31 May 2011

OHIM User Associations Comment on Revision of CTM System at Hearing Before EU Commission

The "Study on the Overall Functioning of the European Trade Mark System" og the Munich Max Planck Institute for Intellectual Property and Competition Law, which has been release in February this year, has triggered a broad and ongoing discussion on the European CTM system among European trademark practicioners and the IP community in general.

To discuss the study's impact on CTM regulation and the Trade Mark Directive 89/104/EEC, the European Commission's Directorate General MARKT invited the OAMI Users' Group (international NGO's from the IP sector, such as MARQUES, ECTA, AIPPI or INTA) to present their views on selected questions as raised by the Commission (see agenda). The hering took place on 26 May 2011 in Brussels. The Commission only listened and did not answer any questions.


The agenda of the meeting included a number of issues being highly relevant to both trademark applicants and representatives, some of the topics being controversially discussed among CTM system users for quite a while: 

1. Requirement for a CTM to be put to genuine use in the Community: to what extent do users agree with the relevant findings and proposals of the MPI study (pages 135-139 of the study)?

2. Distribution of 50% of renewal fees by national offices: what do users think of the position of the study concerning the objectives (pages 243-244, point 5) and the recommended key of distribution (in particular, the suggestion to take the number of NATIONAL applications filed each year as a measure, page 241, item 1.23)?

3. Simplification of CTM procedures by shortening deadlines: to what extents do users agree with
  1. abandonment of the one month deadline for payment of the application fee and its substitution by a system according to which at least the order for payment must be made together with the application,
  2. shortening of the opposition period?
  3. deletion of the "extra" two months period for setting out the grounds of appeal?
  4. reduction of the term from which the three months opposition period is calculated for Madrid marks designating the EU?
4. Current regime on searches (including both mandatory CTM searches and optional national searches): what should be done with it? Would the provision of equivalent, automated priority search tools by the OHIM, free of charge, constitute an adequate substitute for the current system?

5. Filing of CTM applications through national offices: should this option be kept even though relevant applications have become near extinct (0,5 %)? Could it be replaced by the possibility of direct, assisted e-filing of CTMs at national offices?

6. Further harmonisation beyond the scope of the current TMD:
  1. what do users think of the proposals of the study for further substantive harmonization regarding a body of rules addressing trademarks as objects of property (covering transfers and assignment, licences, rights in rem, levy of execution and insolvency, see pages 226-227),  
  2. which provisions of procedural law are considered of major priority to be included (some examples being given by the Commission). The user associations were asked to pick three or four issues of major concern.
7. Use of class headings: what do users think of the proposals of the study to resolve this issue (page 171-172, items 4.59 to 4.64)?

8. Class fees: How do users see the Study propsal of having a separate class fee from the beginning, and not merely starting from the fourth class (both at EU and national levels)?

9. Certification marks: what do users think of creating a Community system for certification marks (page 212 of the study, item 20)?

10. E-Business: to which extend do users encounter legal difficulties with e-certificate? Does this need a clear legal basis in the CTMR?

    I am happy to be able to report below on what the delegates of MARQUES consider the outcome of the hering.

    1.  Requirement for a CTM to be put to genuine use in the Community. The study proposes that political boundaries do not constitute valid criteria in determining the genuineness of use and that Article 15 CTMR should be left unchanged (item 3.30 on page 139 of the study).

    This found unanimous support by all user associations, although UNION suggested to clarify Article 15 to state that use, in order to be genuine, must be of more than mere local significance.

    The study further suggests (item 3.31 on page 139) that use of a younger national trademark in a member state REMOTE from the part of the Community where a conflicting earlier CTM was used should be allowed, if the earlier CTM has been registered for at least 15 years, use of the CTM in the remote member state was ONLY MINIMAL and the later mark was applied for in GOOD FAITH.
    The user associations unanimously disagreed with this approach, stating that it is both against the unitary character of the Community Trademark and against the concept of a single European market. Also it would create more problems than it solves.

    The Commission considered this a "clear vote".

    2. Distribution of 50% of renewal fees by national offices. Some user associations repeated their view that they are against the distribution of 50% of CTM renewal fees. All user associations stated that the money should be spent in the interest of the users of the system. Some associations specifically requested supervision and control of how the money is spent (e.g. MARQUES, INTA, ECTA), AIM suggested EU-wide harmonized governmental budget rules for national offices, and other associations suggested that the money must be spent only for specific services, such as services on top of regular services. There was unanimous agreement that measures should be taken to prevent that the money disappears in state budgets.

    Not many proposals were made for the distribution key. In general, there seems to be agreement that, if at all, the distribution key should depend on how much service is provided to the users by the offices.

