Changes afoot for Community trademarks
Significant changes to European trademark law look to be coming into effect in 2016.
Reform of existing Community trademark legislation has been the subject of several proposals over recent years. In May 2015 some detailed consolidated proposals were published and after various amendments and a visit to the European Parliament, it now looks likely that the final text of a new EU Trademarks Directive will come into force in January 2016. Member States will then have three years within which to bring their national systems into line with it, by which time the future, or not, of the UK in the EU should be known.
The text of a new EU Trademarks Regulation is expected to come into force in April 2016.
These will see the most far-reaching changes to EU trademark law since the Community Trademark system started in April 1996. The Directive itself has increased in size from 19 to 57 Articles!!
A brief summary of some of the principal changes follows:
• What has been known as the Office for Harmonisation of the Internal Market, or OHIM, in Alicante since its inauguration, will become the European Union Intellectual Property Office, or EU IPO, and what is currently known as a Community Trademark, or CTM, will henceforth be known as a European Union Trademark, or EUTM.
• The Office has been accumulating a substantial financial surplus for many years (a victim of its own success). In addition to proposals for distributing a proportion of the EU IPO’s income amongst the Member States each year that there is an annual surplus, renewal fees under the new law will reduce quite significantly, for example down by €500 for a mark in one class, by €300 for a mark in three classes and by €550 for four classes. However, along with application fees, the fee structure will change. For application fees, a mark in one class will cost €50 less than at present, but charges will be made for additional classes after one, so two classes will cost the same as at present (€900), but three classes will cost €150 more. Other official fees, such as for oppositions, cancellations and appeals are also being reduced.
• It used to be quite common for applicants (or their representatives, especially on mainland Europe) to apply for trademarks with very broad ‘class heading’ specifications. Quite apart from clogging up the Register with marks covering vast numbers of goods or services that the applicants were never likely to provide, these ‘class headings’ often did not specifically recite the actual goods or services of greatest importance, even though they might have been listed under the Nice Classification as falling within that class.
Since the IP Translator case, the practice has been tightened up and once the new law is in force, any registration that recites simply the ‘class heading’ will be interpreted as covering only those goods or services specifically listed. Mark owners should review their portfolios to see whether any of their registrations would benefit from being amended to include particular goods or services of commercial interest that might generally have been covered but which are not currently listed specifically. There will be a six-month grace period for doing this once the new law applies, but there is nothing to stop it being done now.
• Designations of Origin and Geographical Indications, along with plant varieties, traditional terms for wine and ‘traditional specialities’, provided they are recognised by EU law or international agreement, have all been added to the list of absolute grounds available for refusal or invalidity. Oppositions to trademarks will also be able to be based on existing Designations of Origin or Geographical Indications, but only if filed by the entity or person holding those rights.
• Provision is also made for the registration of certification marks.
• Changes have been made to the defences available to third parties against infringement. A further exclusion has been added to the list of activities which a trademark owner will not in future be able to prevent. This will be the use by third parties of “…signs or indications which are not distinctive...”. In addition, the use of the ‘own name or address’ defence which used to apply to any third party (subject to ‘honest practices’) will now apply only to natural persons, so legal persons (companies or other organisations) will now have greater responsibility to check out the acceptability for use of their trading names or styles. The new Regulation also confirms that a proprietor can take action against the use of a trade mark in comparative advertising if it does not meet the requirements of the Comparative Advertising Directive (2006/114).
• A new right to assist anti-counterfeiting is proposed under which EU trademark owners can take action to prohibit the transit of goods through the EU, as long as there would also be considered to be infringement of the trademark in the country of final destination. The burden of proof will lie with the shipper to show the final destination and whether or not trademark rights exist there. This suggests that trademark owners having problems with counterfeit goods outside the EU might consider seeking EU registrations for their products even if they do not trade or have counterfeit problems in the EU, and to notify EU Customs of their rights in view of the volume of trade that passes through the EU.
It will be also an infringement to apply trademarks to packaging, labels, security or authenticity features and to sell, stock or import such packaging, labels, tags, security tags. This should also assist trademark owners in combatting counterfeiting more effectively.
• If a trademark is mentioned in a dictionary in a way that suggests it might be a generic term for a product or service, the trademark owner will have the right to insist of the publisher that the word is acknowledged as a registered trademark.
• The definition of a trademark and how it can be represented is being altered. Colours and sounds have been added to the list of examples of specific types of mark that can be registered but other non-traditional marks that have hitherto been difficult to register because of the requirement for a ‘graphical’ (i.e in words) representation may in future be allowed to be registered as long as they can be “…represented on the Register in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor…”. This opens up possibilities for registering mobile marks, holograms and other forms of representation emerging with new technology, and maybe even will give smell marks another chance!
• The provisions in relation to the transfer of marks, either in whole or in part, have been sharpened up and the Commission will specify what documentation will be required and how partial transfers may be achieved.
Some of these changes are the result of EU case law or experience over the nearly 20 years since the Community Trademark started. Other changes not mentioned are relatively minor and/or subtle and others relate to national administration and the roles of national Registries. Any trademark owner wanting further clarification or information on any point concerning EU trademark law is invited to contact any of the firm’s Trademark Group.
Chris Pett, Consultant