The Study on the Overall Functioning of the European Trade Mark System (the ‘Study’) by the Max Planck Institute for Intellectual Property and Competition Law, (the ‘Institute’) is defined as one element of and a ‘contribution’ to the European Commission’s overall evaluation of the European trade mark system. The Commission is not obliged to follow any of the recommendations, some of which are likely to be controversial.

Purpose

The purpose of the Study is to provide the Commission with an in-depth assessment of the functioning of the trade mark system in Europe at both Community and national levels and to identify potential areas for improvement. The Study also seeks to establish the potential for enhanced co-operation between OHIM and the national offices and to evaluate how best to implement the distribution of a proportion of the renewal fees paid for Community trade marks to Member States.

Research conducted

The Institute focused on:

  • •investigating the views of the relevant stakeholders in the European trade mark systems (on the basis of the contributions received, the Institute organised two hearings with representatives of the various associations in June 2010);
  • collecting information from national trade mark offices, in particular information on structure, procedures, enforcement and co-operation with users and with OHIM; and
  • a representative survey among users of the Community Trade Mark (“CTM”) system which was conducted in February and March 2010 by the Institut für Demoskopie Allensbach.

Recommendations

The Institute draws conclusions and makes a large number of recommendations, the most interesting of which are outlined below.

  • Distribution of OHIM fees: OHIM’s current surplus is over €400 million. It had already been proposed that 50% of OHIM’s renewal fees should be distributed to national offices, and used specifically for trade mark related purposes. The Study proposes that this 50% share should be divided equally between (i) a minimum amount to be evenly distributed to all Member States, and (ii) a distribution calculated by reference to the number of trade mark applications and international registrations filed with or granted by Member States. This would guarantee to all Member States a basic amount, while accounting for differences in office size by fixing an additional amount related to volume of work.
  • Graphical representation: It is proposed that this requirement is deleted from the wording of the relevant provisions in the Trade Marks Directive and the Community Trade Mark Regulation so that new types of representation, which may be equally informative and reliable are not prevented from developing. However, this should not detract from the level of certainty prescribed in relation to such ‘non-traditional’ marks in the ECJ’s Sieckmann judgment (C-273/00).
  • Classification: Issues of classification are currently before the ECJ in the case of IP TRANSLATOR, Case C-307/10, in particular, OHIM’s practice of accepting that a filing under a class heading automatically covers all goods within the class, even when there are goods within that class to which the class heading does not obviously refer. Practices in national offices vary. The Study finds that OHIM and national offices should agree a common approach. While using generic terms for claiming protection should be accepted by all offices (eg. “clothing” covers all items of clothing without needing to be more specific), applicants should be required to claim specifically goods or services which may not be understood as obviously falling under a class heading. An example of this would be “software” in Class 9.
  • Acquired distinctiveness: The practice currently established by the General Court implies that acquired distinctiveness for ‘non-traditional’ marks must be established separately for each Member State. However this would lead to a difficulty in obtaining a CTM registration for such trade marks and so it is proposed that assessing acquired distinctiveness should focus on the EU as a whole.
  • Examination of relative grounds: 48% of proprietors expressed a preference for an examination by OHIM of relative grounds of refusal. However the Study takes a view that the opinions expressed do not justify a departure from the current approach, as OHIM does not have the resource to evaluate conflicts between trade marks.
  • Period to file an opposition: 26% of proprietors were in favour of changing the period to two months (from the current three months); however the Study did not consider this as a sufficient basis for proposing any changes.
  • Use requirement: Opinion was divided over whether a three year period should apply rather than the current five year period. The Study does not propose any significant change but does suggest a number of de-cluttering measures, such as, an additional fee for each class (as opposed to the current three classes for one basic fee) and a general requirement that registration requires intent to use. The introduction of a declaration of use was considered but was rejected unless cluttering of the register becomes a serious problem.
  • Genuine Use: This is a controversial issue given that the EU now comprises 27 Member States. The Study emphasises that genuine use should be assessed on a case-by-case basis taking into account the criteria already developed by the ECJ. This issue is currently before the ECJ in the ONEL/OMEL case. It is recommended that there should be no requirement that a CTM must be “used” in more than one Member State. However, the Study envisages difficulty in justifying enforcement of a CTM against a later national trade mark where the two marks are territorially far removed. To resolve this it is proposed that a rule for co-existence between the CTM and later national trade mark is created under certain narrowly defined circumstances.
  • Well-known marks and marks with a reputation: The Study proposes that a mark fulfilling the criteria for extended protection based on reputation should at the same time be considered a well-known mark (under Article 6 bis of the Paris Convention).
  • Counterfeit goods: “Use” should include use anywhere in the territory of a Member State or the EU, including use in custom-free zones (which would change current practice). Additionally, use of trade marks on goods in transit should be actionable if the goods are counterfeit goods under the definition of the TRIPS agreement, and if they would be infringing in the country of transit (or in the EU) and in the country of destination. This issue is currently before the ECJ in the Phillips and Nokia cases, C-446 and C-495. Also a role for OHIM in the area of counterfeiting should be considered.
  • Consistency of decision-making: There is substantial room for improvement at both national and OHIM levels in the consistency of decision making. Although the surveys showed a reasonable degree of satisfaction, there was still a notable percentage of users of the systems who were dissatisfied.

For the full text of the Study, click here