The European Union recently adopted new legislation introducing miscellaneous reforms to EU trade mark law.
The reforms are numerous and include the adoption of a new designation for the Community trade mark itself and a new name for the trade mark registry office (currently, OHIM). More substantive issues include a new definition of what signs qualify as trade marks, new rules on how to specify goods and services in trade mark applications and reforms relating to enforcement and dispute resolution matters. The new legislation also includes various provisions implementing rulings of the Court of Justice of the EU (“CJEU”) on a range of issues and many useful updates and clarifications of the law. There is also a revised fees structure, although overall the level of fees will not change dramatically.
Reforms to the EU trade mark and to national trade mark systems
The reforms introduced by the new legislation will have effect on two levels. Amendments to the regulations governing the Community trade mark will come into force on 23 March 2016, while the trade marks directive, which is a harmonizing measure that applies to the national trade mark systems of EU member states, will be replaced with a new updated version (Directive 2015/2436) to come into effect on 15 January 2019 (to allow Member States time to bring their domestic legislation up to date).
The Community trade mark has been re-christened as the “EU Trade Mark” whilst the registry office, located in Alicante in Spain, which existed for some 20 years under the oddly bureaucratic name, “the Office of Harmonisation in the Internal Market (OHIM)” will now have the more appropriate and straightforward name “the European Union Intellectual Property Office” (even though, it should be noted, it is only in charge of European trade marks and registered designs – European patents, including the new Unitary Patent, remaining the domain of the European Patent Office in Munich).
To keep up with modern times, this note uses the new terminology (but instead of the mouthful “European Union Intellectual Property Office” we will refer simply to the “IPO”).
Signs qualifying as a trade mark
The definition was updated to remove the requirement that a trade mark must be capable of being represented graphically (which included words). Instead, it will now be required that the sign sought to be registered as a trade mark will be capable of being represented on the register “in a manner which enables the competent authorities and the public to determine the clear and precise subject-matter of the protection afforded to its proprietor”.
The amended definition is designed to make it easier to register special signs such as sounds and scents. It may also open up other possibilities (for example, for technology-based signs which cannot practically be represented graphically).
Specifications of goods and services
This reform follows an extensive debate which (following a decision of the CJEU in the IP Translator case in 2012) resulted in changes to examination policies at the IPO and at national trade mark registries. Accordingly, the following rules will apply on the specifications of goods and services:
- Goods and services must be identified with “sufficiently clarity and precision”;
- The class headings of the international classification of goods and services under the Nice Agreement may be used in trade mark specifications, if the language meets the above requirement; and
- Class headings (and any other description) will be interpreted as covering “all goods and services clearly covered by the literal meaning of the indication or term”. The class heading will not be read as including a reference to all goods or services included in the class, insofar as the wording of the class heading does not literally cover such goods or services.
Historically many registrants in the EU used the class headings as the specification of goods or services on the premise that the indication would be treated as a reference to all goods or services included in the class. To accommodate for that historic practice, the new legislation permits owners of existing EU trade marks filed before 22 June 2012 (the date of the IP Translator decision) to file a declaration with the IPO by 24 September 2016, clarifying the intention. A trade mark proprietor will be able to clarify its original intention in the declaration if it was meant to cover all goods or services included in the class even though some of these goods or services were not covered by the literal meaning of the class heading language. The declaration must specify those goods or services which the proprietor wishes to protect in a “clear, precise and specific manner” and the IPO will then publish the amended specifications.
A number of reforms were introduced in order to facilitate enforcement actions against the trade in counterfeit goods.
Goods which pass through the territory of EU member states without being released for circulation in the EU market (goods in transit) are not generally subject to enforcement remedies under EU trade mark law. An infringement action can be brought in relation to goods placed in a customs warehouse (or transported through the EU under a customs seal) only if the final destination of the goods is in an EU member state. Where counterfeit goods are seized while in transit, the proprietor of the registered trade mark seeking to enforce its rights may face practical difficulties proving that the goods are destined for release in the EU. Sophisticated traders in counterfeit goods may seek to avoid enforcement action by designating a final destination outside the EU, and then releasing the goods unlawfully in the EU. Such unlawful practices are often difficult to counter effectively.
