Reforms to the Community Trade Mark (CTM) system were adopted by the European Parliament in December 2015, and several changes to the law will take effect next week, on 23 March 2016.
Summary of action points for brand owners
- For those considering CTM applications in three classes or over, it will be advisable to file before 23 March 2016 to take advantage of the current fee structure.
- Undertake trade mark portfolio review to determine whether Article 28 declarations/partial surrenders are required, or existing protection offered by class specification is adequate.
- Brand owners (luxury brands, FMCGs, etc) having issues with counterfeits to consider EU customs registrations.
- Brand owners seeking protection for distinctive “nontraditional” intangible assets (for instance, instantly recognisable sound/tune used in ad jingles (FMCG) or phones (tech)) to consider applying for protection (change from September 2017).
Key changes to take immediate note of
Name changes: The CTM will be renamed the EUTM (European Union Trade Mark) and the Office for the Harmonisation of the Internal Market (OHIM) will be called the European Union Intellectual Property Office (EUIPO). Given that brand owners/their trade mark attorneys would have earlier alerted their accounts departments and administrative teams to the problem of misleading invoices sent by various entities with "European Union" and "Intellectual Property" in their names, it is important that the relevant people are aware of the name change.
Fee changes: Application fees will be payable on a "per class" basis as opposed to the existing system of "first three classes for the price of one". Consequently, an applicant applying for three classes will have to pay an additional €150. If your company is considering applications
in three classes or more, it is best to file before 23 March 2016 to get the benefit of the current fee structure. There will be a reduction in renewal fees, irrespective of the number of classes.
Literal interpretation of class specifications: The new rules codify the 2012 ruling of the Court of Justice of the European Union (CJEU) in IP Translator – class headings are to be interpreted literally, and cover only the precise goods/services listed or anything that could be reasonably interpreted as being covered by the wording. To give existing registrations a fair chance to comply, Article 28 of the amended Regulation introduces a 6month period (from 23 March 2016 to 23 September 2016) for CTM owners to declare all those goods and services in the alphabetical list of the Nice Classification that their specification intends to cover.
OHIM has published a Communication and a set of FAQs to provide clarity on the Article 28 Declaration process – this seems to indicate that the scope of Article 28 declarations is rather narrow. Additions are limited to goods and services included in the alphabetical list for that class of Nice Classification edition in force at the date of filing, and the EUIPO will object to declarations which seek protection for claims to the entire alphabetical list. OHIM has also prepared an Annexe to the Communication listing those entries in the alphabetical list that it considers go beyond the literal meaning of those covered by the general indications of the class heading, and will therefore not be objected to – this list is also quite limited.
It is not possible to file an opposition or cancellation against an Article 28 declaration. However, the CTM owner cannot prevent third party use of any of the additional goods or services where such use began before the Register was amended, and would not have infringed the owner’s rights on the basis of the literal meaning of goods or services in the Register at the time.
Trade mark proprietors should review their portfolios to determine whether they need to file any Article 28 declarations. The risk otherwise is that proprietors will find their trade mark protection more limited than expected against third parties. To allow for the broadest possible protection and preclude the possibility of the application of the Article 28 defence, where relevant, it may be sensible for brand owners to file a partial surrender before 23 March 2016, by amending the specification to list all of the relevant goods/services in the relevant alphabetical list with the exception of one.
More teeth to the counterfeit goods in transit provision: Now, EUTM owners will be able to avail of Customs assistance for goods in transit, even if the final market of the infringing goods is outside the EU. Some of the customs situations in which owners are entitled to seek assistance include transit, transhipment, warehousing, free zones, temporary storage, inward processing and temporary admission. As before, the entitlement lapses when, in subsequent proceedings, the holder of goods is able to prove that the EUTM owner is not entitled to prohibit placing of goods on the market of the country of final destination. The extension of the goods in transit provision to beyond the EU should be a major incentive for nonEU companies facing counterfeit issues to apply for EUTMs and EU customs registrations.
Other substantive and procedural changes from 23 March 2016
- No possibility of filing EUTM applications through national offices.
