The European Commission has recently presented a proposal of a trade mark system reform. In its Memo from 27th March 2013 the European Commission states that the proposed reform will make “trade mark registration systems all over the EU more accessible and efficient for businesses in terms of lower costs and complexity, increased speed, greater predictability and legal security”.
The proposed package does not have as its aim a creation of the new system but to modernise the existing regulatory framework in order to correspond better the changes in the business environments. It primarily intends to streamline and harmonise registration procedures, modernize and clarify outdated and ambiguous provisions, improve the means to fight against counterfeit goods, enhance the cooperation between the national IP offices and OHIM, adjust the fees and adapt the texts to the terminology and procedures of the Lisbon Treaty.
The proposal contains amendments of three acts:
- Recast of the Directive 2008/95/EC of the European Parliament and of the Council to approximate the laws of the Member States relating to trade marks (“Directive”);
- Revision of the Council Regulation (EC) No 207/2009 on the Community trade mark (“Regulation”); and
- Revision of the Commission Regulation (EC) No 2869/95 on the fees payable to the Office for Harmonization in the Internal Market (Trade Marks and Designs) (“Fees Regulation”).
Revision of the Regulation
Pursuing the objectives of the reform, many proposed changes will definitely benefit the IP rights holders, even though the impact of the proposal will have to be studied in greater detail. Some of the amendments are influenced by the existing practice based on the jurisprudence of the European Court of Justice.
One of the anticipated changes is tougher anti-counterfeit regulation. Because of the criticism of the Philips/Nokia judgement (joined cases C-446/09 and C-495/09) regarding goods in transit and the increasing need to fight against the counterfeit goods, the trade mark holders will be able to prevent third parties from bringing such goods into the customs territory of the European union, regardless their release for free circulation (that means that the legal fiction of the goods in transit not entering the EU territory will not apply for trademark law anymore). The proposal therefore diverts from the current legal situation confirmed by European Court of Justice by reversing the burden of proof, and strengthens the position of right owners.
The changes reflecting the jurisprudence involve the replacement of the requirement of ‘graphic representability’ by more flexible criteria allowing other non conventional trade marks (e.g. sound marks) to be registered. According to the European Commission, the aim is to enable the trade mark to be represented by other technological means offering satisfactory guarantees, while still fulfilling the criteria established in the Sieckmann case (C-273/00). On the other hand, the broad wording of the proposed provision seems to be able to exceed the Sieckmann case and implies that various applications for non conventional trade marks, that will try to push the current limits of what can be registered further, can be possibly expected.
Regarding the trade mark specifications of goods and services, the proposal follows the findings of the IP Translator case (C-307/10). Therefore, the use of general terms, the class headings of the Nice Classification included, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term. Influenced by the decision in case Céline (C-17/06), the proposal states that trade or company names or their parts using the protected trade mark will be treated as an infringing act, if the requirements of use for goods or services are met.
Other changes include for example the clarification of the provisions in relation to Geographical Indications and guaranteeing the protection of traditional terms for wine, traditional specialities and denominated plant variety rights, adding them as another absolute ground for refusal. Non EU languages will be taken into account and the trade mark shall not be registered, if after being translated into any official language of the EU, its registration would have been refused on absolute grounds. Furthermore, the proposal adds a bad faith relative ground for refusal of the registration limited only to the case when the trade mark applied for in a bad faith is liable to be confused with an earlier trade mark protected outside the EU. Providing that this special case of bad faith will be invoked already in opposition proceedings, OHIM will probably need to establish the practice on how the examiners will define and assess bad faith.
Amendments aiming the streamlining of the procedure include, inter alia, proposal that national offices will not be able to receive applications for European trade marks any more. Both national and EU searches will be abolished due to lack of interest of the trade mark applicants in them, given that the applicants have access to better, faster and cheaper alternatives thanks to the IT advances. The period for third parties observations will be prolonged from the moment the third parties become aware of the application (for example through the trade mark database ‘CTM online’) until the end of the opposition period.
The proposed package establishes the currently missing legal basis for mandatory cooperation between the Office and the national offices, which is hoped to bring more homogenous approach in application of the trade mark law. OHIM will be renamed to ‘European Union Trade Marks and Designs Agency’ and ‘Community trade mark’ will be changed to ‘European trade mark’.
Recast of the Directive
The reform is also focused to address the current inconsistencies between the Regulation and the Directive. The harmonization represented by the recast of the Directive is accomplished in two ways: first, by making numerous optional provisions of the Directive mandatory, and second, through including the missing substantial law from the Regulation.
As to the first step, several formerly optional provisions are to become mandatory at national level. This is achieved specially in case of reputed national trade marks, that will enjoy the same level of protection in all Member States as that afforded to Community trade marks. The provisions concerning invalidation of bad faith applications in cancellation proceeding will also become mandatory. On the other hand, ex-officio examination will be limited to absolute grounds only. The new legislative proposal does not give the option to national offices to carry out anymore ex-officio examination of relative grounds, claiming that it creates several unnecessary barriers to the registration of trade marks and legal uncertainty and is many times inefficient and time consuming.
As to the second step, new substantial law adopted from the Regulation will include primarily rules on assignment and transfer, licensing, rights in rem, levy of execution and insolvency proceedings. Another very important harmonization provision will enable to raise the defence of absence of genuine use not only in cancellation but also in opposition proceedings. Further, procedure for revocation or declaration of invalidity will have to be obligatorily established at the national offices as an administrative procedure in order to avoid the delays and higher costs in the court proceedings. Aforementioned new changes introduced in the Regulation like anti-counterfeit provisions or removing the requirement of graphical representation will also be reflected in the Directive.
Revision of the Fees Regulation
Several adjustments are introduced concerning fees. Application fees will become due immediately upon filing and the one-month period will be abolished. The principle of "one-class-per-fee" will apply both for Community trade mark and national trade mark applications, allowing the businesses to apply for the trade mark protection according to their actual business needs and paying lower fees when selecting one class of product only.
Proportionally, renewal fees will be decreased too. This measure is intended to diminish broad claims for goods and services for the classes the trade mark holders did not use with the result of reducing the congestion of the register. On the other hand, although the proposed change is likely to improve the system, decreasing both application and renewal fees might make the Community trade mark even more attractive and lower the (already low) number of national applications. This may threaten the viability of national systems due to the lost of their revenues, a situation contrary to the desired harmonious coexistence and complementarity between the both systems.
It is hoped that the proposed Directive and Regulation will be adopted by the European Parliament and Council by spring 2014. As to the Directive, Member States will then have two-year period to transpose the proposed changes into their national legislations. The Fee Regulation is likely to come into effect by the end of this year after its adoption by the European Commission on condition of prior approval by Committee on OHIM fees.
Written by Zuzana Peniaskova
Image: Sébastien Bertrand under creative commons license CC-BY 2.0