Revision of the European Trade Mark system

The European trademark system is the result of two main legislative instruments:

• Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks, which became Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks;
• And Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark, codified as Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (1).

The Directive is the main legal framework for trademarks throughout the European Union, which Member States must comply with. However harmonisation of national legislations remains partial since some of the provisions of the Directive are not mandatory.

In line with the Directive, the Regulation provided for a system of trademark protection specific for the European Union known as the Community trademark system (2). The Regulation also created the Office for Harmonization in the Internal Market (OHIM) as the Community trademark Office.

According to the European Commission, both texts achieved only a limited harmonisation and they were not significantly modified since their adoption whereas the business environment has changed considerably over the past two decades. That is why the Commission initiated a new harmonisation process and a modernisation of the European Trade Mark package (3).

Based on working groups and reports started since 2007, the European Commission issued in March 2013 two proposals of recast for the Directive and the Regulation on the Community trademark. Both the European Parliament and the European Council entered the discussions and made their observations until a political agreement was found in April 2015. The proposals are now supposed to be final.

Global framework

The New Directive will be a modernised version of Directive 2008/95/EC. Some provisions are recast and adapted to the contemporary business environment and the latest case law of the Court of Justice, but there will be also new rules of substantive law and new rules regarding procedural aspects of the registration procedure.

As for the first ones, we can point out the protection of geographical indications and their relations to trademarks (4), or the registration of collective marks or guarantee or certification marks. The second ones may seem more challenging since they show a real intention of harmonising whole aspects of the registration procedures, including opposition or cancellation procedures.

The New Regulation includes some superficial measures such as the replacement of the “Community trade mark” by the “European Union trade mark” or the replacement of the “Office for Harmonization in the Internal Market” by the “European Union Intellectual Property Office” (5). Apart from that, there will be new provisions in line with the New Directive and also new rules to encourage cooperation and foster convergence of practices between the E.U. IP Office and national IP offices. Eventually, a more flexible fee structure for E.U. trade marks will be established.

Main components of the modernisation package

Definition of a trademark

The new definition of a mark no longer requires that the sign be capable of being represented graphically. The aim is to facilitate the registration of new types of trade marks such as sound, motion or hologram marks. But a close look at the text shows that no type of marks is excluded and some may expect to file as trademarks other types of signs such as scents or smells, tastes or textures.

Let us remain realistic though. The goal must be welcomed but new types of marks will still require being represented on the register, if not graphically then by other means enabling “the competent authorities and the public to determine the clear and precise subject matter of the protection”. First trademark offices must be able to register the mark (6). Second, third parties must be able to understand with sufficient clarity what is claimed by the owner of the mark.

That is why we believe traditional trademarks are not dead yet. In our opinion, the New Directive will mostly foster sound marks, at least more than in the current situation, three-dimensional trademarks (3D marks), but from now on in a three-dimension and dynamic version, and motion marks such as animated signs or logos. However we expect it will be a long time before we can actually and efficiently have taste or texture marks registered.

Designation and classification of goods and services

On many occasions (7), we commented the importance of the consequences of the IP TRANSLATOR decision (8) over the designation and classification of goods and services. However consequences were not the same all over the E.U. since there was a divergence of interpretation between the OHIM and some European national IP offices.

According to the New Directive, all IP offices throughout the E.U. should have the same practice and designated goods and services will consequently be interpreted literally. As a result, the use of general terms such as those included in the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indications or terms and shall not be interpreted as comprising a claim to all goods or services included in the class. This is the end of the “cover-all” approach.

The French and Community trademark offices are already in line with this practice.

Marks with a reputation

Marks with a reputation will become part of prior trademarks barring registration of a third party’s mark or which could be used as a base for a cancellation action.

Reputation of a mark is not an easy character to claim (9), but the new rules will offer trademark owners new possibilities not only to claim damages when the use of a later mark without due cause would take unfair advantage of, or be detrimental to, the repute of the earlier trade mark, but also to file oppositions or cancellation actions before the offices.

Opposition Procedure

Directive 2008/95/EC left it to Member States to provide, or not provide, for an administrative opposition procedure.

