The community trademark: what next?

The European Commission has proposed that the regulation on Community trademarks (CTMs) be revised, and for the directive to approximate the laws of the member states relating to trademarks. This is the first big change for many years, and we need to get it right.

The intention is to streamline and modernise the system, to make the registration system more accessible and efficient, to make it less complex and cheaper, to provide increased speed, and to allow for greater predictability, as well as legal certainty.

The Max Planck Institute produced a study back in 2011. This opened the general debate among users of the system. Studies are also ongoing within the Office for Harmonization in the Internal market (OHIM), to look at the contribution of IP to the general economy, and its impact upon society throughout the EU.

A number of interested bodies, who use the system extensively, such as the Institute of Trade Mark Attorneys (ITMA), Business Europe, the European Brands Association (AIM), APRAM and GRUR (the sister organisations to ITMA in France and Germany), the European Communities Trade Mark Association (ECTA) and the International Trademark Association (INTA), have submitted comments on the proposals this year.

I concentrate upon some, although not all, of the points raised by my own institute, ITMA, and these are also my own views. ITMA is a member of OHIM’s User Group, which meets regularly, and exchanges information with the other groups mentioned above, including the World Intellectual Property Organization (WIPO) and the UK IP Office (IPO), and other national registries as well as the commission.

Generally, ITMA welcomes the decision to review the CTM directive and regulations, but some areas do need clarification.

Clarification needed

First, I believe that we should not use the term ‘European’, as not all European countries are actually members of the EU (Switzerland and Norway, in particular). EU has a more specific meaning, and is the appropriate term to be used.

I believe there should be a trademark registration system which allows registrants to choose national and/or whole of EU protection for their IP rights. Particularly in these recessionary times, national IP protection is still important, especially for smaller and start-up companies, and individual registrants.

This has been shown in the UK recently, where national filing figures have shown an increase: in 2012, there was an 8 percent increase in UK trademark filings over the previous year. Therefore, harmonisation between national and CTM systems is essential, to allow for complete freedom of choice by the registrant.

We need more certainty in defining different types of marks, and need to amend Article 3 of the directive and Article 4 of the regulation, to allow for better representation of marks, and therefore legal certainty, particularly for non-traditional marks.

The proposed amendments may not be interpreted with a harmonised view throughout the EU. Why, for example, are sound marks included in the proposals, but not ‘smell’ marks? Definition of such marks should obviously be clear, precise, easily accessible, objective, and durable. Concise codification is essential, so that these rights are generally understood.

As for classification of goods and services, certainty is clearly needed. We need transitional provisions, to allow registrants to clarify what were their intentions at the time of filing—were all goods or services in a given class intended at the outset? Will we have a reasonable time frame to amend specifications, once the registrations are implemented? Should this be six, or 12, months, to allow the administrative and cost burden to be undertaken by registrants, their attorneys, and the relevant IP offices?

I believe that a four-month period to do this is far too short. Indeed, why should applicants have to claim ‘all goods or services’? Why penalise an applicant if its technology is new, and therefore specific wording is required for its mark in that new technology?

"Allowing acquired distinctiveness up to registration could lead to considerable uncertainty in the process, and in my view, could lead to speculative findings."

Allowing national offices to refuse applications where grounds for refusal exist in other member states, say on language grounds, is a real concern.

This would place a huge administrative burden on an applicant, who would have to consider how that mark would be viewed throughout the whole of the EU. This could increase costs up front, by requiring extensive research before a mark is filed, and I believe it would be unworkable practically.

Acknowledgement of acquired distinctiveness after the application date but before registration, cannot be condoned. The acquired distinctiveness should be at application date. Allowing acquired distinctiveness up to registration could lead to considerable uncertainty in the process, and in my view, could lead to speculative filings.

For relative grounds, the ex officio search carried out now is of limited help, as it gives the picture of the register ‘after the event’, ie, after an application has been filed. The potential problem, though, is that abolition altogether of this search may lead to abolition of prior rights searches by national offices, when marks are examined. Notification of applications to earlier rights holders, eg, as happens in the UK, is particularly helpful, especially for smaller registrants, but also for larger corporations who perhaps cannot afford to watch their entire trademark portfolio.

In cases where an application is filed for a mark not yet in use, this information of earlier rights can lead to a strategy re-think, and possibly even abandoning plans, and therefore abandoning an application to protect and use the mark. Being forewarned can be being forearmed, to avoid expensive litigation later.

For marks which have a reputation, these should be entitled to protection, regardless of whether the subsequent mark is used on goods and services which are identical/similar/ dissimilar to those for which the earlier mark is registered.

Opposition and cancellation actions should be available in a fast and inexpensive way. National offices should be able to provide these actions.

Non-use, as a defence in such actions, should be available in all opposition or cancellation proceedings based upon a registration more than five years old. The process should be simple. If the owner does not show evidence of use, then the mark in question should be removed. This must help to overcome the long-term clutter of the register.

I support clarification where use of a company and trading name, and in comparative advertising, can amount to infringement. However, ITMA is concerned by the possible removal of bona fide own name defence. Can you make an arbitrary distinction between personal and company names?

For prevention of goods entering the EU, could we have a defence if the importer can show that he owns the mark in question in the country where the goods will be circulated, and show that the goods are only intended for marketing there, and those goods would not be released for free circulation before arrival in the destination country?

Bad faith should remain as an opposition ground to minimise spurious actions, but why limit it to rights existing outside the EU? If an applicant acts in bad faith at the date of filing, this should be enough to show as an opposition ground.

What about adding certification marks in the EU? They work well in the UK.

As for correction of errors, these should be done only on the existing online database with OHIM, and historical records should not be capable of amendment. We do need amendments to be traceable, and capable of being tracked, and if appropriate, to be undone or redone. The public records should be certain at all times.

Opposition periods should be harmonised. In the UK, we have two months, extendable by one month upon request. This has worked very well, and allows for negotiation between parties before those parties are forced into expensive and protracted opposition proceedings.

‘Three classes for the price of one’: I consider this leads to clutter on the register. It is human nature to buy one class and get two free (regardless of any real intention to use the mark in the additional two classes). Class fees should be paid per class, even if on a sliding scale, as in most multi-class jurisdictions.

Lower fees would lead to speculative filings (look at domain name registrations, for example, where the low filing fees lead to a great number of spurious applications), and that in turn leads to trademark protection with no commercial reality behind that registration.

Things have moved on considerably since 1996, and there is clearly now room for change and improvement. It will be interesting to see how the proposals for the directive and regulations are agreed and implemented.

Maggie Ramage is a partner at Alexander Ramage Associates. She can be contacted at: maggie@ramage.co.uk