By 14 January 2019 the Member States of the European Union (EU) had to implement the New European Union Trade Mark Directive 2015/2436 of 16 December 2015 (the Trade Mark Directive). So, by now the Member States had to bring into force the laws, regulations and administrative provisions necessary to comply with most of the articles of the Directive. However, a couple of months after the deadline it can be concluded that not all of the three Baltic states have so far been successful in fulfilling this duty.
In this Newsflash we will highlight the contents of the Trade Mark Directive and what has changed or will be changed in law and practice as a consequence of implementing it in Estonia, Latvia, and Lithuania.
THE CONTENT OF THE NEW DIRECTIVE
The Trade Mark Directive is part of the new EU Trade mark reform, the goal of which is to “modernize the trade mark systems of the EU Member States by amending outdated provisions, increasing legal certainty and clarifying trade mark rights in terms of their scope and limitations.” Some of the innovations required by the Trade Mark Directive include:
- additions to the grounds for absolute refusal of registration, for example, by including registered plant breeds;
- the option to register certification marks;
- changes in counting the non-use period: it will be counted not from the day of registration, but from the day when the registration procedure is finalised (when the period for filing an opposition has expired).
Additionally, the requirement that a trade mark must be graphically depicted has been deleted. This means that from now on non-graphic signs such as short films, holograms or taste marks may also be registered.
The new Trade Mark Directive also contains two more rights for trade mark owners: Article 10(4) empowers customs authorities to detain potentially fake or counterfeit goods originating from ‘third countries’ if they are passing through their EU Member State without being released for free circulation there, while under Article 11 trade mark owners should be able to stop counterfeiting also in relation to packaging, labels or other materials to which a trade mark is applied.
Finally, the payment system has been changed so that a trade mark application can be more economically advantageous.
More details on the innovations in the Directive are described below under descriptions of state implementation procedures.
This time, Lithuania appears as the most diligent of the three Baltic states. There the regulations on trade marks changed exactly as the clock struck twelve on New Year’s Day – on 1 January 2019, amendments to the Law on Trade marks came into force.
The main changes are as follows:
- The requirement for a graphic representation of the mark was removed.
- Other changes in comparison to the previous law:
- The possibility to register certification marks.
- Mandatory out-of-court procedure at the State Patent Bureau for revocation or declaration of invalidity of a trade mark (previously trade marks could be recognized as invalid or cancelled only by filing a claim with the court).
- Provisions regarding observations by third parties in accordance with Article 40 of the Directive.
- During opposition procedures or applications to invalidate or revoke a trade mark application, and at the joint request of the disputing parties, the possibility to request a minimum of two months delay in order to allow the parties to attempt a friendly settlement.
- The right of a registered trade mark owner to prevent all third parties from transiting goods labelled with the owner’s trade mark across Lithuania unless the transporter proves that the trade mark owner is not entitled to prohibit placing those goods on the market in the country of final destination.
- Non-use of a trade mark as a defence in infringement proceedings.
- The list of absolute grounds for refusing registration and invalidating the registration of a mark was extended by including points (k) and (l) of Article 4 (1) of the Directive.
- The grounds for not registering a trade mark or for declaring a registered trade mark invalid were clarified and extended by including points (a) and (c) of Article 5 (3) of the Directive.
Additionally the new Trade Mark Law was accompanied by changes to official fees as stated in the Law on Fees for Registration of Industrial Property Objects. Generally from 1 January the official fees are increased, while the administrative burden is reduced. For example, the basic fee for trade mark registration, if only one class of goods or services is indicated in the application, was increased from EUR 69 to EUR 180. However, at the same time two previously applied fees (trade mark application filing (EUR 69) and trade mark registration fee (EUR 69)) were combined into one. Also other fees ‒ eg, fees for filing an appeal and for opposition ‒ were increased, while the fee for recording transfer of ownership was reduced.
Additionally, new fees were introduced for accelerated examination of a trade mark application and for examining a request for invalidation or cancellation of a trade mark registration before the Appeals Division of the State Patent Bureau. Finally, filing fees must now be paid when applying for trade mark registration ‒ previously payment could be made within a month from the filing date.
Estonia is the second Baltic state to implement the changes – the new version of the Trade Marks Act was published on 19 March 2019 and entered into force on 29 March. During the development of the draft act, several inconsistencies arose regarding guarantee and certification mark provisions, referring to the Directive’s Article 28(1), as well as general use of wordings, translations and procedural provisions.
Adoption of the new version of the Trade Marks Act brings the following main changes in Estonia:
- The requirement for a graphic representation of the sign was removed. New kinds of trade marks can be registered, as long as signs are represented in a clear, objective and accessible format, such as audio or video files.
- Absolute grounds for refusal are extended and now include, eg, signs which consist of plant variety denominations and signs depicting traditional terms for wine and traditional specialties guaranteed under EU regulation.
- Guarantee marks are replaced by certification marks, while existing guarantee marks remain valid.
- The Estonian Patent Office will no longer conduct examinations of infringement of relative grounds, meaning trade mark proprietors will have to conduct their own searches for infringing identical or similar trade marks – the proceedings in general should become simpler and smoother as the prominence of electronic proceedings has increased significantly under the new Act.
- State fees for registering a trade mark are reduced.
- Dispute resolution will also be simpler and more effective: the first mandatory point of action against the proprietor of a trade mark for the exclusive right of the proprietor of the trade mark to be declared null and void will now be an out-of-court board of appeal formed by the Patent Office.
Finally, in Latvia it has been decided to draft a completely new law instead of preparing amendments to the Law On Trade Marks and Indications of Geographical Origin, so the implementation process is taking more time. The current law was adopted in 1999 and has been amended numerous times, so it was decided that preparing a completely new law would be more efficient. However, the main structure and principles will remain the same.
The Ministry of Justice has set up a working group for implementation of the Trade Mark Directive, so there is still quite a long way for the new law to take shape: after the draft is ready it has to be submitted to the Cabinet of Ministers, and then adopted by the Saeima (the Parliament). An optimistic prognosis is that the new law might come into force in early 2020.
However, it must be noted that the Latvian Law on Trade Marks already incorporates most of the requirements of the Trade Mark Directive, as its drafters were significantly influenced by the European Union Trade Mark Regulation. For example, the law already recognizes the possibility to register combined as well as special trade marks, which include light and sound signals and any other form of representation.
With respect to procedural issues, oppositions and appeals which arise from decisions by the Latvian Patent Office taken within trade mark registration procedures are already settled by administrative procedure in the Industrial Property Board of Appeal. The procedure will only have to be supplemented with:
- the possibility to raise an annulment claim ‒ in respect of a trade mark registration ‒ with the Industrial Property Board of Appeal after the period of opposition has expired;
- certain procedural amendments to the Law on Industrial Property Institutions and Procedures as well as to the Civil Procedure Law with respect to sanctions for a breach of industrial property rights.
This means that most of the innovations from the Directive already exist in the Latvian legal system, which is the reason for the lack of haste.
Nevertheless, it should be noted that in those EU Member States where the Trade Mark Directive has not yet been implemented, on the basis of EU law the Directive gains direct effect. In addition, Latvia may face infringement proceedings from the European Commission for failure to implement the Trade Mark Directive in due time.