Important changes to European trade mark law will be taking effect this year.  The new EU Trade Mark Directive (No. 2015/2436) (the Directive) came into force on 13 January 2016 and the new EU Trade Mark Regulation (No. 2015/2424) (the Regulation) will come into force on 23 March 2016

The Regulation and the Directive represent the biggest shake-up in the EU trade mark system in 2 decades.  Most of the changes introduced by the Regulation will take effect on 23 March 2016.

In this alert, we highlight some of the key changes that may affect trade mark owners.   

Class Headings

The change of most immediate importance affects European Community Trade Marks (CTMs) with specifications consisting of class headings.  The Regulation provides for a change in practice so that all CTMs filed before 22 June 2012 will be treated as covering the goods and services within the literal meaning of the class heading only.  This could result in narrowing the protection of many existing registrations. 

Following the CJEU’s landmark decision in the IP Translator” case (Case C-307/10), OHIM’s practice has been to interpret class headings used in trade mark specifications literally.  Applications covering all terms in a class heading need to explicitly indicate whether the intention is to cover all goods and services in the alphabetical list for that class.  The Regulation codifies this practice.  However, existing registrations and applications using class headings filed before “IP Translator” were treated as a claim for all the goods and services in the corresponding class.  The Regulation changes this to bring the practice in relation to pre-IP Translator CTMs in line with new applications.  

Owners of relevant trade mark registrations wishing to avoid this restriction will have a 6 month grace period to file a declaration specifying which additional goods/services falling outside the literal meaning of the class heading (to be selected from the alphabetical list of goods and services in force at the time of filing) were intended to be covered.  This declaration must be filed between 23 March 2016 and 23 September 2016.  However, it is important to note that any amendments will not be retrospective for the purposes of infringement, opposition or invalidation purposes. Accordingly, it is critical to file amendments as soon as possible. 

New Deadline for Renewals

It is extremely important to note that renewal requests will no longer be accepted up until the end of the month in which expiry occurs.  Under the Regulation, renewals for registered marks due to expire on or after 23 March 2016 must be requested prior to the date of expiry.

Fees

Official applications fees will now be calculated on the basis of “1 class per fee”, replacing the “3 for the price of 1” system (currently €900 if filed electronically).  Under the new regime, the official fee for an application in a single class will be €850, a saving of €50.  2 classes will be €900 and €1050 for 3 classes.

Applicants who only need to cover 1 class will save money but it will be more expensive for those who wish to file for 3 or more classes.  Accordingly, trade mark owners who intend to file in multiple classes should consider filing before 23 March 2016. 

Official renewal fees will be significantly reduced from the current €1350 for 3 classes to €1050 for 3 classes and €150 for each additional class over 3 compared with the current €400.

There will also be a reduction in the official fees payable for oppositions, invalidity and revocation proceedings, as well as filing appeals.

The revised official fee structure is intended to make it cheaper for businesses only wanting to make single-class applications and to reduce congestion on the register by discouraging applicants from automatically filing in 3 classes.

Infringement

Use of a trade mark as a trading or company name is now a specific infringement. 

The Regulation provides enhanced protection against counterfeit goods (including packaging) in transit in the EU, even if the goods are not intended for the EU market, unless the potential infringer can show that the goods would not be considered to be infringing in the country of final destination.  This reverses the controversial decision of the CJEU in the Philips and Nokia cases (C-446/09 and C-495/09).

Certain preparatory acts will also be prohibited as it will constitute infringement to affix trade marks to packaging, labels, tags or security tags or authenticity features and to sell, stock or import such materials. 

The Regulation makes an important clarification in relation to the “own-name” defence, confirming that it is limited to “natural persons” who are using their own name or address in accordance with honest business practices.  Businesses will no longer be able to rely on a company or trading name in relation to this defence.  This enhances the need for businesses to conduct appropriate trade mark clearance before adopting a company or trading name. 

Graphical Representation

It will no longer be necessary for marks to be represented graphically provided that the sign can be represented in a manner that enables the authorities and the public to determine the clear and precise subject matter protected.  The system is intended to allow marks to be represented in any appropriate form using generally available technology.  This should make it easier to file non-traditional marks such as sounds and motion marks, which could be represented by a sound or video file. 

However, signs must still be represented in a manner which is clear, precise, self-contained, easily accessible, intelligible, durable and objective.  This means that some non-traditional marks, such as smell marks, may still face practical hurdles.

This provision will not take effect until 2017. 

Absolute Grounds

Currently, signs can be refused registration if they consist exclusively of the shape of goods or a shape which is necessary to achieve a technical result or provide substantial value to the goods.  This has been extended to include all signs which consist of “any other characteristic”.  The rationale for the original provision was to prevent trade mark registration of shapes that could be protected under other IP rights such as designs or patents.  It is regarded as against the public interest to provide indefinite trade mark protection in technical solutions or functional characteristics which would effectively extend design and patent rights.

The extension of the prohibition was considered necessary in light of the removal of the graphical representation requirement.  However, the effect could be to make it more difficult to register not only non-traditional marks, but other types of marks as well, such as colours, bearing in mind that this is an absolute prohibition which cannot be overcome by evidence of acquired distinctiveness. 

It is now made clear that it is an absolute grounds for refusal where the sign conflicts with designations of origin, geographical indications, and traditional terms for wine, traditional specialities guaranteed and plant variety denominations.

Definitions

The terms “Office for Harmonisation in the Internal Market” (OHIM), “Community Trade Marks” (CTMs) and the “Community Trade Mark Regulation” (CTMR) will be replaced by the “European Union Intellectual Property Office” (EUIPO), “European Union Trade Marks” (EUTMs) and the “European Union Trade Mark Regulation (EUTMR)”. 

Conclusion

Many of the changes will take some time to be implemented but trade mark owners with CTMs filed before 22 June 2012 should review their portfolios to check if they cover the class headings and consider whether clarification of the goods and services will be required.  Although the grace period does not expire until 23 September 2016, any declaration should be filed as quickly as possible bearing in mind that any amendments are not retrospective.

Trade mark owners with registrations due for renewal must check the renewal dates carefully to ensure that they do not miss the deadline.

Trade mark owners considering multi-class (3 classes or more) filings should consider taking advantage of the cheaper official fees prior to 23 March 2016.