Not only does the Future Directive make the administrative opposition procedure a mandatory component of the trade mark system but it also regulates many aspects of the opposition procedure. The procedure must be efficient and expeditious. The opposition must be available at least for earlier trademark owners, including owners of marks with a reputation, and for persons authorized to use a designation of origin or a geographical indication. Although it is not mandatory for Member States, the opposition procedure may also be open to owners of other types of rights such as a sign used in the course of trade, a right to a name or a copyright. The opposition procedure may also be filed on the basis of one or more earlier rights, provided that they all belong to the same owner. The cooling-off mechanism becomes mandatory therefore allowing for the possibility of an amicable settlement between the parties. Non-use becomes a regulated mechanism of defence and IP offices must have a real control over the evidence of use provided by the opponent.

At the Community level, the opposition procedure is already in line with these principles. The French opposition procedure also complies with the main and mandatory principles, especially since French law of 11 March 2014 fighting against the infringement of IP rights (10) and French law of 17 March 2014 related to protection of consumers (11) and the efforts made to adopt new rules and deadlines before the French Patent and Trademark Office (12).

However the New Directive could be the opportunity for France to modernise further its opposition procedure, by adopting some of the optional provisions. For example most trademark practitioners and owners would welcome the possibility to base an opposition on several earlier rights since it would avoid filing several oppositions and multiplying the administrative costs. Strengthening the control of the French office as regards evidence of use provided by the opponent would also be a good improvement in the French opposition procedure since such control is merely formal at the moment.

From a global perspective, it is our opinion that all measures allowing third parties to oppose to the registration of trademark applications more broadly and more easily, in the same circumstances as the ones enabling them to bring an action before the courts, should be welcomed. This would result in (i) less registered trademarks on the registers, (ii) less lawsuits before the courts, (iii) and accelerated and more cost-effective procedures.

In return, let us point out that future applicants will have to perform broader availability searches and it might be rather difficult at least insofar certain types of rights are concerned. For example there is no official register for copyrights in France.

Procedure for revocation or declaration of invalidity

Such a procedure already exists for Community trademarks before the OHIM and it becomes mandatory in the New Directive. It will be entirely new with respect to French trademarks and for the French Trademark Office, as in many other European countries.

Formally, it is expected that the procedure for revocation or declaration of invalidity will be mostly similar to the opposition procedure as we know it. It will allow IP offices to revoke trademarks or declare trademarks invalid at least on the following grounds:

• If, within a continuous period of five years, the mark has not been put to genuine use in the Member State in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use;
• If the mark has become the common name in the trade for a product or service in respect of which it is registered or if it has become liable to mislead the public particularly as to the nature, quality or geographical origin of those goods or services;
• If the mark should not have been registered on absolute grounds, for example for lack of any distinctive character;
• If the mark should not have been registered on relative grounds, i.e. because of the existence of an earlier right.

For the same reasons as those we detailed earlier about the opposition procedure, this new administrative procedure for revocation or declaration of invalidity must be greeted by the French public since it will eventually provide for accelerated and more cost-effective procedures than legal actions brought before the courts. It should also contribute to reduce the overload of the trademark registers. In return, it is necessary that measures be taken to guarantee independence and impartiality of the decisions.

Goods in transit

The New Directive revives the fight against infringing and counterfeit goods when in transit throughout the E.U. whatever their customs situation. The new legal framework is clearly in favour of trademark owners and is clearly against the prior situation set by the Court of Justice (13).

From now on, the proprietor of a registered trade mark shall be entitled to prevent all third parties from bringing goods, in the course of trade, into the Member State where the trade mark is registered without being released for free circulation there, where such goods come from third countries and bear without authorization an identical or similar trade mark. The entitlement of the trade mark proprietor shall lapse only if during the proceedings to determine whether the registered trade mark has been infringed, evidence is provided by the declarant or the holder of the goods that the proprietor of the registered trade mark is not entitled to prohibit the placing of the goods on the market in the country of final destination.

In other words, owners of registered marks will no longer be required to provide evidence that the goods in transit would be placed on the market in a country where the marks are duly registered. Sometimes such evidence was almost impossible to provide and ill-intentioned declarants were visibly using the system at their advantage. But from now on the burden of proof will be shifted onto the holders of the goods. If they cannot prove that the goods are intended for a country where the trademark owners have no rights, then they will be liable for infringement.

