One for all and all for one: here comes more mirroring of EU and national trade mark law

On 10 June last, the Council of the European Union contributed to the impetus towards European trade mark reform [on which the IPKat recently reported here] when its Permanent Representatives Committee approved the text of the new compromise agreement [the relevant documents can be accessed here].

In respect of the prospective CTM Regulation, along with minor modifications, some of the major changes introduced reflect principles which have been articulated in EU trade mark case-law over the past 20 years but which have been so far solely contained in the OHIM guidelines. Forthcoming amendments include the following:

1.            Changes in terminology in the light of the entry into force of the Lisbon Treaty [Not to be confused with the Lisbon Agreement which has more to do with trade marks]: the denomination 'Community trade mark (CTM) 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'.

2.            Office of filing: EU trade marks applications will be filed solely with the European Union Intellectual Property Office.

3.            Fees: From a financial perspective, EU trade mark holders will be asked to pay a fee both at the filing and at the renewal stage for each additional class for which protection is required, in addition to the fees covering the first class; this should result in either a narrower or broader scope of protection for each mark, depending on the financial resources of the trade mark holder.

4.            Protectable subject matter: as already suggested in the Max Planck Institute for Intellectual Property and Competition Law's report in 2013, the criteria for registrability of EU trade marks no longer include a requirement of 'graphic representation'. Also, signs which cannot be seen -- such as smells -- may be registered in so far as they can be represented in a manner that is clear and precise, as the Court of Justice of the European Union indicated in Case C-273/00 Sieckmann v DPMA.

Nice ... and classy!

5.            IP Translator [Extensively reported by The IPKat here]: first, the general indications included in the class headings of the Nice Classification or other general terms mustmeet standards of clarity and precision if a EU trade mark application is to be accepted. The use of general indications and terms will be interpreted as covering all goods and services which can be derive from their literal meaning. All proprietors of EU trade marks applied for before 22 June 2012 [the date of the President's Communication No. 2/2012 of the President of the Office], which are registered for goods and services identified by the entire class heading of a Nice class, will have a 6 months grace period from the entry into force of the new Regulation to declare 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. The declaration will entail a designation of goods and services which must be included in the alphabetical list for each class of the edition of the Nice Classification at time of filing. In the absence of the submission of that declaration, EU trade marks will be deemed to be registered for goods and services covered by the literal meaning of the class heading at issue.

6.            Absolute grounds for refusal: an important modification entails Article 7(1)(e) of the present Regulation [207/2009], which is particularly controversial in respect of the registration of three-dimensional marks. The reform specifically excludes the registrability of EU trade marks when the signs exclusively consists 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 change implies that the threshold for a three-dimensional mark to be registered will be higher. Further, the registration of a EU trade mark can be prohibited on the basis of earlier traditional terms for wine and traditional specialities guaranteed as well as of prior plant varieties, protected under the legislation of the Union or national laws.

7.            Relative grounds for refusal: designations of origin and geographical indications will be included as an autonomous ground of opposition (and of invalidity on relative grounds) within Article 8(4), if they are prior to the EU trade mark application and confer upon their holder the right to prohibit the use of a later mark.

8.            Rights conferred by a EU trade mark: the new draft explicitly lists among the prohibited uses that a trade mark holder can oppose the use of a sign as trade name or company name when it conflicts with the rights in a EU trade mark; this occurs when those signs are used as commercial identifiers, that is for the purposes of distinguishing goods and services. Further, an EU trade mark holder can also block the use of a trade mark in comparative advertisement when it is contrary to Directive 2006/114 concerning misleading and comparative advertisement.

9.            Goods in transit and customs enforcement: EU trade mark holders are now afforded greater protection against goods in transit in the EU which infringe their rights, by means of customs enforcement. The new text expressly allows trade mark holder to prevent the goods from entering in the EU, when those goods bear without authorization a mark identical with or one that is indistinguishable in its essential components from the EU trade mark. The declarant or the holder of the goods involved in any customs proceedings will face the task of satisfying a burden of negative proof in order to prevail over the EU trade mark holder's claim by demonstrating that the EU trade mark holder would not be entitled to prevent the marketing of the goods at issue in the country of final destination.

As recently indicated by The IPKat here, the new text features Recitals 19a and 19b which contextualise customs protection within the EU trade mark system, explaining that the new regime is designed to be compliant with the international obligations to which the European Union is subject under the World Trade Organization framework, with special reference to Article V of the GATT on freedom of transit and the Doha Declaration of 14 November 2001 regarding generic medicines. Recital 19e addresses trade mark enforcement against generic medicines in transit in the EU on the basis of similarities with international non-proprietary names (INNs). EU trade mark holders will not be entitled to prevent the entry of generic medicines into the EU where the alleged infringement is the use of an INN which is a generic name for an active substance in a pharmaceutical preparation.

10.         Infringing preparatory acts: a new Article 9a will provides for the right to prohibit unlawful preparatory acts. This means that the trade mark holder could stop the use of packaging, labels, tags and any other means to which the EU trade mark will be affixed when those features will be use in respect of goods and services in such way to infringe the trade mark rights.

11.         Estoppel doctrine in infringement proceedings: a new Article 13a will explicitly bar the EU trade mark proprietor from prohibiting the use of a later EU or national trade mark when that proprietor's acquiescence has already prevented him from bringing invalidity actions against those later marks, unless the later marks were applied in bad faith. The same applies when, upon request of the holder of a later EU trade mark which is under invalidity attack, the proprietor of a earlier EU trade mark cannot demonstrate proof of genuine use of the mark relied on in the invalidity proceedings. Likewise, the proprietor of the later trade mark will not be entitled to prohibit the use of the earlier mark.

In regard to the new formulation of the text of the Trade Mark Directives, the general idea is that the EU intends to harmonize national trade mark laws and practices to a greater extent than in the past, the principal objective being to enhance legal certainty in trade mark protection, which is expected to be more consistent as between the national jurisdictions and the EU itself. In this latter regard, although the Recitals in the new Directive continue to emphasise that the national and the EU systems are autonomous and independent the common objective is to mirror trade mark at national protection with that afforded at the EU level as closely as possible.

In the light of this consideration the Directive's new provisions must be read insofar as they largely reproduce those introduced in the new EU Trade Mark Regulation: * same scope of protection eliminating the requirement of the graphic representation; * same application of the principles set out in IP Translator ; * same provisions on absolute grounds for refusal both in respect of three-dimensional marks, traditional terms for wine and traditional specialities guaranteed and plant varieties; * addition of the absolute ground for refusal based on prior geographical indications;* same protection against counterfeits and goods in transit.

One for all, and all for one!

The really interesting part of the Directive's revision regards cancellation proceedings. It provides that that in both revocation and invalidity proceedings, whether on absolute or relative grounds, the grounds invoked at national level should be the same as those developed at the EU level. Recital 36 of the proposed Trade Mark Directive establishes that Member States will provide for an administrative procedure for revocation or declaration of invalidity within seven years from the entry into force of the Directive.

The next step involves the endorsement of the compromise agreement by the Legal Affairs of committee of the European Parliament and then the political agreement on part of the Council. While the EU Trade Mark Regulation is expected to come into effect in the second quarter of next year, the Trade Mark Directive will be implemented by the Member States in three years.