ECJ confirms cancellation of Hasbro's MONOPOLY trade mark

The European General Court has recently upheld a decision by the Board of Appeal of EUIPO that the EU trademark registration MONOPOLY must be cancelled for a variety of goods and services because it constitutes a repeat application of earlier MONOPOLY trademarks and, thus, the MONOPOLY registration was made to circumvent the need to demonstrate use and, therefore, in bad faith.

1. Facts

A Croatian company (hereinafter the applicant), which apparently had an interest in applying for the MONOPOLY trademark or a similar trademark itself, attacked the word mark MONOPOLY, which had been applied for at the EUIPO in 2010 for goods and services in classes 9, 16, 28 and 41, with an invalidity application from 2015. In its application for invalidity, the applicant argues that the MONOPOLY word mark constitutes an application in bad faith because the challenged mark is a repeat application of MONOPOLY word marks filed by Hasbro with EUIPO in the past. The renewed application was therefore made in bad faith with the intention of circumventing the obligation to demonstrate the use of the trademark. The Cancellation Division of EUIPO rejected the cancellation request, reasoning that the protection of the same mark within a period of 14 years is not per se an indication of the trademark owner’s intention to circumvent the need to demonstrate use and that, moreover, the applicant had not proved its allegation of Hasbro’s bad faith at the time of filing. The applicant filed an appeal against this decision. The Board of Appeal ordered cancellation of the MONOPOLY mark for all the goods and services that had already been claimed by earlier registrations of the MONOPOLY word mark. Hasbro brought an action against this decision of the Board of Appeal before the General Court.

2. Decision of the General Court

By decision of April 21, 2021, the General Court (case number T633/19) confirmed the decision of the Board of Appeal and dismissed Hasbro’s action.

The General Court makes clear that the obligation of the trademark owner to use its trademark is a fundamental principle of European trademark law and is the justification for the monopoly right of the trademark owner granted by the EU Trademark Regulation after the expiration of the five-year grace period for use, which gives the trademark owner time to market the goods or services under the trademark. To that extent, acts intended to circumvent that obligation to prove use of the mark would fall under the concept of bad faith. Hasbro itself admitted at the hearing before the Board of Appeal that it had filed the trade mark application in order to avoid having to prove use of the mark in each individual case, which, moreover, according to Hasbro, is a widespread and accepted practice in economic life. The fact that Hasbro had put forward other arguments in support of its filing strategy was not sufficient to dispel the finding of bad faith. Hasbro’s conduct aimed at circumventing the rules on proof of use suggests its intention to distort and unbalance the trademark system established by the EU legislature. However, the General Court emphasized that EU trademark law does not in principle prohibit repeat applications or that every repeat application already indicates bad faith on the part of the trademark owner. Rather, it always depends on the circumstances of the individual case.

3. Lessons from the decision of the General Court

Even if the General Court emphasizes that it depends on the circumstances of the individual case and that Hasbro undoubtedly contributed to the cancellation of its MONOPOLY trademark by its own argumentation, the decision of the General Court is at least of great importance for the application strategy with regard to EU trademarks. Thus, trademark applicants should exercise utmost caution in applying for the identical mark for the same goods and services already covered by earlier registrations. However, as the PELICAN decision of the General Court shows (Judgment of 13 December 2012 in Case T‑136/11), the applicant can already avoid the accusation of filing a repeat application in bad faith by making minor changes to the mark (in the specific case, changing the figurative element), citing the need to modernize the mark. In Germany, there has not yet been any supreme court ruling on the question of the admissibility of repeat applications, although the problem has been discussed in the legal literature for decades.