Opportunities and risks for existing and future brand owners in new EU Trade Marks regulation
Kellie Jukkola, Fisher Adams Kelly Callinans
New European legislation which came into force last month has made important changes to the European trade mark system which, left unregarded, could leave existing trade mark owners at risk of losing some of their protection. The changes also affect future trade mark applications, altering processes for oppositions, as well as the standards in tests which determine whether a trade mark could be refused or revoked. However, there are also new opportunities in the form of new ways of representing a trade mark, and changes that will lead to an increase of uniform procedures across the EU Member States.
Below, we summarise the key changes, and the new risks and opportunities offered.
Avoiding losing protection for your specific goods and services – pre 22 June 2012 registrations
The most important issue to be considered immediately by existing EU trade mark (EUTM) owners is that of changes to the rules regarding trade mark classes. All EU trade marks registered must specify to which types of goods and services the trade mark protection applies. Commonly, this has been done by specifying in the application which of 45 NICE classes of goods and services are to be protected. Each of these classes is described by a numerical code, and by a written heading, such as Class 12: Vehicles, apparatus for locomotion by land, air or water. Under the previous system, a trade mark registered under a particular heading enjoyed protection for a range of closely related goods described by the ‘explanatory notes’.
Under the new regulations, only the goods or services covered by a literal interpretation of the class heading will be protected. For example, a trade mark registration which specifies only the class 12 heading (“Vehicles; apparatus for locomotion by land, air or water”) will provide protection for cars, bikes, planes or boats, as these clearly fall under a literal interpretation of the class heading. However, protection will not be provided for vehicle fittings and accessories, such as air bags, tyres, anti-theft devices, motors, bicycle pumps, trailer hitches and so on.
There is an opportunity for existing trade mark holders to continue to enjoy protection for the products and services they offer under the new regulations, provided they act quickly. Where an EUTM was filed before 22 June 2012 under a class heading only, trade mark owners have until 24 September 2016 to amend the goods and services specifications so that they correspond with the actual goods or services of interest within that class. To do this, a registered owner must declare that, as at the filing date of the registration, the intention was to seek protection of goods or services which go beyond those covered by the ‘literal meaning’ of the class heading. If a declaration is not filed by 24 September 2016, only the goods or services covered by a literal interpretation of the class heading will be protected. Any new goods or services added to the specification must have appeared in the version of the Nice classification valid at the time the trade mark was filed.
It should be noted that some protection is provided to other parties who might be adversely affected by such a change to the goods and services specified by an existing trade mark. Once amended, an EUTM cannot be used to prevent third parties from continuing to use a trade mark that was first used before the amendment and which at that time did not infringe the literal meaning of the goods and services. Further, amendment of a trade mark does not give an owner the right to oppose or apply for invalidity of a later trade mark where that later trade mark was in use or an application for registration was filed before the register was amended.
Oppositions, Refusal and Infringement of Trade Marks
Some important changes for current and future trade mark applicants relate to the system of oppositions and standards applied in examination and infringement proceedings.
Additional Grounds for Refusal – Until now, absolute grounds for refusal applied to trade marks consisting exclusively of the shape of the goods or of a shape which is necessary to achieve a technical result, or one providing substantial value to the goods. Under the new regulations, the grounds for refusal extend to trade marks which consist exclusively of “another characteristic” of the goods other than the shape (i.e. another characteristic which results from the nature of the goods themselves, which is necessary to obtain a technical result, or which gives substantial value to the goods). For example, an application to register the word ‘BRIGHT’ for lighting goods will be refused. An objection on these grounds cannot be overcome by filing evidence showing that, despite the apparent non-distinctive nature of the trade mark, it has acquired distinctiveness in the market place through substantial use.
Third Party Observation – Under the new regulations, any third party may submit written observations on absolute or proprietorship grounds, as soon as they become aware of a pending application. The deadline for filing observations is the end of the opposition period or once opposition proceedings have concluded. The ‘European Union Intellectual Property Office’ (EUIPO) can re-open examination at any time before grant of an EUTM. With this in mind, we recommend trade mark owners keep a watch for any new trade marks filed by competitors, with a view to making third party observations during the examination process. If the observations convince the Examiner that the application should not be accepted for registration, formal opposition proceedings will be avoided. We can assist clients with a watch service for this purpose.
