Special Report Community Trademarks by BBC Creativity

special report Community Trademarks insight into Community Trademarks trends and evolutions FEBRUARY 2010

THOMSON COMPUMARK

Introduction This special report offers you a unique insight into the world of Community Trademarks. In an extensive interview, the President of the OHIM gives an overview of the origins and evolution of the Community Trademarks, the impact of the current economic crisis and future trends. How do Community Trademarks relate to Community Designs and how do companies profit from the complementary frameworks of both systems? How do national trademarks relate to community trademarks? Tom Heremans throws his light on this matter with some interesting example cases. Curious as to which product classes are most popular and the types of Community Trademarks available? How have Community Trademarks registrations and applications evolved since their inception and what are the regional trends? Find answers to all these questions and more in our comprehensive statistical analysis.

Community Trademarks: unified trademark registration system

The Community Trademark covers a market of more than 350 million consumers who enjoy some of the highest living standards in the world. Community Trademarks are registered with the Office for Harmonization in the Internal Market (OHIM) and as such, their registration, transfer or lapse applies throughout the European Union. While valid for a period of 10 years, Community Trademarks may be renewed indefinitely. The laws governing the application and use of Community Trademarks are in most cases similar to those employed by the national trademark systems of each member states.

contents An inside perspective on Community Trademarks: an interview with OHIM President Wubbo de Boer.................. 2-3 National trademarks versus Community Trademarks: opposition examples by Tom Heremans.................................4 Community Trademarks and designs in figures: trends in registrations and applications........................................5-7 Design and trademark: best of both worlds...................................................................................................................8 The need for effective searching: a plea for the right strategy......................................................................................9

Special report: Community Trademarks

AN INSIDE PERSPECTIVE ON COMMUNITY TRADEMARKS AN INTERVIEW WITH OHIM president WUBBO DE BOER Charged with the registration of trademarks and designs in Europe, the Office for Harmonization in the Internal Market (OHIM) offers a highly effective and affordable system for obtaining trademark protection across the European Union. We spoke with OHIM President Wubbo De Boer about the unprecedented growth in registrations and the challenges on the horizon for protecting intellectual property rights in Europe.

consumers. This year, despite the global financial recession we expect to receive between 80 000 - 90 000 applications. That is more than five times the predicted figure back when the Community Trademarks was first conceived. It is also worth mentioning that since 2003, OHIM’s remit has broadened to include the Registered Community Design (RCD), which offers EU-wide protection for the external appearance of a product.”

WHAT WERE YOUR EXPECTATIONS FOR OHIM IN THE EARLIEST BEGINNINGS?

WHAT HAS CHANGED, CONCRETELY, FOR COMPANIES APPLYING FOR Community Trademarks?

Wubbo de Boer: “The agency was established as a nonprofit organisation. User fees were our sole source of funding and the initial cost of a Community Trademark – including all application and registration fees – was set at € 2075. With the benefit of hindsight, you could say that we underestimated the popularity of a single application offering EU-wide brand protection.”

Wubbo de Boer: “The first most significant change relates to the speed of the approval process. In the case of unopposed applications (around 80%), we have managed to reduce the registration period from 22 months to just 6 months. The second major evolution relates to costs. As of May last year, Community Trademarks now cost 40% less, which is already the second reduction in fees since the start up. We also took the opportunity to simplify the process even further by doing away with the separate registration fee. A Community Trademarks now costs € 900 and can be applied for online.”

HOW HAS THE SYSTEM EVOLVED OVER THE YEARS?

Wubbo de Boer: “Since its foundation, the Community Trademarks has experienced steady growth and enterprises from all over the world (65% EU, 35% rest of the world) use it. Although at first the Community Trademarks registration was only valid in 15 member states, two expansions have since boosted that number to 27, covering a market of around 500 million

Special report: Community Trademarks

Wubbo de Boer is the current President of the Office for Harmonization in the Internal Market (OHIM), the European Union body in charge of trademarks and designs based in Alicante, Spain. He was appointed to the post of President in October 2000, which was renewed for a period of five years from October 2005. Before making the transition to Alicante, de Boer was Director General of Civil Aviation and of Transport Policy at the Dutch Ministry of Transport. He also held the Director General’s post with respect to Competition Policy and Service Industry, Consumer Protection and Small and Medium Sized Enterprises in the Dutch Ministry of Economic Affairs.

