Water works for Hasbro as EU court limits Monopoly monopoly

The EU’s second highest court has cut down the scope of Hasbro’s European Union MONOPOLY trade mark on the basis that it was re-filed in bad faith[i]. Trade mark owners should review their filing strategies to avoid the risk of invalidity due to re-filing.

What did Hasbro do?

The court found that Hasbro had sought to avoid the consequences of the non-use provisions by re-filing some of its earlier trade marks. This refers to the “use it or lose it” principle that is fundamental to trade mark law and which provides that a trade mark will normally become vulnerable to cancellation if it is not put to genuine use within five years. This rule gives trade mark owners an initial grace period of five years within which they can pursue infringers and oppose later third party trade mark applications without needing to demonstrate use. After that, use must be proved. However, re-filing gives the trade mark owner a fresh, five-year grace period from the date of re-filing.

Why brand owners re-file

Even where there has been genuine use of the mark, re-filing can save costs and administrative effort in proving use. It is also often done in order to obtain a broader, more up-to-date, specification of goods and services consolidating several earlier registrations.

Bad faith

The court held that re-filing does not automatically constitute bad faith but that bad faith may arise where the intention is to avoid having to prove use. It rejected Hasbro’s argument that the object of the re-filings was to reduce administrative burdens. An argument that the practice was common industry practice was also rejected as irrelevant. These findings suggest that demonstrating that the intention was not to avoid the non-use provisions is likely to be an uphill struggle in future cases.

Impact for trade mark owners

Subject to any appeal to the European Court of Justice (CJEU) the consequence of the decision for Hasbro is, broadly, that its re-filed trade mark for MONOPOLY is invalid to the extent that it repeats the earlier trade mark specifications. These earlier trade marks should remain valid to fill the gap, subject to proof of use where they are more than five years old. More widely, trade mark owners should review their filing and litigation strategies as mentioned above to avoid the risk of litigating based on an invalid, re-filed mark.

How does the decision affect UK trade marks?

The UK courts are not obliged to follow this decision, although we can expect them to refer to it. It is not unlikely that the UK court would come to a similar conclusion based on previous case law in any event.

Brexit – a special case

However, special rules apply in relation to the Brexit transition. Hasbro’s UK mark was originally an EU trade mark (EUTM) covering the whole of the EU28. In common with all such marks, the UK part of this trade mark “split away” at the end of the transition period on 31 December 2020, and Hasbro was granted a UK “comparable” trade mark which now sits on the UK trade marks register (number UK00909071961). A UK national mark would not normally be subject to the decision of an EU court. However, as an exception to this, the EU-UK Withdrawal Agreement provided that if an EU trade mark was subject to ongoing cancellation proceedings on 31 December 2020 (as was the case here) the outcome should also be applied to the UK comparable mark, unless the grounds for cancellation would not apply in the UK. A note that such cancellation may apply in this case in fact appears on the UK register entry for the MONOPOLY mark. Subject to any appeal to the CJEU, it is likely, therefore, that the UK mark will also be partially invalid.