New fee structure

The provision of the New Directive is not mandatory but Member States may provide that the application and renewal of a trade mark shall be subject to an additional fee for each class of goods and services beyond the first class. It would be the end of the traditional fee structure covering up to three classes of goods and services for the same price.

The New Regulation with respect to the future E.U. trademark complies with the new mechanism. It even already provides for the future fees to be paid to the Office. For new applications, they will be:

• €850 for the 1st class,
• €50 for the 2^nd class,
• And €150 for the third and each additional class (14).

The French Trademark Office is seriously considering the adoption of an equivalent system.

The aim of the new provision is obviously to reduce the number of marks filed or renewed up to three classes when it is not necessary or when it does not reflect the real activities of the applicants. From the applicants’ point of view, it would allow for a better-estimated and a better-controlled budget (15).

Administrative Cooperation

Thanks to the New Directive, national IP offices and the European Union Intellectual Property Office are encouraged to cooperate effectively with each other in order to promote convergence of practices and tools in relation to the examination and registration of trade marks.

The Future Regulation even provides for a financial support from the E.U. IP Office in favour of national IP offices, at least to help them deal with the growing number of procedures involving Community or E.U. trademarks.

Entry into force

It is slightly premature to talk about entry into force since the New Directive and the New Regulation have not been approved by the European legislative bodies yet. However we have information according to which they could be adopted before the end of the year.

Afterwards the New Directive shall be transposed into national legislations, within three years for all mandatory provisions except as regards the new procedure for revocation or declaration of invalidity for which Member States will have up to seven years.

The New Regulation shall however enter into force much more rapidly, only three months after its publication in the Official Journal of the European Union (16).

It will definitely be the subject of future updates on our website.

© [INSCRIPTA]

(1) There are two additional regulations:

• Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark,
• And Commission Regulation (EC) No 2869/95 of 13 December 1995 on the fees payable to the Office for Harmonization in the Internal Market (OHIM).

(2) A Community trademark is a trademark with a unitary character throughout the entire territory of the European Union, i.e. in all 28 Member States.

(3) We must also reveal that there has consistently been a huge budgetary surplus at the Community level which no doubt was a strong reason for the Commission’s decision to reorganise OHIM and the Community trademark system.

(4) See our article about New geographical indications in France.

(5) Let’s observe that the new name may seem misleading since the notion of Intellectual Property is much wider than trademarks or designs, which will remain the only IP rights under the control of the Office.

(6) It is a known fact that today most IP offices are in the incapacity of registering marks that cannot be represented graphically on the register. Of course you can file a trademark application using a Jpeg format file for a figurative mark but how many offices would accept a video file for example?

(7) See:

• Identification of goods and services – Class headings
• French and International trademarks – Scope of the specification
• Protection and defense of trademarks in the E.U.

(8) Court of Justice of the European Union, 19 June 2012, IP TRANSLATOR, Case C‑307/10.

(9) See decision by the Court of Justice of the European Union, 4 May 1999, Windsurfing Chiemsee, C-108/97 and C-109/97: Factors capable of demonstrating the mark’s distinctive character are the market share held by the mark, the intensity, geographical spread and duration of the use of that mark, the size of the investment made by the company to promote it, the proportion in the relevant fields of those who identify the product or service as coming from a particular undertaking because of the mark.

(10) See our article about French law of 11 March 2014 fighting against the infringement of IP rights.

(11) See our article about French law of 17 March 2014 related to protection of consumers.

(12) See our article about New rules and deadlines before the French Patent and Trademark Office.

(13) See also our article about the Reinforcement of customs action against counterfeiting and the French perspective as a reaction to the decision of the CJEU, 01 December 2011, Joined Cases C‑446/09 and C‑495/09, Koninklijke Philips Electronics NV v/ Lucheng Meijing Industrial Company Ltd and a. and Nokia Corporation v/ Her Majesty’s Commissioners of Revenue and Customs.

(14) The indicated amounts refer to applications filed by electronic means.

(15) It is obvious however that, for three classes, future applications will be more expensive than current applications.

(16) The New Regulation has entered into force on March 23rd, 2016. See our update here.