The fall-out from IP Translator: would scrapping Nice classification be a mercy blow?

The Nice classification system for trade marks was established in 1957, six years before the French sent the first cat into space.  Fifty-five years later, on Monday 9 July 2012, Walker Morris hosted an extremely informative and engaging presentation by Michael Edenborough QC of Serle Court on the judgment of the Court of Justice of the European Union in the IP Translator case.  Michael represented the Chartered Institute of Patent Attorneys (CIPA) before the Court of Justice (CJEU) and so was able to deliver a fascinating discussion of first principles of the classification of goods and services in trade mark matters (for discussion of the case in detail see IPKat posts here and here). 

The issue flows from OHIM's (now obsolete) Communication No. 4/03 which stated that Community trade mark applications which adopted the Nice class heading would be regarded by OHIM as covering all of the goods and services in the designated class.  Adopting this interpretation, the UK IPO refused CIPA's application for IP TRANSLATOR in respect of "education; providing of training; entertainment; sporting and cultural activities" on the grounds that it covered translation services and was therefore descriptive and non-distinctive.  The Appointed Person referred the matter to the CJEU for clarification.

Before a grand chamber of 13 judges and Advocate-General Bot (a fairly rare occurrence), OHIM's primary case was that the reference was inadmissible.  OHIM argued that the circumstances were artificial and that the CJEU should not entertain manufactured facts.  The European Commission also expressed doubt as to the real need for the registration [where does that leave the requirement for a bona fide intention to use under section 32 Trade Marks Act 1994? - Merpel].  However, the CJEU held that the reference was admissible, notwithstanding the UK IPO's derogation from its usual practice [the fact that ten member states had intervened may have helped persuade them].

This Kat has some sympathy with the OHIM's argument.  Ordinarily the UK IPO would have raised an objection in respect of "translation services" and the matter could have been addressed by an appropriate exclusion.  However, the fact that the applicant and the UK IPO were required to contrive a set of circumstances to ensure the reference to the CJEU seems to dramatically exaggerate the significance of the issue.  If the role of IP law in society is to provide a framework conducive to doing business then surely the corollary is a duty incumbent on lawyers and clients to be practical.  Only where there are no commercial solutions available, should resources be applied to amending the law.  Otherwise we end up with bunfights among lawyers on legal principle rather than practical issues.  As proof, witness the number of times a brand owner has litigated a technical point when a commercial solution is available.

The main point of the CJEU's judgment was that parties may use class headings to identify the goods and services, provided they are clear and precise.  However, the CJEU went further and appears to have answered a question it was not asked, possibly in an attempt to accommodate OHIM's previous policy set out in Communication No. 4/03.  In doing so this has created further problems, such as how to interpret historic applications.  Neither does the publication by OHIM of Communication No. 2/12 the day after the judgment help matters. 

The position remains unclear and the parties are no doubt considering their position carefully. If CIPA considers that the policy adopted by the OHIM in Communication No. 2/12 is contrary to EU law, that may lead to a complaint to the European Commission.  It will likely take years for another suitable set of facts to arise and be referred to the CJEU.  Primary legislation may indeed be the only way to clarify precisely the extent of trade mark protection in many Community and European Union national trade mark registrations and applications.

All of this commotion piqued this Kat's curiosity: if we can now find, for free, in a matter of seconds almost any online document in the world in any language, from just about anywhere in the world, where is the continued justification for the Nice classification system at all?  Tremendous resources are being applied, potentially fruitlessly, to clarify the technical issue of trade marks classification.  Surely there ought to also be at least some objective consideration as to whether there is an alternative system which might work just as well.

Those countries which have not adopted the Nice classification system seem to manage (Canada springs to mind).  By precluding disputes over classification, it even has a comparative advantage which should be seized upon in these straitened economic times.  The resources saved could be invested in developing more sophisticated and universal search and taxonomy software. After all, these issues are what the original Nice classification system aimed to resolve in the first place, albeit in an analogue rather than digital world.

Trade mark law will always be subject to semantic squabbles and the means-what-it-says approach is most logical.  This Kat wonders whether now is the time to remove the rigid adherence to classification in trade mark applications and consider the alternatives presented by the exponential growth in computer processing power.  However unpalatable and sacrilegious it may seem, scrapping the requirement to follow the old Nice system and replacing it with a new technological one might well be a coup de grâce.