Following publication of the amending Regulation at the end of 2015, the regime relating to the new EU Trade Mark (as the Community Trade Mark will become known) will be in force from 23 March 2016. Most of the changes take effect on ‘day one’, albeit some (such as removal of the graphical representation requirement) will not be implemented for a further 21 months (i.e. in September 2017). Member States meanwhile have until 2019 to implement the new Trade Marks Directive into their national laws (and until 2023 to introduce administrative cancellation proceedings).
We have discussed the key features of the new regime in our previous bulletin and OHIM (to be re-named the EU Intellectual Property Office) has produced on its dedicated website a useful list of the main ‘technical’ changes. In this bulletin, we focus on two areas for brand owners to be considering possible action now, i.e. in advance of 23 March 2016.
The first relates to the impact of the fee changes for applications and renewals, which may impact on the timing of new filings and renewals. As a result of ‘three classes for the price of one' being replaced by a system of 'one class per fee', applicants who intend to file EUTMs with three or more classes may prefer to file their applications before 23 March 2016, thereby avoiding the fee increase (for three classes, the application fee will rise from €900 to €1050). Meanwhile, marks in a single class will see a slight reduction from €900 to €850: this is unlikely to encourage many delayed applications but may be attractive, for example, where priority can be claimed from an earlier application.
Renewals will be significantly cheaper from 23 March 2016. It had been hoped that owners of marks due for renewal before the new regime was in force could take advantage of the reduced renewal fees by renewing after that date (even possibly renewing during the six month grace period for late renewals, subject to payment of the 25% surcharge fee). However, in its draft amended Guidelines, OHIM’s position is that, where the basic six month period for renewal has started to run before 23 March 2016, the mark will be subject to the old system for renewal fees.
Existing EUTM holders should also be reviewing their portfolios to identify marks where they may need to take action as a result of changes in the rules relating to specifications. In particular, owners of EUTMs filed before 22 June 2012 which include an entire class heading will have a six month ‘sunset’ period during which they can file a declaration stating that their intention on filing had been to seek protection for goods and services which go beyond those covered by the literal meaning of the class heading (subject to certain defences for third parties). If the owner of such a mark fails to file the declaration, their mark will only cover the goods and services covered by the literal meaning. OHIM has issued a draft Communication and FAQ on the criteria for making this declaration, which suggests it will have fairly limited application. However, this will, of course, depend on the class heading and the nature of the trade mark owner's business. Accordingly, it is important to review specifications now and, in particular, to identify circumstances where it may be preferable to file a partial surrender.
Actions to consider now
Applications and renewals – fee changes
File multi-class applications before 23 March 2016
For new EUTM applications from 23 March, the current ‘three for the price of one' system (which allows applicants to cover up to three classes of goods and services for €900, in an electronic application) will be replaced by a ‘one-class-per-fee’ system.
Under this ‘pay as you need' system, the fee for one class will be €850, a reduction of €50 from the current fee. The fee for two classes remains the same as present (€900) but increases to €1050 for three classes (with a class fee of €150 for all subsequent classes). Accordingly:
- Applicants for marks in a single class may prefer to file after 23 March 2016 to take advantage of the modest cost saving (e.g. particularly where they can claim priority from an earlier application).
- Applicants for marks in three or more classes should consider, if possible, filing their applications before 23 March 2016, to avoid the price rise.
The costs savings in the new regime apply particularly to renewals. Presently, the fee to renew a EUTM registered in up to three classes is €1350, with a fee of €400 for the fourth and all subsequent classes.
After 23 March 2016, renewal fees for EUTMs will be:
Click here to view the table.
For multi-class registrations, in particular, this represents a substantial saving.
Another important change in relation to renewals is that the renewal payment must be made by the expiry of the mark (subject to any late payment during the grace period), rather than by the end of the month in which the mark expires (as at present).
OHIM’s draft revised Guidelines propose that, where the basic six month period for renewal has started to run before 23 March 2016, the old renewal fee regime will apply. As an example, if an EUTM has a filing date of 10 May 2006, the basic period for renewal runs from 1 December 2015 up to and including 31 May 2016. The renewal fee for such a mark would be calculated under the old regime.
We will report further on the position concerning renewals and renewal dates once OHIM has confirmed its practice.
