By Sarah Simpson and Teagan Miller-McCormack
For EU and UK trademarks, there is a five-year grace period following the issuance of a registration, during which the trademark owner must use the mark in connection with the goods and/or services covered by the registration before it can be challenged (and potentially ultimately revoked) for non-use with such goods and/or services. Some trademark owners have tried to take advantage of this by re-filing their previously registered trademarks for exactly the same goods and/or services just before the five-year grace period ends as a means of extending this grace period. This is commonly referred to as "evergreening."
In Hasbro v EUIPO1, the General Court has upheld the EUIPO Board of Appeal's decision that repeat filing of trademarks can result in bad faith applications. While it is true that evergreening doesn't always mean bad faith, where it can be demonstrated that an applicant's intention for filing a trademark application is to dodge showing genuine use of a mark more than five years old, then bad faith may be established.
In legal terms, "bad faith" goes back in time and considers a trademark owner's intention at the time it applied for the trademark. If the intention was to weaken the interests of third parties or obtain a trademark registration for reasons that are unrelated to the trademark itself, then this might result in bad faith. In Hasbro, the question of whether the board game conglomerate acted in bad faith hinged on whether Hasbro's repeat filings of the MONOPOLY trademark, to avoid showing genuine use of the mark, amounted to bad faith.
Hasbro v EUIPO
When Hasbro filed its MONOPOLY trademark yet again, specifying goods and services near-identical to its earlier filing, the General Court said the application was made in bad faith, as Hasbro's intention was to prolong the five-year grace period allowed for establishing use.
Although the case was initially rejected by the Cancellation Division of the EUIPO, the EUIPO Board of Appeal partially invalidated Hasbro's EU Registration for the MONOPOLY mark. A key factor of the General Court's decision supporting the EUIPO Board of Appeal's verdict was Hasbro's admission that its motivation for re-filing was to avoid potential costs that would be incurred to show genuine use of the MONOPOLY trademark.
The Hasbro case is setting precedent in both the European and UK courts. Although the Hasbro case came along post-Brexit, it is still considered "good law" in the English courts.
In a recent dispute between the two supermarket chains Tesco and Lidl2, Tesco argued that Lidl's wordless version of its logo should be invalidated, as the mark had never been used and Lidl was periodically re-filing it to avoid having to prove genuine use. Tesco's counterclaim was struck out in the High Court as Tesco had not made a clear-cut case for bad faith. However, the Court of Appeal allowed Tesco's appeal and maintained that it was possible bad faith had occurred. This forced Lidl to explain its intentions when filing the mark, which is consistent with the Hasbro case. Tesco's bad faith allegation will now be assessed at the substantive trial later this year. This will be watched closely by brand-owners and practitioners hoping for further guidance on evergreening and specifically where re-filings amount to bad faith.
In Sky v SkyKick3, the Court of Appeal said that a trademark applicant can have both good and bad reasons for applying to register trademarks. However, trademark filings that are submitted underhandedly, particularly where dishonesty is the main objective of filing the application in the first place, should be invalidated.
Bad faith beware!
The Hasbro v EUIPO decision has resulted in brand owners and trademark lawyers taking greater care when re-filing trademarks. It is important to highlight though, that re-filing a trademark is allowed. It is only when it can be established that an applicant's intention at the point of re-filing the mark was to skirt use requirements, that bad faith can be found.
Brands looking to file new, or re-file existing, trademarks, should ensure they have a clear trademark strategy. Also consider retaining and recording: (1) evidence of genuine use of your marks; and (2) your reasons for re-filing any existing trademarks.
To read Kattison Avenue/Katten Kattwalk | Issue 2, please click here.