Who: Permanent Representatives Committee of the Council of the European Union (the Council of the EU).
When: 10 June 2015
Law stated as at: 30 June 2015
What happened: The Council of the EU has published the final compromise texts on the amended trade marks Directive and revisions to the CTM Regulation with a view to their agreement.
After formal adoption of the package, which is expected to be in early 2016, EU countries will have three years to transpose the recast Directive into national law. Most of the amendments to the Regulation will come into effect with its entry into force 90 days after its publication in the EU Official Journal (the remainder will apply once the necessary secondary legislation has been enacted).
Amendments to the CTM Regulation and Directive
Some of the key amendments include:
(i) Changes to the scope of protectable subject matter
The criteria for registering a CTM will no longer include a requirement for “graphic representation.” This means that signs which cannot be seen, such as smells, may be registered. The principles in relation to which marks for smells could be registered were already established by the CJEU in the Case C-273/00 Sieckmann v DPMA. This includes ensuring that they are represented in a manner that is clear and precise.
The same is true of sound marks, which have also been historically difficult to obtain registration for. Whilst the amendments have removed the hurdle for graphic representation, this is unlikely to significantly impact on the ability to register such marks which will still need to be accompanied by sufficiently clear and precise descriptions.
(ii) Class headings
Further to the decision in IP Translator (Case C-307/10), where a class heading is used in a trade mark specification, the general indications in the class heading must be sufficiently clear and precise if a CTM application is to be accepted.
All proprietors of CTMs applied for before 22 June 2012 which are registered for goods and services identified for the entire class heading of a Nice Class, will have a 6 month grace period from the entry into force of the new Regulation to file a declaration indicating whether they intended to seek protection at the time of filing those marks, for goods and services beyond the literal meaning of the class heading.
This is provided that those goods or services claimed were included in the version of the Nice alphabetical list in place when the CTM was filed. If no such declaration is filed within the grace period, CTMs covering the class headings will be deemed to be registered for goods and services covered by the literal meaning of the Nice indications.
Further, the draft Regulation also provides that CTM owners with such amended specifications will not be able to prevent any third party from continuing to use a trade mark in relation to goods and services where and to the extent that (i) use of the trade mark for those goods and services commenced before the register was amended; and (ii) the use did not infringe the proprietor’s rights based on the literal meaning of the goods and services on the register at the time.
This could have quite a significant impact for the trade mark owner, since previously the use of a class heading in a specification constituted a claim to all goods and services in the class. Whilst amendments made in the 6 month grace period will be subject to the restrictions on preventing third parties, it is not clear whether amendments made before the Regulation comes into force will do so. Therefore, band owners might wish to consider reviewing and amending their trade mark registrations before the Regulation comes in to force.
(iii) Absolute grounds for refusal.
The reform specifically excludes the registrability of CTMs when the signs consist exclusively of not only the shape but also any other characteristic resulting from the nature of the goods or is necessary to obtain a technical result or gives substantial value to the goods themselves. This indicates that the threshold for three-dimensional marks to be registered will be higher.
(iv) Relative grounds for refusal
Designations of origin and geographical indications will be included as a ground of opposition and relative ground of invalidity.
(v) Rights conferred by a trade mark
The new legislation will confer on the trade mark holder the right to oppose the use of a sign as a trade name or company name when it conflicts with the rights in a CTM. Further a CTM holder will also be able to block the use of a trade mark in comparative advertisements when it is contrary to Directive 2006/114 concerning misleading and comparative advertising.
(vi) Infringing preparatory acts
There will be a new right to prohibit unlawful preparatory acts. This means that the trade mark proprietor could stop the use of packaging and labels and any other means to which the CTM will be affixed when they will be in use in respect of goods and services in such a way as to infringe the trade mark rights.
(vii) Changes to the fee structure
The new fee structure will reduce the costs of both filings and renewals. Currently, brand owners pay €900 to file a CTM which covers up to three classes of goods or services. Under the new system it will cost €850, €900 and €1,050 to register a CTM in one, two or three classes respectively. It currently costs €1,350 to renew CTMs covering goods in three classes, but this will fall to €1,050 under the new system.
(viii) Changes in terminology
The term “Community Trade Mark” will be replaced by “European Union trade mark” and the “Office for Harmonisation in the Internal Market” will be rebranded as the “European Union Intellectual Property Office”.
Why this matters:
The changes to EU trade mark law will introduce a number of changes for brand owners and advertisers to be aware of. Whilst many are simply modernising the current legislation by formally incorporating guidance from CJEU case law, some will have a more substantive effect, such as the amendments in relation to class headings. Brand owners may wish to consider reviewing their trade mark portfolios and considering whether amendments should be made before the new Regulation comes into force.