EU Trademark Reform

A legislative reform of trademark registration across the EU, aimed at making the process cheaper, quicker and more reliable, has been launched by the Commission.

The hope is to improve conditions for businesses in order to help them innovate and benefit from more effective trademark protection against counterfeit goods. 

The Commission also wants to better align the existing national and EU-level trademark registration systems.

Context

In Europe, trademarks are registered at the national level at intellectual property (IP) offices, or at the European level as a Community trademark (CTM) through the Office for Harmonisation in the Internal Market (OHIM). This gives the owner exclusive rights across the 27 Member States.

There are approximately 540 000 trade mark applications a year (105 000 Community trademarks applications and 435 000 national trademark applications). There are also around 98 million trade marks already in European registers (90% of them being "national" trademarks and 10% Community trademarks).

National trademark registration in the EU was harmonised 20 years ago, while the unitary Community trademark was created more than 15 years ago. Since then, there have not been any major modifications. The business environment meanwhile has changed significantly over the past two decades.

The Commission believes that the current system is outdated. There are inconsistencies between the two legislative instruments: the trademark Directive and the Community trademark Regulation. The Commission wants to remove these inconsistencies and encourage greater cooperation between the EU trademark Agency and national offices.

The ultimate objective is to align practices at both levels, and to develop common or connected databases and portals for consultation and search purposes.

The Proposal

The proposed package contains three initiatives: 
• A revision of the 1994 Regulation (codified as 207/2009/EC) on the Community trademark 
• A recast of the 1989 Directive (codified as 2008/95/EC) approximating the laws of the Member States relating to trademarks 
• A revision of the 1995 Commission Regulation (2869/95) on fees

Major Changes

Modernising Existing Provisions

The terminology of the Regulations and the Directive needs to be updated. This means changing ‘Community trademark’ to ‘European trademark’.

Regarding the name of the Office for Harmonisation in the Internal Market (OHIM), the Commission is proposing to rename it as the ‘European Union Trade Marks and Designs Agency’.

Up until now, the definition of trademark has made reference to any signs capable of being represented graphically. This requirement of ‘graphic representability’ is now considered out of date, and needs to be removed from the definition.

Increasing Legal Certainty

In case of an identical sign being used for identical goods or services, protection should be granted to a trademark only if the main function of the trademark, which is to guarantee the commercial origin of the goods or services, is adversely affected.

A trademark owner may prevent the use of his trademark in comparative advertising where such comparative advertising does not satisfy the requirements of Directive 2006/114/EC concerning misleading and comparative advertising.

Currently, goods can only be classified as counterfeit once there is proof that they are subject of a commercial act directed at EU consumers, such as sale, offer for sale or advertising.

The Commission wants to fill this gap by entitling right holders to prevent third parties from bringing goods, from third countries, bearing without authorisation a trademark which is essentially identical to theirs.  The owner of a trademark should also have the right to prohibit signs or packaging identical or similar to their trademark.

The goods and services for which protection is sought should be identified with clarity and precision. This will help competent authorities and competitors to determine the extent of the protection that the trademark confers.

Finally, the enforcement of rights conferred by a trademark should be without prejudice to the rights of proprietors acquired prior to the filing of the trademark, says the Commission.

Framework for Cooperation

The Commission also wants to see a clear framework for cooperation between the EU Agency and Member State intellectual property offices. The aim is to promote cooperation and the development of common search tools. The main areas for cooperation are stipulated in the proposal.

EU-Level Changes

Streamlining Procedures

The option for filing applications for European trademarks through national offices would be abolished, as almost all applications are now done online.

Up until now, applicants had a one-month period to pay the application fee. As most applications are examined before the expiry of this period, applicants filed “test applications” and didn’t pay the fee when a deficiency or objection was raised by the Agency.

To avoid this situation, the one-month period will be abolished, and applicants will have to provide evidence that they submitted or authorised their payment when they filed their application.

When a new registration of a European trademark is to be done, certain searches on earlier trademarks are carried out. The Agency is in the process of developing, together with national offices, a number of new more effective tools for conducting these searches and monitoring the registry for infringements.

Current search regimes will be abolished, making it possible to scrap the current one-month period between the Agency notifying the applicant of search reports and publication of the application. This will speed up the registration procedure.

Following the publication of the European trademark application, third parties may submit to the Office written observations explaining why the trademark should not be registered. To streamline proceedings, third parties will be given the opportunity to file observations as soon as they become aware of an application.

Increasing Legal Certainty

The rights conferred by a European trademark will prevail against third parties from the date of publication of the registration of the trademark. Reasonable compensation may be claimed in respect of acts occurring after the date of publication of a European trademark application, where those acts would, after publication of the registration of the trademark, be prohibited by virtue of that publication.

To ensure comprehensive cover, legal certainty and greater transparency, all the Agency’s tasks have been defined under the proposal, including those which stem from other legal acts and are not related to the EU trademark system.

National-Level Changes

Better Protection

In all Member States, national trademarks should enjoy the same level of protection as that afforded to European trademarks, says the Commission.

However, vital aspects of the commercial exploitation of trademarks are regulated poorly and unevenly across the EU. The Commission wants the Directive to include rules that address trademarks as objects of property, as contained in the Regulation.

Streamlining Procedures

There remain several unnecessary barriers to the registration of trademarks, says the Commission. Companies are obliged to undergo expenses and delays, and can fall victim to extortion. For this reason, all intellectual property offices should limit their examination of whether a trademark application is eligible for registration to the absence of absolute grounds for refusal only.

Under the new proposal, every Member State will need to establish efficient administrative procedures to oppose the registration of a trademark application on the basis of earlier rights. An administrative opposition procedure is already available under the Regulation and in almost all Member States.

The Directive will enable a trademark applicant to raise the defence of non-use in relation to an opposition filed by on behalf of an earlier trademark where, at the filing date or date of priority of the later trademark, the earlier trademark has been registered for not less than five years.

In some Member States, trademark applicants and owners can only contest the validity of a prior trademark in court proceedings. These systems can be exceedingly long and expensive. To correct this situation, the proposal calls for reform of Member States’ administrative procedures.

Trademarks will be registered for a period of 10 years from the date of filing of the application. The registration will be renewed for further periods of 10 years, at the request of the proprietor of the trademark or any person authorised by him, provided that the renewal fees have been paid.

Next Steps

The legislative proposals will be transmitted to the European Parliament and the Council for adoption, hopefully by spring 2014. Once adopted, EU countries will have to transpose the new rules of the Directive into national law within two years. Most regulatory amendments will become effective on entry into force, while the rest will only apply when the necessary delegated acts are enacted.

The proposed revision of the Fees Regulation will follow a different procedure. The new Regulation will be adopted by the Commission as an implementing act and therefore requires prior endorsement by the competent Committee on OHIM fees.

The first meeting of the Committee will take place before the summer with the aim of adopting the amended Fees Regulation before the end of 2013.