Non-Use and Trade Marks
Once a trade mark registration is over 5 years old, it becomes possible to revoke it on the grounds of non-use if it has not been used for the goods or services for which it is registered. As trade marks can last in perpetuity if renewed, the ability to revoke them on non-use grounds prevents Registers of trade mark registers from becoming cluttered with unused rights which could be used as an unfair barrier to entry for new businesses trying to enter the market.
If the owner of a trade mark registration which is subject to a non-use action is able to show genuine use of the mark in relation to the goods and services for which it is registered during the 5 year period prior to filing of the non-use revocation action that action will fail. However, proving use of a trade mark can be a time consuming and costly affair, particularly if evidence of use is not readily available or if it is of great quantity.
“Evergreening” Trade Marks
“Evergreening” is the name given to the practice whereby owners of a registered trade mark file an identical Trade Mark Application before the mark becomes vulnerable to action for non-use, so that a new 5 year grace period begins during which the mark is not vulnerable to revocation on the grounds of non-use.
This practice has been used by some trade mark owners as a means of avoiding the requirement to show use, but as of the 21 April 2021 General Court decision in Hasbro, Inc. v European Union Intellectual Property Office (EUIPO) trade marks filed on such a basis risk being invalidated on the grounds of bad faith.
The Case
Hasbro Inc had a number of registered trade marks for the word MONOPOLY dating from 1998, 2009, 2010 and 2011. The 2011 trade mark covered a broader range of goods and services than the earlier rights, but it was identical in all other respects.
In 2015, the board game company Kreativni Događaji d.o.o applied to invalidate Hasbro Inc’s 2011 trade mark registration on the grounds that Hasbro Inc had applied for the trade mark to avoid having to show use of its other rights, and, hence, that the filing had been made in bad faith.
In the first instance the EUIPO Cancellation Division rejected the invalidity action. However, on appeal by Kreativni Događaji d.o.o the EUIPO Appeal Board reversed the decision of the Cancellation Division and concluded that Hasbro Inc’s trade mark had been filed in bad faith, and ruled that the trade mark was invalid insofar as it covered goods and services already protected by the earlier trade marks. Hasbro Inc subsequently appealed the decision to the General Court.
Before the General Court, Hasbro Inc relied on a number of arguments to try and refute the invalidity claim. These included:
- that the 2011 filing had been made to ease its administrative burden;
- that the re-filing of trade marks in order to avoid having to prove use was common industry practice and that it was therefore justified in doing the same.
Nevertheless, the General Court upheld the decision of the Appeal Board. In relation to Hasbro Inc’s specific arguments, the General Court concluded as follows:
- re-filing new trade marks while maintaining old rights would have added to Hasbro Inc’s administrative burden rather than reducing it;
- even if the practice of ‘evergreening’ were shown to be common industry practice (although the General Court did not accept that this was the case, due to insufficient evidence having been presented), this did not mean that filing on such a basis was not in bad faith.
Perhaps the most damning evidence against Hasbro Inc, in the Court’s view, was the fact that one of its witnesses admitted that a reason for the 2011 filing was to avoid having to show use.
The Takeaways
- Re-filing duplicates of existing trade marks to avoid having to show use is making a trade mark filing in bad faith. Such a trade mark is likely to be vulnerable to invalidity on these grounds in relation to all the goods and services that are already covered by identical earlier rights. This is likely to still be the case if trying to avoid showing use is only one of the reasons for the new filing.
- Re-filing a trade mark is not in and of itself a prohibited practice, as long as avoiding having to prove use is not one one of the reasons for making the filing.
- The General Court noted that the 2011 trade mark registration, together with the other earlier rights, had been used by Hasbro Inc to successfully oppose allegedly similar trade marks. The decsions in those oppositions had ultimately been taken on the basis of the 2011 right, as it had not been necessary to show use of this mark. Hasbro Inc’s use of its trade mark in such a manner contributed to the General Court’s conclusion that it had made the filing in bad faith.
- The fact that a witness for Hasbro Inc stated ”for commercial reasons it is only sensible for [a company] to oppose a later filed mark using a recent mark that is not subject to non-use in order to reduce the cost of providing evidence and attending hearings, that is, that it is more administratively efficient not to have to provide it” was held to be highly prejudicial to Hasbro Inc’s case.
- It remains to be seen how broadly the EU courts will be willing to interpret the principles in this case and whether the UK courts will take a similar stance going forward.
- Trade mark owners should ensure that evidence of use is readily available for all their trade marks which are over 5 years old or are nearing the end of the 5 year grace period for non-use.