MONOPOLY decision on bad faith: a blow for repeated trade mark filing strategies

Background

In a ground-breaking decision following an oral hearing, the EUIPO’s Second Board of Appeal partially cancelled Hasbro’s EUTM no. 9071961 MONOPOLY (registered in 2011). The decision was based on bad faith and cancelled the mark for all goods and services that were considered identical to those covered by Hasbro’s earlier EUTMs for identical signs (registered in 1998, 2009 and 2010 respectively), including for those for which the earlier mark was in use (games). The challenged EUTM was only maintained for goods and services that were not covered by Hasbro’s earlier EUTMs. We reported on the EUIPO’s appeal decision here and on the issue of repeated filings here.

General Court decision - Case T-663/19

In an extended panel of five judges, the GC confirmed the EUIPO’s decision, dismissed Hasbro’s action on all grounds and confirmed that the MONOPOLY EUTM was filed in bad faith for the goods and services that were covered by Hasbro’s earlier EUTMs, including for those for which the contested mark was in use.

The GC confirmed that repeated filings as such are not prohibited and that trade mark re-filings do not automatically amount to a filing made in bad faith, only if such filings are made in order to avoid the consequences of lack of genuine use of earlier marks (see also T-136/11, Pelikan).

However, in the specific circumstances of the MONOPOLY case, it was considered that the applicant had intentionally sought to circumvent the rules of proof of use and to artificially extend the non-use grace period. In this context, much stress was put on the applicant’s admission that one of the reasons it filed the challenged EUTM (although there were apparently other reasons) was the reduction of administrative burden, namely that it was more administratively efficient to rely on marks not subject to use than to have to provide such proof in opposition proceedings. This admission and the fact that the applicant did not surrender any of its earlier marks were held against it, although it was claimed that the marks at issue did not follow a ‘traditional re-filing’ pattern and that it was an accepted industry practice to re-file marks with broader specifications.

Moreover, it was considered irrelevant whether or not the applicant could have actually proved use for some of the goods (in this case it is a known fact that MONOPOLY is used for games). Therefore, the mark was only considered legitimate to the extent it covered goods not covered by the earlier marks (as this part of the filing was justified by keeping up with developments in technology and business expansion), but it was not considered legitimate for any other goods, not even for those for which the mark was clearly in use. The GC added that the fact that other companies may be using similar filing strategies does not make this legal and acceptable.

Finally, the GC confirmed that the specifications of  re-filed marks do not need to use exactly the same terms, but that identity - in sense that a broader category covers more specific terms -  is sufficient to declare the mark invalid also for such goods (here games on the one hand and gaming machines, slot machines and playing cards on the other hand).

Comment

The MONOPOLY decision is a blow for brand owners of established brands that strategically use repeated filings to reduce administrative costs of enforcement actions, to the extent it confirmed  that the concept of a bad faith re-filing can also apply to goods for which the re-filed mark is actually in use. Thus, a second filing for an identical mark and identical goods which are in use may now be considered a bad faith filing and procedural economy alone is not a legitimate reason justifying such a filing.

This is in sharp contrast with the practice of the EUIPO in first instance proceedings, according to which for reasons of procedural economy the Office will normally first consider if the opposition can be fully upheld on the basis of the earlier right(s) not subject to use. Only if no such earlier right is available, the Office will assess proof of use (see EUIPO Trade mark guidelines). The standard practice of the EUIPO is thus to avoid assessing evidence of use whenever that is possible, as this is considered the most expedient way to treat oppositions. However, when Hasbro relied on administrative efficiency among other reasons for its repeated filing - in fact following the afore-mentioned practice of the Office - this was paradoxically considered bad faith.

Finally, it is interesting to compare the MONOPOLY decision with the SKYKICK decision (we reported on this decision here), which was more right holder friendly as it confirmed that broad specifications may only be objected to on grounds of bad faith in limited circumstances, while MONOPOLY confirmed that bad faith may also apply to re-filings in relation to goods for which there is actually use.

Next steps

We expect that the MONOPOLY decision will result in an increase in bad faith cancellation actions based on the repeated filings argument before the EUIPO, as well as in increased enforcement costs for opposition and infringement proceedings for many businesses that may need to rely on their older rights instead of their (re-filed) younger rights. The GC decision will likely also result in the EUIPO having to review much more opposition proceedings with proof of use evidence in the long run. Brand owners should thus reconsider their trade mark filing strategies and keep track of their motivation for any repeated trade mark filings.

Hasbro will still have the opportunity to file an appeal to the Court of Justice. However, given the new rules on admissibility of appeals (see Article 58a of the Statute of the Court of Justice which requires that the case raises an issue that is significant with respect to the unity, consistency or development of Union law) it will need to be seen whether such appeal will be accepted. For now, since the introduction of Article 58a not a single appeal has made it to the highest European court. This case may well be an exception and we will keep you posted.

Please feel free to contact us if you would like us to review your filing and opposition strategies or if you need support to defend any potential bad faith cancellation actions.

Authored by Sarka Petivlasova