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COMMUNITY TRADE MARK REFORMS

2016-03-22

The Community Trade Mark regime was established in 1996 and has remained largely unchanged to this day. However, a new Trade Marks Directive and Regulation is due to come into effect on 23 March 2016 which will bring with it significant changes.

We therefore take this opportunity to outline some of the more significant changes affecting our Clients:-

A New Name

The Community Trade Mark, or CTM as it is commonly known, will be renamed the ‘European Union Trade Mark (or EUTM)’, whilst the CTM Registry (currently known by the acronym ‘OHIM’) will become the ‘European Union Intellectual Property Office (EUIPO)’.

Reduction in Official Fees

One of the criticisms often directed towards the CTM system is that it encourages Applicants to file more broadly than perhaps is commercially needed, given that the official fees for filing included the costs for up to 3 classes (currently€900). Therefore, why file for 1 class when you can broaden your protection by filing in 3 classes, especially as we have no intent to use/use requirement? The downside is that it floods the market with trade marks covering a broad range of goods/services and therefore makes it more difficult for Applicants to avoid “paper-conflicts” with third party marks.

Pursuant to the new Regulations, separate fees will apply for each individual class:

Current Official Fees - Basic application fee €900 (up to three classes), Second class fee €50, Third class fee €150. Additional class fees €150.

New Official Fees -  €850 (one class only), Second class fee n/a, Third class fee n/a.  Additional class fees €150.

The cost to file in one class will therefore be lower than the current cost of three classes, whilst to file in two classes will equal the current fee. Filing in three classes will cost €150 more than under the current system, but the cost of adding further classes will remain unchanged.

Perhaps an even more significant change will be that renewal fees will also be revised and brought into line with the above filing fees, meaning a significant reduction overall. The current official fees to renew in three classes is €1,350, with an additional €400 for each extra class; the new fees will therefore reduce renewal in one class to €850, for two classes €900 and €150 for each additional class. 

Payment of Fees on Filing

It is possible at present to delay paying the official fees for up to one month after an application has been filed; this may be done for strategic reasons if, for example, an Applicant wants to secure a filing date but does not want their name disclosed. This option is to be removed under the new Regulations, meaning the official fees must now be paid upon filing.

Priority Claims

It is currently possible to claim priority either at the time of filing an application, or within two months of filing. At this point, it was possible to provide minimal information, before providing evidence of the earlier right relied upon within a further three month period.

The new Regulations confirm that the application number, filing date and country of the earlier right must now be provided at the time of filing, with evidence of these rights to be filed within three months, thereby removing the 2 month post-filing priority claim.

Graphical Representation

The requirement for a trade mark to be graphically represented is removed under the reformed system, the idea being that less traditional marks such as smells, sounds and sequences of movement will become easier to register. However, in practice, this requirement is simply being replaced so that any trade mark must now be represented in a manner which “enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to the proprietor”.  In theory this is broader, but we will need to see how strictly OHIM, sorry EUIPO, will interpret these changes.

Searches for Earlier Rights

Those who utilise the CTM system will be aware that when an application is filed the OHIM produce a computer generated search report. Any owners of marks included in these search reports are automatically notified of the new filing, with a view to possible opposition.

Under the new Regulations, the EUIPO will introduce an opt-in system for Applicants but, importantly, any third parties included in these search reports will still be notified, regardless of whether or not the Applicant has opted-in. In view of this, we feel it is important to opt-in as forewarned is forearmed. Therefore, unless instructed to the contrary, our Firm practice will be to opt-in to these searches.

Opposition Deadlines

The commencement of the 3 month opposition deadline for an EU designation of an International Registration is possibly one of the most random calculations in IP history! The opposition period begins 6 months after publication, meaning that the actual opposition deadline falls 9 months after publication (as opposed to 3 months for CTMs).

Under the new Regulations, this period will be shortened significantly; the opposition period will still be 3 months but will now begin just 1 month after publication.

This change may lead to an EU designation being published before it has actually been examined on Absolute grounds. However, OHIM have informed us that the opposition fee will be refunded in the event an Application is eventually refused on Absolute grounds.

Proof of Use

There will be a significant change to the Proof of Use period for opposition proceedings. Currently, any earlier marks relied upon in opposition proceedings which are older than 5 years, as at the date of publication of the opposed application, will be subject to Proof of Use.  In essence, any goods/services for which use cannot be shown, cannot be relied upon in an opposition.  
Under the new system, the 5 year Proof of Use period will commence not from the date of publication of the opposed application, but from the date of filing of the mark being opposed.

