A new dawn for community trade marks and a new name thrown in too!

11/11/2013

How will the proposed changes to the CTM Regulation affect the practicalities of registering marks in the EU?

The Office for Harmonisation in the Internal Market (better known as “OHIM”) opened its doors in 1995 and has since registered over a million Community Trade Marks (CTMs). The European Commission has now decided that it is time to shake things up and began work in 2009 on harmonising and reforming the law on trade marks in Europe. Tom Sharman looks at how the proposed changes to the regulation in the wake of the study by the Max Planck Institute will affect the practical aspects of registration of CTMs, set to become known as “European Union Trade Marks” (EUTMs), registered by the “European Union Trade Mark and Design Agency” and enforced through “European Union Trade Mark Courts”.

On 27th March 2013, the European Commission released details of various initiatives designed to make the system of trade mark registration around Europe “cheaper, quicker, more reliable and predictable” and allow businesses more freedom to innovate. Many of the proposed changes have since been refined and amended by the European Parliament and those proposals which remain are still being widely debated. The Commission is working hard to implement the changes before the new Parliament and Commission take control in May 2014. EU Member States will have two years to make provision for the new European Directive and Regulation in their respective national laws.

The following are some of the changes brand owners may see if the proposed changes take effect:

• Cheaper fees for one and two class applications – instead of a flat, three-for-the-price-of-one filing fee of €900, the application fee looks set to be lower for one class (€775) and two class (€825) applications, the fee for a three class application remaining the same (€900). This will reduce the cost of Europe-wide protection for brand owners with an interest in only one or two classes of goods/service and should reduce the temptation for applicants or their attorneys to throw in extra classes to maximise the value of the application. It may also lead to a reduction in the number of unwanted oppositions relating only to bonus classes thrown in on filing which are of little real importance;
• Cheaper renewals – the cost of renewing a registration in one class (€1000), 2 classes (€1100) or three classes (€1250) looks set to be lower than the current standard fee for a registration in one to three classes (€1350) and the cost of renewing the fourth and subsequent classes looks set to go down from €400 to €300 per class. It remains to be seen whether the reduction is sufficient for marks to be renewed when they might otherwise be allowed to die;
• All new EUTM applications to be filed directly at the Agency – it will no longer be possible to file CTMs through the national offices. According the OHIM, approximately 96% of all CTMs applications are already filed through the their e-filing software, so this change would appear to cause little disruption to the vast majority of brand owners;
• Removal of the requirement for a sign to be capable of being represented graphically e.g. in words/pictures – this may make it easier to register less traditional types of signs including sounds and smells which have traditionally been somewhat difficult to register. Under the proposed wording of the Regulation, the sign must be “capable of being represented in the register of EU Trade Marks in a manner which enables the competent authorities and the public to determine the precise subject of the protection afforded to its proprietor”. This change seems to make things less clear than the current wording which requires the sign to be represented graphically. It will be interesting to see whether this really makes it easier to register certain types of signs and expect some clarification on the information to be provided o-n filing to satisfy this requirement;
• Examination in all languages – the proposal is that the Agency should refuse applications where a trade mark in a foreign language or script is translated or transcribed into any language of an official language of a member state, suggesting that the Agency will be obliged to look for a descriptive meaning of a mark in any language, not just European ones;
• Goods and services to be clear and precise – implementing the decision the IP TRANSLATOR case, the goods and services for which protection is sought will have to be identified with clarity and precision to enable the relevant authorities and the public to determine the extent of protection. According to the European Commission, class headings will not necessarily longer cover all the goods/services in that class – “The general indications of the class heading of the Nice Classification may be used to identify goods or services provided that such identifications are sufficiently clear and precise…The use of general terms has to be interpreted as including all goods or services clearly covered by the literal meaning of the term”. The amended regulation makes provision for brand owners to adapt the specifications of goods and services of their existing registrations to ensure that they meet the requisite standard of clarity and precision;
