Carrying its own generous measure of brand significance, drawn from one of history’s greatest scientists, German research group the Max Planck Institute was an ideal choice to investigate the workings of the European trademark system. Administered by the Office of Harmonisation in the Internal Market (OHIM), the Community Trade Mark (CTM) has enabled applicants to register brands across EU Member States since 1996. In 2007, Europe’s Council of Ministers called for a report on how the CTM was functioning at both Community and national levels, and whether it could be improved.
At 290 pages, the recently published Study on the Overall Functioning of the European Trademark System is not the final answer – rather, it is just one of several European Commission initiatives that are attempting to evaluate the system. But it does cover a lot of ground, and here we unpick the implications of its three most notable recommendations.
1) Sensory overload?
The end of graphical representation
Among many suggested changes, the Planck report proposes dropping one of the key requirements for trademark registration in Europe: the need to represent trademarks graphically in applications. This requirement has, to date, made it almost impossible to protect non-traditional trademarks such as sounds, smells and tastes. These can be protected in theory, but rarely are in practice, because of the requirement to describe the proposed mark in graphic form.
To amend this, the report recommends removing the graphical representation requirement from both the Trademarks Directive (TMD) and the Community Trademark Regulation (CTMR), potentially opening the door to alternative ways of representing the trademark for which protection is being sought. In the case of sounds, perhaps that would mean sound recordings, but for smells and tastes it seems that the offices would have a more difficult task on their hands, given the technologies available.
Some interesting questions arise from the proposal. For example, how does a new applicant conduct an availability search to ensure that use of a sound does not infringe an earlier right? And further, if there is proliferation of these non-traditional marks, how will the scope of protection enjoyed by these marks be judged? The interpretation of a sound or smell and – perhaps especially – a taste is, potentially, more subjective than comparing traditional marks on a visual and/or phonetic level.
2) Community relations
Genuine use and territorial scope
One point of friction between national and European trademark regimes is that it is possible to protect and enforce marks Europe-wide through the use of a CTM – even though the trademark may be actively used in only one country. At present, if a mark hasn’t been put to genuine use after five years of registration and there are no proper reasons for non-use, it is subject to cancellation if challenged. However the threshold for what constitutes ‘genuine use’ is low: minimal use in only one Member State can be sufficient to maintain the entire CTM and, therefore, provide a monopoly to the trademark owner across the entire EU.
This position is arguably in step with the notion of the CTM as a unitary right that works across political boundaries. However, trademark owners and national offices alike have voiced concerns that this stance damages the coexistence of the national and CTM systems. If a trademark owner can maintain a CTM by showing use in only one Member State then – regardless of that owner’s commercial intentions – the CTM becomes overwhelmingly attractive.
Planck recognises the issue, but for fear of eroding the pan-European principle of the CTM system, rejects the idea of making the genuine-use requirement stricter. Instead, it suggests that, in cases where a CTM has been registered for at least 15 years but used in only one part of the Community, third parties would be able to register subsequent national applications provided the territory concerned was ‘remote’ from the part of the Community in which the earlier mark had been used. In those circumstances, the two marks could coexist. The earlier CTM would continue to be valid and enforceable, and could still be used in the Member State of the later national mark.
It is likely this would ensure that owners of later marks are not penalised or restricted by earlier CTM owners, with whom they may never come into conflict on a commercial level.
3) Class struggle
New thoughts on trading categories
Despite OHIM and national trademark office requirements that goods and services be specified in a trademark application – and despite the fact that the offices use exactly the same classification system – a specification in one territory can offer a very different scope of protection to an identical specification in another. As such, there is ongoing uncertainty.
Currently, all of the offices use the NICE classification, which divides goods and services into 45 classes, broadly defined by class headings. While the CTM office and the majority of national offices accept class headings in specifications, whether the heading is seen to be a claim covering all goods or services in that class differs from office to office. For example, take the Class 15 heading ‘musical instruments’: this would be considered to cover musical instruments alone in a UK trademark, but, at OHIM, it would include tuning forks, cases for musical instruments and sheet-music stands.
There is an argument to say that the CTM version of the process meets business needs, making it easy for applicants to obtain broad protection for five years, after which they can expand into related goods if required. However, allowing applicants to obtain broad protection for goods or services in relation to which they have no intention of using their marks clearly has its downside. Is it reasonable that a computer company claiming the (very broad) Class Nine heading at OHIM is not only protecting its mark for data-processing equipment, but also protective clothing and life-saving apparatus?
The disparity between these practices has caused much debate – especially in the UK – and in an effort to clarify the matter, several questions have been referred to the European Court of Justice (ECJ) from the recent IP TRANSLATOR case. The ECJ’s responses, however, are unlikely to be passed down until later this year.
In the meantime, the Planck team suggests that class headings should continue to be accepted, but only where they are sufficiently precise. So Class 25’s specific ‘clothing, footwear and headgear’ may be allowed, while Class Seven’s vague reference to ‘machines’ may need further description by the applicant. Furthermore, class headings would be seen to cover all goods or services in that class only when they adequately describe those goods or services. This format would be very much in line with the current Class 25. If implemented, the Planck approach to trading classes ought to lead to greater certainty; however, it will require reclassification of old marks. This will likely be done on renewal and, as such, the full effect will probably not be felt for around 10 years.
In addition to the above topics, the report covers a significant number of others, including discussion of changes around the requirements for proving acquired distinctiveness; the assessment of bad-faith applications; the redistribution of the surplus of official fees that OHIM is currently sitting on; and the interplay between marks with reputation and so called ‘well-known’ trademarks. It is clear that substantial changes are on their way. Now we must wait to see whether the European Commission accepts the bulk of the recommendations, or whether it has some surprises up its sleeve.
Mark Devaney and Anna Blackburn are trademark attorneys at Gill Jennings & Every
To download the Max Planck Institute’s full report, click here