Monopoly: General Court narrows Hasbro’s trade mark protection and vetoes evergreening

Written on 27 Apr 2021

Ruling confirms that brand owners who, without good reason, have re-filed a trade mark that is already protected, are likely to find the later registration (or part of it) is invalid and unenforceable

On 21 April 2021, the General Court ruled on the practice of re-filing identical trade marks (known as evergreening) in the judgment of Hasbro, Inc. v European Union Intellectual Property Office (EUIPO), refusing Hasbro's appeal to overturn a decision partially invalidating its EU trade mark (EUTM) for "MONOPOLY" on the ground of bad faith (Case T-663/19). The ruling is another major development in the law of bad faith.

What was the case about?

In 2011, Hasbro registered a EUTM for the word "MONOPOLY" for goods and services in classes 9, 16, 28 and 41.

Prior to this, Hasbro had also registered three EUTMs for the same word mark, the first in 1998, the second in 2009, and the third in 2010; all of which were protected for goods and/or services in classes 9, 16, 25, 28 and 41.

In 2015, the Croatian board game company Kreativni Događaji d.o.o., owner of the board game "DRINKOPOLY", applied to cancel Hasbro's 2011 registration on the basis that the mark was invalid because Hasbro had acted in bad faith when it filed the application, as that application was a repeat filing of the earlier registrations, and the purpose of doing so was to circumvent the obligation to prove genuine use of them.

The EUIPO's Cancellation Division initially rejected the cancellation request, but Kreativni appealed the decision to the EUIPO's Board of Appeal (BOA). The BOA decided that Hasbro had acted in bad faith when it filed the 2011 registration in respect of those goods and services which are identical to the goods and services covered by the earlier registrations, and partially cancelled the 2011 registration in respect of those identical goods and services. So Hasbro appealed to the General Court.

The General Court's view

The General Court reiterated the that the concept of bad faith presupposes the presence of a dishonest state of mind or intention and that trade mark law is aimed at facilitating a system of undistorted competition. To determine bad faith, account must also be taken of all the relevant factors at the time of filing the EUTM application, including whether the trade mark registration is abusive or contrary to honest commercial practices, the commercial logic underlying the filing of the application and the chronology of events leading up to that filing.

The General Court confirmed that, although repeat filings of the same mark are not prohibited, if a trade mark is re-filed to avoid having to prove use of an earlier trade mark, it will constitute bad faith because it abuses the trade mark system.  In this case, by Hasbro's own admission, the "MONOPOLY" mark was re-filed for a number of reasons which might make its management of its portfolio easier in terms of administration.

Hasbro's arguments that the evergreening practice not only benefited them from a proof of use perspective, but it was also a strategy adopted by other brand owners, only served to re-enforce the General Court's view that Hasbro had acted in bad faith. Ultimately, the General Court decided that Hasbro's filing strategy deliberately took advantage of the rules, by artificially creating a situation in which it would not have to prove genuine use of its marks. Further, the General Court rejected the argument that evergreening is widespread, as it was not substantiated by any evidence.

Implications for brand owners?

Brand owners need to be alive to the consequences of this decision as it has opened the door for re-filings of the same mark to be attacked on the grounds of bad faith. The biggest implication will be increased costs as brand owners will now almost certainly have to rely on their older marks more often, which are subject to the expensive exercise of proving use.

That said, this case does not signal the end of re-filings completely, as the EUIPO examiners do not have the power to reject applications on the grounds of bad faith. However, from now on brand owners will have to be more selective when deciding which marks to assert against third parties, to avoid a counterclaim based on bad faith.

This is one of the first major trade mark cases post-Brexit, so UK courts are not bound by this decision.  However, it seems reasonable to assume UK courts will adopt the same approach because it is arguable that re-filings already fall within the bad faith test set out by the CJEU in the Skykick case.

As for Hasbro, this decision is likely to be end of the road given the CJEU now routinely rejects appeals in cases that have already been considered twice, in this case the BOA and General Court.