Significant changes are on their way for trade mark owners in the EU. With the publication of the EU trade mark reform package in the EU’s Official Journal just before the year-end break, the countdown for the new rules to come in has begun.

The reform package consists of (i) a Regulation (EU) No 2015/2424 amending the existing Community trade mark regulation (the Amending Regulation) as of 23 March 2016 and (ii) a Directive (EU) No 2015/2436 effectively replacing the existing trade mark directive (the Directive). The EU’s Member States are permitted three years to transpose the Directive into national law, with the exception of the envisaged administrative cancellation procedures for which they are given seven years.

Here are the key points you need to know. Special attention is required from owners of EUTMs that have been applied for prior to 22 June 2012 – see section 1 below.

1. Goods and Services Covered by an EUTM

The Amending Regulation favours a literal interpretation of the Nice class headings and thereby confirms the contested IP Translator decision of the Court of Justice of the EU. In practice, this means that Nice class headings will only protect goods or services covered by the literal meaning of that class. This literal approach differs from the more expansive ‘class-heading-covers-all’ approach, which extended protection to all goods or services in a particular class.

This shift in interpretation has the potential to significantly reduce the scope of protection enjoyed by an EUTM applied for prior to 22 June 2012 (effectively prior to the date of the IP Translator decision). The Amending Regulation recognises this by providing a sunset period during which owners of concerned EUTMs ‘may declare that their intention on the date of filing had been to seek protection in respect of goods or services beyond those covered by the literal meaning of the heading of that class’ (Article 28(8) of the Amending Regulation). The sunset period ends on 24 September 2016, and declarations to this effect should be filed by that date accordingly.

All EUTM owners affected by this should carefully review their registrations and consider if any amendments are necessary to protect their rights. If such an owner does not take any action during the sunset period, the scope of their EUTM will be limited to the literal meaning of its class heading.

2. Changes in Terminology

From 23 March 2016 and without any formalities or action from their owners, Community trade marks will be known as European Union trade marks (EUTM). On the same date, the Office for Harmonization of the Internal Market (OHIM), which is the trade marks and designs registry of the EU, will change its name to European Union Intellectual Property Office (EUIPO).

3. Trade Marks no Longer Need to be Graphically Representable

The removal of the requirement for a trade mark to be graphically representable permits applicants to obtain protection for smells, noises or motions, for example. However, this always requires that their representation is possible in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded (Article 1(8) of the Amending Regulation).

Any business should carefully consider if it uses any marks that have become eligible for protection as a result of this change.

4. Counterfeits Transiting through the EU

The position of trade mark owners with regards to counterfeited products transiting through the EU has been strengthened significantly. Customs may now seize such counterfeit goods even when their final destination is outside the EU. The owner of the goods may, however, request their release by proving that the trade mark owner cannot prevent the sale of the goods concerned in the country of final destinations.

5. Fee Structure

There will be a reduction in the application fees to register an EUTM. However, the basic fee, set at €850 for electronic filings, will only get you one class of goods and services and no longer three classes for the price of one. Instead, you will now need to pay a surcharge for each additional class. This effectively means that multi-class filing will be more expensive. The upside of this according to the law makers will be more focused trade mark applications and ultimately less unused marks on the EUTM register.

Renewal fees will also be lowered. If you have many renewals due this year, you may consider if it is possible to defer them until the revised fees are in force on 23 March 2016.

6. Miscellaneous

The reform package also streamlines and harmonises trade mark rules relating to the application procedure at national registries, grounds for refusal or invalidity, infringement, defences and revocation.

As referred to above, the Directive requires Member States to introduce an administrative cancellation procedure for trade marks. This will bring significant benefits for parties who, for example, are seeking revocation of a trade mark or declarations of invalidity. Such procedures will be a viable alternative to lengthy and potentially costly proceedings in national Courts.

Bottom Line

The reform package provides compelling reasons to review your trade mark strategy this year. The minimum each business should do is to consider if any of its EUTM registrations require updating in accordance with point 1 above.