The Waterdrop case: When trade mark refiling is bad faith

Refiling a trade mark to avoid having to prove genuine use in opposition proceedings has always been a risky strategy. The General Court's Qingdao Ecopure Filter Co. Ltd v EUIPO (Waterdrop) decision has made that risk even clearer by identifying the combination of factors that may result in a successful bad faith challenge for a repeat filing.  

The parties initially used WATERDROP in different parts of the water market. The predecessor of Qingdao Ecopure Filter Co. Ltd (QEF) filed the EU trade mark in October 2015 for water filters and air-filtering installations, while Waterdrop Microdrink applied for its own WATERDROP EU mark in January 2016 for vitamins, non-alcoholic drinks and beverage preparations. In June 2021, QEF’s predecessor refiled WATERDROP as a word mark with a more detailed specification, only four months after the grace period for its original registration had expired.

The parties’ portfolios began to overlap when Waterdrop Microdrink sought protection for water filters and water treatment equipment in September 2021. QEF then filed five oppositions throughout 2022 against Waterdrop Microdrink’s applications before the EU, French, German, Spanish and Czech trade mark offices. QEF’s newer 2021 registration gave it an important procedural advantage, as it was not yet subject to proof of use. The Spanish opposition was the only one in which QEF also relied on its original mark.

In February 2023, responding to QEF’s oppositions, Waterdrop Microdrink sought to invalidate QEF’s 2021 registration on the grounds of bad faith. The EUIPO initially rejected the application, but its Board of Appeal partially reversed that decision to invalidate QEF's registration for water filtering goods. The General Court upheld this partial invalidity on appeal, ruling that QEF filed the later mark to avoid proving genuine use of its earlier registration.

How to avoid the WATERDROP trap?

The decision offers a practical checklist for both sides of the table: brand owners refiling their marks to reflect genuine commercial developments, and businesses facing an opposition based on a repeat filing.

• Be careful around the grace period. QEF filed the new WATERDROP mark four months after the original registration became subject to proof of use. A repeat filing shortly before or after that date may attract attention. 
• A more detailed specification doesn’t mean the goods won’t be considered identical. QEF argued that its new application listed specific goods for legal clarity and precision. The Court found that those products were already covered by the broad term “water filters” in their earlier mark. Describing the same goods in greater detail did not make them new or justify the refiling.
• Changing the form of the mark may not be enough where change is insignificant. QEF argued that its new word mark was different from the earlier figurative mark. However, the earlier mark simply showed WATERDROP in an ordinary typeface, so the Court considered the difference insignificant. A very minor change is therefore unlikely to justify refiling unless it reflects a genuine change to the brand.
• Document business reasons for refiling. Following the original 2015 registration, QEF and its predecessor filed three further WATERDROP applications within three years for overlapping goods in Class 11. QEF could not demonstrate that those filings were linked to commercial development or expansion of its product range. The water filter market did not rapidly change either. Keeping records of the commercial reasoning behind trade mark applications is therefore key. 
• Make sure consolidation genuinely simplifies the portfolio. QEF argued that the contested 2021 filing would save administrative and renewal costs. However, it did not give up any of its earlier WATERDROP registrations, so the contested mark simply added another registration to the portfolio. This made the consolidation argument less convincing.
• Consider the risks of relying on a refiled mark in enforcement. The Court looked at which rights QEF chose to rely on in its opposition proceedings. In the EU, Spain and the Czech Republic, QEF relied mainly on newer registrations for goods already covered by its original mark. This allowed it to avoid proving use of the original registration and helped the Court identify the practical advantage obtained from the refiling. 
• Keep the supporting evidence and submit it at the earliest stage. QEF attempted to introduce further evidence before the General Court concerning developments in the water filter market, industry innovation and its product range. The Court refused to consider that evidence because it had not been submitted during the EUIPO proceedings. 

Based on the combination of all of these factors, the General Court agreed with the Board of Appeal that QEF had acted in bad faith. The contested registration remained invalid for the overlapping water filtering goods but survived for the other goods.

Trade mark portfolios must adapt as businesses and markets evolve, and refiling can be an important part of that process. However, each refiling should have a genuine commercial purpose, which is documented at the time and reflected in how the portfolio is subsequently managed and enforced.

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