The push to harmonise both the substantive and procedural aspects of European intellectual property laws and to create pan-European rights gathers ever-increasing momentum. New initiatives in the areas of patent, copyright and trade secrets push the boundaries ever further, but in trademark law progress is well ahead of the pack.

In the 2013 edition of this publication, Anna Carboni described what were then the newly minted proposals of the European Commission to modernise and harmonise European trademark law even further by amending both the CTM Regulation (207/2009/EC) and the Trade Marks Directive (2008/95/ EC). Just over two years later, and after a much-debated and highly politicised process, the European Parliament, Council and Commission have announced that a provisional agreement has been reached on European trademark reform.

Fees

A big deal in the reforms is the change in pricing structure for Community Trade Marks (now to be called European Trade Marks). Applicants will now pay on a per-class basis with the fee for an application in one class being lowered to €850, with a renewal fee of €850. This affords applicants a greater degree of flexibility then before and over the long term will amount to a saving of up to 37%. This reduction may well have a detrimental impact on national registration volumes where a business has a degree of European cross-border interaction; however, purely local businesses will still find little reason to choose a European Trade Mark. The quid pro quo for national offices will be an increase in contribution for their handling of European Trade Mark procedures which will amount to between 5% and 10% of the OHIM (now to be called the European Union Intellectual Property Office) budget. In addition, up to 15% of the office’s budget will be set aside for national office cooperation projects. Commentators have raised concerns as to the manner in which these contributions will be made, and whether they will ultimately benefit local intellectual property offices rather than national government coffers. The practical reality is that this will be determined at local level and by government departments that ultimately control the budget of their national intellectual property office.

Definition of a trademark

Acknowledging that the scope of signs that function as trademarks has moved on and that express provision needs to be made for non-traditional marks (such as sound, motion or hologram marks), the requirement for a graphic representation will no longer apply, provided that the technological means for presenting the trademark is generally available and provides that the representation is “clear, precise, self-contained, easily accessible, intelligible, durable and objective”, whatever that may end up meaning. Although this seems to create uncertainties, no doubt a practice will develop for accepted forms of representation of non-traditional marks and the opening up of the register in this way will better reflect the reality of modern corporate branding practice.

Registration procedures including classification

The date of filing of all European Trade Marks will be the actual date of filing and the formality requirements between systems will be made identical.

The “means what it says” ruling from the IP Translator decision (Case C-307/10) requiring that applicants specify goods and services will be formally adopted into both European Trade Mark and national office practice and classification will be based on the Nice Classification system. This means that descriptions of goods and services in the future will need to be specific and clear but for CTM registrations prior to 22 June 2012 the position is much less certain. In relation to this class of trademarks, which will include descriptions based on class headings, there will be a transitional six-month period, instead of the more reasonable one year period proposed by INTA, for registrants to specify the precise goods and services that they seek to rely upon.

This will afford trademark owners the opportunity to pick and choose the terms in their descriptions of goods and services that fall under the relevant Nice class headings to the effect that their descriptions could end up being broader than an unsuspecting third party may ever have thought possible. This hardly seems fair or equitable in the context of maintaining a clear and certain register and it will be a challenge for trade mark owners on both sides of the fence to meet the new classification requirements over that six-month time frame.

Much less troublesome, and reflecting the thrust to move ever further towards a single market model, a new certification mark system will be introduced into the European Trade Mark system.

Revocation and declarations of invalidity

All member states must now provide for efficient and expeditious administrative procedures in national offices for revocation and declarations of invalidity. This can only be a positive development in that it seeks to reduce lengthy and expensive litigation and encourages more efficient and reliable procedures in national offices. However the proof of the pudding will definitely be in the eating, as in practical terms trademark owners and their professional advisers will need to be convinced of the reliability, consistency and speed of national office administrative procedures before being prepared to go down that path. Otherwise decisions will wherever possible end up being appealed through national court systems and little will be gained by embarking on the national office administrative procedure in the first place. There is a seven-year period for these procedures to be introduced so this will all involve a very long taste test.

Anti-counterfeiting and goods in-transit

The agreed revisions will bolster anti-counterfeiting measures in several respects and in particular in relation to counterfeit consignments of goods sold over the Internet, but perhaps most importantly addresses the very vexed question of counterfeit goods in transit. After the Philips/Nokia (Joined Cases C-446/09 and C-495/09) decision of the European Court of Justice, European jurisdictions have become an increasingly used hub for the transit of counterfeit products. Under the new regime, a proprietor of a European trademark will be able to prevent such transit provided that the goods or their packaging bear an identical trade mark, or one which cannot be distinguished in its essential elements. However, if the importer can show that the European trade mark proprietor does not have a registration or the right to prevent use in the country of final destination, the action will fail. Does this means that Community Trade Mark courts will now determine, presumably based on expert evidence where necessary, the extent of legal protection for a mark in a foreign country? In addition there may still be difficulties where the destination of goods is changed at the last minute, but overall these provisions will greatly assist in deterring counterfeiting through European ports while not causing legitimate products to be detained where the trade mark is owned by one proprietor in the EU, but by another in the country of destination.

What was left out of the reforms?

The opportunity to make a wholesale reform of European trademark law does not present itself too often so it is disappointing that a couple of obvious potential areas appear not to have been addressed.

The first of these is harmonisation of the relative grounds of examination across Europe. With differing sorts of examination for relative grounds across Europe this was an area ripe for review and harmonisation. One related aspect not pursued in this review was the omission of bad faith as a relative ground of refusal. A pity, because an applicant who tries to register a mark in the EU based obviously upon a foreign but very well-reputed mark and who has obviously acted in bad faith, should be cut off early at the pass.

The second is not addressing the issue as to what degree of use constitutes genuine use of a European Trade Mark from a territorial perspective. Following the various decisions of the Court of Justice there remains a great deal of uncertainty as to what may or may not constitute genuine use. This would have been an ideal opportunity to address the matter and INTA submitted that the legislative position should be taken that genuine use in one member state would suffice as genuine use of a European Trade Mark. Unfortunately this does not appear to have been adopted into the provisional agreement and the uncertain status quo for businesses and their legal advisers remains.

This article first appeared in Who's Who Legal: Trademarks 2015.