HOW HAS THE ECONOMIC CRISIS AFFECTED APPLICATION NUMBERS?

IS THE GOAL TO ACHIEVE A HARMONISATION OF RULES ACROSS THE EU?

Wubbo de Boer: “From mid 2008, Community Trademarks applications have started to decline in response to the current economic crisis. Recently, however, there have been modest signs of recovery. Overall, applications in the first half of 2009 are down by around 5% compared with the same period in 2008. I would say that, given the seriousness of the economic downturn, that is a very steady performance.”

Wubbo de Boer: “Since Community trademark law is harmonised, users can expect to encounter similar procedural rules and similar decisions across the various jurisdictions. We need to bear in mind that other legal considerations may have to be taken into account when seeking a harmonisation of procedural rules. In this sense, there will always be remaining differences. This is something we are trying to partially address at a pragmatic level by working with the judges in national Community Trademarks and RCD courts. Over the last two years we have hosted eight seminars with around 250 judges from almost all EU member states. The seminars offer an occasion to discuss procedural and enforcement issues in cases where trademarks or designs may be infringed.”

WHAT ABOUT ONLINE APPLICATIONS?

Wubbo de Boer: “Our ambition is to go 100% electronic in the long run. Progress towards becoming a modern e-commerce organisation has already been substantial, with around 80% of Community Trademarks applications currently lodged online. We remain committed to providing faster, higher quality services to our customers and recently reorganised OHIM’s departments to bring every step of the process – from application to registration – under a single Community Trademark Department. We are convinced these changes will put us in an even stronger position to make good on our promises to users.” HOW DO YOU GO ABOUT ENSURING CONSISTENCY IN OHIM’S RULINGS?

Wubbo de Boer: “The best response is intensive quality control. We are constantly developing enhanced tools to minimise errors and guarantee maximum coherence. It is interesting to note that in the past year, OHIM’s own Boards of Appeal, which review decisions independently of the rest of the office, upheld around 85% of first instance decisions for examination cases and 65% of opposition cases. Of the cases handled by the Boards of Appeal only around 10% are pursued further in the Court of First Instance. One of the objectives of the recent reorganisation was to improve the quality of decisions. The Boards of Appeal is also taking steps to improve the consistency of its decisionmaking. While it is fair to say that consistency is one of our priorities, the large number of decisions means there will always be some divergence of opinion, even among experts.”

AND NOW ON TO THE 1 000 000TH COMMUNITY TRADEMARK?

Wubbo de Boer: “We are nearing 800 000 now. It would seem reasonable to expect that the 1 000 000th filing will arrive late in 2011. My guess is that it will be 4.30pm on 11 November.”

“As of May 2009, Community Trademarks now cost 40% less, which is already the second reduction in fees since the start up. We also took the opportunity to simplify the process even further by doing away with the separate registration fee.”

The opinion of the interviewee are his own and do not necessarily represent an endorsement by Thomson CompuMark.

TO WHAT EXTENT DO OHIM’S DECISIONS HAVE AN INFLUENCE ON CASE LAW?

Wubbo de Boer: “Essentially, our office’s job is to register Community Trademarks and designs within a given legal framework and our decisions inevitably contribute to the development of case law. If others disagree with our decisions they can call on the Court of First Instance (CFI) and ultimately the European Court of Justice (ECJ), which is the final arbiter. The decisions and preliminary rulings of these higher courts, in turn, feed back into office practice. We each have our different roles and, on the whole, the system works well.” HOW DOES THE EUROPEAN SYSTEM COMPARE TO OTHER SYSTEMS?

Wubbo de Boer: “The law in Europe provides for a “use it or lose it” system to prevent a build-up of unused trademarks. For a Community Trademark to remain valid there must be “genuine use” within the European Union after a five-year grace period. If someone else wants to use an inactive trademark they can apply for the registration of the unused Community Trademark to be revoked.”

