Yesterday the European Parliament approved the biggest change in European trademark law in the last 20 years. Comprising a new Trade Marks Directive (governing national trade marks across the EU) and a new Community Trade Mark Regulation (governing EU wide trade marks), it aims to make EU trade mark law fit for the challenges of business in the 21st Century. The Directive will come into force 20 days after publication in the EU Official Journal, and the Regulation after 90 days, so around March/April 2016. Although the changes are largely positive there are some important things for brand owners to know. This post focuses on two key action points:
- the need to quickly amend the specifications of many Community trade marks (now called European Union trade marks, or “EUTMs”); and
- the impact of the changes to fees.
The need to quickly amend EUTM specifications
The Regulation provides that all EUTMs filed before 22 June 2012 which cover all terms of a class heading in a specific class (or the class headings plus additional goods/services) will have their scope of protection reduced to the literal meaning of those terms unless a declaration is filed in a six month sunset period after the Regulation enters into force stating that the owner’s intention was to seek protection for certain goods/services included in the version of the Nice alphabetical list in place when the CTM was filed.
If no declaration is filed during the sunset period those EUTMs will be deemed to cover only the goods/services covered by the literal meaning of the relevant class heading. Depending on the class, this could result in a significant reduction of the scope of protection of your EUTMs.
In addition, under the new laws, even if you do file a declaration during the sunset period, you will not be able to prevent a third party from continuing to use a trade mark in relation to goods/services where and to the extent that:
- the use of the trade mark for those goods/services commenced before the register was amended; and
- the use of the trade mark in relation to those goods/services did not infringe the proprietor’s rights based on the literal meaning of the record of the goods and services in the register at that time.
The same limitations apply in the event you decide to file an opposition or invalidity action against a later trade mark (see Article 28(8)(a) of the Regulation).
OHIM (the European Union Intellectual Property Office) has now issued a draft Communication concerning the implementation of Article 28 of the Regulation, which makes it clear that any declarations made in accordance with Article 28 will have to be extremely narrow. In particular OHIM’s draft provides that:
- a declaration must only include goods and/or services that:
- are contained in the alphabetical list for the class in question of the edition of the Nice Classification in force at the date of filing, and
- go beyond the literal meaning of those covered by the general indications of the corresponding class heading.
- OHIM will object to the use of unclear, imprecise or unspecific terms, to claims for the entire alphabetical list, to declarations for goods and services that are deemed to be clearly covered by the literal meaning of the class heading or to declarations for goods or services not contained in the alphabetical list in question.
OHIM has also compiled a draft list of examples of goods and services which it considers to go beyond the literal meaning. This list is also fairly narrow. It remains to be seen to what extent OHIM will be lenient in accepting claims to additional terms beyond this draft list. In any event, there will undoubtedly be some difference in the approach to literal meaning taken by OHIM and by the national judges in the 28 member states when deciding on the enforcement of EUTMs or counterclaims for revocation in the future. Therefore, filing declarations under Article 28 of the Regulation is both difficult and uncertain.
Brand owners therefore have four options:
- Do nothing, and potentially have the scope of protection of their EUTMs severely limited;
- File a declaration under Article 28 of the Regulation within the six month sunset period, in which case the scope of the goods and services will be severely limited and the third party defences under Article 28(8)(a) will apply;
- File a request to “limit” their EUTMs during the six month sunset period by amending the specification to list all of the relevant goods/services in the relevant alphabetical list with the exception of one – this will allow broad specifications, but likely means that the third party defences under Article 28(8)(a) will apply;
- File a request to “limit” their EUTMs BEFORE the Regulation comes into force by amending the specification to list all of the relevant goods/services in the relevant alphabetical list with the exception of one – this will not only allow broad specifications, but should avoid the application of the third party defences under Article 28(8)(a).
We strongly recommend option 4, acting before the end of February 2016, and amending your EUTMs before the new law enters into force to obtain the broadest possible scope of protection and avoid possible third party defences. We have the tools and expertise to help brand owners with this process, and can provide tailored cost estimates as required. Please contact us if you would like to discuss what is needed for your portfolio.
The impact of the changes to fees
The Regulation introduces a new single class fee structure for EUTMs, rather than the current “three for the price of one” model. There are two key things to be aware of right now.
First, if you have large multi-class filings on the horizon you should file them now, before the new Regulation comes into force. Whilst overall fees generally go down, the fees for filing applications in more than three classes go up, in some cases significantly.
Second, renewal fees will all be lowered considerably under the new Regulation. Brand owners with lots of renewals due in 2016 should therefore consider deferring renewals of EUTMs until after the fee change where possible. In particular, for renewals due between now and April 2016 you should consider late renewal in the 6 month grace period, as the total cost will then still be lower (in some cases significantly), even taking account of the 25% surcharge for late renewal filing.