EUIPO provides further guidance on "evergreening" and bad faith following MONOPOLY

Re-filings of identical trade marks are legitimate, but if the purpose is to avoid the consequences of the non-use of the earlier identical registrations, bad faith may be indicated

07 June 2022

In 2021, the General Court of the EU considered the practice of “evergreening” (Hasbro Inc.-v- EUIPO-Case T‑663/19-MONOPOLY). “Evergreening” means the refiling of trade marks that are identical to previously registered marks of the same owner to circumvent the obligation in opposition proceedings to prove genuine use of those earlier marks after five years on the register. The MONOPOLY mark’s validity was attacked for bad faith, claiming that it was a repeat filing of three earlier registrations and their goods. The intention was allegedly to achieve a new mark that would be exempt from proof of genuine use requirements for a new five-year grace period.

Article 52(1) (b) of EU Regulation No 207/2009 provides for the invalidation of a registration if it was filed in bad faith. A trade mark application should be filed with the aim of engaging fairly in competition. Bad faith may be indicated where a mark is filed to undermine the interests of third parties or to gain the exclusive right a registration confers for purposes other than the mark indicating the origin of the goods or services.

The concept of bad faith relates to a subjective motivation on the part of a trade mark applicant, namely a dishonest intention or other sinister motive. It involves conduct that departs from accepted principles of ethical behaviour or honest commercial and business practices (judgment of 7 July 2016, LUCEO, T‑82/14, EU:T:2016:396, paragraph 28).

The requirement to use a mark after a five-year period in order to remain protected aims to prevent an inactive proprietor having a legal monopoly for an unlimited period. The register should reflect marks that companies actually use in the market to distinguish their goods and services.

Repeat filings of a mark are permitted, but where the intention is to avoid the consequences of non-use, bad faith may be established.

20/01/2022, R 223/2021-2, bâoli BEACH (fig.)

The Cancellation Division refused to cancel a registration under Article 59(1) (b) EUTMR. The claim was that the contested mark constituted a repeat application made in bad faith with the aim of artificially extending the grace period for non-use of the sign ‘BAOLI’. Allegedly, the proprietor had filed the application, not with any intention of using the mark, but to damage the interests of third parties in a manner inconsistent with honest business practices. The Cancellation Division rejected the request for a declaration of invalidity in its entirety, finding that bad faith on the part of the EUTM proprietor had not been demonstrated.

The registered owner held earlier EU registrations for marks containing the word ‘BÂOLI’ but the registration under attack protected services in class 35 that were different to those of the earlier marks. The Cancellation Division noted that the registration of several variants of the same mark was a normal practice. These enable the relevant public to link different marks to the same commercial origin, while leaving the proprietor the possibility to create variants in order to communicate different concepts. In the present case, the Cancellation Division found that the contested mark was a variant designating different services.

Re-filings for a trade mark are permitted. However, if made to avoid the consequences of the lack of use of earlier marks, that may constitute a relevant factor capable of establishing bad faith on the part of the applicant (13/12/2012, T-136/11, Pelikan, EU:T:2012:689, § 27; 21/04/2021, T-663/19, MONOPOLY, EU:T:2021:211, § 57).

However, a re-filing cannot per se establish bad faith on the part of the owner. It must be coupled with other relevant evidence provided by the applicant for a declaration of invalidity, or the EUIPO (21/04/2021, T 663/19, MONOPOLY, EU: T: 2021:211, § 70). The circumstances of the present case are different from those in the ‘MONOPOLY’ judgment, where the applicant had deliberately sought to circumvent a fundamental rule of EU trade mark law relating to use. In the present case, the filing of the contested mark had commercial logic. The cancellation applicant did not present any evidence that could lead to the reversal of the presumption of the EUTM proprietor’s good faith. The Board noted that the marks at issue (the ‘earlier marks’ of the EUTM proprietor and the contested mark) were clearly not identical. Although similar as they shared the word ‘BÂOLI’, they each had their own characteristics. Moreover, it was accepted that the contested mark was part of a family of ‘BÂOLI’ trade marks of the EUTM proprietor. The cancellation applicant had not submitted any evidence that could lead to the rebuttal of the presumption of good faith on the part of the EUTM proprietor.

02/09/2021, C 44 949 (Invalidity), STONE (word) / STONE (word)

This Cancellation Division decision also concerned an allegation by the cancellation applicant that the mark under attack was invalid on the ground of bad faith under Article 59(1) (b) EUTMR. Specifically, the applicant argued that the proprietor had filed the EUTM in bad faith as the proprietor had previously filed three EUTMs, all for the word mark ‘STONE’, with each filing occurring at around the end of the five-year grace period of the previous application. The applicant claimed that this EUTM was filed purely to monopolise the word ‘STONE’. It was argued that the sign was not in use and the proprietor was trying to avoid the use requirement for the previous registrations, thereby benefitting from an additional five-year use grace period. The applicant argued that the proprietor simply added goods to disguise a repeat application. However, these additional goods could not hide the fact that the mark was nearly identical to the earlier marks.

The holder argued that both of its other marks were already beyond the five-year grace period and so had already become subject to use requirements at the date of filing of the attacked mark. The Cancellation Division rejected the claim. It pointed out that it is not a requirement that the list of goods or services in an application coincide with the applicant’s field of business at the date of filing. The applicant need not have an intention to use the mark for all the goods and services in the application. As the burden of proof of bad faith contrary to Article 59 (1) (b) EUTMR rests on the applicant for cancellation, the Division found that this burden had not been discharged and refused the application.

For more information or if you have any questions, please contact Louise Carey or Chloe Perea Poole or your usual IP team contact.

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