[Guest Post] Repeat filings after Monopoly: an exchange of views

The beauty of the law is that different views are always possible. So, when Tobias Cohen Jehoram (Erasmus University Rotterdam and De Brauw Blackstone Westbroek) and Irenah Klink (De Brauw Blackstone Westbroek) reached out saying they had different views to those expressed in a recent Katpost covering the General Court (GC)'s decision in T-663/19 Monopoly, a debate was born. 

The subject of debate is what the Monopoly decision might mean for repeat filings of trade marks. Below, Tobias and Irenah share their views, and then this Kat will share the cat sounds she collected around. 

Over to Tobias and Irenah: 

We disagree with the statement in the Katpost that the GC might "effectively [be] telling us that any repeat filing for identical goods will prima facie constitute bad faith." We read this judgment differently. We believe the judgment specifies the type of behaviour that would actually be covered by the bad faith doctrine, while in fact, repeat filings are not prima facie considered as made in bad faith. The EUTM holder’s admission that it had filed the application for the benefit of not having to prove use, weighed heavily in the Board of Appeal’s conclusion that the EUTM Proprietor had filed its trademark in bad faith. 

The judgment 

Throughout the judgment, the GC repeatedly highlighted that re-filing per se is a legitimate practice (emphasis added): 

43 Where EUIPO finds that the objective circumstances of the particular case which were relied on by the applicant for a declaration of invalidity may lead to the rebuttal of the presumption of good faith which the proprietor of the mark at issue enjoys when he or she files the application for registration of that mark, it is for the proprietor of that mark to provide plausible explanations regarding the objectives and commercial logic pursued by the application for registration of that mark. 

57 In the third place, although repeat filings of a mark are not prohibited, the fact remains that such a filing which is carried out in order to avoid the consequences entailed by non-use of earlier marks may constitute a relevant factor which is capable of establishing bad faith on the part of the person who filed that mark [...]. 

70 In that regard, it must be stated there is no provision in the legislation relating to EU trade marks which prohibits the re-filing of an application for registration of a trade mark and that, consequently, such a filing cannot, in itself, establish that there was bad faith on the part of the trade mark applicant, unless it is coupled with other relevant evidence which is put forward by the applicant for a declaration of invalidity or EUIPO. 

Furthermore, the GC highlighted once again – in accordance with established ECJ case-law – how to interpret bad faith, namely that it "presupposes the presence of a dishonest state of mind or intention" [para. 32]. This is the case if it is apparent from relevant and consistent indicia that the EUTM-holder filed the trademark application "not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin" [para.33] 

The importance of the EUTM holder's intention also becomes apparent in the wording of established case-law. While "account may also be taken of the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as an EU trade mark, and the chronology of events leading up to that filing" [para. 38 emphasis added], consideration "must" be given to the EUTM holder's intention [para. 39]. 

This intention must be proven by the applicant seeking cancellation, by submitting sufficient and objective circumstances that would allow for the conclusion that the trademark was filed in bad faith. Only after the applicant for a declaration of invalidity has relied on objective circumstances regarding the EUTM holder's intention that could rebut the presumption of good faith [para. 43 (above) and 44], the burden of proof may shift. 

The GC thus stressed that only the trade mark holder's intention is critical, not whether a trade mark has been re-filed per se [para. 89]. 

In addition, the GC reminded that all of the specific circumstances of the case had to be taken into account [cf. para 71]. In this case, those circumstances included, aside from the EUTM holder's admission, the filing of oppositions based on the trade mark at stake [para. 59] and the fact that the earlier marks had not been surrendered [para. 60]. 

Ramifications of the decision 

There are three conclusions that can be drawn from this decision. 

First, that re-filing as such is considered a legitimate business practice, with the GC going one step further than it did in T-136/11 Pelikan. 

Second, re-filing as such is certainly not sufficient to find bad faith; only the dishonest intent behind a refiling could make the later filing a bad faith filing. The GC put therefore emphasis on the EUTM holder's statement. Once such a statement is made, the implication is that intent has been established, making other considerations to file the trade mark seemingly less relevant. 

