The EU trade mark regime is a first to file system and is therefore very different to some other jurisdictions such as the US in which the applicant must have an intention to use the trade mark before it can secure a valid registered trade mark. Charlene Nelson, Chartered Trade Mark Attorney and Paul Cox, Partner, provide further insight.
An EU trade mark proprietor has a five year grace period to use its mark from the date of registration. If it does not use the mark within this period for all the goods and services claimed, it is possible for a third party to revoke the mark in relation to the goods and services which have not been used under the mark. This causes difficulties for proprietors when enforcing their right in opposition or infringement proceedings.
To get around this rule, it is common practice for a trade mark proprietor to re-file its mark at the EU IPO and thus secure a further five year period in relation to the new mark. So, if an earlier trade mark is lost on the basis of non-use, it would still have the later mark to rely on. This has been an effective strategy for many brand owners over the years.
Recently, Hasbro, Inc., the owner of the well-loved board game Monopoly, has suffered a defeat before the EU Intellectual Property Office (EUIPO) Board of Appeal in relation to the MONOPOLY trade mark.
This case related to Hasbro's EU trade mark registration for MONOPOLY covering goods and services in classes 9, 16, 28 and 41. The application was published on 9 August 2010 and the mark was registered on 25 March 2011. Therefore, this trade mark was not vulnerable to cancellation for non-use but the earlier trade mark registrations were vulnerable.
A third party, Kreativini Dogadaji d.o.o., filed an invalidation application against the trade mark arguing that it had been filed in bad faith on the basis that this mark was a repeat filing of three identical trade mark registrations for MONOPOLY owned by Hasbro. The mark in question covered the same goods and services as the previous three registrations as well as some additional goods and services.
By way of background, an EU trade mark is vulnerable to cancellation for non-use if it has not been put to genuine use in the EU for the goods and services covered by the registration within a continuous period of five years from the date of registration. In addition, if a trade mark owner relies on such a trade mark in opposition proceedings it is required to provide proof of use of the mark in relation to the goods and services relied upon.
Therefore, a trade mark proprietor often files for a new application at the end of the five year period in order to preserve its trade mark rights and ensure protection continues beyond this five year period.
This case therefore addresses whether or not this practice of re-filing the same trade mark after five years amounts to bad faith.
After considering the matter, the Cancellation Division of the EUIPO rejected the request for invalidation in the first instance as it found that it was common practice for companies applying for an EU trade mark to cover a large variety of goods and services and that Kreativini had failed to prove its allegation that Hasbro had acted in bad faith. Kreativini filed an appeal against this decision.
The Board of Appeal then considered this matter. In doing so, it highlighted that why the 5 year grace period for using a trade mark is in place. It stated:
"An EU trade mark which is not used could obstruct competition by limiting the range of signs which can be registered as trade marks by others and by denying competitors the opportunity to use that trade mark or a similar one when putting onto the internal market goods or services which are identical or similar to those covered by the mark in question. Consequently, non-use of an EU trade mark also risks restricting the free movement of goods and services."
It stated that the concept of bad faith is not defined in EU trade mark law and so it is left for the EUIPO and the courts to decide what would constitute bad faith. The courts have previously dealt with the issue of re-filings in the case of Pelian (T-136/11) where it was found that re-filing can constitute bad faith where the purpose of the repeat application is to artificially extend the five year grace period for non-use of an earlier EU trade mark in order to avoid the loss of a right as a result of non-use.
At the hearing, a representative of Hasbro said that the re-filings were made by the company for a number of reasons including being able to rely upon a registration in oppositions without the need to prove use, not because such evidence would not be available but because it would be more administratively efficient not to have to provide it. The Board of Appeal stated that this declaration, together with the fact that all of the earlier trade mark registrations had been renewed and were also relied on in opposition proceedings, indicated that Hasbro's intention in adopting this strategy was to circumvent the obligation to prove genuine use of the earlier trade marks which may be considered an abuse of law.
It stated it was irrelevant if the applicant for the mark could prove use of the mark; as it was the intention of the applicant which needed to be evaluated.
Consequently, the Board of Appeal invalidated the registration for all the goods and services identical or similar to those covered by the earlier trade marks. It was allowed to remain on the register for the goods and services not covered by the earlier marks.
Interestingly, in its judgment, it accepted that applying for a trade mark with a large variety of goods and services is very common and does not amount to bad faith.
Charlene Nelson said "This case is interesting as it highlights the risk of re-filing the same trade mark for the same goods and services. It may not change the practice of doing so but brand owners need to be aware of the risks associated with this practice."