Why Hasbro’s bad faith game ‘did not pass go’
Monopoly: a classic Christmas board game. There’s nothing better than bringing families together for some festive cheer during the season of goodwill to all.
In our house, Monopoly is banned. There have been far too many arguments. My husband, the most loving and supportive man I’ve ever met, but also the most competitive, is still reeling from my mum’s failure to give him £200 as he passed “Go” seven years ago.
He would say it’s “bad faith”, my mum on the other hand still maintains she paid up. At least they still get along, whereas the bad faith committed by Hasbro, owner of the “Monopoly” trademark, has recently had dire consequences for the board game giant.
Bad faith?
In brand legal terms, “bad faith” goes back in time and considers a trademark owner’s intention at the time they 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 pivoted on whether repeat filings made by Hasbro of the Monopoly trademark, to avoid showing genuine use of the mark, amounted to bad faith.
Hasbro v EUIPO
In Hasbro v EUIPO the General Court has upheld the EU Intellectual Property Organization (EUIPO) Board of Appeal’s decision that repeat filing of trademarks, also known as “evergreening”, 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 registration is to dodge showing genuine use of a mark more than five years’ old, then bad faith may be established.
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-registered trademark for Monopoly.
A key factor of the General Court’s decision supporting the EUIPO Board of Appeal’s verdict was Hasbro’s admission that their motivation for re-filing was to avoid potential costs that would be incurred to show genuine use of the Monopoly trademark.
Impact
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 Tesco and Lidl, Tesco argued that Lidl’s wordless version of its logo should be invalidated as the mark had never been used and Lidl were 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 meant it was down to Lidl to explain its intentions when filing the mark, which is consistent with the Hasbro case.
In Sky v SkyKick, 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 making 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 refiling trademarks. It is important to highlight though, that refiling a trademark is allowed. It is only when it can be established that an applicant’s intention at the point of refiling the mark was to skirt use requirements, that bad faith can be found.
If you are a brand looking to file new, or refile existing trademarks, we suggest ensuring you have a clear trademark strategy. We would also suggest retaining and recording: (1) evidence of genuine use of your marks; and (2) your reasons for refiling any existing trademarks.
Sarah Simpson is a senior associate at Katten Muchin Rosenman UK. She can be contacted at: sarah.simpson@katten.co.uk
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