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Do not pass GO, do not collect a registered trade mark

July 01, 2021 - case_law_comment
Do not pass GO, do not collect a registered trade mark

Do not pass GO, do not collect a registered trade mark

When will the refiling of a trade mark be unacceptable due to bad faith? The General Court provides the answer.


21/04/2021, T‑663/19, MONOPOLY, EU:T:2021:211

Stefan Martin, Member of the Second Board of Appeal; Jonathan Boyd, EUIPO Trainee
This article reflects the views and opinions of the authors, and not the position of the EUIPO.

Background

On 30 April 2010, Hasbro Inc. (the applicant), makers of the popular board game Monopoly, applied to register the word mark ‘MONOPOLY’ (the contested mark) for extensive goods in Classes 9, 16, 28 and 41. This registration was accepted on 25 March 2011. The applicant also owned three earlier trade marks for the word ‘MONOPOLY’ registered between November 1998 and August 2010. Collectively, these earlier marks covered goods in Classes 9, 16, 25, 28 and 41. On 25 August 2015, Kreativni Događaji d.o.o. (the intervener) applied for a declaration of invalidity of the contested mark, on the basis that it had been applied for in bad faith. The intervener argued that the contested mark was a mere refiling of the earlier marks, designed to circumvent the need to prove genuine use of these earlier marks.

On 22 June 2017, the Cancellation Division rejected the invalidity application. It found that refiling in order to protect the same mark over 14 years was not, per se, indicative of an intention to avoid the need to prove genuine use, and that the intervener had not provided any evidence of the applicant’s bad faith when it applied for the contested mark. The intervener appealed this decision and oral proceedings took place before the Second Board of Appeal. On 22 July 2019, the Board partially annulled the Cancellation Division’s decision, declared the contested mark invalid for some of the goods and services covered, dismissed the appeal as to the remainder, and ordered the parties to bear their own costs for the invalidity and appeal proceedings. The Board found that, based on the evidence presented to it, the applicant had acted in bad faith when it filed for the registration of the contested mark (22/07/2019, R 1849/2017‑2, MONOPOLY, § 86).

The applicant filed an action before the General Court, relying on two pleas in law: (i) infringement of Article 52(1)(b) CTMR (now Article 59(1)(b) EUTMR), and (ii) infringement of the right to a fair hearing. This article focuses on the first of these pleas.

The judgment

The Court dismissed the applicant’s action, finding that the Board had applied Article 52(1)(b) CTMR correctly to the facts of the case. Article 52(1)(b) CTMR says:

  1. A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings:
    […]
    1. where the applicant was acting in bad faith when he filed the application for the trade mark.

Since the Regulation does not go into any further detail on what constitutes ‘bad faith’, it must be interpreted in accordance with its meaning in everyday language, as well as the fundamental purpose of the legislation and the previous case-law of the EU courts (§ 30-34). The Court noted that the essence of bad faith is:

the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin.

(12/09/2019, C‑104/18 P,STYLO & KOTON (fig.), EU:C:2019:724, § 46) (§ 33)

Good faith in filing is therefore presumed, and bad faith, being a subjective intention held at the time of filing, must be proven by objective evidence. In assessing evidence, the factors listed in leading case on filing in bad faith, Lindt, are influential. These include:

(i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought;
(ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought.

(11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 53)

The emphasis, however, in that case and subsequent cases on Article 59(1)(b) EUTMR was that the list of factors was non-exhaustive and must be adapted by reference to the meaning of bad faith and the purpose of trade mark protection (§ 36). These factors must be read broadly and supplemented where the case is one of seeking a general advantage rather than targeting a specific competitor, and Sky confirms that bad faith absolutely applies to such a case (see 29/01/2020, C‑371/18, SKY, EU:C:2020:45, § 77-78).

The Court concluded on this point as follows:

The Board of Appeal’s reasoning, as summarised in paragraphs 59 to 64 above, unambiguously shows that it is not the fact that an EU trade mark is re-filed that was found to be indicative of bad faith on the part of the applicant, but the fact that the information in the case file showed that the applicant had 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 (§ 69).

The Court went on to reject the applicant’s justifications for its refiling of the mark, which included that no harm was caused by this activity, that it was common and accepted in the industry and that it had the advantage of administrative efficiency.

Practical significance

This judgment applies the law on bad faith filing, usually confined to cases where an applicant seeks to gain advantage over a particular competitor by pre-empting their use of a particular mark, to cases where a more general IP-strategy advantage is sought. It underlines the fact that circumvention of a rule of EU law is the keystone of bad faith intention, and that the case for finding bad faith will be stronger where there is clear advantage gained by the applicant or detriment to a third party caused by circumventing the rule. Given bad faith’s nature as a subjective intention, however, this advantage or detriment does not need to actually be realised. What matters is that such an intention was present at the time of filing (§ 79-84). This is why refiling a mark is not inherently an action of bad faith, this depends entirely on the applicant’s intention when refiling (§ 82).

Finally, the Court rejected all the applicant’s justifications for refiling, including those on procedural efficiency (§ 108) and the commonly accepted nature of the refiling practice (§ 92). This suggests that once the presumption of good faith has been rebutted by evidence, strong, well-substantiated reasons would be required to avoid a finding of bad faith.


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