Special report: Community Trademarks

national trademarks versus Community Trademarks opposition examples by tom heremans When an undertaking would like to register a Community Trademark, it must make sure that its Community Trademarks will not create a conflict with prior trademarks, such as other Community Trademarks or national trademarks. Because a Community Trademarks is per definition valid in all the member states of the European Union, its validity can be challenged by a single earlier trademark in any of those member states. To protect his rights, the owner of an earlier, national trademark will have no other choice than filing an opposition against the Community Trademarks. Otherwise he may be confronted with products or services that are marketed in his national territory under a trademark that is identical or similar to his earlier, national trademark. case 1: the beatles versus beatle

A recent illustration can be found in the case of Apple Corps versus MovingPeople.net (OHIM Opposition Division, 25 August 2009, B 839 318). In this case, Apple Corps, a multimedia corporation founded in January 1968 by British rock band The Beatles, filed an opposition against the Community Trademarks application for the mark Beatle. The trademarks The Beatles are registered in most of the EU member states as national trademarks for a plethora of products and services, including sound recordings, video recordings, music, films, promotional merchandise, goods and services in the field of entertainment, etc. Apple Corps tried to oppose the registration of the Community Trademarks Beatle, but failed because the new Community Trademarks Beatle was filed for wheelchairs. The OHIM ruled that there is no likelihood of confusion because the products and services of the earlier, national marks The Beatles are different from the wheelchairs for which the new Community Trademarks was filed.

Articles 8 and 41 of the Community Trademark Regulation clearly provide that an opposition against a Community Trademark can be based on prior rights that result from Community Trademarks, national trademarks or international trademarks with effect in one of the member states. But be aware, in the opposite case where a Community Trademark is used to oppose the registration of a national trademark, an important topical legal issue has arisen. In a recent case, the Benelux Office for Intellectual Property (BOIP; see www.boip.int) stated that a Community Trademark cannot be used as a legal ground for an opposition if it has only been used in one member state. According to BOIP, a Community Trademark should at least be used in several member states. If no such use is shown, the Community Trademark should not block the registration of national trademarks in one of the member states. This view of the Benelux Office is approved by some but heavily disputed by others. The decision of the Benelux Office is being challenged before the Court of Appeal of The Hague and eventually this issue may be decided by the Court of Justice of the European Union.

Tom Heremans is Attorney at Law for CMS DeBacker in Brussels, Belgium. He is lecturer at the University of Brussels on domain names and teacher in de postgraduate marketing program at HU Brussels on the legal aspects of marketing. He is also Vice-president of the Benelux Trade Mark Association.

The OHIM ruled that there is no likelihood of confusion between the community trademark BEATLE and the national marks The Beatles.

case 2: the olympics versus culturolympics

Another recent case in which the trademark owner was more successful regards the Comité International Olympique, who owns, amongst others, the national trademark The Olympics. The Comité filed an opposition against a Dutch individual who applied for the Community Trademark Culturolympics. The OHIM found that there is a likelihood of confusion between those two marks and refused to register the mark Culturolympics (OHIM Opposition Devision, 21 July 2009, No B 1 322 496).

Source screenshots: SAEGIS™ on SERION™

Special report: Community Trademarks

Community Trademarks and designs in Figures Trends in registrations and applications Since the introduction of the Community Trademark in 1996 and the Registered Community Design in 2003, there has been marked growth in the total number of marks and designs registered by the OHIM. Even allowing for the current economic downturn, the statistics suggest continued interest in the Community based route for the protection of intellectual property rights. Below we offer a summary of the global trends in Community Trademarks, including a breakdown of applications and registrations according to type, country and product class.

Community Trademarks

Figure 1: Evolution of registrations per year (1997-2009)

100000 89969

90000

Continuing Growth in Registrations

80000

By the beginning of December 2008, the total number of Community Trademarks registered had passed the 500 000 mark, corresponding to hundreds of thousands of enterprises from all over the world (Figure 1). As of December 2009, a total of 597 884 Community Trademarks have been registered. 2009 saw a total of 89 969 Community Trademarks registered, by far the most of any year since its introduction.

70000

Demand for new Community Trademarks remains steady

The previous constant annual growth in demand for Community Trademarks levelled somewhat in 2008 for the first time since the Community Trademark was introduced in 1996. Although in that year the OHIM received fewer applications, the figure was still 46% higher than in 2004 (Figure 2). germany and us head community trademarks applications and registrations

As of 2009, the Community Trademark is still a popular international choice for IP protection in the EU. German companies are once again the most active with 16 296 Community Trademarks applications in 2009 (Figure 3). While applications from the United States and the United Kingdom have both fallen, these countries are still the second and third most prolific applicants respectively. A total of 11 340 US applications and 8 028 UK applications were received in 2009. The United States, however, continues to top the table with the highest total applications since 1996 (159 601 applications). Germany comes in at second place with 139 824 applications.

