Hasbro ruling casts doubt on ‘evergreening’ TM strategy

On April 21, Hasbro had its EU ‘Monopoly’ trademark partially invalidated by the EU General Court.

The ruling found that the company’s re-filing strategy was designed to avoid proving genuine use—upholding a prior EU Intellectual Property Office (EUIPO) decision.

Under EU law, trademarks granted by the EUIPO can be invalidated if the owner can’t prove genuine use five years after the mark is registered.

The top line of Hasbro’s argument was that the Monopoly brand was “so famous that it would be fanciful to suggest it has not used the trademark in connection with games” and that  “proving the use of that mark in connection with board games in invalidity proceedings would result in its incurring significant costs”.

This process of refiling identical marks, known as ‘evergreening’, is common among brand owners with substantial portfolios. While the court ruled that refiling is not necessarily tantamount to bad faith, the judgment ensures that rights holders still need to prove genuine use.

“The decision is quite a significant blow to Hasbro,” said Sean Ibbetson, senior associate at Bristows. “Not least because Hasbro readily admitted that one of the benefits of re-filing its earlier trademarks was that this avoided the need to prove genuine use.”

“Hasbro will need to carefully consider whether any more registrations in its portfolio may be at risk of similar invalidation actions on the ground of bad faith. The EUTM registration in question has only been invalidated in respect of goods and services that were already covered by Hasbro’s existing registration, so it has effectively not lost any rights.

“However, it will face difficulty in enforcing its registrations in respect of goods/services for which it has not put its marks to genuine use, particularly since the remaining EUTM in question is itself now outside of the grace period of non-use.”

What next for Hasbro?

The logical next step for Hasbro in this situation would be to appeal the decision, but the likelihood of the CJEU reaching a different decision “seems slim”, said Ibbetson.

Harry Rowe, managing associate and UK trademark and design attorney at Mathys & Squire agreed: “Hasbro may appeal the General Court’s decision to the CJEU if it considers there is merit in pursuing such an appeal. It will be interesting to see what action it takes in this regard.”

In light of this decision, several other of Hasbro’s evergreen trademarks could be at risk from similar bad faith invalidations—which could impact any ongoing IP litigation it might be facing.

“If I were in Hasbro’s shoes I would undertake a serious and immediate portfolio review.  This case has garnered a lot of attention and I dare say that those facing opposition based upon rights owned by Hasbro will point to their admission in this case as being reflective of Hasbro’s general approach,” said Aaron Wood, trademark attorney at Blaser Mills Law.

“Even where a new mark has been adopted and subsequently relied upon I dare say they may face some attacks.”

Takeaways for rights owners

This ruling could see far-reaching implications for many US and EU national trademark holders.

Any company that engages in evergreening IP, even if it’s a household name as was the case with Monopoly, are not safe from invalidation if the rights owners cannot prove their entitlement to the mark.

“Trademark owners who have re-filed identical trademarks for existing goods/services may be at risk of those later registrations being invalidated on the ground of bad faith,” warned Rowe.

Wood added that EUTM owners who have for years been advised to engage in filing practices that seek to ‘game’ the system by seeking overly broad specifications are likely to receive “a shock”.

It will also likely impact upcoming disputes, with possible increased costs for owners looking to protect their old marks and prove their entitlement.

As Hasbro argued in proceedings before the court, proving use of the ‘Monopoly’ mark in connection with board games would result in “significant” costs. But following this ruling, that's just what companies might have to do.

“Trademark disputes before the registries and courts are likely to become more expensive if trademark owners are required to rely on their ‘old’ trademarks and argue that they have been put to genuine use,” said Ibbetson.

The outcome for Hasbro may have been avoidable. One of the key points of the court’s ruling is that Hasbro had admitted to the board of appeals that the “advantage of its filing practice was not having to prove genuine use of the mark in opposition proceedings”.

Parties in similar situations will likely be warier of being so forward about the motivations behind their trademark filings, suggested Ibbetson.

He added: “This will inevitably mean it will be more difficult for tribunals to reach the conclusion that their intentions at the time amounted to bad faith.”

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