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Proposals concerning the use of community trademarks (CTMs) could give UK brand owners more power to leverage when protecting their marks in EU member states. In some instances, this could lead to an increase in litigation.
In the first report of its kind, published on 15 February, the Max Planck Institute has put a series of recommendations to the European Commission for the reform of the European trademarks system. The report was commissioned to examine the system used to acquire CTMs, marks that give the brand owner protection across all member states. Specifically, the institute was tasked to recommend ways to improve the efficiency of the CTM filing process, which is administered by the Office for Harmonisation in the Internal Market (OHIM), and to address divergent practices within the OHIM and between it and national trademark offices.
There is plenty of room for improvement. Registering a CTM currently takes anything between 12 and 18 months, while a trademark registration in the UK can usually be completed in just four months.
The report’s findings are comprehensive and helpful. But we will have to see to what degree the OHIM is prepared to change its practices ahead of any requirement to do so, which could take months.
There will be considerable relief among brand owners and their lawyers that, according to the report, an OHIM rule allowing a brand owner to resist a challenge for non-use of their trademark after five years, so long as it can prove use in at least one member state, is likely to remain unchanged. A case brought in Benelux, which has since reached the EU’s Court of Justice and is awaiting a final decision, had threatened to overturn this rule, arguing that demonstrating use in just one country is insufficient. The report’s findings on this matter make it less likely that the court will want to change the existing rule.
The report’s findings also bring greater clarity to the issue of counterfeit goods and confirm the rights of national customs officials to confiscate them even when they are in transit and destined for sale outside the EU. In the UK there was a controversial case last year where HM Revenue & Customs officials refused to confiscate a consignment of fake Nokia handsets because they were just passing through. The study makes it clear that customs should have the power to confiscate counterfeit goods, regardless of where they are intended for sale. The Court of Justice is currently considering the Nokia case following an appeal by a UK Court of Appeal judge, and is expected to take the report into account when giving its judgement.
A further recommendation, intended to improve consistency in the interpretation of European trademark law, affects the classification of trademarks. In the UK, when specifying the class of goods on the registration document, the use of class heading is not deemed to cover all goods or services in that class.
herefore, the brand owner is advised to promote a more detailed description than, for example, class seven (machines). This differs from current OHIM practice, but has been highlighted by the report as good practice.
The report also clarifies that an unregistered, well-known trademark should have the same protection in terms of its access to the EU judicial system as a registered trademark with reputation. This could potentially lead to an increase in litigation.
A number of common sense proposals are also included in the report. For example, if a brand owner is required to show use of a shape or colour, the report concludes that it should not be necessary to do this in all 27 member states, just a few will do. Additionally, in the case of unusual trademarks, such as sound marks, it should be possible to file in more suitable formats, such as CD-ROM.