    3. Simplification of CTM procedures by shortening deadlines.

    a) abandonment of deadline for payment of application fee: Representatives of OHIM explained that, with this proposal, OHIM would like to facilitate the system and align it with the Community Design Regulation where payment has to be made immediately. Also, may be even more important for OHIM, the registration speed shall be increased by such measure.

    The user associations presented various very different reasons for MAINTAINING the one month term for payment, unanimously. However, it was suggested that the OHIM could only start examination of a trademark application after receipt of such payment (APRAM, MARQUES). If the registration procedure is delayed by late payment, this should not be of concern to OHIM as it is the free choice of the applicant.

    b) shortening of the opposition period: Again, the basis for this proposal is OHIM's desire to speed up the registration procedure which is delayed by the three months opposition term because registration occurs after termination of the opposition term or subsequent opposition proceedings.

    The user associations unanimously voted for maintaining the three months opposition term (e.g. IPA, APRAM, ITMA, CNIPA, UNION, EFPIA, ECTA, GRUR, CIPA, MARQUES) and presented many different reasons for this. It was suggested, however, that the three months opposition term should be unified throughout the Member States.

    c) deletion of the "extra" two months period for setting out the grounds of appeal. This proposal is a further attempt of OHIM to reduce the duration of proceedings (here appeal proceedings) before OHIM.

    Also in this question, there was an unanimous voice of the user associations that the two months for lodging an appeal plus additional two months for submitting the grounds in support of the appeal should definitely be maintained for various reasons (e.g. ECTA, MARQUES, GRUR, INTA, UNION, EFPIA).

    Interestingly, during the last OAMI Users Group Meeting in Alicante on 15 April 2011 the same issues were discussed with the same unanimous vote from the user associations. It was therefore surprising to see the same questions raised by the European Commission here again. However, after all, it would also be very surprising if the European Commission would propose a change of the law against the unanimous vote of the users.

    d) reduction of the term from which the three months opposition period is calculated for Madrid marks designating the EU: Currently, the three-months opposition term begins six months after republication of the international registration by OHIM. The purpose was to give the applicant the option to withdraw the application after he has received the national search reports and Community Search Report. Now, since national search reports are optional and rarely requested, the proposal in the study is to limit the six-months period to three months.

    It was suggested by MARQUES to reduce this term even further, considering that establishing the Community Search Report should take less than three months and in order to enable OHIM to inform WIPO about both absolute grounds of refusal and relative grounds of refusal in a single statement within six months after republication of the international registration.

    There was general agreement among the user associations with the proposal in the study to reduce this term from six months to three months or even less than three months (e.g. INTA, UNION, GRUR, ECTA, APRAM).

    4. Current regime on searches: A majority of user associations were of the opinion that national searches should be dropped and the CTM search should be kept optional (AIM, MARQUES, APRAM), whereas some user associations even preferred to abandon the searches entirely as they were considered useless (INTA). APRAM and ITMA wanted to maintain the mandatory CTM search.

    As regards automated search tools offered by OHIM free of charge, various user organizations stressed that OHIM should not provide legal advise on conflicting earlier rights (e.g. INTA, ECTA, Business Europe, AIPPI, MARQUES, EFPIA).

    5. Filing of CTM applications through national offices. Some user associations agreed that this option should be abolished (e.g. GRUR) whereas other user associations favoured maintenance of this option (e.g. INTA, AIPPI, ECTA). However, other associations insisted that, even if the number is low (0,5% equals about 450 cases per year), before abolishing the system one should find out the reasons and/or the type of applicants making use of this option (e.g. MARQUES, CIPA, UNION).

    6. Further legislative harmonization beyond the current scope of the TMD.

    a) further substantive harmonization regarding a body of rules addressing trademarks as objects of property. It seems that all user associations are in support of such substantive harmonization, but that care should be taken because some areas of the law cannot be harmonized under EU-law but are at the discretion of national laws. UNION even suggested that rather than harmonizing the law in this respect, identical national legal systems should be set up.

    b) which provisions of procedural law are considered of major priority to be included. The user associations were asked to pick three or four issues of major concern. While the user association states that all examples given by the Commission were important, it seems that the most relevant issues of concern were in the following order:
    •  providing administrative procedures for cancellation and opposition proceedings (e.g. MARQUES, INTA, APRAM, ECTA, GRUR, ITMA, ...)
    • abolishing ex-officio examination of relevant grounds (e.g. MARQUES, INTA, APPA, GRUR, FPIA, ...)
    • defence of "absence of genuine use" in opposition proceedings (e.g. MARQUES, INTA, ITMA, ...)
    • the option to base an opposition on a number of different rights (ECTA, ITMA) offering the same grounds for opposition in all member states (APRAM)
    Further suggestions were:
    • harmonizing the starting date for calculating the term for paying prolongation fees of converted CTMs (APRAM)
    • application numbers and registration numbers should be identical (AIM).
    7. Use of class headings. This question involves two issues, namely whether or not the use of class headings should be permissible and the scope of protection if class headings are used.

