Briefing

Reform of EU Trade Marks

Posted by: Anthony Misquitta | Date posted : 24/09/2015

On 1 April 1996 Tony Blair's vision for a new Labour Party was in its ascendency, the British public was still reeling from the news that Take That had split up and the very first Community Trade Mark Application was filed. Almost 20 years later Jeremy Corbyn's vision for a new (or perhaps old) Labour Party is in its ascendency, the British public is still reeling from the news that One Direction has split up and the Community Trade Mark, and indeed all trade mark systems across the EU, are about to get a substantial reboot.

The EU Commission has been pushing for a reform of trade mark law since at least 2011 when it reached the conclusion that in order to meet increased demands from business for faster, higher quality, more streamlined trade mark registration systems, which are more consistent, user friendly, publicly accessible and technologically up-to-date, there is a necessity to modernise the trade mark system across the EU as a whole and adapt it to the Internet era.

Some of the changes are cosmetic but some could have far-reaching consequences for any business that uses brands. Significantly, these are not just changes to the law, but also changes to the systems and processes in place across the EU by which trade mark registrations are obtained. The following is a summary of some of the more interesting changes:

Terminology Changes: the Community Trade Mark (CTM) will under the new regime be known as the "European Union Trade Mark" (presumably EUTM) and the Office for Harmonization in the Internal Market (OHIM) will be known as the "European Union Intellectual Property Office" (presumably EUIPO).

Representation of the Mark: at present, a trade mark can only be registered if it is capable of being "represented graphically" so, for example, sound marks must be registered in notation form. Under the new regime, a mark will be registrable if it is capable of being "represented on the register in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor." That means sound marks should be capable of being filed as MP3 files. As technology develops all sorts of new file types might become available.

Infringing Company Names: at present it can be difficult to sue a company for registered trade mark infringement where the trade mark in question appears in the company's name, but the company does not affix its company name to the goods or services in question. Under the new regime "using the sign as a trade or company name or part of a trade or company name" is expressly listed as an infringing use.

Preparatory Acts and Packaging: at present it can be difficult to use a registered trade mark to stop the import of goods where the goods and the packaging are imported separately (a defendant can argue that the registered mark has not, yet, been applied to the goods). In order to enable proprietors of registered trade marks to fight counterfeiting more effectively, the new regime prohibits the affixing of an infringing trade mark to packaging and other preparatory acts where there is a risk that those packages/acts will result in an infringement down the line.

The "Own Name" Defence: at present, a defendant can avoid liability for infringement if it can show that it is honestly using its "own name". This defence worked in a recent dispute where the Court of Appeal held that the company ASOS could rely on the "own name" defence to trade mark infringement claim made by Assos which would have otherwise been successful. Under the new regime the "own name" defence will only be available to "natural persons" which, presumably, means that companies will no longer be able to benefit from it.

Exhaustion of Rights across the EEA: at present, the rights in a trade mark are exhausted as soon as goods bearing the mark are put on the market within the EU with the consent of the brand owner. Therefore, goods that a brand owner sells in Norway can, in some circumstances, be blocked from sale in the EU. Under the new regime the rights of a trade mark owner are exhausted when the goods are sold in any EEA country (such as Norway) even though the CTM (or EUTM) may have no effect in those countries.

EU Application Fees: at present, the basic filing fee for a CTM is €900 for which the applicant is entitled to up to three classes before it has to pay any additional fees. In practice, applicants seek to get their money's worth so most applicants file across three classes even if they only need one or two. Under the new regime the basic fee for a three class application will remain at €900 but applicants will be offered a discount if they file in less than three classes.

No timetable for the implementation of these recommendations is yet available so it is possible that the Labour Party will have entered another new era and we shall be mourning the loss of yet another boyband by the time these changes come into effect.

If you require further information on anything covered in this briefing please contact Anthony Misquitta (anthony.misquitta@farrer.co.uk; 020 3375 7545), or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Intellectual Property page on our website.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, September 2015