Due to be implemented in the UK by 14 January 2019, EU Trade Mark Directive 2015/2436 aims to further harmonise the national trade mark laws of EU member states (see our earlier article here on the Directive). To help prepare for the changes, earlier this year, the UK government published a consultation paper on how to approach the Directive and its impact on existing legislation. The government has considered the responses to the consultation and has just published its own response. The key aspects are summarised below:
- Removal of requirement for "graphical representation" of trade marks: The government confirmed that the ultimate intention is to allow trade marks to be represented in the widest range of digital file formats permitted by its current system. However, trade marks must still be clearly and precisely defined regardless of whether they are represented graphically. Further guidance on new filing requirements and acceptable file formats will follow.
- Distinctive character acquired after application date but before registration (optional): This optional provision permits use of a trade mark between the filing and registration dates to be taken into account when deciding whether it has acquired distinctive character. The government's view is that this would create unnecessary uncertainty. Respondents to the consultation agreed and added that it could increase complexity and lead to applicants prolonging the registration process. This optional provision will not be implemented.
- Definition of "earlier trade marks": The Directive contains an exhaustive list of "earlier trade marks" which may be considered for the purposes of relative grounds for refusal. However it does not list expired marks. This is at odds with section 6(3) of the Trade Marks Act 1994 ("the Act") which requires expired marks to be taken into account one year after expiry, provided that mark has been used during the two year period immediately preceding expiry. The two year use proviso is also incompatible with the five year proof of use period referred to in the Directive. The government added that if expired marks do not fall within the definition of "earlier trade marks", they would no longer be notified to applicants as potentially conflicting rights. This could lead to applicants facing unexpected opposition by the owners of expired, but later restored, marks. To implement the Directive, the government will repeal section 6(3) and amend rule 37(1) of the Trade Mark Rules 1994 ("the Rules") by allowing restoration of expired marks only if the failure to renew was unintentional. It will also add rule 37(1A) which will protect the legitimate interests of third parties who, in good faith, adopt a sign that is identical or similar to an expired, but later restored, trade mark.
- Earlier rights being "industrial property" (optional): Under section 5(4)(b) of the Act, earlier rights "in particular by virtue of copyright, design right or registered designs" may prevent registration of a later filed trade mark. Although optional, the Directive allows for the definition of earlier rights to make reference to the broad term "industrial property rights". The government will implement this optional provision and ensure that section 5(4)(b) refers to "industrial property rights", thus eliminating the risk of excluding a type of earlier right that was intended to be covered by legislation.
- Earlier marks protected abroad (optional): The Directive provides that a trade mark may not be registered if it is liable to be confused with an earlier mark protected overseas, provided that the applicant has acted in bad faith. The government will not implement this optional provision. Adequate protection is already contained in section 3(6) of the Act relating to bad faith filings.
- Comparative advertising: The Directive prohibits use of a sign in comparative advertising if it is contrary to the Misleading and Comparative Advertising Directive 2006/114/EC. To implement this, the government will add the relevant wording of the Directive as new section 10(4)(e) of the Act and will also repeal section 10(6) as it will become redundant.
- Goods in transit: The government will introduce section 10A to the Act allowing for potentially counterfeit goods originating from outside the EU to be detained in the UK without being released for free circulation.
- Right to prohibit preparatory acts in relation to the use of packaging or other means: The Directive enables trade mark owners to prohibit preparatory acts such as applying an infringing sign to packaging, labels or tags. This is, to some extent, dealt with in section 10(5) of the Act. However, there are differences. For example, an infringement under section 10(5) requires knowledge that the offending sign is being applied to packaging without the consent of the trade mark owner. There is no such requirement under the Directive. The government will implement this part of the Directive by repealing section 10(5) and adding new provisions to the Act.
- Reproduction of trade marks in dictionaries: The government will introduce section 99A to the Act allowing trade mark owners to request publishers to correct dictionaries (and other reference works) which wrongly identify a trade mark as a generic term. To ensure this can be enforced, certain remedies will be available to trade mark owners including the granting of a court order for amendment of the relevant publication.
- Prohibition of the use of a trade mark registered in the name of an agent or representative: The Directive contains a prohibition on the use of a trade mark registered by an agent or representative without the owner's consent. To implement this, new section 10B will be introduced to the Act. It will allow for the trade mark register to be rectified by substituting the name of the offending agent or representative with the name of the relevant owner.
- Non-use as defence in infringement proceedings: Under the Directive, trade mark owners cannot seek to prevent use of a sign if their earlier mark is liable to be revoked for non-use. As such, defendants may ask trade mark owners to prove that an earlier mark has been used during the five year period preceding the date an infringement action is brought. If they cannot, the action will fail. Section 11A will be inserted into the Act to implement this part of the Directive.
- Licensing: The Directive sets out conditions that apply to exclusive and non-exclusive trade mark licenses. However, it remains silent on whether trade mark owners should be joined as parties to infringement proceedings brought by licensees. Sections 30(4) and 30(5) of the Act allow for this and so, to bring the Act into line with the Directive, the government initially suggested that those sections be repealed. Respondents to the consultation raised a number of concerns about this, including that trade mark owners should not be able to shield themselves from proceedings and should be joined for cost implications so that they can be bound by arguments in proceedings and decisions issued. The government will therefore not repeal sections 30(4) and 30(5). Instead, the wording of section 30(4) will be amended to reflect the different circumstance under which infringement proceedings may be taken by authorised users.
- Division of trade mark registrations: The government will amend section 41(1) of the Act by providing for the division of trade mark registrations. Only trade mark applications may be divided under the current regime. This will be supplemented by new rule 26A of the Rules which will specify that licences, security interests and disclaimers recorded against an existing registration will apply to each subsequent divisional. Rule 26A will also stipulate that registrations may not be divided if they are subject to an existing dispute.
- Disclaimers and limitations: Although this issue does not arise from the Directive, the government considered whether disclaimers and limitations should be repealed. Its view is that the ability to disclaim or limit certain elements of a trade mark right serves a useful business function and should therefore be retained under section 13 of the Act. Respondents to the consultation paper agreed and argued that the removal of disclaimers and limitations would reduce opportunities to settle disputes, make it more difficult to deal with objections raised during examination and could lead to an increase in the number of registry proceedings. Section 13 of the Act will therefore be retained.
The government will now finalise the draft Statutory Instrument so the Directive can be implemented into UK law. With the 14 January 2019 implementation date just six months away, it should not be a long wait.