EU trade mark reforms could have 'unintended consequences' for cost of national marks, warns expert

Trade mark law specialist Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said whilst many businesses would welcome reforms that will reduce the cost of registering and renewing Community trade marks, he warned there could be "unintended consequences" for national trade mark registries and companies looking to protect their brands on a national basis only.

Connor was commenting after EU institutions confirmed that a political consensus has been reached on reforms to the existing Trade Mark Directive and Community Trade Mark Regulation. Formal adoption of the reform package is expected in "the coming weeks", the European Commission said. Both the European Parliament and Council of Ministers must vote through the changes.

A significant part of the reforms is the move to a new 'one-class-per-fee' system, meaning a separate application and renewal charge will apply for each class of goods that brand owners wish to obtain Community trade mark protection for.

Currently, brand owners can pay €900 to obtain Community trade mark cover for either one, two or three classes of goods. Under the new system it will cost them €850, €900 and €1,050 to register Community trade marks in one, two or three classes respectively.

The new fee structure would reduce the cost of renewing Community trade marks. It currently costs €1,350 to renew Community trade marks covering goods in three classes, but this will fall to €1,050 under the new system. It will cost €850 to renew Community trade marks in a single class.

Other changes being brought about under the agreed reforms include the harmonisation of trade mark registration procedures across the EU, including at national trade mark registries. Businesses will also be able to challenge applications for, or already-registered, trade marks before national trade mark registries without having to go to court.

"The reform package does not constitute the root-and-branch overhaul of trade mark law that many brand owners and practitioners have called for," Connor said. "It will therefore not address concerns that the existing framework does not provide sufficient certainty to businesses about the protection to their brands."

"Making the fee structure for applying for and renewing Community trade marks more attractive will be welcomed by many businesses that operate on a pan-EU basis. However, reducing the cost differential between pan-EU registration and renewals and the equivalents run by national trade mark registries for national trade marks could prompt a shift away from the system for national protection towards greater reliance on Community trade marks by brand owners," he said.

"Such a shift could force national registries to increase the cost of registering and renewing national trade marks. This would have an impact on businesses that only operate in one or two countries within the EU and which have no need for pan-EU trade mark protection for their brands. It would also affect businesses that do operate on a pan-EU basis but which are precluded from registering a Community trade mark by pre-existing rights, for example in cases where the word they want to protect is considered a common word, and therefore ineligible for trade mark protection, in a particular language in an EU country," Connor said.