    Various user organizations considered the use of class headings being too broad (e.g. ECTA, APRAM, UNION, ...), whereas others were in support of the use of class headings (e.g. associations representing the pharmaceutical industry) while others expressed that they are not against the use of class headings (e.g. MARQUES).

    As regards the scope of protection, the Study suggests that, if a product does goods do not fall within the particular meaning of a general indication of a class heading, there is no reason to consider that the application/registration claims such product ("means-what-it-says" approach) contrary to the practice at OHIM ("class-heading-covers-all" approach). There was unanimous consent among all user associations that the means-what-it-says approach should prevail (e.g. ECTA, APRAM, UNION, MARQUES, AIPPI, EFPIA). INTA said they had not reached an agreement within the membership, but supports harmonization.

    8. Class fees. The reason behind this proposal is the attempt to reduce the so called "cluttering of the register".

    The user associations had different opinions on this issue. Some were said that there was no prove of cluttering and, therefore, were in favour of maintaining the current system covering three classes with the filing fee (e.g. AIM, GRUR, Business Europe, ...), whereas other associations supported a single class fee (e.g. ECTA, CIPA, FICPI). Even other associations stated that a change from the three-class practice to a single-class practice would be acceptable if, and only if, the filing fee was reduced to the extent that, if three classes are claimed, the amount of fees is not higher than the current filing fee (e.g. MARQUES, APRAM, UNION, INTA).

    9. Certification marks. Such system is in place e.g. in the UK and France.

    GRUR suggested that this new type of trademark should first be analyzed in more detail, e.g. how it is dealt with in various member states and whether certain problems have arisen there.

    Some user associations supported the creation of certification mark protection (e.g. CIPA, APRAM), also because International trademark registrations would provide for certification marks (APRAM). The remaining user associations stated that they are not generally against the creation of certification mark protection (e.g. MARQUES, ECTA, AIM, INTA, FPIA), but more details would be needed before creating such system (INTA) and such system should not be too complicated (AIM). ECTA pointed out that special rules would be needed, including e.g. compensation rules in case of infringement.

    10. E-business: ECTA stated that e-certificates could create problems before some courts and authorities. GRUR added that such problems are less within the European member states but more severe outside Europe and worldwide.

    AIM suggested to provide certification on EU level free of charge, in case such certification is needed in addition to an e-certificate. INTA added that a legal basis should be provided for the recognition of an e-certificate in the EU.

    General questions: Although not provided for in the original agenda, the user associations were given the opportunity to raise general questions.

    AIM explained that a move to 100% e-business should not be made too fast, considering that small entities and areas within the European union are not having a complete IT infrastructure.

    Concluding remarks by Commission services: The hearing was concluded with the statement of the Commission that, apparently, the user associations would not desire any changes, except harmonization. The Commission added that the Commission would only consider necessary to fine tune the current system.

    The Commission considered the most important message that "genuine use" is an important element of the system in practice.

    Also, the Commission stated that they have understood that the user association would expect particular services in exchange for the 50% renewal fees and further stated that this has always been supported by the Commission, but that the national offices would have to cooperate. The Commission further understood that the distribution of the 50% renewal fees should depend on how much service the national offices are providing for the users.

    The Commission will now draw up a proposal (hopefully) by the middle of October. In the meantime, further comments and input would still be welcome.

    16 May 2011

    EPO Advertises Commercial Products of its Media Partners by Email (updated)

    Waking up in San Francisco where I am for the INTA Annual Meeting, I found a surprising e-mail from european-inventor@epo.org in my inbox.

    It says that the EPO's Communications Director Oswald Schröder is offering a free three-months subscription of Financial Times Deutschland as part of a cooperation with the daily financial newspaper in the course of the European Inventors Award.
    The original German wording of that email is as follows:
    Sehr geehrte Damen und Herren,

    wir freuen uns, Ihnen im Rahmen einer Medienkooperation zum European Inventor Award 2011 mit der Financial Times Deutschland ein kostenloses Abonnement anbieten zu können.

    Sie erhalten die FTD drei Monate gratis. Im Anschluss endet die Belieferung automatisch.

