17 February 2016

The new EU Trade Mark - Updated Guidance from OHIM

Speed read

Following publication of the amending Regulation at the end of 2015, the new EU Trade Mark (as the Community Trade Mark will become known) regime will be in operation from 23 March 2016.  Most of the changes take effect on ‘day one’, albeit some (such as removal of the graphical representation requirement) will not be implemented until 1 October 2017.  Member States meanwhile have until 2019 to implement the new Trade Marks Directive into their national laws (and until 2023 to introduce administrative cancellation proceedings).

We have discussed the key features of the new regime in our previous bulletin and OHIM (to be re-named the EU Intellectual Property Office) has produced on its dedicated website a useful list of the main ‘technical’ changes.  In this bulletin, we focus on two areas.

The first is the fee changes for applications and renewals.  As a result of ‘three classes for the price of one' being replaced by a system of 'one class per fee', applicants who intend to file CTMs with three or more classes may prefer to file their applications before 23 March 2016, thereby avoiding the fee increase (for three classes, the application fee will rise from €900 to €1050).  Meanwhile, marks in a single class will see a slight reduction from €900 to €850: this is unlikely to encourage many delayed applications but may be attractive, for example, where priority can be claimed from an earlier application.

Renewals will be significantly cheaper from 23 March 2016.  OHIM has confirmed that the reduced fees will apply to CTMs that expire on or after 23 March 2016.

Existing CTM holders should also be reviewing their portfolios to identify marks where they may need to take action as a result of changes in the rules relating to specifications.  In particular, owners of registered CTMs and International Registrations designating the EU filed before 22 June 2012 which include an entire class heading will have a six month ‘sunset’ period during which they can file a declaration stating that their intention on filing had been to seek protection for goods and services which go beyond those covered by the literal meaning of the class heading (subject to certain defences for third parties). 

If the owner of such a mark fails to file the declaration, their mark will only cover the goods and services covered by the literal meaning.  OHIM has issued a Communication and FAQ on the criteria for making this declaration, which suggests it will have fairly limited application.  However, this will, of course, depend on the class heading and the nature of the trade mark owner's business.  Accordingly, it is important to review specifications and, in particular, to identify circumstances where it may be preferable to file a partial surrender. 

Applications and renewals – fee changes

File multi-class applications before 23 March 2016

For new CTM applications from 23 March, the current ‘three for the price of one' system (which allows applicants to cover up to three classes of goods and services for €900, in an electronic application) will be replaced by a ‘one-class-per-fee’ system. 

Under this ‘pay as you need' system, the fee for one class will be €850, a reduction of €50 from the current fee.   The fee for two classes remains the same as present (€900) but increases to €1050 for three classes (with a class fee of €150 for all subsequent classes).  Accordingly:

  • Applicants for marks in a single class may prefer to file after 23 March 2016 to take advantage of the modest cost saving (e.g. particularly where they can claim priority from an earlier application). 
  • Applicants for marks in three or more classes should consider, if possible, filing their applications before 23 March 2016, to avoid the price rise.

Renewals

The costs savings in the new regime apply particularly to renewals. Presently, the fee to renew a CTM registered in up to three classes is €1350, with a fee of €400 for the fourth and all subsequent classes. 

Under the new regime, renewal fees will be:

One class €850
Two classes €900
Three classes €1050
Fourth and subsequent classes €150

For multi-class registrations, in particular, this represents a substantial saving.  

On 29 January 2016, OHIM issued Communication 2/2016 which confirms that the relevant factor for determining whether the old or new renewal fee regime applies is the day of expiry of the relevant mark.  Accordingly:

  • CTMs that expire before 23 March 2016 will be subject to the current renewal fee structure (even if the renewal is requested and paid for after 23 March); and
  • CTMs that expire on or after 23 March 2016 will be subject to the new fee structure (even if the renewal was requested and paid for before the Communication came into force, in which event, OHIM will reimburse the excess fee). 

Another important change under the new regime is that the renewal payment must be made by the expiry of the mark (subject to any late payment during the grace period), rather than by the end of the month in which the mark expires (as at present). The new regime for calculating the renewal date will apply to those marks where the six month renewal period commences on or after 23 March 2016.

Specifications of goods and services

Both the new Regulation and Directive deal with specifications that contain general terms such as ‘class headings’ by applying the CJEU’s 2012 IP Translator decision: applicants must identify the goods and services with ‘sufficient clarity and precision’ such that it is possible, on that sole basis, to determine the scope of protection.  However, class headings may still be used, provided they comply with the clarity and precision standard (OHIM and the national offices have previously agreed general indications that do not comply with this standard).  Where general terms (including class headings) are used, the ‘means-what-it-says’ approach will apply, i.e., protection will extend only to goods and services clearly covered by the literal meaning of the indication or term.  This approach will apply from 23 March 2016 and will apply to all CTMs filed after 21 June 2012, and also CTM applications filed on or before that date but which are not registered by 23 March 2016 (and, for relevant marks, where an appropriate declaration is not filed as explained below).

