IP Cases & Articles

Trade Marks and the EU Is it Time for Change?

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set out its proposals for reform of the CTM system, arguing that change is essential because the current system is outdated, the legislation (eg, the Trade Mark Directive (Directive) and the Community Trade Mark Regulation (CTMR)) is inconsistent, harmonisation between member-states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

Current position Proposed change
Filing requirements: CTM Applications can be filed direct at OHIM or via the trade mark office of any EU member-state. All CTM applications to be filed via OHIM only.
3 classes for the price of a single CTM application. Only 1 class to be included in the basic CTM filing fee.
CTM Filing fees can be paid up to 1 month after the filing of the application. All CTM filing fees will be due on the date the CTM application is filed.
Specifications: Class headings may be used to identify goods and services within CTM applications. Where the Class heading is used, applicants can indicate whether their intention is to obtain protection for all goods and services falling within the alphabetical list of the Nice Classification for that Class. Class headings may be used to identify goods or services for CTMs but they will be given their precise, literal meanings. TM holders of registrations which predate IP TRANSLATOR (22 June 2012) and which use the Class headings may declare whether they intended to seek protection for all the goods/services in the alphabetical list of the Nice Classification for the Classes in question. If no declaration is received, the CTM in question will only be deemed to cover the literal and precise meaning of the Class heading.
CTM searches: OHIM automatically conduct searches of the CTM Register for possible conflicting registrations to any newly filed CTM and report the results to the CTM applicant and earlier rights holders. OHIM will no longer search for potentially similar CTM applications/registrations. The burden will lie with rights holders to monitor the CTM Register for possible conflicting rights.
Oppositions: Proof of use requests for CTMs more than 5 years old require the holder of the earlier right to prove use from a period of 5 years preceding the publication of the CTM application being opposed. The period for filing proof of use will be the 5 year period preceding the filing (or priority date) of the CTM application being opposed.
Counterclaims: Counterclaims challenging the validity of a CTM can be determined in a CTM court with or without OHIM’s knowledge. OHIM must be informed of all counterclaims for validity of a CTM and if OHIM are already investigating the validity of a CTM, the CTM Court must stay its proceedings until a decision has been rendered by OHIM as to the validity of that CTM.

Changes to existing legislation

Current provision Proposed change
Directive: 3 - A CTM must be graphically represented. CTMR: 4 - The words “graphically represented” will be removed and the Article reworded to “a trade mark may consist of any signs, in particular words….devices, logos, letters, numerals, colours…, the shape of goods or their packaging, or sounds” with a caveat that the sign must distinguish the goods of one undertaking from those of another and be represented in a manner which conveys the precise scope of protection afforded by the sign.
Directive: 4(2) - Absolute grounds objections will apply to trade marks even if the grounds ofnon-registrability exist in only part of the Community. CTMR: 7(2) - Any trade mark in a foreign language will not be registrable, if when translated into an official language of the member-state in question, it would not be registrable under Article 4(1)/ 7(1).
Directive: 5(3) - No current provision. CTMR: 8(3) - A new subsection is to be introduced which provides for a bad faith claim in an opposition where there is liable to be confusion with an earlier mark which is not protected in the EU.
Directive: 11 - The provisions of Article 11/9(1) relating to rights conferred by a trade mark include prohibiting use by:(a) affixing the sign to the goods or to the packaging thereof;(b) offering the goods, putting them on the market or stockingthem for these purposes under that sign, or offering orsupplying services thereunder;(c) importing or exporting the goods under that sign;(d) using the sign on business papers and in advertising. CTMR: 9(a) - Where there is a risk of infringement of a trade mark within the EU by use of a trade mark for goods or services, the TM holder shall have the right to prohibit:a) Affixing in the course. of trade a sign identical with or similar to the trade mark on get-up, packaging or other means on which the mark may be affixed;b) Offering or placing on the market, or stocking for those purposes, or importing or exporting get-up, packaging or other means on which the mark is affixed.
Directive: 10 - No current provision. CTMR: 9(4) - Goods may not be imported into the EU even if only the consignor is acting for commercial purposes.
Directive: 10 - No current provision. CTMR: 9(5) - Where goods are held under suspensive procedures, the holder of such goods will need to provide evidence of the final destination of the goods where there are reasons to believe the goods will be placed on the EU market.
Directive: 14 - A trade mark shall not entitle the proprietor toprohibit a third party from using in the course of trade:(a) his own name or address. CTMR: 12(1)(a) - The defence of relying on your own name or address will not apply to trading names but personal names only.

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.

Useful links

The European Commission Representation in the United Kingdom