Community Trade Mark Special Advantages

Jennifer Clayton-Chen, Kador & Partner, email: MAIL@INTELLECTUALPROPERTY.DE

 

1. Unitary System

Concept

The unitary character of the Community trade mark (hereinafter CTM) is the central feature of the Community trade mark system. It is described in Article 1 (2) of the Council Regulation (EC) No. 40/94 of December 20, 1993 on the Community trade mark (hereinafter Community Trade Mark Regulation or CTMR) as follows:

"A Community trade mark shall have a unitary character. It shall have equal effect throughout the Community: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. This principle shall apply unless otherwise provided in this Regulation."

Examples

The unitary character of the Community trade mark is demonstrated for example by the following:

  • When filing a CTM application it is not necessary to designate countries, because the application automatically extends to all the EU Member States.
  • Accordingly, it is also not possible to limit a CTM application or registration to certain countries - also not as a consequence of a registrability objection or an opposition.
  • Vice versa, it is not possible to limit an opposition against a CTM to certain countries.
  • Although Article 17 (1) CTMR explicitly allows the transfer of a CTM in respect of some or all of the goods or services for which it is registered, it is not possible to limit the assignment to certain countries.
  • A Community trade mark must be distinctive throughout the territory of the Community ("Options" decision of the Court of First Instance of March 30, 2000, Case T-91/99). The Court stated that "the principle of the unitary character of the Community trade mark is expressly applied in Article 7 (2) CTMR which provides that a trade mark is not to be registered 'notwithstanding that the grounds of non-registerability obtain in only part of the Community'."
  • A further consequence of the CTM's unitary character is the fact that in order to be properly used, use "in the Community", i.e. in a substantial part of the Community, is sufficient according to Article 15 (1) CTMR.

Exceptions

  • One exception which is explicitly provided for in the Community Trademark Regulation refers to the prohibition of use of Community trade marks. It is possible that the use of a CTM will infringe national trade mark rights or other earlier rights in a Member State. For this case the Regulation provides that use of the Community trade mark can be prohibited with effect for the specific Member State only (Article 106 (2) CTMR). It was necessary to find a compromise in the Community Trade Mark Regulation to solve the conflict between two principles, namely the unitary character of the CTM on the one hand and the principle of coexistence of Community trade mark law and national trade mark laws on the other hand.
  • A second example for a legal exception from the rule of the unitary character refers to the extent of jurisdiction of the Community trade mark courts. According to Article 93 (5) infringement proceedings may, among other venues, also be brought in the courts of the Member State in which the act of infringement has been committed. With this venue, however, the jurisdiction of the Community trade mark court is limited to acts committed within the territory of the Member State in which the court is situated (Article 94 (2) CTMR). · A further exception can be found in Article 22 (1) CTMR according to which a Community trade mark may be licensed for some or all of the goods or services but also for the whole or part of the Community.
  • Finally, the seniority system can result in a Community trade mark having several different seniority dates in different Member States.

Advantages

The unitary system has many advantages:

  • First of all, there are considerable economic advantages in the form of lower registration and renewal costs and lower costs for trade mark administration. One trade mark registration covers the territory of 15 European states with approximately 375 million inhabitants.
  • The unitary system also leads to a number of administrative advantages. The management of a company's trade mark portfolio in Europe becomes much simpler, and trade mark monitoring, (e.g. trade mark searches and watches) will become easier in the future as the number of national trade mark registrations will decline and the number of CTM registrations will grow.
  • Of course, there are also major legal advantages: A single trade mark can be registered, protected and enforced in the whole of the territory of the EU.

Conversion

For all cases in which the unitary character of the Community trade mark proves to be a stumbling-block (for example due to a registrability problem in only one or certain countries or due to an opposition based on an earlier right valid in only one country or certain countries) there is an "Emergency Exit": In such cases the Community Trade Mark Regulation provides for the possibility of converting the Community trade mark into individual, national trade mark applications.

2. Seniority

Concept

The seniority system can be described as the possibility of "merging" earlier, identical trade mark registrations in EU Member States into Community trade marks. It provides a major incentive for trade mark owners who already own a prior trade mark registration in one or several EU countries to switch from their national trade marks to the Community trade mark system.

