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Does The Council Of The EU’s Proposed Directive Hit The Mark?

Does The Council Of The EU’s Proposed Directive Hit The Mark?

With the new Trade Mark Directive, published by the Council of the EU in June 2015, expected to be given a stamp of approval any time now, businesses should start thinking about reviewing their current levels of protection and consider whether anything further is required.

The Directive aims to provide greater legal certainty (which is perhaps reflected in the increase from 19 articles in the Regulations from 2009 to 57 articles in the new Directive), harmonise the requirements across Europe, lifting them to a higher standard and make the provisions more accessible for businesses. Of course, some Member States will have more work to do than others to bring the Directive into national law and the UK is likely to get off lightly and not have too much to do.

Some of the amendments are fairly minor, for example, the terminology has been modernised to refer to the ‘EU’ instead of ‘Community’ throughout, turning Community Trade Mark (CTM) to EU Trade Mark (EUTM) and Office for Harmonization in the Internal Market (OHIM) becomes EU Intellectual Property Office (EUIPO).

Other amendments, or entirely new provisions, are significant. For example, there is no longer a requirement for marks to be represented graphically. A mark simply has to be capable of being represented on the register in a way which distinguishes the good/service to give it clear and precise protection. The Directive really opens the doors as to what can be registerable. It includes signs, shapes, sounds and, interestingly following Cadbury’s assertions that its purple colour should be protected, colours are now included.

But where one door opens another closes, and the grounds for refusing to register a Trade Mark or for holding it invalid have been broadened to include signs that consist exclusively of the characteristic (for example, shape or smell) resulting from the nature of the goods themselves. This can no longer be overcome by arguing that it is precisely that feature which makes the good distinctive. So Cadbury’s argument that the shade of purple which they use makes their products distinctive would not stick under the new Directive (although as stated above, colour itself is now registerable). Similarly, it would not be possible for Terry’s to argue that the smell of their chocolate orange makes it distinctive and registerable.

Another key change is that the current “own name defence” which allows people as well as companies to use their own names in the course of trade will be limited to natural persons only going forward. So the owner of a Trade Mark which also happens to be the name of a company will be able to restrict the company from using their name in its usual course of trade if it infringes their mark.

Using a registered Trade Mark without the owner’s consent in a sign used for comparative advertising is also now prohibited. As a result, the argument which British Airways made in their claim against Ryanair - that using logos in adverts is justified when comparatively advertising - will no longer be possible.

A significant proportion of the Directive centres on preventing counterfeiting. On the plus side, there is an explicit provision for Trade Mark owners to prevent third parties transporting counterfeit goods across the EU. However, Trade Mark owners may be disappointed by the qualification that if evidence can be produced to show that the goods are for onward transportation outwith the EU then that will be allowed. The Trade Mark owner is not entitled to stop the marketing of the goods in the final destination country. Therefore, if there were circumstances similar to those in the case of Phillips v Nokia, where Phillips placed mobile phones into EU but only in order to ship them to another jurisdiction outwith the EU, that would not constitute putting the phones into EU market and, upon producing evidence, would be allowed.

Finishing on a positive note, the Nice Classification system remains in place and there is additional protection which has been introduced for existing Trade Mark owners to prevent any prejudice to them arising from the new right for owners to expand their rights by declaring that previous registrations cover the whole alphabetical list of goods under a listed Nice class heading. When registering a Trade Mark, owners will need to be precise about the uses it is intended to cover and ideally the sub-classes would be listed.

Businesses should take stock of what signs, sounds or other characteristics their business has which distinguishes it. If you need some guidance as to whether or not it may be registerable, or want more information on the new Directive, contact us.

Fiona McAllister