The rat’s out of the bag: lessons from Banksy’s EU trade mark losses on grounds of bad faith

The European Intellectual Property Office (the “EUIPO”) declared Banksy’s ‘Radar Rat’, ‘Painting Rat’, ‘Bomb Hugger’ and ‘Girl with an Umbrella’ trade mark registrations invalid last week . This latest set in a string of decisions dating back to September 2020 reinforces the fact that genuine intention to use a trade mark must exist at the time of filing the trade mark application.  In particular (and rather unsurprisingly), the EUIPO noted that use “only to circumvent the law” does not count as genuine intention to use.

The central issue under which the validity of Banksy’s trade mark registrations was called into question was that of genuine use, and what Banksy’s intention was at the time of filing these trade mark applications. 

The EUIPO Cancellation Division took issue with the fact that, at the time the invalidity actions against Banksy’s trade mark registrations were filed, Banksy had never marketed or sold any goods or services under the marks; in fact, the only use of the trade mark registrations was made shortly after they were contested by Full Colour Black, in October 2019 when Banksy opened an online shop in an apparent effort to show use of the contested registrations.  Though this couldn’t save Banksy from the EUIPO’s ultimate finding that Banksy had no genuine intention to use the marks at the time of filing, the EUIPO considered that this post-registration use was not genuine in any event, since evidence pointed to the fact that the raison d’être for the shop was purely to circumvent the law and overcome the requirement of non-use for trade mark proceedings rather than to commercialise the goods marketed for sale in the online shop.  Banksy’s own public statements surrounding the launch of the shop (notably “sometimes you go to work and it’s hard to know what to paint, but for the past few months I’ve been making stuff for the sole purpose of fulfilling trademark categories under EU law”) undermined his case on intention.

Given that, on the evidence, Banksy was considered to have had no intention to use the contested trade mark registrations for the registered goods and services at the point of filing, the trade marks were held to have been filed in bad faith.  On that basis, the EUIPO Cancellation Division invalidated these four further trade mark registrations on grounds of bad faith. 

Takeaways for holders of EUTM rights

• The burden of proof when alleging bad faith lies with the invalidity applicant to show that the trade mark registrant had no genuine intention to use the mark at the time of filing. 
• Bad faith is assessed subjectively based on the applicant’s intentions when filing a trade mark application. 
• To find bad faith, there must be an action by the trade mark owner which reflects a dishonest intention and an objective standard against which that action can be measured against. In particular, there is bad faith when the conduct of an applicant for a EU trade mark departs from the accepted principles of ethical behaviour or honest commercial and business practices.  
• The concept of ‘bath faith’ may refer to situations where it is apparent that the owner of an EU trade mark did not seek to register its mark with the aim of engaging fairly in competition but, rather, with the intention of either undermining the interests of third parties in a manner inconsistent with honest practices or obtaining an exclusive right for purposes other than fulfilling the main function of the mark.
• In these cases, Banksy’s actions were inconsistent with honest practices as the intention was to obtain an exclusive right for purposes other than those falling within the functions of a trade mark.  The purpose of a trade mark is not to prohibit others from registering or using signs to identify goods and services in order to carve out a portion of the commercial market.
• Whether (which was disputed) Banksy developed an intention to make genuine use of the EU trade marks in the future did not matter; what needed to be examined was Banksy’s intention at the time of filing the trade mark application.  
• Whilst intention is assessed subjectively, and may be difficult to demonstrate if challenged, it certainly helps not to publicise a lack of genuine intention to use.

Relevance to the UK?

As regards what can be considered to demonstrate bad faith in the UK, there is potential for divergence post-Brexit between how EU and UK trade marks are treated: the Banksy EUIPO cancellations are the latest example of the particularly topical thread of bad faith which is weaving its way through both European and UK trade mark courts at present, including notably the recent MONOPOLY ruling (Hasbro v EUIPO, Case T-663/19) and the awaited English Court of Appeal decision in Sky v Skykick  following the CJEU judgment which seemed to set a rather low bar (at least by UK standards) with respect to the threshold for genuine intention to use.  Watch this space…

Whilst arguably Banksy’s case represents the low water-mark of “no genuine intention to use”, this case highlights the importance for trade mark applicants – whether of UK or EU trade marks – in making sure they have a genuine intention to use a mark, as filed, at the time of filing the application to register it.  In a worst-case scenario, brand owners may be subject to invalidity proceedings, ultimately lose their registered rights and with that, the ability to enforce them. 

Authored by Anneka Dalton and Laura Alvarez Otero