The basic concept of seniority is described in Article 34 (1) and (2) CTMR:

"(1) The proprietor of an earlier trade mark registered in a Member State, including a trade mark registered in the Benelux countries, or registered under international arrangements having effect in a Member State, who applies for an identical trade mark for registration as a Community trade mark for goods or services which are identical with or contained within those for which the earlier trade mark has been registered, may claim for the Community trade mark the seniority of the earlier trade mark in respect of the Member State in or for which it is registered.

(2) Seniority shall have the sole effect under this Regulation that, where the proprietor of the Community trade mark surrenders the earlier trade mark or allows it to lapse, he shall be deemed to continue to have the same rights as he would have had if the earlier trade mark had continued to be registered."

The legal fiction of seniority enables trade mark owners to maintain the priority of their national trade mark registrations without maintaining the trade marks themselves - this provides the enormous financial and administrative advantage of maintaining the national trade mark rights without having to renew them.

Formal requirements

The formal requirements for seniority claims are laid down in Articles 34 and 35 of the Community Trade Mark Regulation, Rule 8 of the Implementing Regulation, and in the Communication No. 2/00 of the President of the Office of February 25, 2000.

A seniority claim can be filed, either

  • in the CTM application itself, or
  • subsequently, within two months from the filing date, or
  • after the Community trade mark has been registered (Article 35 CTMR).

The seniority claim must provide the following data of the earlier national trade mark registration(s):

  • The Member State concerned,
  • the effective date (i.e. filing or priority date),
  • the registration number, and
  • the goods and services.

The seniority claim furthermore has to be supported by documents which have to be filed within three months from the CTM filing date or from the date when the subsequent seniority claim was filed. The following documents will be accepted as proof by the Office:

  • certified copies of the registration certificate and of further certificates to prove the status of the trade mark at the time of filing the CTM, such as amendment, assignment, and renewal certificates, or
  • simple copies of such documents, or
  • copies from publications in official journals, or
  • printouts from databases with indication of source.

Substantial requirements

The main substantial requirements for a valid seniority claim refer to the relevant dates and the so-called triple identity rule. Furthermore, seniority can only be claimed on the basis of earlier trade marks registered in EU Member States including the Benelux, not on the basis of trade marks registered in any other countries.

Dates: if a seniority claim is to be made at the same time as the filing of the CTM application, the national trade mark on which the seniority claim is based must have both an earlier application or priority date and an earlier registration date than the CTM application date, i.e. the national trademark must have been filed and registered before claiming its seniority in a CTM application. If only the first date (i.e. the application or priority date) is earlier, but the national trademark has not yet been registered, it is not possible to claim its seniority in the CTM application, but its seniority can still be claimed at a later stage, namely after the CTM has been registered (Article 35 CTMR). The reason is that according to the Community Trade Mark Regulation seniority can only be claimed for earlier national trade mark registrations, not applications.

Triple identity rule: the triple identity must apply at the time of filing the CTM application, and refers to three aspects, namely ownership, trade mark and goods/services.

1) Identical owner

The CTM applicant and the owner of the senior national mark must be identical at the time of filing the CTM application.

  • This means that changes affecting the identity of the trade mark owner must be registered by the national Patent and Trade Mark Offices prior to the filing date of the CTM application. If this is not the case, then the seniority can only be claimed after registration of the Community trade mark (Article 35 CTMR).
  • Changes of name and address that do not affect the trade mark owner's identity do not destroy the identity requirement.

2) Identical trade mark

In considering whether the CTM application and the senior national trade marks are identical the Office for Harmonization in the Internal Market (hereinafter OHIM) applies a strict standard.

  • As far as word marks are concerned, it is clearly accepted by the Office that different type scripts used by the national Patent and Trade Mark Offices in the registration certificates does not affect the identity of the marks, but there is no clarity yet with regard to other differences, such as the use of capital and lower case letters.
  • As far as device marks are concerned, the Office has let it made known that it considers "differencies that can be seen" to affect the identity.
  • If colour claims were made, these also have to be identical.

