Locations
In a ruling handed down on 21 April 2021 (T-663/19 – Hasbro, Inc. v EUIPO), the EU General Court upheld an earlier decision issued by the EUIPO Board of Appeal on the controversial practice of "evergreening" where trade mark owners re-file identical trade marks for identical goods and services in order to secure an additional five year grace period for their new registrations.
Our blog post on the original EUIPO decision which resulted from legal action brought in 2011 by a Croatian board games company, Kreativni Događaji, to invalidate Hasbro's EU trade mark (EUTM) registration for MONOPOLY on the grounds of bad faith can be found here: Do not pass Go, do not collect £200, do not register trade marks in bad faith.
General Court's ruling
In the appeal, the General Court found that Hasbro acted in bad faith by re-filing for its MONOPOLY trade mark for goods and services in classes 9, 16, 28 and 41 in the EU with the intention of avoiding the requirement to prove genuine use of the mark – something which Hasbro openly acknowledged was a key motivation behind its re-filing strategy. Hasbro sought to persuade the court that this was common practice within the industry and that they had relied on advice from counsel in pursuing this strategy. Hasbro further argued that the EUIPO Board of Appeal had changed the law in its 2019 decision, that requiring it to prove use of the mark would result in Hasbro incurring significant costs, and that a finding against Hasbro in this case would lead to the EUIPO being swamped with cases invoking bad faith for trade mark owners engaged in the practice of evergreening.
The General Court rejected each of these submissions, finding that Hasbro's conduct was contrary to the objectives of EUTM Regulation No 207/2009. It is important to note the court did not go as far as finding that re-filing for EUTM protection does not automatically amount to evidence of the existence of bad faith and each case will require a detailed assessment of the specific facts in question. Competitors who bring actions on the basis of bad faith against trade mark owners who are re-filing for protection will still need to provide significant evidence to persuade the EUIPO that dispensing with the presumption of good faith – and thereby invalidating the mark on the grounds of bad faith – is justified.
However, the General Court's decision does mark a decisive step towards discouraging the controversial practice of evergreening. People have been aware of the practice for some time, and this adds further clear guidance that evergreening is going to be frowned upon. While the court was not persuaded by Hasbro's suggestion that this practice is commonplace within the industry, it made clear that even if this is true, re-filing strategies of this nature will not be tolerated and trade mark owners will need to demonstrate genuine use or provide good reasons as to why the mark has not been put genuine use. A failure to do so will leave the marks in question vulnerable to invalidity actions brought on the grounds of bad faith.
Comment
It is important for brand owners to familiarise themselves with the ruling in this case, alongside the recent CJEU judgment in Sky v SkyKick (C-371/18) which has a significant impact on the issues of genuine use and bad faith in EU trade mark law.
Whether you are considering re-filing strategies to retain protection over trade mark portfolios or acting for a party concerned about the actions of a suspected abuser of the EUTM filing system, it will be important to consider the issue of bad faith. Hasbro might have avoided some of the issues in this litigation by taking clear steps to evidence good faith, by diligently collating evidence that proves genuine use of trade mark registrations and carefully considering the scope of the specified goods and services in any new applications, which will be critical for brand owners who seek longevity in their trade mark protection within the EU.
As always, future developments should be monitored closely to keep abreast of this evolving area of law. For now, it seems clear that there will be no 'get out of jail free' cards for brand owners who attempt to evergreen their registered marks. In short, the risk of successful invalidity actions brought on the grounds of bad faith for evergreening could become a real deterrent following the General Court's decision.
With thanks to Charlie Carman, co-author of this blog.