New Trade Marks Directive Becomes Effective

The final stage in a decade long European Union harmonisation exercise concluded on 14th January 2019. From midnight on Monday the Trade Marks Regulations 2018 (SI2018/825) (“the Regulations”) were implemented throughout the UK making the EU Trade Marks Directive 2015 (“the Directive”) effective and relevant to UK businesses. The Directive includes an updated definition of the term “trade mark”, intended to better reflect the various elements which combined make a mark distinctive, and further provided a new suite of tools which trade mark owners can use to combat counterfeiting once a product enters the European Economic Area.

In July 2008, the European Commission began reviewing the functioning and interaction of Community and national trade mark systems. The Commission was mandated by the European Council to consider how pan-European intellectual property protection could better complement national measures which let Member States develop distinctive intellectual property protection regimes to offer competitive options to trade mark holders. Essentially the EU institutions asked – how could the EU improve its basic federal protections while also enabling Member State space for innovation and development of best practice?

By 2015, the European Commission, European Parliament and European Council confirmed they had reached the political agreement to make what some commentators have described as the most extensive changes to trade mark legislation since the 1980s.

The implementation of the Regulations and the Directive will naturally have an impact on trade mark proprietors based in the UK. Below we have discussed what we consider to be some of the major changes brought about as a result of such implementation which UK based proprietors should be mindful of going forward:

• Improved registration procedures and new trade mark definition

A fundamental feature of the Directive has been to make trade mark registrations throughout the EU easier to obtain and administer. The EU institutions believe they have done this by setting out procedural guidelines for Member States so that they might better align procedures with those of the European Union Intellectual Property Office.

A key feature of this harmonisation is the introduction of a new definition of “trade mark”, however this innovation may be somewhat lost on UK businesses as the ‘new’ definition simply works to make that definition set out in current UK legislation pan-European. The implementation of an identical definition throughout the Member States provides two advantages for UK businesses. The first is that the definition is now the same across the Member States, easing the administrative and technical burden for proprietors seeking protection on an international scale.

The second is the advancement of the criteria that can be recognised as a mark to include sounds. Guidance published by gov.uk confirms that applicants will no longer have to provide a visual representation of the trade mark; instead, where appropriate, they can use MP3 or MP4 formats and file the application online. The intention here is that marks should be capable of reproduction in any appropriate form on available technology, as well as preconditions of its distinctiveness.

• New rights for proprietors

The Regulations introduce a new right for trade mark owners to alert customs authorities of the entry of suspected counterfeit goods into their market places before such goods are distributed throughout the European Economic Area (the “EEA”). Once suspected goods are detained there is an obligation on the goods holder to prove that the trade mark owner is not entitled to prevent the sale of the goods within the destination country.

This contrasts with the previous regime where the onus was on the trade mark owner to prove that there was enough reason to suspect the goods were counterfeit before the customs authorities were able to detain them. By shifting the burden of proof on to the goods holder trade mark owners are offered a new level of protection to stop counterfeit products from entering the market. Trade mark owners should be mindful not to use enhanced rights indiscriminately; where it can be proven that the goods holder is entitled to sell the suspected products in the relevant market the trade mark holder will be liable for damages accrued due to the delay.

The Regulation further attempts to dismantle the production line of counterfeit goods by allowing trade mark owners to take actions against individual traders involved in the production chain, as opposed to only targeting sellers of counterfeit goods. From now acts such as affixing identical or similar marks to packaging, labels and security features or devices will be considered as acts of trade mark infringement, along with offering or placing on the market, as well as stocking, importing or exporting such items.

The Regulations also specify that using trade marks in company names is an act of specific infringement. This measure aims to stop the twin nuisances to brand owners, first of company registrations by the ill-informed who fail to conduct proper searches before incorporating, and second by speculators who register a trademark as a company name in the hope of inflating the price of the company name in the event that the brand owner wants to purchase the company name to protect their reputation or brand.

The common connection between each of these enhanced benefits for proprietors is that they are pre-emptive. They attempt to assist brand owners in protecting their intellectual property before damage is suffered to their reputation or branding.

• Transfer with a business

To streamline the procedure of selling a business contracts of sale will now contain obligations for sellers to transfer any registered trademarks (unless the contract contains clear evidence to the contrary).

The changes implemented by the Regulations are designed to better reflect the realities of registering and protecting trade marks in the fast-moving EEA. The greater legal certainty provided by the Directive on procedural matters will assist ambitious brands who wish to forge an international presence by offering them the ability to protect trademarks throughout the European Union. Finally, established brands have gained new tools to fight against counterfeiting. The shift in the burden of proof will undoubtedly be a welcome change to proprietors battling counterfeiting, arming them with the appropriate tools for on-going brand protection.

Should you wish to discuss any of these changes in greater detail, please contact a member of the Intellectual Property team.