Background

Between 1996 and 2010, a US toy manufacturer applied for the Community/European Union word mark MONOPOLY for various goods and services of classes 9, 16, 25, 28 and 41. Eventually, in 2010, it applied for the registration of a Community/European Union word mark of the same name for goods and services of classes 9, 16, 28 und 41. A few new goods and services of classes 9, 16 and 41 were included in addition to the goods and services covered by the older registrations. The trade mark was registered in 2011.

In 2015, a Croatian company filed an application for cancellation in relation to all goods and services protected by the trade mark on the grounds of bad faith within the meaning of art. 59(1)b) EUTMR.

The Cancellation Division dismissed the application by decision dated 22 June 2017, arguing that a trade mark application covering different goods and services covered is common and accepted business practice. Furthermore, it stated, the applicant did not furnish sufficient evidence showing that the trade mark proprietor acted in bad faith at the time of filing the application. On appeal, the applicant objected to this decision.

Decision

The EUIPO Second Board of Appeal largely granted the relief sought by the Applicant, thus disagreeing with the Cancellation Division.

It argued that, while it is common business practice to keep the specification of goods and services as broad as possible, it was unacceptable to artificially extend the grace period for non-use. Filing another trademark application, even if only extending the specification circumvents rules governing compulsory use.

However, the Second Board of Appeal did consider that, in this case extending the specification appeared to be the applicant's main reason for re-filing this trademark. Other reasons cited by the trade mark applicant, such as harmonisation of its own trademark portfolio or simplification of trade mark management, were less significant.

The Second Board of Appeal declared invalid the goods and services for which the trade mark had already been registered on grounds of bad faith within the meaning of art. 59(1)b) EUTMR. However, this did not apply to the newly covered goods and services.

Comment

The decision raises fundamental questions regarding the legal concept of bad faith. As that legal concept is not defined by the EU legislator, its interpretation and development is a matter for the courts and the chambers of EUIPO. Special mention must be made in this context of the Lindt GOLDHASE decision (C-529/07), in which the CJEU laid out criteria for establishing bad faith.

It's likely that MONOPOLY will reach the General Court (GC) and a decision at that level could make a significant contribution to legal certainty in dealing with bad faith in EU trade mark law. Another crucial decision concerning the concept of bad faith is the GC's Pelikan ruling (T-136/11), to which the Board of Appeal of EUIPO directly refers in the present case. In that ruling, the GC found that filing another application for a trade mark in order to artificially extend the grace period for non-use is generally capable of satisfying the element of bad faith. In the present case, the Board of Appeal picks up this line of thought and develops it further.

The SKY/SKYKICK (C-371/18) case is also to be decided by the CJEU in a preliminary ruling procedure. It revolves, among other things, around the question of whether the application for a trade mark is in bad faith if, from the outset, the applicant never intends to use that trade mark.

Authored by Patrick Fromlowitz and Nikolaus von Bargen