Maxing out on Trade Mark Reform in the EU: the Study is here

Today's the day we've all been looking forward to with excitement, fear and jealousy -- the day the Study on the Overall Functioning of the European Trade Mark System, presented by the Max Planck Institute for Intellectual Property and Competition Law, goes live on the Single Market pages of the European Commission's website (here). It's such hot stuff that it comes with not one but two disclaimers:

"Notice:
This study, by the Max Planck Institute, is a contribution to European Commission’s overall evaluation of the functioning of the trade mark system in Europe. The results of this external study do not prejudge any proposals which the Commission may make on the basis of its overall analysis of the European trade mark system and on the basis of an impact assessment of different conceivable options of legislative or non legislative nature. 

Legal disclaimer:
The sole responsibility for the content of this study, including the interpretations and opinions contained therein, lies with the authors. It does not represent the official position of the European Commission. The latter is not responsible for any use that may be made of the information contained therein.".

This does not look like an enthusiastic endorsement of the Study, but nor is it a criticism or rejection of it.

The study itself is 279 pages and cannot be skim-read without doing violence to the careful manner in which it has been drafted. It is accompanied by the results of the Survey of Market Participants who use the CTM system, which was carried out by the Institut für Demoskopie Allensbach in Spring 2010. This runs to 102 pages plus appendices, which seems to suggest that it's worth going out and buying shares this morning in companies that make and sell print cartridges.

Among the highlights of the Study's recommendations are these:

* the "genuine use" requirement  -- ie should use of an earlier Community trade mark in only one EU Member State count as genuine use of a mark that purportedly covers the entire EU (currently festering before the ECJ in ONEL/OMEL) should be left to the ECJ to decide, but the solution should not be one that takes political boundaries into consideration;

* the "graphic representation" requirement should be scrapped in favour of a more flexible approach to the description of a sign in accordance with the rules in Case C-273/00 Sieckmann [thus causing IP lecturers all round Europe to tear up about two lectures-worth of notes];

* there's no great need to fiddle around with either the scope of infringing acts or the defences to them though a little clarification of the current position would be good. In particular the texts of the Trade Mark Directive and the Community Trade Mark Regulation should be rewritten to match what the Court of Justice said they actually meant in eg Case C-292/00 Davidoff v Gofkid [we've all got used to the law now, so it would be a shame to spoil things by changing it -- but hasn't the ECJ's ruling in Davidoff done quite a bit to clutter the register by extending trade mark protection way past that which the law explicitly provided?];

* to establish an appropriate balance in the fight against counterfeits, goods in transit should be regarded as infringing if they infringe trade mark rights in the country through which they are passing [see the currently pending Philips and Nokia references, here];

* it would be good to see a chunk of law regarding sanctions for infringement inserted into the Community Trade Mark Regulation -- but this probably isn't the time to do it, since the IP Enforcement Directive 2004/48 is itself currently under review;

* , contrary to current OHIM practice but in line with the practice of the majority of national offices, a solution to the "Class headings" problem -- currently before the ECJ in IP TRANSLATOR [see IPKat here]-- which would require applicants specifically to claim goods or services which may not be understood as falling under a class heading [sadly, recommendations of the Max Planck Institute aren't binding on the Court of Justice ...];

* regarding proof in priority claims, the present system of "confining the examination to requiring the necessary documentation for inclusion in the files and the congruence between what is documented and what is claimed" should be maintained, so as to keep administrative costs down [the IPKat wonders if the current rules aren't already too permissive];

* since it's so difficult to demonstrate acquired distinctiveness separately for each EU Member State, instead of following a scheme of compartmentalization the assessment of acquired distinctiveness should focus on the European Union as a whole and, "in accordance with the spirit underlying Article 6quinquies(C) of the Paris Convention, the length of time of an unchallenged and substantial use of a sign should be taken into account for the establishment of acquired distinctiveness [the IPKat will be sad to see the need to prove acquired distinctiveness for each country go, since the instances in which this change will benefit anyone are those in which the applied-for mark is generally very weak or close to descriptive];

* it is not proposed that OHIM examine bad faith ex-officio as an absolute ground for refusal, but for national trade marks bad faith should be a mandatory ground for refusal or cancellation [this should tidy things up a bit];

* in the absence of any consensus that a three-year non-use period for revocations would unclutter the register more effectively than the current five year period, or that declarations of use would have the same effect, no change is proposed in the status quo [Apart areas like pharma marks, where external considerations make it very difficult to find usable marks, the IPKat is not convinced that cluttering of the register is a serious commercial issue and would like more proof that it is];

* the mandatory search of the OHIM register for prior marks should be maintained, on the basis that so many stakeholders like it, but OHIM should be free to offer pre-filing search services in cooperation with national offices on payment of a special fee;

* a mark fulfilling the criteria for extended protection based on reputation should be considered as well-known in the meaning of Article 6 bis of the Paris Convention and should therefor enjoy protection against likelihood of confusion as well as against unfair use of, and detriment inflicted on, their reputation or distinctive character, irrespective of whether they are registered or not in the territory where protection is sought [the Court of Justice jurisprudence would probably reach the same conclusion on its own, given enough references for preliminary rulings which asked the right questions];

* relative grounds oppositions based on earlier unregistered rights should be limited to those which have a nation-wide rather than purely local scope, which is normally the case in practice [and presumably always the case in Europe's smallest countries];

* OHIM should be encouraged to use more advanced forms of telecommunication than the fax [heavens, it should never have been necessary for a Study to have to say this!];

* no position is taken on whether OHIM should actually be entrusted with activities and tasks beyond the field of trade marks and designs, though further roles in regard to counterfeiting, geographical indications and designations or origin might be contemplated [This Kat reiterates his strongly-felt feeling that TM offices are ill-equipped to play any part in the fight against counterfeits other than to ensure that they do their ordinary work efficiently so that rights are granted smoothly and, in the case of designs, that counterfeiters and copyists aren't able to register their copies as Community designs].

* No major restructuring of office fees is needed, since the system seems okay as it is [No surprise there].

* A separate application and renewal class fee should be payable for each class beyond the first (and not the third as is currently the situation), not for purposes of adjusting any imbalances in the fee structure, but rather for purposes of reducing unwarranted claims for goods or services not really required by the proprietor of the mark [this puts the interest of the market first, to the detriment of small business which find that, on account of the arbitrary division of goods and services into classes, their own closely related activities span several classes -- as has happened with the IPKat's own Community trade mark].

From what the IPKat has seen so far, the Study looks intellectually rigorous, well constructed, clearly reasoned and definitely practical. This Kat congratulates his academic colleagues on their efforts.  Merpel says, but now comes the real fun: it's time to dissect this corpus and see how well it withstands the effects of a crowd-sourced autopsy at the hands of lobbyists, single interest groups and public sector employees ...