Existing CTM registrations covering class headings

Article 28(8) of the Regulation provides for a transitional period for owners of registered CTMs filed before 22 June 2012, and registered in respect of the entire heading of a Nice Class, to clarify the scope of protection of their marks.  Such brand owners may, within the six month period following 23 March 2016 (i.e., by the deadline of 24 September 2016), file a declaration stating that their intention on filing had been to seek protection in respect of goods and services which go beyond those covered by the literal meaning of the class heading.  Those goods or services must be included in the alphabetical list for that class of the Nice Classification edition in force at the date of filing.

Currently, Communication No 2/12 (issued by OHIM after IP Translator) treats such marks as covering all the goods and services included in the alphabetical list of the relevant class in the Nice Classification in force at the date of filing.  This will no longer apply to such marks following the end of the transitional period. 

Brand owners should review their portfolios to identify marks where they need to take action, either by getting ready to file an appropriate declaration in the transitional period, applying to amend a relevant application before the new regime is in place, or by filing a partial surrender.

On 15 February 2016, OHIM issued a Communication and FAQ document from which the following key points can be taken:

  • If an acceptable declaration is not filed for relevant marks by the deadline, a mark including an entire heading of a Nice Class will only cover goods and services clearly covered by the literal meaning of that heading (i.e. the scope of protection of such a mark may be less than currently under Communication No 2/12).
  • Declarations may only be made for registered CTMs filed on or before 21 June 2012.
  • Contrary to the position stated by OHIM in its draft Communication, declarations can be filed for International Registrations which designated, or subsequently designated the EU before 22 June 2012, and that continue to be in force for the entire class heading of at least one Nice class. 
  • Whilst national marks are not governed by Article 28, it is possible that Member States whose previous policy was to interpret class headings as covering the entire alphabetical list may implement a similar transitional mechanism.
  • The mark must be registered in respect of the entire heading of at least one Nice Class. It does not matter if there are additional goods and services in the specification, provided that the language does not limit or in any way disclaim the general indications of the heading.
  • The declaration must only include goods and/or services that:
    • are in the alphabetical list for the relevant class of the edition of the Nice Classification in force at the date of filing; and
    • are not clearly covered by the literal meaning of the general indications of the class heading (OHIM has issued a non-exhaustive list of examples of such goods and services, which will not be objected to). 
    • This tends to suggest that the scope of an Article 28(8) declaration will, in fact, be fairly limited.  In particular, the EUIPO will object to declarations which seek protection for:

    • unclear, imprecise or unspecific expressions (e.g. ‘all goods in class X’ or ‘all goods not covered by the literal meaning’);
    • claims for the entire alphabetical list;
    • goods and services that are clearly covered by the literal meaning of the class heading;
    • goods and services not contained in the relevant alphabetical list.
  • OHIM has confirmed that the list of examples is provided purely as guidance as to terms that are clearly not covered by the literal meaning of the general indications of the Nice class headings.  It recognises that there may be others for which there is reasonable doubt.
  • The deadline for submitting declarations is 24 September 2016 (albeit this is a Saturday and so the date will roll over to 26 September).  There will be a two month period to remedy any deficiencies.  Declarations must be filed in writing (one declaration per mark), preferably on the specific online Recordal application form.  There will be no fee.

Impact of making a declaration under Article 28(8)

The possibility of making a declaration under Article 28(8) is without prejudice to use requirements.  However, it will not be possible to file an opposition or cancellation against the declaration. 

There will however be a defence for third parties: the trade mark owner cannot prevent third party use of any of the additional goods or services where that use began before the Register was amended, and would not have infringed the owner’s rights on the basis of the literal meaning of the goods and services in the Register at that time.  There is a similar provision relating to oppositions or declarations of invalidity against later marks, based on the additional goods and services.

Actions to be considered

Owners of CTMs with class headings applied for on or before 21 June 2012 must carefully consider their options in respect of those marks and may want to take action:

  • If they do nothing, i.e. they fail to file an acceptable Article 28(8) declaration by the end of the transitional period, their marks will be limited after the end of the transitional period to the literal meaning of the relevant indication or term. As OHIM notes in its FAQs, if all that a CTM owner wishes to protect can be understood to fall within the literal meaning of the class heading, no action will need to be taken.  However, much will depend upon the specification and class in question, and so specifications should be reviewed carefully now.  
  • An appropriate declaration under Article 28(8) may be filed during the transitional period in accordance with the criteria specified by OHIM, taking into account the possible impact of third party defences.
  • Alternatively, a CTM owner can file a partial surrender under Article 50 e.g., by deleting the class heading and indicating all of the goods in the alphabetical list (provided they exclude at least one type of good or service).  The OHIM FAQ note that a partial surrender could be used to restrict a list containing class headings to specific goods or services covered by their literal meaning, or to replace a general indication with more precise terms.  Partial surrenders are not subject to the defences in Article 28(9), but the genuine use provisions will need to borne in mind.

Further, applicants for CTMs containing class headings that were filed before 22 June 2012, but which are not registered by 23 March 2016, can amend the specification of goods and services in accordance with the provisions of Article 43.  However, this must be done before 23 March 2016: after that date, all such pending applications will be subject to the rule that protection extends only to goods and services clearly covered by the literal meaning of the indication or term.

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