3) Identical goods/services

Finally, the goods and/or services covered by the senior trade mark and the CTM application have to be identical, or at least partly identical in the sense of an overlap. Total identity of goods and services will result in total seniority while partial identity will result in a partial seniority.

Practical aspects

Due to the unexpectedly large number of CTM applications filed from the beginning in 1996 up to now, the OHIM was unable to continue examining the seniority claims because the examination of the seniority claims proved to hold up the processing of the CTM applications from filing to publication. In October 1997 the Office therefore announced a temporary suspension of examination of seniority claims based on Article 34 CTMR in the application stage, while continuing examination of seniority claims pursuant to Article 35 CTMR after registration.

The present status is the following:

  • Substantial examination of post registration seniority claims according to Article 35 CTMR is carried out on a routine basis.
  • The examination of seniority claims made in CTM applications (according to Article 34 CTMR) has been resumed with CTM applications filed since May 1, 2000.
  • Seniority claims the examination of which had previously been suspended remain suspended until further notice.

Effects of seniority

The legal effects of seniority are defined in Article 34 (2) CTMR:

"Seniority shall have the sole effect under this Regulation that, where the proprietor of the Community trade mark surrenders the earlier trade mark or allows it to lapse, he shall be deemed to continue to have the same rights as he would have had if the earlier trade mark had continued to be registered."

As long as the senior registration is still existing and valid, the seniority is ineffective and irrelevant. It only comes to life once the senior registration has lost its validity. Three specific effects of the seniority right are worth mentioning:

  • The continuation effect as stated in Article 34 (2) CTMR
  • The notice effect which follows from the publication of the seniority claim in accordance with (Rule 12 (h)), and
  • The conversion effect (Article 108 (3) CTMR) which becomes relevant if a Community trade mark is converted back into a national trade mark application in a Member State where the seniority of a prior identical trade mark had been validly claimed. By way of the conversion effect a senior national trade mark which had already expired can be re-animated in the form of a converted CTM.

Loss of seniority right

The responsibility for the validity of the seniority claim lies with the CTM owner, and accordingly the owner has to take care that the seniority claim is not lost due to negligence.

· According to Article 34 (3) CTMR the seniority shall lapse if the earlier trade mark is declared to have been revoked or to be invalid or if it is surrendered prior to the registration of the Community trade mark. The CTM applicant should therefore take care not to surrender his national mark before the CTM has been registered.

· If the triple identity is affected by actions which take place after the CTM filing date, this can also affect the extent or validity of the seniority claim. For example, if the list of goods and/or services of either the senior national trade mark or of the CTM is subsequentliy restricted, the extent of the seniority claim will be affected. Where the subsequent limitation of the list of goods and services refers to the Community trade mark application or registration, it is possible to save the seniority right for the deleted goods or services by way of converting the CTM back into a national registration.

· The seniority claim will also be lost if the Community trade mark application or Community trade mark are assigned without at the same time assigning the senior national trade mark, or vice versa.

· Great care also has to be taken if a CTM registration is cancelled after the senior trade mark has been abandoned. If the CTM is not or cannot be converted back into a national trade mark application, the senior trade mark right will be irrevocably lost.

It can be seen from the above examples that Community trade marks where seniorities have been claimed have to be handled with special care by both the trade mark owners and their attorneys.

Comparison of seniority and priority

The previous explanations may already have shown up a few points of comparison between the seniority and priority concepts. The basis for comparison can be found in Articles 34, 29 and 31 CTMR.

  • The concepts of seniority and priority are basically the same where the triple identity rule is concerned: in both cases, there has to be an earlier national trade mark, and the trade mark, the goods and services and the owner have to be identical.
  • There are four main differences: priority can be claimed on the basis of an earlier trade mark application filed in a Member State of the Paris Convention or the World Trade Organization. By contrast, seniority can only be claimed on the basis of an earlier trade mark registration in a Member State of the EU.
  • While the priority of an earlier trade mark application can only be claimed within a priority term of six months, there is no term equivalent to the priority term in the seniority proceedings.
  • Finally, the effects of priority and seniority are different. In the case of priority, the application date of the priority trade mark counts as the date of filing of the CTM application for the purposes of establishing which rights take precedence (cf. Article 31 (CTMR)). Per contrast, the seniority only becomes effective at the time when the senior trade mark expires: it is then "merged" into the Community trade mark. Accordingly, the effects of the seniority claim are much more far reaching than the effects of a priority claim.

