Member Article

Some opening words

In South Africa, as in many jurisdictions, the concept of good faith (bona fides) crops up a lot. So, for example, in order to get registration of a trade mark, the applicant must have a good faith intention to use the trade mark. Once the trade mark is registered the owner must use it in good faith in order to keep the registration alive. In the words of George Michael, “You gotta have faith". Good faith.

The (board) game

A recent EU decision, Hasbro v EUIPO, dealt with an interesting application of the good faith principle. The trade mark involved is one of those we all know, Monopoly. Hasbro is both the manufacturer of the game and the owner of the trade mark Monopoly. It has a number of EU trade mark registrations for the trade mark dating back to 1998, 2009 and 2010. These registrations cover a range goods and services in classes 9, 16, 25, 28 and 41.

Some opposition to Monopoly

In 2011, Hasbro filed a further application to register the trade mark Monopoly in the EU in four of these classes: 9, 16, 28 and 41, so only 25 (clothing) missing. The 2011 application was opposed by a third party who claimed that Hasbro had filed the 2011 application in bad faith. The opponent’s argument was that, as Hasbro already had earlier identical registrations covering all the goods and services covered by its latest application, one could only infer that the 2011 application was filed in bad faith.

The opponent argued that the only possible purpose of the new application was to avoid the hassle and irritation of having to prove actual use if any of its existing registrations were ever attacked on the basis of non-use for five years or longer.  Something that could well happen given that Hasbro had recently raised its head above the parapet by opposing an application to register the trade mark Drinkopoly (this game does sound like a lot more fun than Monopoly.)

The court

The matter made its way up to the General Court, which decided that the 2011 Monopoly application had indeed been filed in bad faith. The court concluded that Hasbro had intended to improperly and fraudulently extend the five-years non-use grace period. The company had in its court papers even admitted that there was an administrative benefit in being able to rely on later trade marks without the need to prove use. The court ruled that Hasbro’s intention had been to artificially extend the grace period for non-use, and the fact that it could actually have proven use if required to do was irrelevant.

But everyone’s playing this game

Hasbro argued that the refiling of trade marks is a “common and accepted” practice, so common in fact that it even has a quaint little name – “evergreening”. But the court wasn’t interested. For starters, the court said that the claim of common practice was mere conjecture, and even if it is common practice this does not make it acceptable. Hasbro had, said the court, sought to circumvent a “fundamental rule” of EU trade mark law in order to derive an advantage to the detriment of the system. It had therefore acted in bad faith.

Bad faith: there’s a fair bit of that about

Some other recent examples of bad faith being raised:

Exhibit one: Banksy

We saw a claim of bad faith in a recent case involving the artist Banksy, where a greeting card company applied to cancel Banksy’s trade mark registration for his famous picture "The Flower Thrower".

Lots of arguments were raised: there had never been any intention to use the artwork as a trade mark; Banksy had himself announced that he had no intention of using it; the artwork had in fact never been used as a trade mark. But the one that grabbed the headlines was Banksy’s (reckless) statement that “copyright is for losers”, something the court described as a “disdain for intellectual property rights.”

The court concluded that the trade mark had not been registered with a view to engage fairly in competition, but rather with a view to undermining the interests of third parties. So, registered in bad faith.

Exhibit two: Sky

We also saw it in a case involving Sky, where the issue was whether the use of the very broad term “computer software” in a trade mark specification can amount to bad faith. Europe’s highest court decided that it can if there was no intention to use the trade mark on those goods. This was the case here: the court said that the intention was to undermine the interests of others, and that the company was seeking very broad trade mark protection “purely as a legal weapon.”

To sum up

Keep the faith!

Reviewed by Gaelyn Scott, head of ENSafrica’s IP department.

Liézal Mostert

IP Trade Mark Attorney Senior Associate

[email protected]

+27 65 164 7274