    Unter folgendem Link können Sie in wenigen Schritten das Abonnement abschließen. Bitte beachten Sie, dass das Kontingent begrenzt ist. http://www.ftd.de/inventoraward

    Best regards / Mit freundlichen Grüßen / Sincères salutations

    Oswald Schröder
    Principal Director
    PD 0.8 I Communication I Spokesperson
    European Patent Office
    Landsberger Str. 187 | 80687 Munich | Germany
    Tel. +49 (0)89 2399 1800
    Fax +49(0)89 23991802
    When following the provided link, you are directed to a subscription form hosted by Gruner+Jahr GmbH, the largest printing and publishing firm in Europe, informing under the EPO logo that "on behalf of the European Patent Office you receive Financial Times Deutschland free for three months".

    It comes as a surprise, that the EPO is advertising products of its media partners by direct emails from the Principal Director Communications. It appears that the EPO has provided its professional address pool for commercial advertisements of its media partner. If this really is the case, I wonder which address database they are using and whether I previously have (accidentally) agreed on receiving commercial advertisements from the EPO.

    Personally, I do not at all appreciate such emails, especially not from a non-profit IP organisation funded by applicants fees. Apparently, the EPO's address pools (professional representatives, newsletter subscribers, online service users) are a valuable source for commercial firms like Gruner+Jahr. However, I would prefer if the EPO would better distinguish between its professional contacts and commercial interests and follow established data protection standards as, e.g., specified under section 13 (Data Protection) of the "Terms and conditions of use for the website of the European Patent Office", reading
    13.2. Personal data may not be recorded or saved without the user's express consent. By completing any data collection form on the Website, the user expressly agrees to the storage and processing of the data entered.  All data provided by the user [...] will be treated as confidential [...]. In particular, personal data will not be passed on to third parties or published or made available for general access without the user's express agreement [...]. 
    Update (May 18, 2011): I just received via email a "mea-culpa" from Mr Schröder saying that he should have better checked the FTD email campaign of his team beforehand - which apparently is true - and that the EPO has not provided any data to third parties. Thank you Mr Schröder for your clarifying response.

    14 May 2011

    Linux Foundation CEO Sees Bright Future for Linux as Receiving ITechLaw Award on Behalf of Linus Torvalds

    Before going in medias res, a very brief note on my own regard
    As you might have noticed, I haven't contributed anything for more than a month, due to time constraints resulting from more important engagements. Now I hope to be able to regularly contribute again, maybe not with the previous frequency, but still. As a solo blogger, it is considerably demanding to provide a constant flow of hopefully recognised postings, not knowing for how long I can keep it up this time. For that reason I am currently re-thinking my blogging concept in terms of coverage and would highly appreciate suggestions for collaborately running a blog in the present or another form.

    Linus Torvalds
    But now let's turn to the 2011 ITechLaw Conference, which this week has been held in San Francisco and attended by 240 attendees from 40 countries.

    In the opening session, Linus Torvalds was awarded with the first Inaugural ITechLaw Achievement Award for his significant and demonstrable achievement in technology which, as we all know, relates to creation of the Linux kernel in 1991 and the huge implications this and the open source idea had on the IT world in the following years.

    On Torvalds' behalf, the award was handed over to Jim Zemlin, executive director of the Linux Foundation, who then delivered the keynote address by pointing to the 20th anniversary of the Linux kernel and admitting that developers always wanted to be lawyers ("I am not a lawyer, but ..."). In his address, Mr Zemlin basically recapitulated the Linux history as presented in a video on the Linux Foundation's website, enriched by some more facts and opinions.

    While the story started as a private programming project of Mr. Torvalds, Linux now is such a big player in the relevant markets that legal issues are nowadays very important. According to Mr Zemlin, Linux today not only dominates the supercomputer market, embedded systems (28% as compared to 17% of MS Windows), mobile devices (by e.g. Android or Chrome, LiMo) and high performance computing, but is also operated in high-reliability areas such as air traffic control, nuclear submarine control or at the European Organisation for Nuclear Control (CERN). The commercial success of Linux was illustrated by the fact that the stock price of Linux distributor RedHat outperformed that of Microsoft. It was predicted that Linux will also play a dominant role when bridging the gap between real the and virtual world by the so called Internet of Things

    J Zemlin, CEO Linux Foundation
    As his look into the future, Mr Zemlin expects that the price pressure on innovation will rise so that hardware will be free in the end, mainly due to virtualisation concepts in the cloud. This will necessarily shift innovation towards software, thus promoting service-based businesses and forcing the IT industry to more and more shift in that direction. All this will, according to Zemlin, play into the hands of open source and particularly Linux, since free availability and openness will become the key features to outperform closed and proprietary approaches as e.g. adopted by Microsoft's Windows.

    We will see if that prognosis is appropriate. At least the tremendous success of the utterly closed company Apple and the immense demand for their highly propretary products may be a sign that Zemlin's vision will not come true in the nearest future and may at least require some twists and shift before it will be fully established.