Draft legislation by the European Commission ('Commission') concerning the European Trademark System was recently leaked. The available version of this draft legislation is unofficial and the final amendments may differ. Marques has reported on these documents, and since the potential impact is quite significant, we deem it useful to highlight a few of the expected changes.

Community Trademarks and OHIM

Terminology

In order to adapt the terminology to the Lisbon Treaty, the Commission proposes changing the designation 'Community trade mark' to 'European trade mark' (ETM), and the name of OHIM to 'European Union Trademarks and Designs Agency'.

CTM filing practice

The filing of CTMs (ETMs) at national offices (and the Benelux Office of Intellectual Property) and conducting optional searches of some national registries will be abolished. The CTM fees will become due immediately upon filing. The fee structure will be amended to include one class of goods/services during the application and renewal process in order to discourage filings from being too broad. However, the total fee for three classes is expected to remain more or less the same.

In an effort to increase legal security by clarifying provisions and removing ambiguities, the Commission is proposing quite a few changes. Below we highlight some of the most significant ones.

Graphical representation dropped, non-traditional trademarks welcomed

The requirement for trademarks to be represented graphically will be abolished. Instead, a sign must be capable of 'being represented in a manner which enables the competent authorities and the public to determine the precise subject of the protection afforded to its proprietor'. This will allow for the registration of sound and smell marks. Furthermore, the definition of trademark is widened to specifically include 'colours as such' and 'sounds'.

Customs procedure, shifting the burden of proof to the importer

The burden of proof in suspensive custom procedures will be reversed, so that the importer must prove that the counterfeit goods are destined for a territory outside the EU.

Preventive action – labels and packaging in itself will be infringing

A CTM owner will be allowed to take action against the production and distribution of labels and packaging or similar items which may subsequently be combined with illicit products.

Bad faith

The possibilities of opposing European trade mark registrations filed in bad faith are extended. Opposition will also be possible where the trademark is likely to be confused with a trademark filed earlier in time and outside the EU. This translates into significantly enhanced protection for marks from outside the EU.

Use of class headings in older registrations

In order to comply with the IP Translator, decision owners of already registered trademarks are given the opportunity to file a declaration where they can state that on the date of the filing, it was their intention to seek protection in respect of goods and services beyond those covered by the literal meaning of the class heading. If no such supplementary declaration is filed, the registration is deemed to extend only to goods and services covered by the literal meaning.

Foreign descriptive terms banned

The draft Regulation provides for a new absolute ground for non-registration. Terms that would be descriptive if translated or transcribed into any script or official language of a Member State will be blocked from registration. This means, for example, that a sign in Chinese characters that would be descriptive in China will not be registered as a trademark.

National Law

In order to further harmonize national law, the Commission has expanded the 18 articles of the current TM Directive to 57 articles in a recast Directive. Optional areas will largely become mandatory. Because some proposed changes mirror the changes as set out in the draft Regulation discussed above, we will only mention some of the most significant changes that are different or relate specifically to national law.

Extension of territories where absolute grounds apply

The absolute grounds listed will apply even if the issue arises in another Member State. This means, for instance, that a sign descriptive in Dutch cannot be registered in any other Member State, even if the Dutch meaning is not recognized in the other Member State. This does away with the practice allowed by the Matratzen Concord case of the ECJ.

Revocation and invalidity in administrative procedures

In order to oblige parties to go to court, the recast Directive provides for mandatory administrative revocation and invalidity proceedings to be lodged before the national office. This will lower the threshold and costs for such proceedings.

Third party observations allowed

In accordance with the procedure before OHIM, third parties will be able to file observations on absolute grounds without becoming a party to the proceedings.

Genuine use period defined

The recast Directive clarifies the five year period in which the trademark should be genuinely used. If a Member State provides for opposition proceedings, the five-year period shall be calculated from the day the mark can no longer be opposed of if opposition proceedings have been lodged and not withdrawn: from the date on which a decision terminating the opposition proceedings has become final.

Once again we note that the draft legislation discussed above is not yet official and changes may occur. The above does not qualify as legal advice.