National Member States

Whilst in theory there is supposed to be harmonisation of IP systems across the EU Member States, there are still a number of differences, particularly in relation to cancellation proceedings.

Under the new Regulations, Member States will have 3 years to implement further harmonisation procedures – for example, currently cancellation proceedings in Benelux, Spain, Italy and France need to be done via the Courts and the process can be time-consuming and costly. Under the new Regulations, cancellation proceedings in these territories will need to be handled at the local IPO level rather than through the Courts, which should mean a reduction in costs to Applicants.

Specification Wording

In 2012, a decision was handed down in the IP TRANSLATOR case which stated that a trade mark specification of goods/services should be interpreted literally; in other words, what you see is what you have. In the good old days, prior to the IP Translator case, an Applicant using a particular pre-defined paragraph for each class (known as the ‘Class Heading’) could claim rights for all goods or services falling in that class, even if they were not specifically listed.

The new Regulations follow the IP TRANSLATOR ruling, meaning that if a certain item is not listed in a specification, it is deemed not to have been covered.

The OHIM has recognised there needs to be a transition period allowing owners of marks filed prior to 22 June 2012,that included the Class Headings, to clarify the rights covered. All such Applicants will be given 6 months from the date of the Implementation of these Regulations (i.e. by 24 September 2016) to file a formal Declaration stating their intention to go beyond the literal meaning of the class heading(s), and specifying any additional goods or services that they intended the mark to cover.

If no declaration is filed within this period, the CTM will be deemed to cover only those goods/services covered by the literal meaning.

Given the importance of this change, we shall be writing to our Clients separately to advise them further on the next steps.

Acquired Distinctiveness Claims in Invalidity Cases

When seeking to overcome objections for invalidity based on lack of distinctive character, the current provisions require that evidence in support of a claim of acquired distinctiveness relates to the period prior to the filing of the application. This will now be changed, so that evidence of distinctiveness acquired after a mark was filed or registered will be considered. This makes it easier to rely upon the claim, particularly for marks that have been registered for some time, as supporting evidence is likely to be more accessible.

The above changes, for the most part, simply look to solidify in statute the case law that has shaped our Community Trade Mark system and are a positive step towards providing clarity. The reduction in fees is also a welcome step, although the new name will take a little getting used too!  

If you have any questions about the above, please do not hesitate to get in touch with your normal contact at Lane IP or send your enquiry to enquiries@laneip.co.uk.

Latest news

Brexit – its impact on Trade Marks and Designs in the UK...

This week is a historic week in which Article 50 is triggered signaling the UK’s exit from the EU.

Before we go any further, let’s be clear about one thing: despite some of the comments coming from certain
firms in some other member states, nothing at all will happen for at least 2 years. Nevertheless, we recognize
that our clients want to know what the future holds after Brexit. This is what we know, and can guess, at the
moment.

Laos became a Member of the Madrid Protocol as of 7 March 2016.

The Ministry of Commerce & Industry are currently in discussions to make significant changes to the way in which Trade Mark filings are handled and current proposals indicate that official fees are likely to increase by 100%.  Details as to when this will take effect have not yet been finalised but notification confirming the same is expected soon.

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On 28 February 2018, the EU Commission published its first draft proposal[1] as to the terms of withdrawal of the UK from the European Union, outlining how existing EU trade marks and designs will be treated vis-a-vis the UK following Brexit.

Although this is a draft document that is yet to be ratified by the UK government or UK Intellectual Property Office, it clearly sets out the EU's preferred stance as to the treatment of IP rights. It will now be sent to the EU parliament Brexit Group before then being transmitted to the UK government and bodies.

UK Court Seeks Guidance from CJEU on Issues of Broad Lists of Goods/Services and Intent to Use on Filing and Impact on Validity of Trade Marks

The UK High Court recently referred some key questions to the CJEU in a trade mark infringement action brought by Sky Plc[1], the answers to which could have a significant impact on the future filing strategies of brand owners in the EU and UK.

Mr Justice Arnold, acknowledging the 'general public importance' of the issues raised in this case, referred the following questions to the European Court for guidance, firstly on the issue of the clarity of broad terms in goods/services contained in a trade mark registration.

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