearing in 23 years, underlining the significance of this case.  The decision concerns the practice of "re-filing" (or "ever-greening") a trademark which is identical to an earlier registration and which covers identical goods/services. The Board has said that, where there is an intention to circumvent the obligation to prove used of the earlier marks, re-filing improperly and fraudulently extends the five-year grace period and amounts to bad faith.  Any such re-filed marks are liable to be revoked in relation to the goods and/or services covered by the earlier marks.

Given the potentially far-reaching consequences of this decision, it seems almost inevitable that the decision will be appealed. Pending any appeal, this decision will, of course, be relevant to trademark filing practice.  However, brand owners should also consider this decision when identifying which rights to rely upon in opposing third party applications, to avoid unwanted invalidity challenges against important marks. 

Background

The case concerns an invalidity challenge against Hasbro's famous MONOPOLY EU trademark (the "Registration").  A third party had filed to register DRINKOPOLY and Hasbro had opposed its application on the basis of its earlier rights, prompting the third party to retaliate with this cancellation action.  The Registration is identical to earlier MONOPOLY registrations owned by Hasbro and covers identical goods and services to those earlier marks (although it also covers additional goods and services).  The Cancellation Applicant argued that the Registration had therefore been filed with the dishonest intention of preventing third parties from using or registering similar marks, while avoiding the obligation to provide proof of use in opposition proceedings, and had therefore been filed in bad faith. 

The trademark applicant's intention is central to any finding of bad faith (Lindt). Hasbro gave evidence that it takes a number of commercial factors into account when filing a trademark application, such as new licensing opportunities, the desire to maintain a consistent and up-to-date trademark portfolio, and the need to address any gaps in protection due to new products or services.  However, Hasbro did also acknowledge that there is a benefit in having "young" trademarks where there is no requirement to prove used and that this is "a consideration" in its trademark filing strategy.  This acknowledgement, notwithstanding its submission, that this is common industry practice, seems to have been fatal to Hasbro's argument.  

Decision

The Board of Appeal held that the practice of re-filing can serve to improperly and fraudulently extend the 5-year grace period indefinitely to evade the proof of use requirement and the corresponding sanctions.  It acknowledged that there were other commercial objectives at play when Hasbro filed the Registration, as it covers goods and services not covered by the earlier marks. However, the Board held that a filing strategy was not made acceptable by the fact that it was not motivated only by the advantage of avoiding proof of use.  It was also not made acceptable because it was a common practice, particularly where the Courts had not tested its lawfulness. The Board held that the Registration, to the extent that it covered goods/services covered by the earlier marks, was filed in bad faith and it was invalidated for those goods and services.