Opportunities in the European Union
With 28 member States, including the UK, the European single market represents one of the largest consumer markets in the world. In terms of GDP, it is second only to the United States. At the same time, the EU is also Australia’s second largest trading partner after China, with an annual increase of 2.7% over the past five years. At present, Australia exports a considerable amount of vegetable oils and alcoholic beverages to the EU.
Free Trade Agreement (FTA) with Australia
An exciting prospect for Australian business is the ongoing negotiations for an FTA between Australia and the EU. This would mean the reduction in trade barriers, such as tariffs and quotas, between Australia and the EU.
Four Levels of Trade Mark Registrations
There are four ways to obtain trade mark protections within the EU: national, regional, European Union Trade Mark (EUTM), or through the World Intellectual Property Organisation (WIPO).
The first option is to register your trade mark at the national level. This would only grant you protection within that country. Nevertheless, it is the most inexpensive option. For instance, the application fee for trade mark registration in Germany costs as little as €290.
Secondly, Belgium, the Netherlands and Luxembourg have an integrated trade mark system. Registrations are administered centrally by the Benelux Office for Intellectual Property (BOIP). Once your trade mark has been registered, it would enjoy protection within these three countries. The application fee is relatively inexpensive, starting from €248.
Thirdly, you may apply for an EUTM instead, which grants you rights and protections across all 28 Member States of the EU. Fees are substantially higher, however, costing upwards of €850. The choice between registering your trade mark at the national level and at the EU level would likely depend on how many European countries your business intends to operate in.
Finally, if you already have a registered trade mark in another country, you may apply for trade mark protections in any of the Member States, or across the EU through WIPO. The advantage of this option is that, you may also apply for protection in countries outside Europe in the same application. The basic fee is CHF 653, in addition to the individual fees for the countries you designate. For the EU, this is CHF 897.
Trade mark holders and prospective ones would be glad to know that, despite Brexit, the UK has agreed to grant holders of EUTMs trade mark rights in the UK without re-examination before the end of the transition period, which is 31st December 2020. Likewise, trade marks filed with WIPO designating the EU would also continue to enjoy protection in the UK, provided that this is done before the transition period has expired. As such, at this point in time, there does not seem to be any need to double file.
Why Register?
The EU only confers very limited rights on unregistered trade marks. To prevent a similar trade mark from being registered, two requirements need to be met. Firstly, the unregistered trade mark needs to be “used in the course of trade of more than mere local significance”.
Secondly, the new trade mark can only be refused registration to the extent that it is prevented by the national law of Member States. In the case of the UK, for example, registration would only be refused if it would constitute passing off. In turn, to establish passing off, the user of the unregistered trade mark must have a goodwill. Protections for unregistered trade marks are even weaker amongst civil law countries, which constitutes the vast majority of jurisdictions within the EU, since they tend to adopt a first-to-file system.
At the same time, your unregistered trade mark may conflict with a registered trade mark, thus constituting infringement. The three defences available are very narrow. Firstly, you may rely on the fact that the trade mark consists of your (not your business’) name or address. Secondly, it may be that the mark is not distinctive or concern the characteristics of the goods or services. Thirdly, you may argue that your use of a registered trade mark is for the purpose of indicating that you are providing the accessories or spare parts for that product.
However, all three defences are subject to the condition that your use of the trade mark is in accordance with honest practice. This means that the use cannot give the impression that there is a commercial connection between your business and the trade mark owner. At the same time, your use cannot tarnish, dilute or take unfair advantage of a reputable trade mark.
Given the very limited rights afforded to unregistered trade marks, it is advisable to register your trade mark as soon as you intend to use the trade mark in Europe.
Reputable Trade Marks in the EU
Trade mark protections under EU Law differ from those in Australia in one major respect. In relation to trade marks with a reputation in the EU, the law offers substantially more protection.
Trade mark laws in Australia are governed by the principle that trade marks predominantly serve as an indication of origin. As such, an infringement action can only be brought when the defendant has used a mark is substantially identical with or deceptively similar to the plaintiff’s registered mark. The same goes for opposing applications for new trade marks.
In the EU, however, the law recognises that, in addition to being an indication of origin, trade marks are also the result of substantial investment by trade mark owners, and serve an important advertising function. As such, reputable trade marks are protected from the use of similar marks, which even though do not cause confusion, would nevertheless take unfair advantage of a registered trade mark, tarnish its reputation, or erode its distinctive character.
For instance, L’Oréal was able to bring a successful action against a company that produced an imitation of their perfume. The defendant, in this case, used packaging and bottles similar to the ones used by L’Oréal. Moreover, the defendant provided a comparison list to the retailers, showing expensive perfumes in one column, and giving their corresponding imitations in the other one. Even though there was no confusion, the Court of Justice of the European Union (CJEU) found that there was infringement, since the defendant took an unfair advantage of L’Oréal’s reputation.
Keyword Advertising
Businesses are increasingly utilising keyword advertising on search engines. In recent years, European and British courts have started addressing the issues involved.
A good example is Interflora, which operates a flower delivery service. Marks & Spencer, which also offers this service, used Google AdWords such that when an Internet user searches for the term “Interflora”, the website of M&S would come up in the results.
In this case, the CJEU held that trade mark rights would be infringed where the use of AdWords adversely affects any of the trade mark functions, that is, indication of origin, investment, and advertising. In particular, where a reasonably well-informed and reasonably observant Internet user would not be able to ascertain without difficult whether the goods and services that came up in the search belonged to the trade mark holder or a third party, a case of infringement would be made out.
Parallel Importations
Once a trade mark owner has put the goods into the market, its trade mark rights are said to be “exhausted”. This means that any one can resell these products even though they are not the trade mark owner.
In Australia, exhaustion happens internationally. This means that, once the goods have been released into an overseas market, a trader may resell these goods in Australia, even if the original manufacturer also holds a trade mark in Australia. This practice is otherwise known as “parallel importation”.
The reason behind parallel importations is that businesses often use price differentiations in different markets, depending on the local demand and supply, in order to maximise their profits. Third-party traders, on the other hand, try to exploit the price difference.
The doctrine of exhaustion, however, applies differently in the context of the EU. The CJEU has held that exhaustion only applies within the EU. This means that goods released in markets outside the EU cannot be resold in the EU without the permission of the trade mark holder.
For businesses operating in the EU as well as countries outside the EU, registering your trade mark would allow you to stop these parallel importations without compromising on your price differentiations.
DO IT YOURSELF v. EXPERT WORK
Should you need strategic advice or require assistance with drafting your list of goods and service, so its wording is accepted by EUIPO or require a similarity search before you submit an application to avoid refusal of your application, please visit our website
www.one-ip.com.au
or send us an email to
office@one-ip.com.au.
ONE IP INTERNATIONAL can help with trade mark applications in any country for an affordable fixed fee.