- Clarifies that the time period for submitting third party observations– this should take place before the end of the opposition period or, where an opposition against the trade mark has been filed, before the final decision on opposition is taken.
- EUIPO has the right to reopen examination of absolute grounds on its own initiative at any time before registration.
- Absolute grounds of refusal: Grounds for rejection that were reserved solely for properties of shapes (shapes arising from the nature of the goods, or necessary to obtain a technical result, or giving substantial value to the goods) have been extended to all nonshape marks.
- Relative grounds of refusal: Introduction of a separate specific ground of opposition and cancellation on the basis of Protected Designation of Origins (PDOs) and Protected Geographical Indications (PGIs).
- Change in date to determine the obligation to submit proof of use: The relevant date is now date of filing or priority date of the contested EU trade mark application rather than the date of its publication. The implication is that the fiveyear period to determine use may be pushed further back, so there is a possibility that more recent use will not fall within the fiveyear period. Proof of use can be requested in all infringement, opposition and invalidity actions.
Opposition and Cancellation
- Start date for the opposition period against international registrations in the EU: Opposition period to start 1 month after publication – earlier it was 6 months.
- Counterclaims before national courts: Designated EUIPO national courts are not to proceed with examination of the counterclaims until either the interested party or court have informed the EUIPO of the date on which the counterclaim was filed – counterclaiming parties need to be aware of this obligation to inform the Office to avoid delay in proceedings.
- EUIPO information obligation towards national court: The EUIPO is obliged to inform the national court in question of any previous application for revocation or declaration of invalidity filed before the Office.
- Existing use provisions have been interpreted by the CJEU to mean that any use of a differing form of CTM must exclude use of forms themselves registered. The amending regulation adds wording to this provision to the effect that the use requirement will be fulfilled, even if the different form of the mark is itself registered. This is good news for brand owners who have altered or are considering altering their trade marks as part of re branding/modernization strategies, since all registered and unregistered marks in a single family (for e.g., black/white and colour marks) will be considered in proof of use situations.
- Narrowing of “own name” defence: “Own name” defence narrowed down to natural persons, so the use of a trade mark as trading or company name will be considered an infringing act.
- Preparatory Acts: Affixing trade marks on packaging, tags, security labels may amount to infringement – yet another measure to help clamp down on counterfeits.
- Comparative advertising: Clarify that if use of a competitor’s trade mark does not comply with provisions of the EU Comparative Advertising Directive, it can be considered an infringing act.
Defences to Infringement
- Some changes limiting scope of defence and some expanding.
- Extension of “descriptive use” defence – extended to use of a non distinctive slogan (for example, a slogan that would not be seen by consumers as indicating origin).
- Use of trade mark for “artistic expression” allowed as long as it is in connection with “honest practices” – this can be considered to be a parody exception.
- Counterclaim for revocation is unnecessary because it is open to defendant to put a claimant to proof to show use, if the claimant’s mark has been registered for more than five years.
- Trade mark proprietor prevented from successfully suing for infringement in relation to the use of a later registered mark in situations where that proprietor’s own mark only gained distinctiveness or reputation after the later mark was applied for.
September 2017 changes
The amending CTM Regulation contains some provisions that will come into force only 21 months after publication (i.e. on 23 September 2017). OHIM has noted these provisions come into force only later since they require to be developed by further guidance and legislation.
- Elimination of the graphical representation requirement: Signs can be represented in any appropriate form of generally available technology, as long as the representation is clear, precise, self contained, easily accessible, intelligible, durable and objective. This change may facilitate the registration of nontraditional marks (for instance, a nonmusical sound may be represented by an electronic sound file). It will be three years before this is transposed into UK law (based on the new EU Trade Mark Directive which came into force in January 2016), so it might be worth considering the registration of nonconventional marks as EUTMs.
- Introduction of EU certification marks: Certification marks will allow a certifying institution or organization to permit adherents to the certification system to use the mark as a sign for goods and services, as long as complying with certification requirements.