EU Trademark Law Reform – What Will Change?

Time for reform

Harmonisation of EU trademark law has been a success story. In late 1988 Directive 89/104/EEC (“Directive”) was enacted to harmonise substantive trademark law provisions throughout the European Community — which had 12 members at that time. With a mere 15 substantive articles to date, harmonisation was to a large extent effective. Later, in 1996, based on the basic principles of the Directive, a trademark with a unitary effect was established in the EU, the Community Trade Mark (“CTM”), with great success.

Two decades on, a reform of EU trademark law has been initiated in order to reflect technical developments and the clarifications made by the Court of Justice of the European Union (“CJEU”), and to harmonise further aspects of substantive law as well as basic procedural principles. This ties in with the modernisation of the CTM system. A review of the significant changes that will become effective in 2016 demonstrates their value.

New terminology

The term “Community Trade Mark” only held meaning to some people, and since there was no longer a “community”, the new name “European Union trade mark” (“EU trademark”) will now communicate the nature and territorial scope of the registration. Similarly, the “Office for Harmonisation in the Internal Market (trade marks and designs)” will receive a more meaningful name: the “European Union Intellectual Property Office” (“EU IPO”).

Registrability — the end of the graphical representation requirement

Traditionally, registration of trademarks required a graphic representation. In the future this will be aided by technology since trademarks can — starting in 2016 — be represented in any appropriate form using generally available technology (as long as the representation satisfies the CJEY’s criteria that it be clear, precise, self-contained, easily accessible, intelligible, durable and objective). The most obvious effect of this change is that sound marks can be filed by submitting sound files instead of submitting transcriptions.

Adjustments to bars to registration

In its first proposal, the European Commission intended to have the traditional limits on trademark protection apply across languages. In other words: for instance, the German word “Matratzen” (meaning “mattresses”) could never have been registered for the goods mattresses, even where German is not spoken by a significant part of the relevant public. This proposal received wide rejection — potentially unjustly, because at least for descriptive and generic indications it had its merits — and it was not incorporated in the latest text.

The burden for the trademark owner of proving acquired distinctiveness for a descriptive, generic or otherwise not distinctive sign, has been relieved to some extent. A trademark may, going forward, also be defended, if acquired distinctiveness can be shown at the date when the trademark is challenged in a cancellation action. This will relieve the trademark owner from having to furnish proof of distinctiveness at the application date, which for older marks was sometimes a practical burden.

Under the existing regime, only monopolisation of characteristics of goods by way of registration of shape is excluded from trademark protection; under the new regime this will apply also to other characteristics of the said goods as well.

Scope of protection

In its case law the CJEU recently held that goods in transit do not infringe upon trademark rights as long as they are merely transiting. A heated discussion arose as to whether this is an adequate standard for effective action against product piracy. A compromise was finally reached that goods in transit, coming from third countries and bearing identical (or not distinguishable) marks shall infringe trademark rights. However, a customs seizure of such goods would have to be relieved, if it is proven that marketing of the goods in the country of final destination would or could not be opposed by the trademark owner.

A significant obstacle to the enforcement of trademark rights against piracy has been that labels sent independently from goods, which — once those labels were applied — would be considered counterfeit could not be seized by customs or enforced as trademark infringements. In the future the mere shipping of labels or packaging to be applied later on to counterfeit goods will be seen as actionable trademark infringement.

Lack of genuine use — intervening rights

Under the new system, owners of earlier marks will only be able to act against colliding younger marks, if genuine use as required for the earlier marks can be shown as of the filing or priority date of the younger mark. Otherwise the owner of the younger mark will gain an intervening right. This means that trademark owners are well advised to keep evidence of use for any time over the life of the trademark.

Procedural issues

Member states are required to have procedures in place for the recording of transfers, rights in rem, levies of execution, and licences in their trademark registers. This applies not only to trademarks already registered, but also to pending applications.

Opposition proceedings must also be made available in all member states and based on all relative grounds provided for in the Directive. “Efficient and expeditious” administrative cancellation procedures must be available at trademark offices (and not only at courts).

Member states will have 36 months from entry into force of the Directive to amend their laws to comply with it.

EU trademark law will be modernised with effect from early 2016. Several new substantive and procedural provisions will become mandatory throughout EU member states harmonising a wider scope of trademark law.

authors: Christian Schumacher, Michal Gruca