This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Summary and implications
The amended EU Trade Mark Regulation which comes into force on 23 March 2016 signifies a modernisation rather than a fundamental rethink. Official guidance has just been published in relation to Article 28 which deals with goods and services coverage. We will discuss this and other key aspects of the new regime.
With the intention of making the system more self-explanatory, there will be two key name changes:
- a Community Trade Mark (CTM) will be renamed a European Union Trade Mark (EUTM); and
- the Office for Harmonisation in the Internal Market (OHIM) will be renamed the European Union Intellectual Property Office (EUIPO), to reflect its work beyond trade marks.
We will use the new names as we all need to become accustomed to them.
Specification wording – Article 28
The regulation implements the controversial judgment in the 2012 IP TRANSLATOR case. The consequences are not new, but they are important. This aspect of the new rules has attracted significant attention.
Specifications of goods and services must be sufficiently clear and precise to identify the extent of protection sought by those words alone. They will be interpreted literally. In particular, class heading language will be strictly interpreted to include only those goods and services covered by its literal meaning. New applications should therefore individually specify all items of interest, in addition to any broader general or class heading language as a sweep-up measure.
Existing EUTMs covering full class heading wording will lose their "whole class coverage". Under Article 28 of the new regulation, proprietors of EUTMs filed before 22 June 2012 have a six month window (ending on 24 September 2016) to file a declaration to potentially widen the scope of protection. These declarations involve retaining the class heading and adding additional goods and services included in the alphabetical list for that class in force at the time of filing, so long as they are not already covered by the literal meaning.
The guidance published today annexes a non-exhaustive list of examples of goods and services that the EUIPO considers go beyond the literal meaning of the class headings (view the annex here). After all the attention Article 28 has attracted, the unusual nature of most of the items in the list is a comforting indication that the EUIPO will consider the majority of goods and services in most classes to fall within the literal meaning of the class heading. This is not law, but the practice which the EUIPO proposes to follow. Therefore it seems practical for proprietors to rely on this annex to avoid significant investment in trawling the alphabetical list to establish if specific goods or services are protected.
There are some goods which the EUIPO says do not clearly fall within the literal meanings of the class headings that may be of interest. For example, in class 9, "spectacle frames", "spectacle cases" and "downloadable electronic publications" are listed as items from the alphabetical list that could be added to existing registrations depending on the filing date. Also, in class 7, owners may wish to list some of the particular types of machines included in the alphabetical list, set out in the annex. If these or any of the other goods and services listed in the annex appear highly relevant to your business, it will be worth investigating whether an Article 28 declaration can be made. (There is also a possible option of listing them by making a partial surrender before the new regulation comes into force.) However, we expect that this will only be relevant to quite a small proportion of trade mark owners.
Other key changes
We are still waiting for the EUIPO to issue its general guidelines, but here are some other key changes.
Using a mark as (or as part of) a trade or company name is now specifically cited as an act that may infringe an EUTM. This does not change the existing law, since it only applies "where the use is made for the purposes of distinguishing goods and services". Nonetheless it is comforting to have it spelled out.
End to "own name" defence for corporates
The honest use of a natural person's name continues to be a possible defence to an infringement claim. The same defence is no longer available for the use of a company name.
Introduction of the "not distinctive" defence
It will no longer be an infringement to use signs or indications that are not distinctive, provided that they are used in good faith. It is yet to be seen how widely this will be interpreted.
Other rights owners
Infringement claims are now expressly stated to be "without prejudice to the rights of proprietors acquired before the filing date or priority date of the registered trade mark". This provides a potential defence to a trade mark infringement claim by a junior rights owner. Although the concept is not new, the language is, and its ambiguity is likely to create uncertainties.
What is new, and noteworthy, is the introduction of a defence for owners of later registered marks, who cannot be prevented from using their marks if those junior rights "would not have been declared invalid" on the basis of earlier senior rights.
It is not possible to enforce an EUTM if it is liable to be revoked for non-use at the time the infringement action is brought. The five-year period during which use must be shown now ends on the date that the defendant's application was filed (or the priority date), rather than the date of publication of the defendant's application.
If the applicant in invalidity proceedings is required to prove use for the five years prior to the date of the junior trade mark application, as well as five years prior to the date of the invalidity application, the same amended timescale applies.
Counterfeit goods in transit
Under the existing law, trade mark rights are not infringed by counterfeit goods merely in transit through the EU. Under the new regulation, goods in transit will infringe where they bear a mark that "cannot be distinguished in its essential aspects" from the EUTM in question. However, it is a defence if the importer can provide evidence that the trade mark registrant is not entitled to prevent sale in the intended final destination.
The new regulation intends to provide EUTM proprietors with stronger protection, although some will not be convinced this measure goes far enough to combat infringement by counterfeit goods. Difficulties may also arise given the implied requirement for the courts to consider trade mark law under foreign jurisdictions.
There will no longer be a requirement to represent a mark graphically, which is particularly relevant for the registration of non-traditional marks such as sounds and smells. A clear and precise representation must still be given, but this can take any appropriate form using generally available technology. This may include providing an electronic file, a hologram or motion marks. This change is not due to take effect until 2017.
Fees will be payable upon filing the application, removing the previous one month grace period. Currently, the EUTM application fee covers three classes of goods and services, which may encourage applicants to file for multiple classes. However a "one class per fee" system will be introduced, at a lower rate of €850 for a single class. Although overall the aim is to make applications more cost effective, this will depend on the number of classes covered, as a separate fee will be attributed to each additional class.
Proprietors will welcome the news that renewal fees will be reduced significantly to the same level as application fees for those EUTMs due to expire after 23 March 2016. This is the case even if a request to renew has already been submitted, and refunds will be given if payment has been made in advance. The official fee for oppositions, cancellations and appeals will also be reduced.