The CTM system has recently registered its 500,000th Community
Trade Mark (CTM). The application fee for a CTM was reduced by
approximately 40 per cent from 1 May 2009, following adoption of
Commission Regulation (EC) 355/2009 (the Fee Regulation). In light
of the new fee structure and other features of the CTM registration
process, we consider whether it makes sense for businesses to apply
for EU trade mark protection only via the CTM or whether national
registrations still play a part. Generally speaking, given the
territory for protection (currently 27 Member States) and the costs
involved, CTMs appear to be more attractive. However, CTMs may be
more vulnerable to challenge and in certain circumstances national
trade marks remain advantageous.
CTMs: the current fee structure
The Fee Regulation introduced a unique fee of €1,050 (€900 for
online applications) for a single CTM in up to three classes,
payable on application, with a cost of €150 for each additional
class. Unlike the previous payment regime there is no follow-up
registration fee.
Comparison of fees in key EU territories
OHIM's fees are likely to be considerably cheaper than applications
for national marks in multiple EU territories. Note that our
estimates do not include agency or legal fees, which are likely to
fluctuate significantly across the EU.
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Territory/Official fee
CTM - €1,050
Benelux - €240
France - €225
Germany - €300
Italy - €272.91
Spain - €452
Sweden - €307
UK - €351
Table 1 Prices are for a single trade mark
registration in up to three classes.
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CTMs vs national trade marks
The harmonised CTM presents a number of advantages, including:
- enforceability throughout the EU;
- simplified formalities and management;
- reduced administration and fees;
- validity cannot be challenged at national EU trade mark registries
if used in opposition proceedings;
- proof of use (required to defend against revocation for non-use
proceedings) need generally only be demonstrated in one Member
State;
- CTM courts can grant pan-European relief in many cases, so less
need to issue multiple proceedings in different jurisdictions; and
- CTMs automatically benefit from enlargement of the EU.
Ideally, CTMs remove the need to register national trade marks in
Member States unless there is no intention of seeking protection in
multiple Community territories (in which case a national
registration is likely to be cheaper). However, the CTM is a
unitary right and cannot be divided (e.g. by assigning the mark in
one or more countries). If the validity of the CTM is successfully
challenged in any Member State on the basis of a prior national
right, it becomes invalid for all Member States. Although a
challenged CTM may potentially be converted into a bundle of
national rights, the costs of doing so may be significant. This is
worth remembering as CTMs are particularly vulnerable to challenge
due to the large number of national territories that they cover.
They are also fairly slow: if no oppositions are filed, the
prosecution process usually runs at 9 to 15 months.
Comparison of application time in key EU
territories
With one noticeable exception (Italy), the average application
period for CTMs is longer than for the national equivalents.
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Territory/Approx. application time
CTM - 9-15
Benelux - 3-4
France - 4-6
Germany - 8-12
Italy - 36
Spain - 6-12
Sweden - 5
UK - 3-6
Table 2 Estimates are expressed in months on the
basis that no oppositions are filed.
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When is it worth filing national applications?
Despite the evident advantages of CTM registrations, where
businesses intend to exploit a trade mark exclusively in one or a
limited number of Member States, it may still be cheaper and
quicker to proceed with national registrations. This is especially
true if the intended use does not include Germany as German
companies are frequent opponents at OHIM.
An additional downside of CTM applications is that, in the case of
a successful opposition by the proprietor of an earlier national
mark, the consequent refusal to register will affect all 27
countries (albeit that conversion is a possibility, although at
additional cost). It is therefore advisable to carry out full
availability searches covering all EU Member States prior to
application - but the cost of such searches can be prohibitive and
could outweigh the financial advantage of applying for a CTM where
there is little intention of using the mark throughout the EU.
Many companies with valuable marks are wary of running the risk
either of a successful opposition or a subsequent invalidity action
resulting in their "crown jewels" being lost. They often keep
national registrations (at least in key countries) as a back-up so
as not to put all their '"eggs in one basket". Such registrations
also have the benefit of giving proprietors more flexibility when
it comes to forum-shopping for infringement and there is no doubt
that different courts do give diverging results (not least because
of linguistic and market factors) - note for instance the
conflicting rulings in cases bought by L'Oréal against eBay,
addressed in our above review of luxury brands. A further advantage
of a national mark is that one can rely on any provisions of
national trade mark law that are not replicated in the CTM
Regulation (e.g. section 11(1) Trade Marks Act 1994, which provides
a defence to an infringement action if the allegedly infringing UK
mark is registered in the UK).
It therefore remains prudent, particularly for important marks, to
back up Community filings with local applications in key
territories, particularly when speed is of the essence.
Consequently, there is still very much a role for national
registrations within the EU framework.
Please click on the links below for the other articles in
the July 2009 IP/IT newsletter
Contacts
Mark Lubbock
T: +44 (0)20 7638 1111
E: mark.lubbock@ashurst.com
Ian Starr
T: +44 (0)20 7638 1111
E: ian.starr@ashurst.com
This newsletter is not intended to be a comprehensive review of
all developments in the law and practice, or to cover all aspects
of those referred to. Readers should take legal advice before
applying the information contained in this publication to specific
issues or transactions.