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Major Changes to EU Trade Marks Law After Reform

2016-06-01

Introduction

For companies which have worldwide business operations, it may be necessary for them to register their intellectual property rights in multiple jurisdictions. In particular, when considering whether to register their trade marks in one or more European Union (“EU”) Member States, it is desirable to take into consideration the option to register such trade marks as EU trade marks. Generally, EU trade marks could enable the trade mark applicants/owners to gain protection in all the Member States of the EU, at a lower average cost per Member State, when compared to filing separate national trade mark applications.

The EU Trade Mark Regulation was recently amended pursuant to Regulation (EU) 2015/2424. Trade marks in the EU are now regulated by Council Regulation (EC) No. 207/2009 (the “New Regulation”), which came into force on 23 March 2016. Below is a summary of the important amendments made. The corresponding articles in the New Regulation are indicated in each sub-heading.

Kindly note that while the United Kingdom (the “UK”) voted to leave the EU in the referendum taken place on 23 June 2016, the UK will still be required to notify the European Council of her intention to withdraw from the EU, after which there will be a prescribed period for negotiations on the terms of her withdrawal.  On the assumption that that such negotiations will not likely to be completed before the default period of 2 years, EU trade marks would continue to have effect and afford their owners trade mark rights protection in the UK until June 2018 if not beyond.  Hence, the following discussion remains relevant to the EU trade marks regime as applied in the UK.


Change of terminology

The Office for Harmonization in the Internal Market (the “OHIM”), which was the trade marks registry for EU, is now replaced by the European Union Intellectual Property Office (the “EUIPO”). Trade marks registered at OHIM, which were previously known as “Community trademarks”, are now renamed as “European Union trade marks”.


Removal of graphical representation
requirement – Article 4(b)

Signs no longer have to be capable of graphical representation in order to be eligible for trade mark registration. A sign can be represented graphically if it can be represented by means of images, lines or characters. Previously, only visually perceivable signs, such as logos, names, acronyms and graphic designs, and sound marks can be registered. Under the current regime, the signs must now be represented in a manner that shows the precise subject matter to be registered; e.g. a computer file containing a recording may represent the trade mark sought to be registered.

The graphical representation requirement has not been removed in Hong Kong trade mark applications. While there is no prohibition of non-conventional marks (i.e. marks based on appearance, sound, smell, taste and/or texture) from registration, this requirement makes it difficult to register such marks in Hong Kong. Those who seek to register non-conventional trade marks in both Hong Kong and the EU should take note of such difference when making the applications.


Change in interpretation of classification
of goods and services – Article 28(5)

When making a trade mark application, the applicant has to indicate in which class(es) of goods and/or services the trade mark is sought to be protected. The classification system used in the EU (and many other jurisdictions including Hong Kong) is the Nice classification. It consists of 45 classes ranging from medical services to furniture to fuel. The Nice classification system is structured such that each class has its class number, followed by the heading, then an explanatory note.

Previously, where a trade mark application indicated the class number and heading, the protection was automatically extended to cover all the goods or services mentioned in the heading and the explanatory note. After the judgment of Case C-307/10, Chartered Institute of Patent Attorneys v Registrar of Trade Marks (the IP Translator case) and under the new regime, a literal approach is adopted to interpret terms indicated in the application. For example, where an applicant applies for trade mark protection for “vehicles; apparatus for locomotion by land, air or water” under Class 12, the trade mark protection will not be extended to cover vehicle parts, such as airbags.

This limitation in interpretation applies retrospectively. This means that it applies to all trade marks filed and registered well before the New Regulation came in force. Trade mark owners have to declare whether the trade mark protection is intended to extend beyond the literal meaning of the class heading for trade marks filed before the IP Translator judgment, i.e. before 21 June 2012, and such declaration has to be done by 24 September 2016.

The Hong Kong Trade Marks Registry adopts a similar literal interpretation approach by giving specifications in the application/registration its ordinary and natural meaning. This means that applicants seeking trade mark protection in both Hong Kong and the EU should ascertain that the terms written on the application sufficiently covers the scope of protection sought.


Transit of goods – Article 9(4)

EU trade mark owners are now given the right to prevent all third parties from bringing goods in the course of trade into the EU without being released for free circulation if such goods (including the packaging) bear a mark identical or similar to their EU trade marks without authorisation. This means that proprietors can exercise their exclusive rights over their EU trade marks even if the goods in question are only passing through the EU in transit to a non-EU country, or where the goods are in the EU for preparatory acts before circulation outside of the EU.

It is noteworthy that the EU trade mark owners cannot exercise this right to prevent entry of goods if a third party holding the goods is able to prove that the EU trade mark owner is not entitled to prohibit the goods from being put on the market in the country of final destination.


Trade mark use in company and person’s name
– Article 9(3)(d) & Article 12

After the reform, an EU trade mark can be used in a natural person’s name or address during his course of trade. However, companies are not allowed to use an EU trade mark in their names. Parties seeking to register a company in any EU Member State should therefore conduct a trade mark search in advance to make sure that the intended company name does not contain any trademarked term.

The same provision is not included in the Trade Marks Ordinance (Cap. 559) (the “TMO”), meaning that it is possible to name a company with a trademarked term in Hong Kong. In addition, there is no infringement when a registered trade mark is used in a natural person’s own name or address or the name of his place of business, or the same of his predecessor pursuant to sections 19(3)(a) and (b) of the TMO.


New application fee system – Annex 1

Prior to the New Regulation, the application fee system for trade mark registration was a flat fee for the first three classes registered, and additional fee for every subsequent class added. Under the New Regulation, the application fee increases with the number of classes at varying increments. The same applies to the renewal fee.


Caveat to EU trade marks persists

Notwithstanding the reforms as discussed above, EU trade mark remains to be subject to the risk of opposition from owner(s) of earlier identical or confusingly similar trade mark(s) in the Member States, including those in Member State(s) where the applied-for mark is not intended for use. This could result in increased costs in converting the EU trade mark application to national trade mark application. A similar risk of invalidation by such owner(s) and need to convert to national registration, after the EU trade mark is registered, is also a constant threat for EU trade mark owners. Intended EU trade mark applicants should therefore still consider conducting trade mark searches ahead of filing their applications, so as to detect potential earlier trade mark(s) which may give rise to the said risks.


Concluding remarks

Although treaties such as the Paris Convention, the Madrid Agreement, the Madrid Protocol and the Agreement on Trade-Related Aspects of Intellectual Property Rights, i.e. TRIPS, have sought to streamline and harmonise trade mark regimes worldwide to strengthen international trade mark protection, there still remain nuanced differences among different jurisdictions. This becomes even more apparent when trade mark laws are evolving over time. For instance, he EU regime under the New Regulation discussed above has now become less similar to the Hong Kong regime. Parties registering the same trade mark in multiple jurisdictions must pay attention to the different local requirements. It is therefore advisable to seek competent legal advice from each of these jurisdictions before proceeding.





For enquiries, please contact our Intellectual Property & Technology Department:

E: ip@onc.hk                                                                    T: (852) 2810 1212
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www.onc.hk                                                                F: (852) 2804 6311

19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong

Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2016


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