The reformed legislation offers some solution by allowing the proprietor of the registered trade mark (with the assistance of customs authorities) to prevent the entry of counterfeit goods into the EU territory, even if they are stated to be merely in transit. That entitlement will expire if the holder of the goods submits evidence that the placing of the goods on the market in their final country of destination will not infringe the rights of the trade mark proprietor in that country. Effectively, the new regime shifts the burden of proof to the importer or holder of the goods and may help to reduce the movement of counterfeit goods through the EU and the unlawful importation of such goods into the EU.
Another measure designed to facilitate enforcement action is to allow trade mark proprietors to prevent preparatory actions which precede the act of affixing an infringing sign to goods or their packaging. This may include acts such as dealing with packaging, labels, security or authenticity features or devices or other means by which the mark can be affixed to goods, including importing such things, placing them on the market or stocking them. This measure may assist trade mark proprietors to interfere with counterfeiting activities at an earlier stage of the production chain and to direct enforcement action against parties involved in various activities ancillary to the actual dealing with counterfeit goods.
Introducing mediation into trade mark and registered design proceedings
A new mediation centre will be set up by the IPO which parties to proceedings before the IPO will be able to use on a voluntary basis. Following the filing of an opposition, application for revocation or application for a declaration of invalidity of an EU trade mark or a Community Registered Design, the parties to the proceeding will be able to apply jointly to arrange for a mediation through the IPO mediation centre. The proceedings before the IPO will then be suspended for the duration of the mediation.
As in the case of court proceedings, parties to registry disputes may wish to attempt mediation proceedings in order to try and achieve an expedited resolution of the dispute, save costs or with the view to reaching an agreed settlement which often provides a better more commercial resolution for both parties which a decision of the court or the IPO on the legal merits of the case may not achieve.
Clarification of the law
Various changes were introduced implementing the case law of the CJEU of the last 10-15 years or simply clarifying the legislation. Some points of note include provisions as follows:
- that the rights of the proprietor of a registered EU trade mark are without prejudice to earlier third party rights;
- that the use of a sign as a company name or trading name can infringe a registered trade mark, if the name is used to distinguish relevant goods or services; and
- that the use of a competitor trade mark (or a confusingly similar sign) in comparative advertising – which can otherwise be lawful – infringes the trade mark if such use in not in accordance with the EU rules on comparative advertising (under Directive 2006/114/EC).
The legislation also introduces two important points relating to defences against trade mark infringement:
- narrowing down the “own name” defence to apply only to the use of the name and address of a natural person (therefore, the use of a company name does not qualify for the “own name” defence – although in some cases it could give rise to a defence based on prior rights); and
- that the use of a non-distinctive sign does not amount to an infringement (an extension, or rather clarification, of the rule concerning the descriptive use of a sign – this is a valuable clarification as not all non-distinctive indications are also descriptive).
A new fees structure
The official fees charged by the IPO have been modified slightly. The overall level of fees has not changed much but the new structure encourages applicants to cut down on the number of classes.
So far, the basic application fee covered up to 3 classes of goods or services. Under the new fee structure, the basic fee will be slightly lower, but there will be a EUR 50 change for the second class of goods or services and a further charge of EUR 150 for each additional class. The figures are modest but this may discourage applications designating goods in an unnecessarily large number of classes.
The new legislation introduces reforms in many other respects, some of which are of a more technical or administrative nature (such as new measures relating to digitisation of data and decisions) and others will be of interest only to some (such as a number of reforms relating to the assertion of geographical indications and designations of origin against trade marks). Overall, the reforms will modernise and update the EU trade mark system in ways which ought to be beneficial for all users of the system.