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EU reforms law on Community Trade Marks
Trade marks in the European Union recently underwent their most significant reform since the EU harmonized trade mark laws within its borders some twenty years ago. During that period, the EU’s unitary Community Trade Mark (CTM) system, administered by the Office for Harmonization in the Internal Market (OHIM), has enabled the registration of a single trade mark to cover all 28 EU Member States.
EU Trade Mark Regulation 2015/2424 (the Regulation) came into force on 23 March 2016 throughout the Single Market with a number of reforms to the CTM system. The Regulation introduces a wide range of changes, but this article focuses on those with key commercial implications for businesses with European trade marks.
New names for the CTM and OHIM
A CTM is now known as a European Union Trade Mark (EUTM); OHIM is now known as the European Union Intellectual Property Office (EUIPO). These amendments bring European trade mark terminology into line with the changes to EU nomenclature introduced by the Treaty of Lisbon that removed all references to the European ‘Community’. If you are the proprietor of a European trade mark, then you will need to ensure that both you and your finance team are familiar with the new names.
Broader European trade mark definition from 1 October 2017
The very definition of a European trade mark has been updated with effect from 1 October 2017. Previously, in order to be registered, a CTM had to be a sign capable of being “represented graphically”, but this will no longer apply to an application for an EUTM once this amendment comes into force. Instead, an EUTM will have to be a sign capable of representation “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”. In addition, sound and colour signs are now specifically listed as examples of suitable marks in the Regulation itself.
The rationale behind the outgoing test of graphical representation was that, if a trade mark proprietor is to be granted a registered monopoly right, it is only fair that the scope of the monopoly right is clear and made publicly available to avoid inadvertent infringement by third parties. In the early 1990s, graphical representation was seen as the best way of recording a sign unambiguously for deposit on a public register. But in the Internet age there are other means of achieving this end in a consistent and accessible manner, for example, by uploading to the public register an electronic sound or video file.
In theory, this reform will broaden the scope of signs that it is possible to register as a trade mark. In practice, however, this reform may prove to be more of a legislative update to reflect evolving practice at the EUIPO. For example, Metro‑Goldwyn‑Mayer Studios’ application to register its familiar lion’s roar as a trade mark, by providing a spectrogram and verbal description, was initially refused by the OHIM for a lack of certainty; however, a further application in 2008 was then granted by the OHIM when the spectrogram and description were accompanied by an .mp3 file.
The express approval to non-graphical signs provided by this reform is thus likely to increase the number of applications and registrations for sound and video marks, but it remains to be seen whether there will also be more applications and registrations of even more untraditional marks. For example, it will likely remain very difficult to register scent marks because such marks are inherently difficult to record clearly and precisely. Scents will always be perceived very personally and subjectively by each individual and there remains a lack of technology to record them in a sufficiently “clear and precise” method to satisfy even the updated definition of a trade mark.
Class headings only in your mark’s specification? Take action by 24 September 2016
In order to register an EUTM, it is necessary to specify certain goods and services for which the mark will be used. Since the Nice Agreement of 1957, these goods and services have been recognised internationally as being divided into 45 classes. Before 22 June 2012 it was possible to register a trade mark to cover an entire class of goods or services by the shortcut of simply including only the words of the class heading itself in the specification for the trade mark application. For example, Class 38 “Telecommunications” would cover services for telephone, television broadcasting and radio (among many other more specific sub-classes).
But the judgment in the IP Translator case (C‑307/10) ruled that any such application after that date would only cover the literal wording of the class heading itself and not any of the more specific sub-classes within that class as well. The Regulation has now put the IP Translator judgment on a statutory footing and, more importantly, the Regulation will also apply the ruling to trade marks registered before 22 June 2012, which were previously exempt.
In light of this amendment, if you have a CTM registered before 22 June 2012 for only the words of an entire class heading, you need to file a declaration at the EUIPO by no later than 24 September 2016 if you do, in fact, wish your trade mark to also cover more specific goods or services within that class. Otherwise, your mark will be deemed to be limited to only the literal wording of the class heading.
The OHIM previously charged a flat-rate official filing fee of €900 for registration in up to three classes, with a further official filing fee of €150 per additional class. The EUIPO no longer offers a flat-rate system for filing in three classes. Instead, the new official filing fees are €850 for one class, €900 for two classes and €1,050 for three. An additional €150 remains payable for the fourth and every subsequent class. Overall, the official filing fees are therefore slightly more expensive and only applicants for protection in a single class will see a reduction from this change.
