The European Parliament has published its draft report detailing its suggested revisions to the European Commission's proposals to reform the Trade Marks Directive (Directive 2008/95/EC), published in March 2013.
In making its amendments, Parliament sought to balance the objective of stronger harmonisation of European trade mark law against the need to ensure that national trade mark protection remains an attractive option for applicants. Parliament's suggested amendments include the following.
The origin function and scope of infringement in double identity cases
In a major amendment of great concern to brand owners, the Commission had proposed to limit the scope of infringement in double identity cases (identical trade mark and identical goods/services) only to instances where the use of the sign "affects or is liable to affect the origin function". The premise for this was that the recognition by the courts of additional trade mark functions, such as advertising and investment, had created legal uncertainty between double identity cases and the extended protection afforded to marks with a reputation. However, Parliament has taken the view that this would in fact create increased legal uncertainty and has proposed removing this limitation. This is a welcome development for brand owners who saw the Commission's proposal as a retrograde step from recent case law, notably Bellure, recognising additional trade mark functions over and above the origin function.
Counterfeit goods in transit
The Commission has proposed to reverse the position of the CJEU in Nokia/Phillips to allow brand owners to prevent third parties from bringing counterfeit goods into the customs territory of the EU regardless of whether the goods are released for free circulation. Therefore, counterfeit goods in the physical territory of the EU under a suspensive customs procedure such as external transit would be treated as having entered the EU jurisdiction for trade mark infringement purposes.
However, Parliament has raised the concern that this goes too far and would limit legitimate international trade. It has therefore proposed adding a requirement that the trade mark owner must have a valid trade mark registration in the final destination country of the goods concerned, such that they would also be counterfeit in that destination. This amendment is not particularly controversial, and should address the difficulty of allowing infringement proceedings to be taken in the EU where there is split ownership of a brand in different territories as a result of which goods which would be infringing in the EU are legitimate in the country of origin and destination. It is not yet know how this would be implemented in practice: it would be an onerous obligation on rightsholders to require them to record details of trade mark registrations in all potential countries of destination with customs upfront and appears more likely that rightsholders would need to confirm this information quickly following a seizure. Rightsholders may therefore wish to ensure their records of trade mark registrations are accurate and up to date in preparation for this potential change in practice.
Nonetheless, the overall proposed change to the law regarding goods in transit remains a positive development for brand owners which will enhance their ability to tackle infringement globally.
The Commission's proposals include a new provision enabling brand owners to object to the importation into the EU of infringing goods, even if only the consignor is acting for commercial purposes. This is intended to target the online sale of counterfeit goods to private consumers.
Whilst the Commission's proposals referred to infringing goods, therefore including parallel imports, Parliament has considered the scope of this would be too wide and has narrowed its application to counterfeit goods.
Absolute grounds objections existing in other member states
The Commission had proposed extending the application of the absolute grounds for refusal so that a trade mark application in one member state could be refused on the basis of absolute grounds objections to that mark existing in another, and also where an absolute grounds objection would apply to a mark written in a foreign language mark if it were translated into any of the EU official languages.
Parliament has proposed removing this amendment, as it would conflict with the territorial nature of national trade mark registrations and would be "disproportionate and practically unworkable to require national offices to examine absolute grounds for refusal in all national jurisdictions and languages of the Union."
Parliament has proposed the following amendments to the requirements around assignments of trade mark rights and their recordal.
- Removal of the requirement for assignments to be in writing and signed. Although in practice most assignments will still be in this form, Parliament considered that formally requiring this could fetter parties' freedom, especially in e-commerce.
- When requesting a recordal of an assignment in the register, the requesting party must provide documentary evidence of the assignment.
- An assignee is to be able to invoke its rights once the application for the assignment to be registered has been received by the relevant office, and not once it has been entered onto the register as is currently the case.
Parliament has also made a number of further proposed amendments, the most significant of which are summarised below:
- Terminology: OHIM to be known as the "European Union Intellectual Property Agency" (and not the "European Union Trade Marks and Designs Agency" as originally proposed).
- Searches of prior marks: Further to the proposed abolition of relative grounds examination by national trade mark offices, such offices may still provide searches of earlier marks for information purposes only.
- Plant Variety Rights: Plant Variety Rights to be added as an absolute ground for refusal, in the interests of consistency with the Community Trade Mark Regulation (Regulation 207/2009 EC).
- Consent to registration: It is to be obligatory for national offices to give effect to consents and allow the registration or maintain the validity of later marks where the holder of an earlier mark has consented.
- Start of five-year non-use period: For the sake of clarity, the effective date from which the five-year non-use period begins to run should be entered on the register .
- Address for service: Parliament proposes relaxing the requirements to allow parties to designate an address for service within any member state, not necessarily the country in which proceedings are taking place.
- Scope of oppositions, invalidity actions and revocation actions: Under Parliament's amendments, a trade mark owner would be permitted to file a single opposition or invalidity action based on multiple prior marks, with no need to file separate actions for each mark relied on. Actions can also be based on some or all of the classes in which a prior mark is registered, and directed against some or all of the classes covered by the contested mark. This will allow oppositions and invalidity actions to be prosecuted more efficiently in Member States which do not currently permit this.
Parliament's proposed amendments are now to be sent back to the Commission for further review, and it remains to be seen the extent to which these proposals are adopted in the final version of the amended Directive, and what further revisions may be made in the course of the review process.
Furthermore, Parliament is yet to publish it's report on the Commission's corresponding proposed reforms to the Community Trade Mark Regulation, although it is likely that Parliament's suggested amendments will be materially the same as those in relation to the Directive
The EU institutions are aiming to adopt the amended versions of both the Trade Marks Directive and Community Trade Mark Regulation by Spring/Summer 2014 . In the light of this somewhat ambitious timetable, Parliament has expressly stated that its report covers the main issues where it 4 Intellectual Property Client Alert December 2013 considers there is a need to amend the Commission's proposals and has reserved its right to make additional amendments and proposals.