Shorter Opposition Period for an EU Designation of International Registrations – Before 23 March 2016 EU Designations of International Registrations were open to opposition by third parties for three months starting six months after the date of publication. Now, the opposition period will commence one month after publication. This means that an opposition may be filed and the application subsequently refused on absolute grounds, in which case we understand that official opposition fees will be refunded to the opponent, but the opponent will be out-of-pocket for any Attorney’s fees incurred for preparation of the opposition proceedings.
Proof of Use – A trade mark owner can only enforce its rights to the extent its trade mark is being used by the owner (or another party authorised by the owner) in EU commerce. Previously, if a party was accused of infringing a trade mark which they believed was not in use by the registered owner or authorised user, it was necessary for the defending party to counterclaim for revocation of the allegedly infringed trade mark. Under the new regulations, this process is no longer necessary. Rather, where a registration has been in force for more than five years, a defendant can require that the owner provide proof of use (or suitable reasons for non-use) for the five years leading up to commencement of the infringement action. This is in line with existing proof-of-use requirements for opposition and cancellation proceedings.
Definition of a Sign – New Opportunities
Previously, in order to be protected a trade mark needed to be able to be ‘graphically represented’ – ie to be clearly and specifically described by an image on the page. Now, any trade mark that is capable of ‘being represented… in a manner which enables the competent authorities and the public to determine the clear and precise subject matter’ can be protected. For example, where a sound is not capable of graphic representation in the form of sheet music, an applicant may now file the sound by way of an MP3 file. Presumably, once appropriate technology is available, registrations for smell and taste may also be sought. This provides a significant opportunity for clients with less conventional marks to obtain trade mark protection.
Bringing Europe together – Harmonising member state level regimes
In addition to the changes described at the European Union level, the new regulations also insist on changes to trade mark laws within individual Member States. From now on, each Member State will be required to:
- refuse registration or declare trade marks invalid if an earlier trade mark has a reputation and the use of the later trade marks would take advantage of or be detrimental to the distinctive character of the earlier trade mark;
- provide for a suspension in opposition proceedings of at least two months if both parties agree;
- allow a six-month grace period for late renewal of trade mark registrations;
- include a ‘bad faith’ ground for invalidity in revocation proceedings;
- provide for refusal or invalidity of a trade mark where an earlier trade mark has a reputation and the use of the later trade mark would take advantage of or be detrimental to the distinctive character of the earlier trade mark; and
- provide for “efficient and expeditious administrative procedures” for revocation or invalidity proceedings.
Member States have a period of three years within which to effect changes 1 to 5 above, and seven years to action item 6. This will help to ensure that clients who are interested in pursuing the route of local protection within individual EU member states will face a more consistent and predictable IP regime.
The new regulations have also introduced some largely administrative changes. On 23 March 2016 the ‘Office for Harmonization in the Internal Market’ changed its name to the ‘European Union Intellectual Property Office’ (EUIPO). In addition, EU trade marks are now called European Union Trade Marks (EUTMs), rather than CTMs.
Fees for new trade mark applications will now also be payable on a per-class basis. There is a moderate reduction in application fees and the former ‘three-for-one’ fee structure has been abandoned. Renewal fees have been reduced by more than a third, and EUTMs must be renewed in the six months before expiry (not on the last day of the month of expiry as was the case prior to 23 March 2016).
EUIPO will continue to search for earlier conflicting EUTMs and will notify earlier trade mark owners of a later-filed EUTM, however an applicant must now elect whether or not to receive a copy of the search report. There is no charge to an applicant to receive a copy of EUIPOs search report and on this basis we will ‘opt-in’ on behalf of our clients when filing EUTMs going forward. EUTM owners can now also ‘opt-out’ of receiving notifications from EUIPO about potentially conflicting later-filed trade marks if, for example, an owner does not intend to maintain a registration.
In summary, these changes represent a risk to owners of pre-22 June 2012 registrations, which must be urgently assessed. However for new applicants, as well as for those looking to assert their existing rights, the new regulations provide opportunities for unconventional types of marks, for new strategies in opposing a trade mark or defending against infringement proceedings, and for easier local approaches. We recommend consulting with your local trade mark attorney to understand how these changes might affect your IP strategy in Europe.
A number of additional changes to European trade mark practice and procedure came into effect on 23 March 2016, and we would be happy to provide further details for applicants considering filing into the European Union. In the meantime, we are reviewing our client’s pre-22 June 2012 registrations to ensure that owners are not unduly restricted to a literal interpretation of class headings.
For any further information about European Trade Marks, or the process of protecting your IP in general, please contact us on +61 (0)7 3011 2200 or firstname.lastname@example.org. You can also follow all of our news updates at www.linkedin.com/company/fisher-adams-kelly