Since the introduction of the Community Trade Mark (CTM) nearly 2 decades ago, the law and practice governing CTMs and the harmonisation of national laws has been fairly static. Following the recent study undertaken by the Max Planck Institute, this may all be about to change. In its press release of 27 March 2013, the European Commission set out its proposals for reform of the CTM system, arguing that change is essential because the current system is outdated, the legislation (eg, the Trade Mark Directive (Directive) and the Community Trade Mark Regulation (CTMR)) is inconsistent, harmonisation between member-states has not been fully achieved and because the business environment within the EU has substantially changed since 1996 and the current system no longer reflects the business environment which it seeks to protect.
The Commissions’ proposals suggest a revision of both the Directive and the CTMR as well as a revision of the Commission Regulation on fees payable to OHIM. The Commission hopes to enhance and streamline procedures, facilitate cooperation between member-states, assist the fight against counterfeit goods and modernise the fee structure to better meet the requirements of those customers using the CTM system.
Whilst the proposals remain in draft form for now, the main changes proposed are as follows:
Procedural changes for trade mark applicants and owners
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Changes to existing legislation
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Some of the proposed changes outlined above will almost certainly be met with some resistance. For example, in relation to the proposed changes in relation to how counterclaims for validity are to be handled, it may suit some defendants to have the CTM Court handling the infringement case to also decide the counterclaim for validity rather than OHIM, especially if they are keen for a quick resolution on the matter. Having OHIM decide the claim may delay any decision in the infringement case.
In addition, the requirement that foreign language trade marks may not be registrable in the EU even if the word itself is not known by consumers in the EU is likely to be unattractive to some applicants. This also reverses the decision in the MATRATZEN case.
The removal of the 'own name' defence for trading names will be unhelpful to anyone other than individuals or companies consisting of the personal names of their owners. This defence has recently been discussed in the cases of Stichting BDO v BDO Unibank Inc. (2013 EWHC 418 4 March 2013).
Conversely, the proposed addition or provisions relating to bad faith claims in CTM oppositions will no doubt be welcomed by most practitioners and trade mark holders who up until now have had to wait until the CTM that is believed to have been filed in bad faith has been registered before asserting a challenge to the mark. Given that on average, CTMs take around 9-12 months to be registered, or even longer if there are objections, it will be beneficial for objections on bad faith (albeit only for marks that are not registered in the EU) to be raised before the registration of the CTM in question takes place.
In other proposed changes:
- CTMs will be renamed as European Trade Marks (ETMs);
- CTM Courts will become known as European Trade Mark Courts;
- OHIM will become the (slightly less catchy) European Union Trade Marks and Designs Agency (EUTMDA);
- For National trade marks, the Directive will remove the examination of trade marks on relative grounds;
- In invalidity actions to national trade marks based on lack of distinctive character, trade mark holders will be able to submit evidence of use from after the date of registration rather than before the date of filing;
- National opposition procedures will require a mandatory 2 month cooling-off period before the adversarial stages of the opposition commence;
- Revocation and invalidity actions should all be heard before the National trade mark offices rather than before the Courts;
- Introduction of 2 relative grounds other than registered/pending trade mark, e.g. non-registered trade mark rights and rights to a name, personal portrayal, copyright and industrial right.
The proposed changes will not be effected until they are incorporated into the Directive. This is hoped to take place by Spring 2014, with member-states transposing the new rules into national law within 2 years. Most provisions of the CTMR will be amended when the new Regulation comes into force.