When is the right time to abandon an earlier national trade mark?

The CTMR does not use the term "abandonment" - instead, in Article 34 (2), it refers to "surrender" and "lapse". Accordingly, when is the right time to surrender an earlier national trade mark or to allow it to lapse due to non-renewal? Since non-renewal will be the more common case in practice, the following statements will concentrate on that aspect.

  • A national trade mark should not be allowed to lapse before seniority has been claimed, if the trade mark owner is interested in profiting from the national trade mark's seniority. In some cases the seniority question may have been postponed or not taken into consideration at the time of filing the CTM application. If the national mark is allowed to lapse before the seniority claim has been filed, the link between the national mark and the Community trade mark will be irrevocably lost.
  • According to an explicit provision in Article 33 (3) CTMR, the seniority shall lapse "if the earlier trade mark the seniority of which is claimed is declared to have been revoked or to be invalid or if it is surrendered prior to the registration of the Community trade mark". If these steps take place before the registration of the Community trade mark, they will result in a loss of the seniority right. Since Article 33 (3) CTMR does not include the "lapse" of the earlier national registration as a result of non-renewal, the earlier national registration may be allowed to lapse before the CTM is registered without any loss of the seniority effect (cf. ECTA Special Newsletter on Seniority, p. 56).
  • According to the ECTA Special Newsletter on Seniority, the earlier national trade mark should not be allowed to lapse before the seniority claim has been accepted by the Office. This advice has become all the more important since the Office has declared the temporary suspension of seniority claims based on Article 34 CTMR, because since that time Community trade mark applications have been registered before the seniority has been accepted or even examined by the Office.

Thus: Never abandon a national trade mark registration before the seniority claim has been filed and accepted, and before the Community trade mark has been registered.

3. Conversion

Concept

The main features of the conversion system are laid down in Articles 108 to 110 CTMR. Conversion is the "mirror-image" of seniority. While seniority enables the "merging" of prior national trade marks into Community trade marks, conversion allows the Community trade mark to be divided and converted into national trade marks at the price of losing its unitary character and of increased expenses. From another point of view, conversion is the "emergency exit" from possible problems with the CTM's unitary character.

  • Article 108 (1) CTMR describes when conversion is possible:

"The applicant for or proprietor of a Community trade mark may request the conversion of his Community trade mark application or Community trade mark into a national trade mark application

(a) to the extent that the Community trade mark application is refused, withdrawn, or deemed to be withdrawn;

(b) to the extent that the Community trade mark ceases to have effect."

  • Article 108 (2) CTMR states when conversion is not possible, namely:

(a) in the case of revocation of the CTM on the grounds of non-use, unless in the Member State for which conversion is requested the Community trade mark has been put to use which would be considered to be genuine use under the laws of that Member State;

(b) in Member States in which according to a decision of the OHIM or a national court grounds for refusal or revocation or invalidity apply to the CTM.

Structure

The conversion system is a two-level system, first on the OHIM level and subsequently on the level of the national Patent and Trade Mark Offices. This paper shall not deal with the individual proceedings before the national Patent and Trade Mark Offices but shall be limited to a general outline of the conversion process.

1) On the first level, the CTM applicant or owner files the conversion request with the OHIM.

  • The conversion request has to specify the Member States in which application of the procedure for registration of a national trade mark is desired.
  • The request shall not be deemed to be filed until the conversion fee has been paid (Article 109 (1) CTMR).
  • The conversion request must additionally fulfill certain requirements according to Rule 44 of the Implementing Regulation.
  • The conversion request has to be filed within a certain time limit, usually within three months.
  • After receipt of the request, the OHIM checks whether the above requirements and the requirements of Art. 108 (1) have been fulfilled and if this is the case, transmits the request to the national Patent and Trade Mark offices of the States specified in the request (Article 109 (3) CTMR). The Office informs the applicant of the date of transmission (Rule 47 of the Implementing Regulation).

