After a long gestation, the European Union trademark package will enter into force on March 23, 2016. It’s intended to streamline the trademark application process, and it will be the largest reform to EU trademark law in 20 years. Here’s a summary of the major revisions you should be aware of if you’re dealing with any trademark issues in Europe.
Renaming and Terminology
Some key terminology is changing to comply with international naming convention. The Community Trademark will become the European Trademark. The Office for Harmonization in the Internal Market will now be the European Union Intellectual Property Office.
Revision of the fee structure
The package recasts both the basic application fee and the renewal fees.
The basic fee for a Community Trademark goes from a unique fee of € 900 for three classes of goods and services (and € 150 for each subsequent class) to € 850 for the first class, € 50 for the second class and € 150 for each subsequent class. In the new system, an application in one class will therefore cost less than in the current system, while an application in two classes will cost the same price and an application in three or more classes will cost more than in the current system. The system is designed to discourage applicants from filing and maintaining overly broad specifications.
The good news for trademark owners is that the costs for renewing an EU registration will be reduced significantly, from € 1350 (covering up to three classes) to € 850 (for one class) or € 900 (for a registration in two classes). The fee for renewing each additional class (beyond two or three) is also substantially reduced, going from € 400 to € 150. This reform will benefit all trademark holders, from small companies with limited trademark budget to large companies with substantial trademark portfolios.
The designation of a class heading no longer covers all the goods and services of the relevant class
Prior to the Court of Justice of the European Union decision “IP Translator” (C-307-10, issued on June 19, 2012), if a specification of goods for a trademark application included the class heading, the resulting registration was deemed to cover all the goods or services included in that class. IP Translator put an end to this practice, stating that trademark applications designating a class heading were protected only for the products and services falling under the literal meaning of the class heading. The new regulation has adopted this interpretation. Trademark owners who wish to specify the scope of the protection of their trademark should do so by September 23, 2016; failing to do so will restrict the scope of their trademarks.
Suppression of the graphic representation requirement to promote the registration of unconventional trademarks
In order to facilitate the registration of unconventional trademarks such as sounds, smells or tastes, the criteria for graphic representation of a trademark is removed. A clear representation of the trademark limiting the scope of the rights being claim should however still be provided.
New grounds for refusal: geographic indication and functional trademarks
All marks containing geographic indications or indications of origin shall be refused based on absolute grounds. This means that trademark including names such as Parmigiano Reggiano, Champagne or Neapolitan pizza will be refused on absolute grounds, regardless of a possible challenge from the association or entity defending these rights. Likewise, signs giving the substantial value to a good or services or that are necessary to achieve technical results—such as the shape of a bottle dictated by its anti-skid character—will no longer be eligible for registration.
Better tools to fight piracy and the gray market
The new trademark package provides better protection against piracy and the gray market by (i) targeting mere preparatory acts and (ii) increasing the customs’ power to block infringing goods. Right holders will also obtain better control over any goods in transit since the burden in now on the importer to prove that the good is allowed to be sold in the country of destination. This solution overrules the judgment which had been issued by the CJEU in Philips v. Nokia (C-446/09 issued on Dec. 1, 2011).
Bad faith is now a ground for opposition
The new regulation provides a new ground of opposition making it possible for a third party to oppose a registered trademark on the grounds that the proprietor was acting in bad faith when it applied for the mark. Third parties may rely on the registrations they own outside of the EU, alongside other elements, to support a claim that the application was filed in bad faith.
Right holders obtain better control over the importation of infringing goods by consumers
The new regulation creates a new option for right holders to block the importation of infringing goods even when only the consignor—rather than the importer—acts in commercial capacity. This provision confirms the solution adopted by the Court of Justice of the European Union in Blomqvist v. Rolex (C-98/13, issued on February 6, 2014).
Extension of the cooling-off period to national opposition proceedings
The reform extends the “cooling-off” period—during which parties are encouraged to enter into discussions to settle their trademark dispute—to national opposition proceedings. This provision should encourage the settlement of more trademark disputes in Europe.
Overall, the new trademark package provides a number of positive reforms which should benefit most trademark owners: reduced fees for trademark filings and renewals, broader scope of protection for trademarks, and most importantly, a new range of tools to fight infringement, both within the EU frontier and at the borders. In the context of an increasingly integrated transatlantic market, this reform should further encourage U.S. right holders to extend the protection of their marks in Europe.