Trade Marks in the EU are changing. Here’s what you need to know

On 15 December 2015, the European Parliament adopted a new European Trade Mark Directive and Regulation which will implement a number of reforms to a) national laws in the European Union and b) the Community Trade Mark (CTM) system. The aim of the reforms is to make trade mark systems across the EU more accessible and efficient for businesses by lowering costs, reducing complexity, increasing speed, and providing greater predictability and legal security.

These changes to the CTM system come into force on 23 March 2016 with Member States having three years to implement changes to their laws. Although numerous changes are being implemented, for many trade mark owners the most relevant are as follows with arguably the most important being the change in practice relating to class headings and the introduction of a limited period in which declarations may be filed to confirm protection for certain goods/services.

New Names for OHIM and the CTM

The “Office for the Harmonisation in the Internal Market” (OHIM) will be renamed the “European Union Intellectual Property Office” (EUIPO).

The Community Trade Mark (CTM) will be renamed the “European Union Trade Mark” (EUTM).

Three Classes for the Price of One Abolished

Currently one fee is payable for the first three classes of a CTM. From 23 March 2016 application fees will be payable on a “per class” basis to try and stop the register becoming clogged up with unused marks as a result of applicants filing overly broadly. It also makes it cheaper for applicants filing in only one class. At the moment official fees for a CTM application in up to three classes are €900 with an additional fee of €150 per class after the third. This will change to:

Classes

Current fee (Euros)

New Fee (Euros)

One

900

850

Two

900

900

Three

900

1050

4th and subsequent classes

150

150

If any CTM applications in three classes or over are currently under consideration, they should be filed before 23 March 2016 to take advantage of the current fee structure.

Meanwhile, renewal fees are being reduced:

Classes

Current Fee (Euros)

New Fee (Euros)

One

1350

850

Two

1350

900

Three

1350

1050

4th and subsequent classes

400

150


Specifications and Class Headings at OHIM 
– what you see is what you get

Following the IP Translator case in June 2012, specifications must be “clear and precise”, meaning that class headings are now to be interpreted literally and cover only the exact goods/services listed or anything that could reasonably be interpreted as falling under the wording. For example, “musical instruments” would still cover “guitars”. Before IP Translator class headings at OHIM were deemed to cover all the goods and services in a class, even if they were not specifically named in the specification or would fall under the broader term. To follow the example above, “musical instruments” being a class heading would have included “music stands”. This will no longer be the case.

A transitional period is being introduced meaning that for CTMs filed before 22 June 2012 which cover a class heading, owners will have a one-off six month period from 23 March 2016 (i.e. until 24 September 2016) to declare whether they intended to seek protection for more than the literal interpretation of the heading. The declaration must indicate clearly and precisely the goods and services other than those covered by the wording’s literal meaning, based on the alphabetical list of the Nice classification that was in force at the time of the application. Otherwise protection will be confined to the goods/services listed.

We would encourage owners to review their portfolio and check what their registrations cover so that any declarations are filed within the relevant period or new applications are lodged in good time. We can help to manage this process and make appropriate recommendations as required.

Counterfeit goods in transit

Trade mark owners will be able to use Customs to prevent third parties bringing infringing goods into the EU which bear a EUTM even when the goods have not been released on to the market. The burden of proof is on the importer to show that the goods do not infringe.

Filing “non-traditional” trade marks such as sounds made easier

At the moment, all trade marks must be “represented graphically” which makes filing and interpreting non-traditional trade marks such as sounds and smells difficult. This is being abolished and replaced with a more liberal requirement that trade marks are shown in a manner which allows the authorities and public to determine the trade mark’s precise subject matter. For example, sound files can be used for a sound mark.

Infringing acts

Certain infringing acts will now be clarified/codified, for example:

  • Use as a company name is now included as an example of infringing use.
  • Preparatory acts may amount to infringement, for example, where trade marks are put on packaging, tags and security labels. Selling these items also amounts to infringement. This is a further measure to help combat counterfeits.
  • Comparative advertising – if the use of a competitor’s trade mark does not comply with the Comparative Advertising Directive this is now specifically recognised as an infringing act.

Defences to infringement

Some changes are also being made to the defences to a claim of infringement, some of which will help the claimant and some the defendant:

  • There is already a “descriptive use” defence – this will be extended to the use of a non-distinctive sign for example, use of a slogan which wouldn’t be seen by consumers as origin-indicative.
  • Use of a trade mark for “artistic expression” is allowed as long as it is in accordance with honest practices. This is linked with the principle of freedom of expression.
  • Proof of use – as in CTM opposition proceedings, a defendant will be able to ask the owner of the EUTM to prove that it has been used, if it has been registered for more than five years. This may mean a counterclaim for revocation may not always be necessary as is the case now.

Invalidity proceedings – how strong is your trade mark?

Trade mark owners will not be able to bring proceedings against a later mark if, at the filing date of the later mark, the earlier mark was not inherently distinctive, not distinctive enough to support a finding of a likelihood of confusion or had not acquired a reputation if that ground is being alleged.

Seniority claims for EUTMs

If the earlier national registration upon which the claim is based was vulnerable to an invalidity action or revocation action at the date the claim was made, the seniority claim cannot be maintained.

Declarations for invalidity and revocation

At the UKIPO and at OHIM it is possible to apply to invalidate/revoke a trade mark registration – in other words, marks can be cancelled through an administrative and not just through a court-based system. In some EU countries by contrast, it is not possible to bring an action before the national registry – court proceedings are required. The new Directive provides that the Member States must provide for an administrative procedure where trade marks can be invalidated/revoked. This is an effort to reduce the time and costs associated with such actions.

Action points for EUTM owners

Although the reforms will affect national trade marks once the changes are implemented in local law, the most immediate effect of the changes is on EUTMs. Trade mark owners and those applying for EUTMs should consider the following issues:

  • Where they have previously filed in three classes as a matter of course, whether this should still be the case in light of the increased filing fees.
  • If not, which classes should be dropped for any new filings?
  • CTMs registered before 22 June 2012 should be reviewed to determine whether coverage is adequate as it stands, whether declarations should be filed or if new applications are necessary to ensure the right level of protection.

If you would like further advice on these or any other issues associated with the changes to the legislation please contact us.