Changes Coming in 2016 For Community Trade Mark System

The Community Trade Mark (CTM) is a single trademark registration covering all countries in the European Union. The CTM registration system is administered by the Office for Harmonization in the Internal Mark (OHIM) located in Alicante, Spain. A trademark owner does not have to be domiciled in a European Union country in order to apply for a CTM registration.

The member countries of the European Union have provisionally agreed to a number of changes to CTM regulations. The changes constitute the first major reform since the CTM was introduced more than fifteen years ago. The general objective of the reform is make the CTM more cost-effective, accessible and predictable, and to reflect the ongoing changes as to how trademarks are used in commerce. The majority of the changes are expected to come into force during the first six months of 2016.

The following is a summary of key reforms. This list is not exhaustive.

1) Name changes

The Community Trade Mark (CTM) will henceforth be known as the European Union Trade Mark (EUTM). The Office for Harmonization in the Internal Mark (OHIM) will change its name to the European Union Intellectual Property Office (EUIPO).

2) Fee changes

The fee for electronically filing a trademark or service mark application is currently €900 (Euros) for up to three classes. This base fee is being lowered to €850, but will only cover a single class. The rational for this change is to discourage filing for goods and services that are not of true importance to the applicant. The fee for an application covering two classes will be €900, and third and additional classes will require a fee of €150 per class.

The fee for renewing a CTM registration online will follow the same schedule. Electronically renewing one class will cost €850, with €50 for the second class and €150 for the third and each additional class.

3) Identification of goods and services – Class headings

The new regulations will require that the goods and services in a EUTM application be identified with "clarity and precision" based on the "natural and usual meaning" of the terms. Owners of Community Trade Mark registrations filed before June 22, 2012 which listed the Nice Class heading as their identification will have a six month transitional period after formal implementation of the reforms to file a declaration specifying which specific goods or services are to be covered by the registration. If no declaration is filed it will be assumed that the registration covers only goods or services within the literal meaning or the Nice Class heading. Applications that were filed on or after June 22, 2012 with a Nice Class heading were already supposed to indicate whether or not their intention was to cover all the goods or services in the Nice alphabetical list or only some of those goods.

4) Non-traditional marks

The requirement for the application to include a graphical representation of the mark will be eliminated. A mark need only be represented in a sufficiently clear and precise manner to enable the competent authorities and the public to determine the extent of the trademark rights. This should facilitate the registration of non- traditional marks such as holograms and scent marks.

Currently marks can be refused protection if they are composed entirely of the shape of the goods or a shape necessary to achieve a technical result or provide substantial value to the goods. Under the reforms an additional prohibition will be extended to marks which are composed solely of another characteristic besides shape which results from the nature of the goods, is necessary to obtain a technical result, or gives substantial value. This additional prohibition may create potential impediments to certain type of non-traditional marks such as scents.

5) Certification marks

The new regulations will make provision for the registration of certification marks.

6) Anti-counterfeiting provisions

A trademark owner will be able to prevent the transit through the European Union of goods bearing a mark without authorization which is identical or indistinguishable from the owner's mark, assuming the party shipping the goods cannot demonstrate that the trademark owner would not be able to legally preclude the marketing of the goods in the country of final destination. The new regulations will also allow a trademark owner to take action against third parties who offer, stock, import or export packaging or labels with counterfeit marks.

7) Proof of use

In an infringement proceeding the defendant may require the owner of a EUTM registered for more than five years to provide proof of use (or suitable reasons for non-use) for the five years immediately preceding commencement of the infringement action. This new requirement conforms to the proof of use requirement for oppositions and invalidity proceedings. A trademark owner can only enforce its rights to the extent its mark is in use in commerce.

8) Proof of use period in oppositions

The period for which an opposer must file proof of use of the mark will be the five year period preceding the filing date (or priority date) of the EUTM application being opposed. The terminal date was formerly the date of publication.

9) Revocation actions against EUTM registrations

All European Union member states must provide efficient and expeditious administrative procedures for revocation and declarations of invalidity against trademark rights. The administrative proceeding is intended as a less expensive and quicker alternative than pursuing revocation in a national court. Member states will have up to seven years to implement this particular reform.

10) Opposition of International Registrations

The time between publication and the start of the opposition period for an EUTM designated in an International Registration is shortened from six months to one month.

11) Search of prior registrations discontinued

OHIM currently conducts searches of prior CTM registrations for each filed applications, although conflicting registrations do not constitute an absolute bar to the application. Upon implementation of the reforms, EUIPO will no longer search for prior registrations.

12) Use of company name as infringing

The proposed regulations confirm that use of a company name or trade name confusingly similar to a registered mark constitutes infringement. A defense based on the use of a personal name will still be available.

13) Comparative advertising

A trademark owner may block the use of the mark in comparative advertising if such use is contrary to the Comparative Advertising Directive 2006/1114.

14) Geographical indications

A designation of origin or geographical indication that predates an application will now be considered absolute grounds of refusal.

15) Acquired distinctiveness

Descriptive marks shall not be refused if they have acquired a distinctive character before the application date. Registered marks shall not be declared invalid if they have acquired distinctiveness before the commencement of the action for invalidity.

16) Refusal based on reputation

The reforms make mandatory the requirement for all European Union member states to refuse registration or declare a mark invalid if an earlier mark has a well- known reputation and the use of the later mark would be detrimental to the distinctive character of the earlier mark.

Please direct any questions to Christopher Donahue at cdonahue@oblon.com