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“All may be lost through wanting too much1 ” or when applicants are reminded that bad faith has its limits, even/especially in trade mark law

Since time immemorial, there have always been some who have been tempted interpret basic principles a little freely to circumvent, or even abuse, trade mark law, but the courts are the keepers of both the spirit and the letter of the law and differentiate between naivety, bad faith and distortion of competition.

 1. The General Court of the EU2 recently sanctioned strongly against the abusive practice of filing repeated identical trade mark applications.

On 30 April 2010, the company Hasbro filed a European Union trade mark “MONOPOLY” in classes 9, 16, 28 and 41. This trade mark was registered in March 2011.

Some of the goods and services covered by this filing were already concerned by prior community trade mark registrations for “MONOPOLY” dating from 1998, 2009 and 2010.

In 2011, Hasbro filed a notice of opposition against an international trade mark designating the EU filed by the company KREATIVNI DOGADAJI d.o.o. and based its action on its trade mark from 2011, which was thus not yet subject to the requirement of use.

In 2015, that company riposted and initiated proceedings for revocation of the aforementioned trade mark, on the basis of Article 52, paragraph 1 b) of regulation 207/2009, whereby a trade mark shall be declared invalid when the applicant was acting in bad faith on filing the trade mark application.

The Croatian company argued that the sole objective of the “MONOPOLY” trade mark of 2011 was to circumvent the obligation of proving genuine use of Hasbro’s earlier trade marks.

In 2017, the cancellation division rejected this application for invalidity.

During the proceedings, Hasbro admitted that one of the advantages justifying the filing of the disputed trade mark, was to be able to assert it in legal proceedings, without having to prove genuine use and it added that this aspect was known to all trade mark owners.

In relation to this, the Board of Appeal held that Hasbro’s behavior extended “the grace period of five years unduly and fraudulently” and “manifestly intended to circumvent the obligation to prove use of earlier marks” and so must be “considered as an intention to distort and imbalance the European Union trade mark system”. It thus partially revoked the disputed trade mark for all the goods and services identical to those already covered by Hasbro’s earlier trade marks.

This analysis was upheld by the EU General Court in its decision of 21 April 2021.

The EU General Court noted that there is was justification for protecting EU trade marks only “where the trade marks are actually used” (Point 50).

It added that “although repeat filings of a mark are not prohibited”, these may be revoked in case of bad faith by their proprietor (Point 57).

According to the Court, the evidence in the case showed that Hasbro “intentionally sought to circumvent a fundamental rule of EU trade mark law, namely that relating to proof of use, in order to derive an advantage therefrom to the detriment of the balance of the EU trade mark system established by the EU legislature” (Point 69).

The General Court even went so far as to add that “the filing strategy practised by the applicant, which seeks to circumvent the rule relating to proof of use […] calls to mind a case of an abuse of law” (Point 72).

1 “The Heron” by J. de La Fontaine

2 General Court Judgement 21 April 2021, T-663/19, EU:T:2020:1044, Hasbro, Inc. / EUIPO – Kreativni Događaji

It thus upheld the reasoning of the Board of Appeal which ruled that Hasbro acted in bad faith and that the disputed trade mark should be revoked, for all the goods and services identical to those already covered by its earlier trade marks.

Hasbro’s testimony, which was clumsy to say the least, would appear to have had a negative impact and special attention should be given to the evidence filed and to its presentation, since it may ultimately be detrimental to the party adducing it.

The practice of systematically repeated and/or identical filings to abusively extend the period of non-vulnerability for lack of trade mark use, has seduced numerous applicants. However, the General Court noted that “the simple fact that other companies may be using a specific filing strategy does not necessarily make that strategy legal and acceptable” (Point 94).

Although the assessment by the General Court may appear severe to some, as Hasbro had “merely” made three EU filings of word trade marks (with an updated specification) over 14 years, and not automatically at the end of each period of five years, it is an appropriate reminder of the principle of trade mark law, the object of which is not to alter free competition, and above all calls for the greatest prudence of trade mark proprietors who might envision repeat trade mark filings, but however bearing in mind that the position may vary according to country and situation. This decision is also a warning that it is crucial for proprietors to have a strategy of preserving evidence of use of their trade marks, so this can be produced when the time comes.

 2. The issue of bad faith has been regularly fueled, especially of late, by decisions of the Cancellation Division3 of the EUIPO ruling on four new trade mark filings, representing works of BANKSY, held by the company apparently handling management of the artist’s rights.

The EUIPO indeed held in particular that these trade marks were not filed to be exploited as such, but with the objective of appropriating rights on signs for which BANKSY could not claim copyright without lifting anonymity, and that this was therefore a misuse of trade mark law, not conforming to honest use in business or industrial practice: “The purpose of a trade mark is to allow consumers to identify the commercial origin of the goods or services at issue and distinguish these goods or services from those of other companies. The purpose of a trade mark is not to prohibit others from registering or using signs which the applicant for invalidity is not using to identify goods and services in order to carve out a portion of the commercial market”.

These recent decisions are there to serve as a reminder that:

  • the essential function of a trade mark is the identification of the origin of the goods and/or services of the proprietor on the market in order to distinguish them from others.
  • and although a trade mark may be renewed indefinitely, the object of a trade mark is nevertheless not to clutter the register for all eternity, nor to indefinitely paralyze potential competitors, but simply for use as a distinctive sign.
  • and that one is not at leisure to distort its definition, nature and purpose thereof.

Our firm is fully at your disposal to advise you on these different matters, taking into account the specificities of each situation and in strict compliance with the law.

3 Cancellation No. c 39 921 (invalidity), Cancellation No. c 40 000 (invalidity) of 19/06/2021 and Cancellation No. c 40 001 (invalidity), Cancellation No. c 39 872 (invalidity) of 18/06/2021

Isabeau Harretche is an Intellectual property attorney with nearly 7 years experience working in IP firms. She joined Santarelli in 2020. She advises and assists clients of varied profiles in the management of their portfolios and in the defense of their IP rights both in France and abroad.