Specifications of goods and services
Both the new Regulation and Directive deal with specifications that contain general terms such as ‘class headings’ by applying the CJEU’s 2012 IP Translator decision: applicants must identify the goods and services with ‘sufficient clarity and precision’ such that it is possible, on that sole basis, to determine the scope of protection. However, class headings may still be used, provided they comply with the clarity and precision standard (OHIM and the national offices have previously agreed 11 general indications that do not comply with this standard). Where general terms (including class headings) are used, the ‘means-what-it-says’ approach will apply, i.e., protection will extend only to goods and services clearly covered by the literal meaning of the indication or term.
Existing EU TM registrations covering class headings
Article 28(8) of the Regulation provides for a transitional period for owners of registered EUTMs filed before 22 June 2012, and registered in respect of the entire heading of a Nice Class, to clarify the scope of protection of their marks. Such brand owners may, within the six month period following 23 March 2016 (i.e., by the deadline of 23 September 2016), file a declaration stating that their intention on filing had been to seek protection in respect of goods and services which go beyond those covered by the literal meaning of the class heading. Those goods or services must be included in the alphabetical list for that class of the Nice Classification edition in force at the date of filing.
Currently, Communication No 2/12 (issued by OHIM after IP Translator) treats such marks as covering all the goods and services included in the alphabetical list of the relevant class in the Nice Classification in force at the date of filing. This will no longer apply following the end of the transitional period.
Brand owners should review their portfolios now to identify marks where they need to take action, either by getting ready to file an appropriate declaration in the transitional period, or potentially seeking to amend the relevant specification before the new regime is in place.
- If an acceptable declaration is not filed by the deadline of 23 September 2016, a mark including an entire heading of a Nice Class will only cover goods and services clearly covered by the literal meaning of that heading (i.e. the scope of protection of such a mark will be less than currently under Communication No 2/12).
- Declarations may only be made for registered CTMs filed on or before 21 June 2012. Declarations cannot be filed for international registrations which designate the EU; national marks are also not affected.
- The mark must be registered in respect of the entire heading of at least one Nice Class. It does not matter if there are additional goods and services in the specification, provided that the language does not limit or in any way disclaim the general indications of the heading.
- The declaration must only include goods and/or services that:
- are in the alphabetical list for the relevant class 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 class heading (OHIM has issued a draft list of examples of such goods and services, which will not be objected to).
This tends to suggest that the scope of an Article 28(8) declaration will, in fact, be fairly limited. In particular, the EUIPO will object to declarations which seek protection for:
- unclear, imprecise or unspecific terms
- claims to the entire alphabetical list
- goods and services that are deemed covered by the literal meaning of the class heading
- goods and services not contained in the relevant alphabetical list
- The deadline for submitting declarations to the EUIPO is 23 September 2016 (there will be a two month period to remedy any deficiencies raised by the EU IPO). Declarations must be filed in writing (one declaration per mark), preferably on the specific Recordal application form. There will be no fee.
We will report further should the position change in the final published version of the Communication and FAQs.
Impact of making a declaration under Article 28(8)
If a declaration under Article 28(8) is made claiming additional goods and/or services, it will not be possible to file an opposition or cancellation against it.
There will however be a defence for third parties: the trade mark owner cannot prevent third party use of any of the additional goods or services where that use began before the Register was amended, and would not have infringed the owner’s rights on the basis of the literal meaning of the goods and services in the Register at that time. There is a similar provision relating to oppositions or declarations of invalidity against later marks, based on the additional goods and services.
Actions to be considered now
Owners of CTMs with class headings applied for on or before 21 June 2012 must carefully consider their options in respect of those marks and may want to take action:
- If they do nothing, i.e. they fail to file an acceptable Article 28(8) declaration in the transitional period, their marks will be limited after the end of the transitional period to the literal meaning of the relevant indication or term. However, the extent to which this is a concern will depend upon the specification and class in question, and so specifications should be reviewed carefully now.
- An appropriate declaration under Article 28(8) may be filed during the transitional period in accordance with the criteria specified by OHIM, taking into account the possible impact of third party defences.
- If a trade mark owner wishes to restrict a list containing class headings to specific goods or services covered by their literal meaning, or to replace a general indication with more precise terms, they should do so by filing for partial surrender, preferably before 23 March 2016 (in order to avoid the potential application of third party defences).