• Details of any priority application to be included when filing the EUTM – the priority of an earlier application to register the same mark is a different territory will have to be claimed on filing the CTM and the applicant will have to provide details of the earlier mark (country, official number and filing date) at the time of filing and cannot claim priority of provide the details later;
• No more searches – the Office will not conduct any searches for earlier CTMs or national marks. It is considered that brand owners already have effective searching tools available to them and that it is no longer necessary for the Office to conduct any searches. There is also a suggestion that the Agency will make all-encompassing, fast and powerful search engines available to the public;
• No notifications to go to earlier rights owners – with the abolition of the searches, there will no longer be a requirement for a one month delay the search report and publication of the application while the owners of any earlier and potentially conflicting CTM owners are notified. We expect applicants to notice a corresponding reduction in the time to registration;
• No more ‘free’ examination – it will no longer be possible to defer payment of the official filing fee for up to one month from filing the application and it will instead be necessary to provide evidence that payment was made on filing. This means that applicants will lose the ability to wait and see what an examiner makes of a borderline mark before committing to the €900 filing fee and has the potential reduce the time to registration;
• Bad faith oppositions – it will be possible to oppose an EUTM application filed in bad faith, although the latest wording of the regulation suggests this will only apply where the contested application might be confused with an earlier mark protected outside of the EU. The introduction of bad faith as a ground of opposition brings the European position into line with UK position where applications can already be attacked on the ground of bad faith but the wording seems to be very restrictive in requiring the existing mark to have already been protected and outside of the EU. It will be interesting to see whether this provision will be further amended and whether we will see many applications being opposed on this ground;
• Expanded bases for opposition – the proposals suggest that Geographical Indications of origin and Protected Designations of Origin could be used as well as or instead of earlier trade marks as the basis for attacking a later application to register a trade mark;
• Change in evidence of use in opposition proceedings – under the new proposals, the owner of an earlier mark used to oppose a later application can be put to proof of genuine use of the mark in the EU during the period of five years preceding the filing / priority date of the later application instead of the publication date of the later mark. In the case of an application filed at the end of the six months priority window, this could shift the five year period for the earlier mark owner to show use by around eight or nine months;
• Shorter opposition window for international marks – in the case of international marks registered under the Madrid registration system, the period for third parties to oppose will be significantly reduced – six months down to one month;
• Longer period for 3rd party observations – there will be a longer window for third parties to file observations on the registrability of marks. Under the proposed new regime, observations can be filed any time after details of the application appear on the register up to the end of the period for opposing the application or, if opposition is filed, when a final decision in the opposition is reached;
• Acknowledging registered marks – according to the proposals, “The proprietor of a registered European trade mark shall have the right to use in connection with the goods and services covered by the registration a symbol right next to the trade mark attesting that the trade mark is registered in the Union” This can only be done while the mark is registered and in force. The exact configuration of the symbol is yet to be decided;
• Control on surrender – it will no longer be possible to surrender a registration which is already the subject of an application for revocation until there has been a final decision concerning the revocation. This would appear to prevent a CTM owner from claiming damages for infringements up to a date which is later than the date from which the mark could be removed from the register if the application to revoke it is successful.

Comment

Many of the proposed changes appear to be sensible and to streamline and modernise the system for obtaining EU-wide trade mark protection. We question whether there is a real need to make the registration system cheaper and quicker and whether the changes achieve the Commission’s trickier goals of the making the system “more reliable and predictable” and allowing businesses more freedom to innovate. We are surprised by the omission of any specific provision relating to the decision in ONEL on the geographical extent of use required to maintain a EU-wide protection and that there is no amendment of the provisions relating to the registration of shape marks as trade marks.

Links

Further information is available at:

• http://ec.europa.eu/internal_market/indprop/tm/
• http://europa.eu/rapid/press-release_MEMO-13-291_en.htm?locale=en
• http://www.ecta.org/IMG/pdf/reform_of_the_ctm_system_-_ecta_comments_executive_summary_final.pdf
• http://www.ecta.org/IMG/pdf/ecta_opinion_on_legislative_package_summary.pdf

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.