Defensive trademark registrations in the EU

by | Jan 7, 2021 | Filing, General, Insights | 0 comments

Sometimes big companies register trademarks that they do not use or intend to use. The logic is that by doing that, they can enhance the protection their brand has. Is it allowed? What are the risks? Can it be done?

What are defensive registrations?

Defensive trademarks have two main types. The first type is registering a trademark for goods and services other than for which the company actually uses its trademark. For example, the Olympic rings have been registered for surgical instruments, and Apple has registered its trademark for bleach and laundry products. 

Another type of defensive registration is where a company registers a closely resembling trademark or the trademark’s nickname. For example, Daimer (the owner of trademark MERCEDES-BENZ) has registered the trademark MERC for vehicles and Alibaba has registered trademark ALIMAMA. Defensive registrations are often used to protect a particularly prominent part of the trademark. In addition to different variations of their name, Alibaba has also registered the trademark ALI.

Some countries have special provisions for these kinds of defensive trademarks. Typically this means that if the principal trademark is used, these defensive registrations are not liable to be cancelled for non-use and can be used against other companies.

The EU does not have specific provisions for defensive trademarks. EU trademarks are all subject to use requirements after five years. For example, if Alibaba has not used the trademark ALI (independently) or ALIMAMA, these can be cancelled for non-use.

 

Can the use requirement be circumvented?

In order to avoid cancellation for non-use, the main rule is that the trademark must be used as it is registered. However, small alterations are acceptable if they do not alter the distinctive character. If the trademark consists of a distinctive element and descriptive elements, it is sufficient to use the trademark without the descriptive element. 

For example, the use of trademark ALI would probably be sufficient use of registered trademark ALIPAY, and use of trademark ALIPAY would probably be sufficient use of trademark ALI. Because ALIPAY is a payment service, the word “pay” is generic in that context.

This means, in practice, that while the EU does not recognise defensive trademarks, they can still be relied on in limited circumstances where the trademark consists of a distinctive part and generic part. For example, the owner of (invented) trademarks ZUDON PAY, ZUDON EXPRESS and ZUDON INSURANCE could register trademark ZUDON as a defensive trademark. Using the trademarks ZUDON PAY, ZUDON EXPRESS and ZUDON INSURANCE would also constitute the use of trademark ZUDON, so it could not be cancelled for non-use. 

 

Could defensive registrations constitute bad faith?

A potential hurdle that must be taken into account with defensive trademarks is the risk that they might constitute bad faith filings and be invalidated. If you register a trademark for the sole purpose of blocking others from using it or one with a similar name without having any intention of creating an outlet for your goods and services with that name, there is a risk that your trademark could be considered to have been filed in bad faith. 

If the intention is to enhance the protection of the principal mark(s) that you are using, that would seem like a legitimate commercial interest. So far there is no conclusive view at a European level on whether defensive trademarks could be considered having been filed in bad faith, but the threshold of bad faith has been getting lower and lower and the latest cases make it at least possible that purely defensive trademarks might be problematic.

In practice, however, it might be difficult for others to show that a trademark has been registered in bad faith if there is at least some plausible connection with the products that the company is selling and the products for which trademark is registered. For example, if a clothing company registers its trademark for bags while not currently having any bags in its product lines, it would be very difficult to show that the application was made in bad faith as bags are an obvious extension for most clothing brands. Having such a trademark cancelled for bad faith would probably require an admission that there has never been any intention to use the trademark for bags. Incredibly, that has happened on several occasions (see here and here).

If there is a logical connection between the product for which the trademark is used and for which it is registered (but not used), the risk of losing the trademark for bad faith is minimal. If there is no commercial logic between the two (you could maybe wonder why Apple has registered its trademark for laundry products), there may be some risk.

 

Is there a viable alternative?

One aspect that companies may be able to rely on is the concept of “family of marks” or “series of marks”. In the ZUDON example above, the owner could claim that they have a “ZUDON” family of marks, based on the registration of ZUDON PAY, ZUDON EXPRESS and ZUDON INSURANCE. That would give them good chances of opposing others from exploiting other companies trying to have similar trademarks that could be thought to belong to the same family (e.g. ZUDON MONEY). 

Citigroup, the owner of trademarks CITIBANK, CITIGOLD, CITIEQUITY, CITICARD (etc.) has been successful in preventing others from using similar names, such as CITIGATE.

To have a family of marks, you need to have at least three trademarks within that family and all those trademarks must be in use. Also, the common element must be distinctive. A family of marks cannot be created around a descriptive common element like “Pay”.

 

Conclusion

While the EU does not explicitly recognise defensive registrations, it may be possible to rely on them in some circumstances. The main question, which is not yet resolved, is how they relate to the issue of bad faith. On that, the jury is still out. In the meantime, protecting the trademark for at least products or services that are logically connected to your actual products or services is a widely used and acceptable practice. It is almost impossible to lose such a registration due to bad faith, except if you admit yourself that you have no intention of using the trademark for those additional products or services, and your only reason for registration is to block others.

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