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IP Cases & Commentary – Details

2 May 2011

The Max Planck Institute Study - Overall Functioning of the European Trade Mark System

Richard Burton

The Max Planck Institute for Intellectual Property and Competition Law has released its much anticipated study on the overall functioning of the European trade mark system. It is the most comprehensive, and perhaps most controversial, document written on European trade mark law since the Community trade mark came into effect in 1996. It contains many recommendations for changes to the current system and will now be considered by the European Commission.

The Commission may not follow any of the recommendations; however, if it recognises areas for improvement, there could be a string of changes, which could potentially come into effect before the end of the year. The changes to the Trade Mark Regulation and the Trade Mark Directive could have far reaching implications for the future of the European trade mark system as we know it.

Common themes of ‘consistency’ and ‘coherence’ run throughout the study (not least in terms of approach and decision making), which seek to establish the potential for enhanced cooperation between OHIM and the national offices.

Of the many recommendations contained within the study, a sample of the most interesting topics are as follows:

Genuine use

The study suggests that genuine use should be assessed on a case-by-case basis taking into account the criteria already developed by the Court of Justice. This issue is currently before the Court of Justice in the ONEL case. It is recommended that there should be no requirement that a CTM must be ‘used’ in more than one member state.

Co-existence

In order to resolve the issue surrounding the enforcement of a CTM against a later national trade mark where the two marks are used in territorially distant member states, it is proposed that a rule for co-existence between the CTM and later national trade mark is established under certain circumstances. The study states that:

The registration and use of subsequent national trade marks in a member state remote from the part of the Community where a conflicting earlier CTM, which has been registered for a period of at least 15 years was used, should be allowed provided that the later mark was applied for in good faith. Such registrations should co-exist with the earlier CTM which continues to be valid and enforceable and may also be used in that member state. It should be explicitly set out in the rule that it only applies to CTMs if only minimal use of the CTM has been made in a part of the Community which is distant from the relevant member state.

This proposal goes completely against the grain of one of the fundamental aspects of the CTM system, namely that it is a unitary right.

Graphical representation

One proposal is that the current graphical representation requirement is simply removed from the wording of the relevant provisions in the Trade Mark Directive and the Community Trade Mark Regulation. This would encourage the development of more non-traditional trade marks, which are currently hindered from developing. This has interesting implications following the so-called Sieckmann criteria in relation to such marks, which the study held should be maintained. Marks such as sound marks could become more common for example; however, it is hard to see how even more non-traditional marks, such as smells and tastes, could easily meet the requirements.

Acquired distinctiveness

Currently, acquired distinctiveness for non-traditional marks must be established separately for each member state, however, given the difficulty that this poses in obtaining a CTM registration for a non-traditional mark, it is proposed that acquired distinctiveness should be assessed bearing in mind the EU as a whole.

National office examination

In order to improve consistency in examination of marks, the study suggests that:

OHIM and national offices could cooperate by putting new applications on a common internet-based platform for a limited period of time allowing participating offices to raise objections, which would become part of the examination in the respective office.

It is thought that such involvement of national offices in OHIM examinations could well give rise to OHIM paying the participating offices for their involvement (similar to the proposed fee-sharing arrangement for the fees to be paid for seniority claims). This is perhaps a step too far for some, who might suggest that it is simply another way of distributing the growing surplus of funds at OHIM due to the huge success of the system to date.

Class headings

The study discusses the issues of classification which are currently before the Court of Justice in the IP TRANSLATOR case. The question is whether OHIM’s current practice of accepting that a filing for a class heading automatically extends to all goods/services within the class is correct, even when there are goods/services within that class which the class heading does not refer to. There is currently a variation in the way in which national offices address this issue; the UK Intellectual Property Office is of the view that the class headings do not automatically cover all goods within the class.

The study suggests that using generic terms for claiming protection should be accepted by all offices without needing to be more specific (the example of clothing is given), however, applicants should be required to claim specifically goods/services which may not be understood as obviously falling under a class heading. The study suggests:

If the goods do not fall within a particular generically indicated group, there is no good reason to consider that an application or registration claims that product. OHIM and member states should agree, prior to implementing any change in their practice, for which classes the class headings are not appropriate, to include all the goods properly classed in that particular class.

The suggestion that there should be some classes that are widely agreed to cover all goods/services within that class seems to be a compromise of the current position. The fact that a common approach is desirable is widely accepted, and any changes that take place are ultimately likely to depend on the judgment of the Court of Justice in IP TRANSLATOR.

Use requirement and cluttering of the register

The study proposes that separate application and renewal class fees should be payable for each class over one. Currently CTM applications cost the same whether they cover one class or three, which, without doubt, leads some applicants to file for broader specifications than they might well need. This proposal would lead to a reduction in the number of unwarranted claims for goods or services not required.

The study also proposes a general requirement that registration requires intent to use. The introduction of a US-style declaration of use was considered but was rejected unless cluttering of the register becomes more problematic.

Well known character and 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 6bis of the Paris Convention), thus enjoying an enhanced level of protection regardless of whether it is registered in the country in which protection is sought.

Conclusions

Some proposals not only look for clarification of issues that have been developed by the Court of Justice, but seek to take a new direction. For example, the study suggests that recognition of the broadening of the scope of protection of trade mark rights as identified in DAVIDOFF v GOFKID should be clearly set out in the legislation. It is also suggested that it should be more difficult to establish a valid claim for unfair advantage.

Those who have delivered the study have certainly attempted to bring national laws and the Community trade mark legislation closer together. Ongoing practical issues have also been flagged up which would bring about beneficial changes such as encouraging OHIM to use more modern methods of communication than faxing.

It is certainly true that the European trade mark system has expanded at a rapid pace since its inception 15 years ago. Those who drafted the legislation cannot have realistically foreseen the position that we find ourselves in now. The study looks back with a view to moving forward with more efficiency and changing with the times. If nothing else, it has created a heated debate and encouraged all concerned to voice their views as to what is, and is not, working. Assuming the changes that take effect are an improvement on the system that is currently in place, this can only be a positive step in preparing it for the next 15 years.

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