New Rules, New Names: EU Trade Mark System Gets A Makeover
This article was originally published in Scrip
New EU rules on trade marks come into force today as part of a drive to align practices at member state and EU level, make the trade mark system more efficient and easier to use, and reduce the cost of registering marks, especially for smaller companies. Further legislation taking effect in March will rename both the trade mark and the European office that registers them.
The rules, in the form of a legislative package adopted in December and consisting of a new Directive (No 2015/2436) and Regulation (No 2015/2424), are expected to increase legal certainty and clarity for those looking to register and enforce trade marks in Europe.
As well as streamlining and harmonizing trade mark practices and processes in Europe, the legislation makes it possible to impound counterfeit goods moving through the territory of the EU, although it includes specific measures to prevent the possible seizure of generic medicines in transit – something that had been of great concern to the generics industry when the legislation was being drafted.
The directive, which replaces the current Directive 2008/95/EC, came into force on Jan. 15, although the member states have three years in which to implement its provisions into their national laws.
By contrast, the provisions of the regulation will become effective on Mar. 23. As well as outlining the rules for registering a trade mark at EU level and the rights conferred by those marks, it states that Community trade marks will henceforth be known as European Union trade marks, and the Office for Harmonization in the Internal Market (OHIM) will become the European Union Intellectual Property Office.
The legislative package, which was first drafted by the European Commission in March 2013, retains the dual system of national and EU trade marks, while streamlining and modernizing registration procedures and requirements and helping to align national practices with those at EU level.
It will be of particular interest to pharmaceutical and other healthcare companies that make wide use of trade marks and have to take great care when selecting an appropriate name, given the propensity for confusion among drug names, the need to avoid misleading connotations, and so on.
"The new directive and regulation will govern trade marks across the EU, and businesses should therefore review their existing trade mark portfolio and consider the best way to protect and enhance the portfolio through new applications or renewals of registration," said law firm Reed Smith.
Fees, Graphic Representation & Specification
Under the legislation there is a new fee structure for trade mark registration that on average will make trade mark protection cheaper, particularly for smaller firms. Rather than the present fee system that covers the first three classes in a trade mark application, a new "one-fee-per-class" provision allows an EU trade mark to be registered for just one product class. Renewal fees are significantly reduced.
There is no longer any need for marks to be represented graphically, as long as they can be represented in a way that allows the authorities and the public to identify the subject matter of the mark. "The recitals indicate that the representation can be in any appropriate form using generally available technology," said law firm Field Fisher. "This should make it easier to register non-traditional marks, such as hologram and motion marks in line with digital branding strategies."
There are also changes to the specification of goods and services that will require companies to be more specific when registering trade marks. Previously, any reference to a Nice class heading in the specification constituted a claim to all the goods and services in that class. Now, though, only goods and services specifically listed will be covered under the class heading. "This means that trademark owners should review their portfolio to see whether their registrations would benefit from being amended to include particular goods or services of commercial interest that might have been generally covered by a 'class heading' but are not currently specifically listed," commented Mark Green of patent and trade mark attorneys UDL Intellectual Property. There is a six-month grace period, from the time the legislation takes effect, for amendments to be made, although this only applies to marks filed before June 22, 2012.
Protection For Generics In Transit
Generics companies will welcome the provision protecting generic products in transit from possible seizure as counterfeits.
Following the approval of the package last month, the European Parliament said that the new rules would "provide better means to fight against counterfeit goods in transit through EU territory" while ensuring that legitimate trade interests were not affected. "Throughout the negotiations, MEPs stressed the need to ensure smooth transit of generic medicines to developing countries," it declared.
An amendment to this effect was originally introduced in 2013 by the lead MEP for the European Parliament's legal affairs committee, Cecilia Wikström, who referred to the seizure of a consignment of generic amoxicillin and noted that "generic names are not grounds for trademark infringements and thus should also not be grounds to intervene against generic medicines in transit."
Pressure for special provisions for generics had come from both the generics industry (in the form of trade body the EGA) and the R&D-based industry federation EFPIA. In a joint statement in 2013, they said it was "crucial that policy makers distinguish between medicines that are legitimate generic medicines and medicines that are counterfeiting trademarks."
Legitimate generics in transit through EU countries should not be the target of unjustified detentions, seizures or destruction by customs authorities, the industry statement said. "Customs officers need to focus on the real threat of trademark abuse – counterfeits perpetrated intentionally by organised criminal groups which present public health risks. Patent disputes between legitimate pharmaceutical producers should not be confused with the criminal activity of counterfeiting."
The new legislation says that the proprietor of an EU trade mark "should be entitled to prevent third parties from bringing goods, in the course of trade, into the Union without being released for free circulation there, where such goods come from third countries and bear without authorisation a trade mark which is identical or essentially identical with the EU trade mark registered in respect of such goods."
However, in order to avoid such seizures of generic medicines en route to or from non-EU countries, it says, "appropriate measures" should be taken to ensure the "smooth transit of generic medicines."
With respect to international non-proprietary names (INNs) as globally recognised generic names for active substances, the legislation says it is "vital to take due account of the existing limitations on the effect of trade mark rights. Consequently, the proprietor of a trade mark should not have the right to prevent a third party from bringing goods into a member state where the trade mark is registered without being released for free circulation there based upon similarities between the INN for the active ingredient in the medicines and the trade mark."
UK Situation Unclear
After the proposals were adopted in December, the UK government said it welcomed the changes as they would make the trade mark process "easier, cheaper and clearer for businesses to use," and that the convergence of practices across the EU would "create a more robust and streamlined system fit for the digital age."
It said that in early 2016 it would be seeking views on how the UK laws should be changed to reflect the provisions of the directive. However, in view of the growing likelihood that the government will hold the referendum on EU membership sometime in the middle of 2016, and the uncertainty this casts over the relevance to the UK of any new EU legislation, this particular issue may well have slipped down the political agenda.