Understanding Bad Faith in Trademark Law

Malicious conduct includes the intention to damage the interests of others when applying for a trademark, or the act of obtaining exclusive rights for purposes other than the function of the trademark. The judgments in the SIMCA and MONOPOLY trademark cases clearly illustrate the two aspects of malicious conduct.

SIMCA Case

In the SIMCA case, the dispute centred on the registration of the “SIMCA” trademark. The trademark was registered by an individual and subsequently transferred to a company. The owner of the earlier trademark “SIMCA” (GIE PSA Peugeot Citroen) filed an invalidation action against the registration, as the trademark still had a certain degree of reputation among the public interested in cars (“surviving/residual reputation”) despite not having been used in previous decades. This conduct was considered a strategic attempt to exploit the dormant value of the trademark and take advantage of its surviving/residual reputation, and was therefore considered to be in bad faith under EU trademark law. This registration was intended to “free ride” on the surviving reputation of an existing trademark, setting a precedent for dealing with similar issues in the future.

Monopoly strategy

The Monopoly case revealed Hasbro’s strategy of repeatedly registering the same trademark in the same class to avoid the burden of proving use in the many opposition proceedings where applicants had to prepare and submit evidence, and thus extending the five-year grace period to prove use. This practice was considered contrary to the objectives of EU trademark law and was criticized as undermining the integrity of the trademark system as it showed that re-applications could be flagged as bad faith when they were used to circumvent legal obligations.

EUIPN's Role and Practices

The European Union Intellectual Property Network (EUIPN) plays a vital role in standardizing practices across the EU on bad faith and other trademark issues. Common Practice 13 "Bad faith trademark applications" was developed in consultation with various stakeholders and is an important resource for understanding and applying consistent standards across Member States. The guidelines are intended to assist examiners, applicants, claimants and trademark agents in analysing possible bad faith conduct in trademark applications. It is available in 23 EU languages on the EUIPN website.

The SIMCA and MONOPOLY cases highlight not only the nuances of bad faith conduct in trademark law, but also the EUIPO’s ongoing efforts to improve and effectively enforce trademark regulations. As strategies for trademark registration continue to evolve, the importance of vigilance and ethical compliance remains paramount.