81474

60000

59758

61588

68000

50000 40000

34277

24252

30000

38547 35903 34318 34451

34770

20000 10000 0

577 1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Figure 2: Evolution of applications per year (1996-2009)

100000 88191

90000

88444 87984 77993

80000 70000

59649

60000

57601 49494

50000 40000

43284

30000

41397 27319

59791

65385

46906

31656

20000 10000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Figure 3: Number of applications by country 180000 160000

159601

Total number of applications (1996- 2009)

139824

140000

Applications 2009

120000 100000

91697

80000

64076

65021

60000

56180

40000 20000

16296 11340

8028

7333

6960

0 Germany

Special report: Community Trademarks

Italy

Spain

6589 France

The top six countries in terms of registered Community Trademarks (1997 - 2009) are, in order, the United States (118 131 trademarks), Germany (101 939 trademarks), the United Kingdom (65 596 trademarks), Italy (49 063 trademarks), Spain (46 267 trademarks) and France (41 461 trademarks) (Figure 4). class 09 most popular

The most popular class of goods for Registered Community Trademarks (Table 1) remains ‘electrical and scientific apparatus’ (class 09) with 164 216 registered trademarks, followed by ‘computer and scientific’ (class 42; 112 976 registered trademarks), ‘advertising and business’ (class 35; 110 254 registered trademarks), ‘paper goods and printed matter’ (class 16; 90 100 registered trademarks) and ‘education and entertainment’ (class 41; 81 577 registered trademarks). Word marks still most prominent type

Of the 597 884 Community Trademarks registered since 1996 (Figure 5), the majority consist of word marks (366 352 trademarks or 61.3%), followed by figurative / device marks (222 960 marks or 37.3%), colour marks (5 323 marks or 0.9%) and 3-D marks (2 871 marks or 0.5%). In 2009 58.6% of the year total consisted of word marks and 38.9% of figurative marks. In 2003 63% of the year total were word marks and only 36% were figurative marks.

Figure 4: Number of registrations by country 140000 118131 120000

Total number of registrations (1997-2009)

101939

Registrations 2009 100000 80000

65596

60000

49063

46267

41461

40000 20000

15925

13499

8868

7518

7041

6397

0 Germany

USA

Italy

Spain

France

Table 1: Community Trademarks registrations - most popular classes (1997 - 2009)

Class

Number of registered trademarks

164 216

10.33%

112 976

7.11%

110 254

6.94%

90 100

5.67%

81 577

5.13%

Figure 5: Type of marks (1996-June 2009) 3D 0,5%

Colour 0,9%

oppositions

During the year 2009, there were 13 851 oppositions (Figure 6). 763 requests for cancellation before court were received. 46 Community Trademarks were cancelled and surrendered, of which 11 were cancelled after registration and 35 were withdrawn after registration. In 2008 there were 18 853 oppositions.

Figurative 37,3% Word Mark 61,3%

Other 0,0%

Figure 6: Number of oppositions (1997-2009)

20000

18853

18000

17495

16000

16601

14225

14000

12890 11500 11061 10801 10610 9987 9862

12000 10000

13851

8000 6000 4000 2000 0

851 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Special report: Community Trademarks

Community designs Annual growth in community designs past its peak

Since the introduction of the Registered Community Design (RCD) in 2003, OHIM has received 460 730 designs (including International designs received via WIPO with protection in the European Union). 2008 saw a total of 79 817 designs received, 2009 a total of 76 394 (Figure 6). Since 2003, OHIM has received 116 464 effective design applications. In 2009 the number of applications fell slightly to 19 048 and the average number of designs per application was also down slightly.

Figure 6: Designs received by OHIM (including International designs received via WIPO with protection in the European Union)

90000 79817

80000 69323 63640

60000 53792

50000 40492

40000 30000 20000 10000 0

2003

ReCEIVED community designs by product class

The most popular classes of goods for which design protection was sought from 2003 till 2009 pertained to furniture (class 06; 58 288 received community designs), clothing (class 02; 42 682 received community designs) and electronic devices (class 09; 32 930 received community designs) (Table 2).

