As of March 23, 2016, the European Parliament brought new changes into effect relating to the Community Trade Mark System, also known as Regulation (EU) 2015/2424.
The Community Trade Mark System (CTM), created in 1996, allowed brand owners to obtain registered protection for trademarks using one European Union (EU) filing. Filing one single trademark application carried forward to each of the 28 EU member states. The system has changed names and has some new rules to consider.
1. The first key change to the CTM is the nomenclature.
Both the system and the agency are now called European Union Trade Mark as opposed to Community Trade Mark. The office or agency that was in charge of handling trademark applications was previously called the Office for Harmonization of the Internal Market, popularly called OHIM; it's now called the European Union Intellectual Property Office (EUIPO).
Anyone using a template for the application process and enforcement of the marks will need to update them to ensure that any contracts and provisions are in compliance with this change.
2. The change most interesting to brand owners is the change in the fee structure.
Before the change, you may obtain coverage for up to 3 classes for one official fee of €900. The new system will charge brand owners per class for each additional class. The official fees now are €850 for filing in one class; €900 in two classes; €1050 for three classes; and €150 for the fourth and each subsequent class thereafter. The new fee structure should save clients some money in the end because the renewals became substantially cheaper.
3. Items not covered in the Nice Classification heading must be indicated specifically in order to get coverage.
The Nice Classification, which is the international classification system used by almost 150 trademark offices in the world for classifying goods and services in trademark applications, goes by numbers and class headings. For example, Class 18 heading says, "Leather and imitations of leather and goods made of this material and not included in other classes: animal skins, hides, trunks and traveling bags, umbrellas and parasols, walking sticks, whips, harnesses, and saddlery."
Before, for CTM applications "broad" specification of the classification number and just a heading was deemed to cover all goods and services within that particular class, even if they were not explicitly listed. If done so now, under the new system, the application will be deemed to cover exactly-and only-what the class heading states. So, to use the above example of Class 18, if you are a brand owner in the fashion industry, you will have to be careful. "Trunks and traveling bags" are mentioned in the class heading, but "handbags" are not. The application will not cover "handbags" unless they are specifically indicated.
Note: For marks applied before June 22, 2012, there is a 6-month window in which the brand owner can declare that their intention at the date of filing was to seek protection in respect of additional goods and services beyond those covered by the literal meaning of the class heading. However, if another brand owner began using the mark before the register was updated, rights cannot be enforced against that party.
4. Absolute grounds of refusal for your trademark application have expanded beyond shapes.
Before, absolute grounds of refusal only included shapes of a mark. The new system has expanded to include absolute grounds of refusal for:
- whatever results from the nature of the relevant good (e.g., CASTFLOOR); or
- the necessary factors to achieve a technical result (e.g., CARBON ELIMINATOR); or
- something that gives substantial value to the goods (e.g., HEALTHY HAMP).
Additional grounds for absolute dismissal have been expanded to now also include:
- Designation of origin; and
- Geographical indication.
Note: Brand owners should stay away from marks that consist of geographical terms because they will be tougher to register.
5. It is easier now to register your non-traditional marks.
Putting those limitations aside, non-traditional marks (e.g., sounds, smells, motion, or holograms) are now more easily registrable at the EU level. It was always difficult to describe and graphically present these types of marks to represent the trademark. This presentation requirement has now been abolished. Brand owners can now define non-traditional marks in a manner which enables the public and relevant authorities to determine the clear and concise subject matter of the desired protection. A good example of this change is sound marks -- before only sounds that were able to be presented in music notes may have been registered.
6. New certification marks for trade associations or other centralized commercial groups can now be registered.
As of October 1, 2017, certification marks will be available in the EU for the use of the mark as a sign for goods and services complying with applicable certification requirements, which will now be inconsistent with national systems.
7. The 5-year period for proof of use now starts ticking from the filing date or foreign priority, whichever is earlier.
This change only applies to oppositions that are filed on or after March 23, 2016. Previously, if a third party were to oppose your application you could require the opposer to submit proof that its mark was in use during the 5-year period measured from the last day of your mark's publication. Under the new rules, the proof-of-use period has shifted to be 5 years measured from your filing date, or priority date, whichever is earlier.
8. "Own name" defense is no longer available, except for natural persons.
If you are using a registered trade mark as a trade name or company now, it may be deemed infringement of a third party's right.
To avoid such an infringement, we recommend that trademark owners subscribe to a company name watch. Our firm provides this service, not just for a company name watch but also for any name watch.
9. Trademark owners can now seize goods in transit.
Before the change, items simply passing through the European Union, not to be sold there, could not be classified as counterfeit. Now, with a European Union Trade Mark registration items can be seized in transit unless the presumed infringer can show that he or she is entitled to sell those goods in the final destination country.
Note: We recommend to brand owners having problems with counterfeits outside the EU to consider obtaining EU trade mark registrations and EU customs registrations.
While the list above is a general review of the recent changes, we advise brand owners to review their trademark portfolios.
If you have any questions or concerns about your EU trademark or other IP considerations in any jurisdiction, please contact us anytime.