Third, assessing whether a trade mark was filed in bad faith is case specific and depends on various factors. The GC stressed that the intention not to use the trade mark may be one such factor. This is in accordance with the ECJ's judgment that bad faith may be established if the trade mark holder had "no rationale for the application of the registration." [C-371/18 Skykick, para 77] At the same time, the ECJ explicitly stated that a lack of economic activity as such does not establish bad faith. This suggests once more that the intention (to circumvent the use requirement) and not the lack of use (or that there is a repeat filing) is decisive. 

In this context, it is stressed that the burden of proof may shift once the EUIPO concludes a dishonest intention established on the basis of the objective circumstances the cancellation applicant has submitted – refiling as such (which is allowed and a legitimate business practice) does not trigger such shift. This is in fact only the case if the refiling is done with a dishonest intention to be proven by the party claiming bad faith. 

Alternative views see that: 

This Kat appreciates Tobias and Irenah's valuable points. To encourage open debate, below are some of the different perspectives this Kat has hunted from here and there: 

First, as Tobias and Irena recall, that a repeat filing is not, by itself, indicative of bad faith. 

However, does it deduce that the GC then regarded the repeat filings as “a legitimate business practice”? There seems to be rather a leap from “not prohibited” to “legitimate”. There can be circumstances where repeat filings are legitimate, for instance, where a mark evolved over time [Pelikan at 36] or where the repeat filing is made for new goods and services as the proprietor expands its business [Monopoly at 75]. By contrast, the GC made very clear that repeat filings seeking to circumvent the rule relating to proof of use are illegitimate [Monopoly at 70, 72].

Good faith is indeed presumed, and the applicant must prove that bad faith based on objective circumstances. However, different opinions submit that if revocation proceedings are pending against the earlier mark and the proprietor is unable to furnish proof of use, that is an objective indication that the repeat filing was intended to circumvent the rule relating to proof of use. Because, after all, in these circumstances, repeat filings will inevitably and objectively result in the circumvention of the proof-of-use rule. 

Again, a repeat filing without the use of the earlier mark doesn't automatically render the repeat filing in bad faith. Instead, it shifts the onus of proof on the proprietor to show that the repeat filing was nonetheless legitimate, as per para 43-44 of the GC's decision. 

Incidentally, reliance by the proprietor on the repeat filing in subsequent oppositions or proceedings, as also occurred here, is an even stronger indication of bad faith, because reliance on the older mark would have been precluded by the proof-of-use rule. Thus, the illegitimate advantage of refiling is immediately felt. 

Second, there are strong policy arguments for limiting repeat filings, and the GC emphasises them throughout its decision [e.g. at 54-55, 70, 94]. The purpose of applying the bad faith doctrine to repeat filings seeking to circumvent the proof-of-use rule is to ensure that the trade mark register "faithfully reflects what companies actually use on the market to distinguish their goods" [54]. That purpose is best served if the burden of proof shifts on the proprietor whenever a repeat filing would result in circumvention of the proof-of-use rule. After all, all such cases objectively result in the continued registration of unused trade marks. 

Conversely, requiring an explicit admission of the proprietor that they indeed sought to circumvent the rule would render the doctrine meaningless. There seems to be no rational reason to allow repeat filings of unused marks in all cases where the proprietor is shrewd enough not to admit they are seeking an illegitimate extension of their monopoly. 

Kat's observation

This Kat sees the views expressed by the above two sides as having their own merits and focus.

Meanwhile, however, the Court appears also to say that any repeat filing is an indication of bad faith unless specific reasons justify that. These do not include the circumvention of proof of genuine use. All that seems to come quite close to, although not there yet, the effect that the repeat filings do somehow establish the presumption of bad faith. In this scenario, to quote a prestigious scholar this Kat had the honour to talk with on such matter: 

Formally, it remains true that it is for the owner of the junior mark to prove a bad faith intent of the senior mark owner. So, though repeat filings do not per se amount to a manifestation of bad faith, they put the owner of the senior mark in an awkward position.

What do you think? At this point, this Kat invites interested readers to share their thoughts in the comments section below generously. Let us see how the individual comparisons and valuations may diverge or eventually come into harmony. 

The floor is yours - enjoy!

Kat photo courtesy: Mochi & Cappuccino's mom