Modernisation of trade mark law in the USA
The Trademark Modernization Act of 2020 will be implemented in the USA in December 2021.
Formula 1 driver Lewis Hamilton has been unsuccessful in his attempt to cancel an existing EU trade mark registration for the word HAMILTON, held by a watch maker of the same name.
Having had their EU trade mark application to register the name Lewis Hamilton for jewellery and watches opposed, the company holding the IP rights of Lewis Hamilton sought to cancel the HAMILTON trade mark registration in order to clear a path to registration.
In November 2014 Hamilton International AG (“Hamilton AG”), an American-founded watch maker now owned by Swiss giant Swatch, filed an application to register the word mark HAMILTON in classes 9 and 14 covering a variety of goods including mobile electronic devices, jewellery and watches. Hamilton AG also had an earlier registration from 1998 for the word HAMILTON covering largely similar goods.
In November 2017 the company holding Lewis Hamilton’s IP rights 44IP Limited (“44IP”) filed its application for a declaration of invalidity against all of the goods for which Hamilton AG’s trade mark was registered on the grounds that it was registered in bad faith as it was filed to circumvent EU law by extending the grace period for non-use of its 1998 registration.
After 5 years on the register one entity can apply to have another’s EU trade mark registration removed from the register if it has not been put to genuine use by the owners within this period. To avoid losing their registration some trade mark owners circumvent this rule by filing a fresh application for an identical trade mark covering identical goods in order essentially ‘reset the clock’, as the new application cannot be challenged on grounds of non-use until it is at least 5 years old. Such an application would be considered to be in bad faith.
Along with the bad faith claim, 44IP also based the cancellation application on a claim that the registration in question was contrary to public policy as it ‘improperly impedes fair competition and free movement of goods’ in the EU.
To 44IP’s claim of bad faith, the proprietor Hamilton AG replied by submitting evidence showing that its earlier trade mark had in fact been used (a fact which 44IP itself admitted in its own submissions) and that the contested registration had simply been filed to update its list of goods in accordance with changes in practices relating to the specification of goods and services. Furthermore, Hamilton AG also submitted that the contested trade mark was filed to update its list of goods to reflect technological developments in its field, such as smartwatches.
The first instance decision of the Cancellation Division found against the cancellation applicant 44IP, stating that both the bad faith and public policy grounds had not been proven and as such, the cancellation failed in its entirety.
In February 2020, the applicant filed an appeal to the Board of Appeal (the Board) requesting the annulment of the Cancellation Division’s decision in its entirety.
In deciding that the appeal was unfounded, the Board noted in its consideration of the bad faith claim that it is commonly understood ‘that the applicant of an EU trade mark does not have to give legitimate reasons for the filing of an application or to justify his actions or omissions’. Instead, to be successful in its claim, ‘the cancellation applicant needs to prove that there was bad faith on the part of the proprietor at the time of filing the EUTM, such as that the EUTM proprietor has registered the trade mark with no intention of using it but with the sole aim of preventing a third party from entering the market.’ The Board found that the cancellation applicant 44IP had not proven bad faith.
The fact that Hamilton AG demonstrated by way of evidence that it had significant economic activity in its field since 1892, meant that the claim that the contested mark was ‘a repetitive filing of the earlier registration filed with an aim to ‘extend’ the grace period (within which the mark must be put to genuine use) had no factual basis from the outset’. In fact, the Board found that there was ‘commercial logic’ in the filing of the contested registration, from which it could be inferred that the proprietor intended to use the trade mark.
In regards to 44IP’s claim that it had rights in the name LEWIS HAMILTON, the Board also dismissed this claim on a number of grounds including the fact that the name in question was a common name in English speaking countries, and that there was no natural right for a person to have his/her name registered as a trade mark when that would infringe a third party’s existing rights.
The Board also noted that even 44IP itself had accepted that the contested trade mark had been used since 1892, long before Lewis Hamilton himself was born. The applicant had filed extracts of the proprietor’s website showing the trade mark in use for watches, as well as commenting that it seemed ‘incredible’ that a company which sold wrist watches since 1892 would radically change its plans in 2014. 44IP had also commented that Hamilton AG’s evidence “at most, shows use of the trade mark on watches in class 14.”
The Board also noted that the applicant was 44IP Limited and that the reference to the natural person, ‘Lewis Hamilton’ remained unsubstantiated.
As regards the Applicant’s argument that the proprietor’s registration for HAMILTON should be cancelled because it is contrary to public policy, the Board noted that the applicant failed to demonstrate in what way the contested registration was contrary to public policy and dismissed this ground, noting that the contested registration was neither offensive nor insulting.
For these reasons, the Board decided that the appeal was not well founded, and upheld the Cancellation Division’s original decision.
This decision serves as a reminder about the need to have clear and sound grounds to succeed in a bad faith claim in the EU, particularly when based on repeat filings. The burden of proof lies with the applicant for cancellation and it will not be enough to simply state that the goods in the later application are largely similar to the earlier registration or submitting speculation without proof about the proprietor’s intentions at the time of filing.
Furthermore, we are reminded that there is no ‘natural right’ for a person to have his or her name registered as a trade mark in the EU if it is already registered by a third party (although there is an exceptions when it comes to infringement under Article 14(1)(a) EUTMR, as noted below).
This decision may also be taken as a lesson for well-known persons to consider cultivating alternative brand names if their own natural names are relatively common, particularly if they intend to obtain trade mark registration. In order not to miss out on capitalising on their well-known names they could still incorporate their names in the presentation of the brand, i.e “[brand name] by Lewis Hamilton”. Using the name this way should fall under the Article 14(1)(a) ‘own name’ defence if challenged for infringement. In the EU, a registered trade mark is not infringed by the use by an individual of his own name or address. However, this provision will only apply where the use is in accordance with honest practices in industrial or commercial matters.
For further advice on protecting well-known brand names, please get in touch to speak to one of our trade mark attorneys.