2) After receipt of the conversion request by the national Patent and Trade Mark Offices, it is processed to a stage from when on the national registration procedure takes over. The national Patent and Trade Mark Office decides as to the admissability of the conversion request in accordance with Article 108 (2) CTMR. The national Patent and Trade Mark Office may require that the applicant shall, within not less than two months:

  • pay the national application fee;
  • file a translation in one of the official languages of the State in question of the request and of the documents accompanying it;
  • indicate an address for service in the State in question;
  • supply a representation of the trade mark in the number of copies specified by the State in question (Art. 110 CTMR).

Art. 110 CTMR furthermore provides that a conversion request shall not be subject to formal requirements of national law which are different from or additional to those provided for in the Community Trade Mark Regulation or in the Implementing Regulation.

Effect of conversion

The effect of the conversion is described in Art. 108 (3) CTMR:

"The national trade mark application resulting from the conversion of a Community trade mark application or a Community trade mark shall enjoy in respect of the Member State concerned the date of filing or the date of priority of that application or trade mark and, where appropriate, the seniority of a trade mark of that State claimed under Article 34 or 35."

4. Use

In all Member States of the EU, trade marks have to be used in commerce within five years after the registration in order to remain fully effective. The Recitals to the Community Trade Mark Regulation consequently state that there is

"no justification for protecting Community trade marks or, as against them, any trade mark which has been registered before them, except where the trade marks are actually used".

Furthermore, Art. 15 (1) CTMR provides that

"if, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use".

The owners of individual trade mark registrations in all of the EU Member States have to use their mark in 13 territories (including the Benelux territory) to maintain the validity of all the national registrations.

By comparison, Article 15 CTMR offers an enormous advantage to the owners of a CTM registration, because the term "in the Community" is understood by practitioners and authors to mean use within a certain part of the Community, e.g. within one Member State, and not necessarily extending over the whole of the EU territory. Accordingly, the owner of a Community Trade mark registration has a much lower burden not only regarding actual use of the trade mark but also with regard to the requirement of proving use in legal proceedings.

The European Court of Justice has not yet issued a decision on this question for the simple reason that no Community trade mark has been registered for the period of five years yet.

The use requirements become valid in opposition and revocation proceedings (Articles 43 and 50 CTMR) but also e.g. where acquiescence is concerned (Article 53). Accordingly, the consequences of acquiescence for a period of five successive years in the use of a later Community trade mark become effective if the later Community trade mark has been used "in the Community" and the owner of the prior CTM has been aware of such use. Again, it is not necessary that such use has taken place in the whole territory of the EU. The owners of prior CTM registrations will therefore have to pay particular attention to the existence and use of later Community trade marks because the awareness of use of a later CTM registration over a period of five successive years in a substantial part of the Community may lead to limitation of their rights in consequence of acquiescence.

5. Costs

The Community trade mark system offers an enormous cost advantage compared to the traditional national registration system in Europe. This can already be shown on the basis of a comparison between the official filing and registration fees, the opposition fees and the renewal fees of a CTM as compared to national trade marks in 12 Member States and the Benelux.

Both the official filing and registration fees for up to three classes add up to roughly USD 2,000.00 for one CTM compared with approximately USD 3,600.00 for 12 national registrations and one Benelux registration (national registration fees included, where applicable).

The official fees for opposing one CTM are USD 350.00 as compared to approximately USD 1,200.00 for filing oppositions in those 10 countries in which the filing of oppositions is presently possible.

The official fees for renewing a CTM for up to three classes costs USD 2,500.00 as compared to approximately USD 4,200.00 for renewing 12 national registrations and one Benelux registration.

Of course, the main cost advantage lies in the enormous savings on attorney's fees (one attorney only instead of thirteen attorneys) and administration costs which can hardly be calculated in hard currency. For many potential trade mark applicants, the most important question is "How much will it cost us?" Where all other arguments fail, it may finally be the cost argument which will convince companies to file more CTM applications in the future.