MONOPOLY case: The practice of repeatedly applying for registration of a trademark in order to avoid the consequences of its non-use

May 2021

On 21 April 2021, the General Court of the European Union ruled in case T-663/19 in relation to the practice of repeatedly applying for the registration of a trademark in order to avoid the consequences of its non-use by the owner, and in which MONOPOLY was involved. However, this decision, which is not yet firm, can still be appealed before the Court of Justice of the European Union.

This case dates back to 2010, when HASBRO applied for registration of the famous word mark MONOPOLY for classes 9, 16, 28 and 41 of the Nice Classification (granted in 2011). With this application, it was extending the trademark MONOPOLY which it had already held in classes 9, 16, 25, 28 and 41 since 1996.

However, a few years later, the company KREATIVNI DOGADAJI D.O.O. brought an action for invalidity insofar as HASBRO already owned three other EU word trademarks ‘MONOPOLY’, which already included goods and services identical to those applied for in 2010, claiming that the owner of MONOPOLY was pursuing the unfair purpose of circumventing the proof of use required for its earlier registered trademarks for more than five years in conflicting proceedings.

Therefore, it is important to mention that this dispute does not focus on the actual and effective use of the “MONOPOLY” trademarks, but on the obligation of the proprietor of the trademark to prove such use.

HASBRO INC; a toy company and owner of the trademark MONOPOLY, claimed that the new applications were intended to extend the coverage of its application and to facilitate the administrative management.

In particular, HASBRO cited a number of legitimate factors, such as the need to protect expanding business interests and product offerings, for licensing relationships and opportunities and to reflect evolving trademark specification and filing practice. He noted that the MONOPOLY trademark is well known and evidence of actual use has been submitted. However, he acknowledged that there is an administrative benefit in being able to rely on subsequent trademarks without the need to prove use (and the associated expense of producing evidence) for reasons of “administrative economy or efficiency”.

The Board of Appeal, in this sense, concluded that the applicant (MONOPOLY) had recognized that one of the advantages of this strategy was that it did not have to prove use of the trademark at issue in opposition proceedings.

In particular, the General Court states that the appellant’s intention was actually to benefit from EU trademark law rules by artificially creating a situation where it did not have to prove actual use of the earlier marks for the goods and services covered by the contested mark. Therefore, according to the Court, it must be “considered that the appellant’s conduct was intended to distort and unbalance the regime established by that law as laid down by the EU legislature”

As regards genuine use of an EU trademark, it is true that no EU trademark regulation prohibits the repeated filing of applications for the same trademark, nor does it in itself prove the existence of bad faith, but such filing is deemed to be made in bad faith where the intention is to circumvent the rules relating to proof of use, since it is an action contrary to the objectives of Regulation No 207/2009, which is liable to restrict the free movement of goods and the freedom to provide services.

However, it should be recalled that the period of genuine use of the trademark is five years. That is to say, as the General Court reminds us, that “if, within a period of five years following registration, the EU trademark has not been put to genuine use in the EU by the proprietor in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the EU trademark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use”.

Thus, the main requirement for proving that a trademark has been put to genuine use in order to continue to be protected by EU trademark law lies in the fact that “the registration of an EU trademark in the register of the EUIPO cannot be assimilated to a strategic and static deposit which confers on an inactive proprietor a legal monopoly for an indefinite period of time”.

This is because when a trademark owner is granted an exclusive right over the mark – which arises from the registration itself – it can only be protected over time if, on expiry of the five-year grace period, the owner demonstrates and proves genuine use of the trademark. In this way, both the interests of the proprietor himself as a legitimate person and those of competitors who, in the absence of use of a trademark, also have standing to act against this act, are weighed up.

Finally, what the Court does remind us in its decision is that it is possible to resort to this strategy of repeatedly applying for the registration of a trademark, but only if there are circumstances that make it necessary and that such filing is not contrary to the objectives of the EU trademark, such as, for example, avoiding the consequences of non-use, as in the case of MONOPOLY.

However, as we indicated at the beginning of this article, it is still a decision that is not firm yet and, in any case, is subject to appeal. It should be noted that, as in practically all cases in the wider legal world, the conditions and characteristics of the specific case will always have to be considered, without this necessarily implying the application of the same measures in other different cases. Check the full resolution here.

Eduardo Zamora / Sara del Rio

Image: Pedro Santos on Unsplash