Conversely, official renewal fees have been reduced slightly for trade marks with registrations in fewer than four classes. Previously, a renewal fee of €1,350 covered up to three classes. The new renewal fee structure is €850 for one class, €900 for two classes, €1,050 for three classes and an additional €400 for every further class. Official fees for opposition, invalidity, revocation or appeal proceedings have also been slightly reduced across the board.
Further amendments of particular commercial interest include:
- Absolute grounds of refusal – it has long been the case that CTM applications have been refused when the sign is a 3D shape that:
- exclusively arises from the nature of the goods;
- is necessary to obtain a technical result; or
- gives substantial value to the goods.
This was seen as being unfairly and illogically restricted to signs with a 3D shape as a characteristic, so these prohibitions have been extended to all characteristics of a sign, not just its shape.  For example, if a sign’s colour, sound or smell fulfilled one of the above criteria, it would now also be prohibited. This restriction is also a sensible limitation given the updated broader definition of a trade mark (see above). It remains to be seen how often this restriction will apply in practice—in many cases, the sign would already not be registrable as a mark because of a lack of distinctiveness.
- Company names – it is now expressly set out in the Regulation that only natural persons and not companies may benefit from the ‘own name’ defence (for example, where an individual named ‘John Lewis’ trading under his own name may have a defence to an infringement action brought by the popular retailer). In addition, using a registered trade mark as a company name is now in itself expressly an infringement. These amendments emphasise the importance of proper searches when choosing a company name.
- New infringing acts – the Regulation introduces new infringing acts to close some gaps in the existing law. Certain preparatory acts, such as affixing infringing signs to packaging, labels or tags is now in itself an infringing act. Further, a trade mark owner may now take action against goods in transit containing an infringing sign that merely pass through the EU and are not released into circulation there.
- Challenges for non-use – Existing EUTMs or national marks may be relied upon by their owners to oppose the registration of new trade mark applications in opposition proceedings. As part of opposition proceedings, the trade mark applicant may challenge the opponent’s existing mark for a lack of genuine use and require the opponent to provide proof of use, but only if the EUTM has been registered for five or more years. The Regulation has amended the date for calculating the five-year period, which will now be calculated from the existing trade mark’s date of filing or priority rather than its date of publication in the Official Journal kept by the EUIPO. As the date of filing is usually earlier than the date of publication by a few months, this means that, in future opposition proceedings, there will be some instances of trade mark owners who will have to show proof of genuine use, who would have still been within the five-year immunity period under the old law.
- Certification and guarantee marks – the Regulation provides for a framework whereby a quality certification body for goods or services based in the EU, e.g., the British Standards Institute, may obtain an EU ‘certification mark’ for its symbols of quality that are affixed to products meeting those quality standards. This change will first take effect from 1 October 2017 and will be highly relevant to all certification bodies based in the EU. Under the Regulation, anyone can set up such a certification body and obtain an EU certification mark by applying to the EUIPO with a proposed sign and set of proposed regulations, provided that they do not themselves supply the goods or services in question.
There are a number of further changes introduced by the Regulation that are outside the scope of this article, but which may be relevant to proprietors of EUTMs. If you are the proprietor of a EUTM, we recommend that you speak with your legal advisers to determine how the reforms will specifically affect you—Kemp Little’s brand experts would be happy to assist.
Harmonization of Member States’ national trade mark laws to come
The EU also passed Trade Mark Directive 2015/2436 (the Directive) at the same time as the Regulation to ensure harmonization of Member States’ national trade mark laws across the EU. Member States have another three years to implement the Directive.
Unless Brexit happens this summer, we will wait to see when the UK Government will implement the Directive and how closely the legislative reforms to UK trade marks will align with the reforms to EUTMs.
 Accessible at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2015:341:TOC in the Official Journal of the European Union, L 341, 24 December 2015.
 Article 1(8) of the Regulation, amending Article 4 of Regulation (EC) No 207/2009 (the CTM Regulation).
 Registered number EUTM 005170113.
 Article 1(28) of the Regulation, amending Article 28 of the CTM Regulation.
 For an example of a successful shape EUTM, see Toblerone’s chocolate prism packaging with registered number EUTM 000031203.
 Article 1(9) of the Regulation, amending Article 7(1) of the CTM Regulation
 Article 1(13) of the Regulation, amending Article 12 of the CTM Regulation
 Article 1(11) of the Regulation, amending Article 9 of the CTM Regulation
 Article 1(12) of the Regulation, inserting new Article 9a into the CTM Regulation
 Article 1(11) of the Regulation, amending Article 9 of the CTM Regulation
 Article 1(40) of the Regulation, amending Article 42(2) of the CTM Regulation
 Article 1(67) of the Regulation, inserting new Section 2 to Title VIII of the CTM Regulation