2004

Special report: Community Trademarks

2007

2008

20000

19232 17628

16817

2009

19213

19048

14051 10475

10000

5000

0 2003

2004

2005

2006

2007

2008

2009

These statistics are based on the figures published on the website of OHIM (status mid January 2010).

Table 2: Most popular classes (2003 - 2009)

Class

Number of designs received

58 288

12.5%

42 682

9.2%

32 930

7.1%

30 201

6.5%

27 277

5.9%

The success of e-filing

E-filing continues to grow in popularity and is now the preferred route for many users. At present, around 90% of Community Trademarks applications, not including those submitted via the World Intellectual Property Organization, use the online route. For RCDs, e-filing accounts for around 60% of designs received, while around 20% of oppositions against Community Trademarks applications are filed electronically. Although the overall trend towards using online services can be seen in most countries, there continue to be national variations, with Italy and Spain the most active e-filers.

2006

25000

15000

e-filing

2005

Figure 7: Applications community designs per year (2003 - 2009)

germany leads community design received

The highest number of Community design have been received from German based companies, with around 110 608 designs between 2003 and 2009. Italy is next in line with 66 234 designs followed by the US (37 574) and France (38 248 designs) (Table 3).

76394

77272

70000

Table 3: Total number of designs received (2003 - 2009)

Country

Number of designs received

Germany

110 608 designs

Italy

66 234 designs

France

38 248 designs

United States

37 574 designs

DESIGN and TRADEMARK BEST OF BOTH WORLDS More and more companies are using both the Community design and trademark systems simultaneously to protect their intellectual property rights. It goes without saying that this trend has a clear impact on the growing number of Community Designs. Since 2003 we have seen an increase in the number of applications of community designs. Complementary use

Registered Community designs and Trademarks can and very often are used in a complementary manner. A strategy which results directly from the legal differences between both systems. A design can be useful as a fall-back solution when e.g.: • a shape is likely to be refused as a trademark; • a figurative sign seems descriptive; • an opposing right may be in sight. A trademark can be used to overcome the limitations inherent to the design legislation by: • prolonging protection beyond 25 years, especially when a design is commercially successful; • diminishing the risk of refusal; • avoiding the risk of opposition. In order to provide comprehensive legal advice, it is strongly recommended to check designs as well as searching or watching trademarks.

Examples of similar Community Designs and Community Trademarks with a different owner

Special report: Community Trademarks

COMMUNITY DESIGN

COMMUNITY TRADEMARKS

N° 307814-11

CTM 1756196

N° 757992-2

CTM 6045488

N° 755004-1

CTM 2222453

the need for effective searching a plea for the right strategy Being successful in a highly competitive market such as the EU largely depends on how brand owners manage their risks to get there. Like in golf, it is a matter of choosing the right club to take your swing. success of Community Trademarks raises great expectations

When the Community Trademark was launched in 1996 the general assumption was that it would attract around 15 000 applications per year. With hindsight, it is apparent that the popularity of EU-wide brand protection via a single application was underestimated. In reality, the Community Trademarks register grew at a rate of about 61 500 applications on average per year. The large reduction of the filing fee in 2009 continues to raise expectations for the future. The interest in Community Trademarks – and therefore the need for effective search strategies in Europe – will continue to increase.

effective strategies for searching the eu

Before entering the market, searching Community Trademarks would be an obvious choice. The decision on the breadth and depth of searching amongst the 27 member states of the EU is however subject to a variety of factors. Where will the trademark be used? What are the plans for the future? What is the available budget? Or in short: What risk is the brand owner willing to take when launching his trademark in the European Union? Reducing the risk of conflicts with competing marks, above all, is about setting the right strategy. Based on this strategy, effective searching should be executed. Thomson CompuMark provides a range of solutions to support brand owners and trademark professionals with this.

whatever european strategy you may have, you will find a solution of thomson compumark that matches it:

• Europe’s key filing registers? Search Package Centre of Europe • A specific set of countries in mind? Search Package EU Choice of 5 • Screen the entire EU in one go? Identical Search Package European Union • The highest possible level of certainty? Availability Search Package European Union • Direct online access to the EU? SAEGISTM on SERIONTM For more information, contact our Customer Services.

Special report: Community Trademarks

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THOMSON COMPUMARK

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