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European trademark package

January 8, 2016: by Trevor Little

The European trademark package: what’s changing; when and how to prepare

Last month we reported that the European Parliament had approved the European trademark reform package. The subsequent publication of Regulation (EU) No 2015/2424 of the European Parliament and the Council amending the Community trademark regulation in the Official Journal of the European Union means that the amending regulation will enter into force on March 23 2016 (although some of the provisions will require secondary legislation and will take effect from 21 months after the publication date of the regulation – September 23 2017). The new Directive (2015/2436) will enter into force 20 days after its publication in the Official Journal (on January 15), but Member States have three years to then transpose them into their national law (seven years as regards to the provision of an administrative procedure for the cancellation of national marks). Issue 60 of World Trademark Review will present full analysis of the changes and outline how counsel should be preparing. In the meantime, here is a round-up of some of the notable upcoming changes.

A new name for OHIM
On March 23 the Office for Harmonization in the Internal Market (OHIM) will change its name to the European Union Intellectual Property Office (EUIPO), while the Community trademark (CTM) will be called the European Union trademark (EUTM). The rebrand will keep the office’s Alicante employees busy (particularly those in charge of the stationary!), but is also something for trademark practitioners to note – and, crucially, to ensure that colleagues are aware of. Trademark solicitation campaigns have long plagued practitioners and there is every likelihood of a spike in activity as scammers seek to capitalise on any confusion caused by the changeover. Invoices need to be carefully checked and, if you have briefed the accounts department to treat invoices bearing generic office names like ‘The European Union Intellectual Property Office’ with scepticism, it is time to tell them that future invoices bearing that name should not be automatically discarded.

Fees are changing – mostly for the better
The current regime allows for CTM protection in three classes for a €900 (electronic application) or €1,050 (paper application) fee. That is set to change with the introduction ‘one-fee-per-class’ approach. From March 23, the fee for registration is one class will be €850, with a second class costing an additional €50. Extending coverage to a third class (and for each subsequent class) will cost an additional €150. Therefore, applicants will pay a lower fee if they only apply for one class, the same fee if they apply for two, and a higher fee if they apply for three or more. Meanwhile, renewal fees are reduced in all instances and set at the same level as application fees. Therefore, instead of paying €1,350 to renew a mark in 3 classes, the cost will be €1,050.
Overall, then, the changes are mostly budget-savers. However, for those considering the timing of their applications, Verena von Bomhard, partner at Bomhard IP, argues that “the fee benefits or downsides of the new law are so minor that we do not consider them to justify any acceleration or deferral of applications”. However, her advice for those eyeing renewals is slightly different. Under the new law, renewals must be requested by the date of expiry and not the end of the month during which expiry occurs. However, it is unclear what cut-off date will be applied for this (and the new fees regime). von Bomhard notes that OHIM is considering charging the existing renewal fees for all marks for which the six-month period for requesting the renewal started before the entry into force of the new law. This would mean that all Community/European Union trademarks with renewal dates up to August 2016 would fall under the old regime. Until the position is clarified, she recommends that mark owners “defer renewals of CTMs expiring between March 1 and August 30 2016 to a later time, when it is clear which regime applies”.

What you see is what you get
A key area of harmonisation relates to goods and services and adapting the classification system to comply with the IP TRANSLATOR case and the Nice system. The amending regulation codifies the existing practice for trademarks filed after the judgment in ‘IP Translator’ (and extends this practice to trademarks filed before the judgment, giving their owners a transitory six-month period to adjust the specification of their marks to their original intention when they filed them). It explains: “The use of general terms should be interpreted as only including all goods and services clearly covered by the literal meaning of the term. Proprietors of EU trademarks, which because of the previous practice of the Office are registered in respect of the entire heading of a class of the Nice Classification, should be given the possibility to adapt their lists of goods and services in order to ensure that the content of the register meets the requisite standard of clarity and precision in accordance with the case-law of the Court of Justice of the European Union.”
The onus is on the applicant/mark owner to identify “with sufficient clarity and precision” the goods and services for which the protection of the trademark is sought. To this end, von Bomhard recommends that counsel undertake a portfolio review “to assess whether any specifications should be amended before the new law enters into force, or during the six-month period thereafter – allowing sufficient time for any action to be taken before March 23. This is not overly time consuming and should be done as soon as possible”. For those fearing an avalanche of resulting paperwork, she reassures: “We have seen that in most industries, for a number of reasons, there is much less need for the amendment of CTM specifications than might be expected, and such amendments have a much lesser practical impact than is sometimes believed”.

Opposing views
Turning to oppositions and cancellations, one change worth noting is that the opposition period against international registrations designating the EU (which currently commences six months after publication) will change to one month after the date of publication. The opposition period itself stays at three months. With respect to counterclaims before EU trademark courts, the courts will not proceed with their examination until either the interested party or the court has informed the office of the date on which the counterclaim was filed.

An absolute (and relative) position
A number of changes are also being made with respect to absolute grounds of refusal. Amongst these, the possibility for users to add disclaimers in trademark applications in order to overcome future absolute grounds objections is eliminated and functional signs (such as colours or sounds) will now be subject to the same prohibitions applied to shape marks. The amending regulation also codifies the current practice in regards to invalidity proceedings based on absolute grounds, limiting its examination to the arguments and the grounds provided by the parties. Turning to relative grounds, there is the introduction of a separate specific ground of opposition and cancellation on the basis of both Protected Designations of Origin and Protected Geographical Indications.

The goods in transit compromise
The treatment of goods in transit was a hotly debated topic during formation of the legislation. The final result? That EU trademark owners will be able to prevent the entry of infringing goods and their placement in all customs situations (“including transit, transhipment, warehousing, free zones, temporary storage, inward processing or temporary admission”), even if the goods are not intended to be placed in the European Union market. The caveat? That this entitlement lapses when, in subsequent proceedings, the declarant or the holder of the goods is able to prove that the EUTM holder is not entitled to prohibit the placing of the goods on the market in the country of final destination. Reflecting on this, Bird & Bird’s Patricia Collis and Mark Holah suggest that “all trademark owners having problems with counterfeits outside the EU should consider obtaining EUTM registrations and EU customs registrations, even if they have no counterfeit problems (or even, arguably, no business) in the EU”.

Welcome to the party
At present, legal practitioners qualified in one of the member states of the European Union are permitted to act as professional representatives before OHIM. However, the new legislation extends this right to those qualified in one of the member states of the European Economic Area (EEA) – namely those from Iceland, Liechtenstein and Norway. For counsel in these countries, the countdown starts now.

Mark the date: September 23 2017
A number of changes will come into force 21 months after publication of the amending regulation (ie September 23 2017). While not as pressing in terms of preparations, these are worth noting now. One is the elimination of the graphical representation requirement in applications. Instead, signs will be permitted to be represented in any appropriate form using generally available technology, and thus not necessarily by graphic means, as long as the representation is clear, precise, self-contained, easily accessible, intelligible, durable and objective. This change should provide a useful boost for those seeking to register non-traditional trademarks. September 2017 will also see the introduction of European Union (EU) certification marks, which allow a certifying institution or organisation to permit adherents to the certification system to use the mark as a sign for goods or services complying with the certification requirements. The registration cost for an EU certification mark will be the same as for an EU collective mark.
That this is one of the longer blogs we have written shows just how much there is to consider. OHIM confirms that all the office’s online tools and services will be fully updated to reflect the changes in the fee structure. An updated version of the Guidelines for Examination will also enter into force, which will reflect the changes introduced by its amendments in the Office’s trademark examination practice.