The European Union’s (EU’s) Community Trademark Regulation describes a trademark as “ any sign capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.” Even sounds can receive trademark protection, as long as the sound distinguishes the product and can be graphically represented (for example, through a musical stave).

US registered trademarks do not provide protection outside of US territories. If a company wants to protect a trademark asset in the EU, it must register the trademark with an individual Member State or with the EU in the form of a Community Trade Mark (CTM). Registration is especially important in the EU because, unlike in the US, where trademark protection is based on “first use" as well as registration rights; the trademark registration system in the EU is based on a "first-to-file", or more precisely, a “first to successfully register” approach.

• Legislation

American companies interested in marketing, manufacturing or selling products and services in the EU must consider whether to obtain international, EU, or national trademark protection.

International Law

WIPO created the Madrid System for the International Registration of Marks (the Madrid System), which is governed by two treaties: the Madrid Agreement Concerning the International Registration of Marks (Madrid Agreement) and the Protocol Relating to the Madrid Agreement (Madrid Protocol). This system allows applicants to file a single application where protection is sought in any Member State. The Madrid System, which applies to all EU Member States, allows applicants to submit a single application, which may have effect in several countries, as designated by the applicant.

The EU and the US are members of the Madrid Protocol only. Under the Madrid Protocol, companies may have their trademarks protected in any of the countries that have joined the Madrid Protocol by filing a single “international application” directly with their own national or regional trademark office. The resulting “international registration” may then be used to seek protection in Madrid Protocol countries, each of which apply their own rules and laws to determine whether or not the trademark may be protected in their jurisdiction.

European Union Law

Trademarks may be registered either within individual Member States, or across the entire EU’s twenty-seven Member States, in the form of an EU Community Trade Mark (CTM).  The CTM is administered by the Office for Harmonization in the Internal Market (OHIM) in Alicante, Spain.

The CTM system creates a unified trademark registration system in Europe, whereby one registration provides protection in all EU Member States. The “single” nature of the CTM (single application, single language, single fee, single administrative center) also makes it singly fallible. A CTM application will be refused for the entire EU if there are grounds for refusal in any one of the twenty-seven EU countries – this is known as the “all or nothing” concept.

Similarly, if a registered CTM is successfully challenged because of a competing claim in one EU Member State, it immediately becomes invalid for the entire EU. This risk of EU-wide refusal during the examination stage or cancellation after registration need not dissuade businesses from starting first with a CTM registration. An unsuccessful CTM application or registration may be “converted” into individual EU national trademark applications and retain the priority filing date of the CTM application. In practice, this means that if a company applied for a CTM on 1 January 200x then their subsequent EU national applications would be backdated to 1 January 200x.

National Law

If your company is targeting only a limited number of EU countries, it may choose to register its trademark in individual Member States. Information about national Member State laws is available from OHIM.

• Registration

International Registration. The Madrid System which is governed by the Madrid Agreement and the Madrid Protocol, allows a company to protect its trademark in several countries by simply filing one application directly with its own national or regional trademark office. An international trademark that is registered under the Madrid System maintains the same effect of a registration in the Member State(s) that the applicant designates. In other words, if the trademark office of a designated country does not refuse protection within a specified period, the protection of the mark is the same as if it had been registered by that country’s trademark office. The Madrid System also simplifies greatly the subsequent management of the mark, since it is possible to record subsequent changes or to renew the registration through a single procedural step. Requests for protection in additional member countries may be filed at a later time.

The US and the EU are both parties to the Madrid Protocol only. Under the Madrid Protocol companies can use their US registered trademark application or registration as a basis for filing an international application through WIPO’s International Bureau. Since the EU joined the Madrid Protocol, an international application may designate the “European Community” and thereby seek trademark protection in all the EU countries. It is important to remember that the Madrid Protocol does not give a single “internationally effective” trademark. Rather, it provides a streamlined process for companies to secure a bundle of different national/regional marks, which can include the EU’s CTM.

European Registration at OHIM. The Community Trade Mark is administered by the Office for Harmonization in the Internal Market (OHIM) based in Alicante, Spain. The CTM registration is valid for ten years and may be renewed indefinitely. A basic renewal fee and fees for each class of goods or services in excess of three must be paid; these fees are doubled in the case of collective marks.

To register a CTM, a company may go directly to OHIM to complete a single application, or use an EU Member State’s national trademark office that will subsequently forward the application to OHIM. Generally speaking, it is wise to have an agent help US companies with the registration procedures in the EU.

If your company does not have an EU commercial establishment or business presence it can still apply for a CTM. However, note that without a legal/business presence in the EU, your company must have an EU based approved agent or legal practitioner for all dealings with OHIM, except for the initial application procedure.

If EU-wide protection is requested in an international registration under the Madrid Protocol, OHIM has up to 18 months to notify WIPO of any refusal to extend protection. If OHIM fails to make notification within 18 months, then the holder of the international registration is automatically granted protection of its mark in the EU.  OHIM processes applications that arrive via WIPO in exactly the same way as those that are filed directly with their office. That is, OHIM conducts the same examination, publication, opposition period, and registration phases.  The only difference between filing under the Madrid Protocol and going directly to OHIM is that the Madrid applications for a CTM are strictly limited to the eighteen-month period.

OHIM Registration Procedure. The CTM registration process with OHIM consists of five stages: application, examination, publication, opposition, and registration.

Application: Companies may apply for trademark registration with OHIM by hand-delivery, mail, fax, or via an on-line application. If your company applies off-line, you will need to complete the OHIM application form, specify the goods and services for which protection is requested (using the internationally recognized NICE classification system – e.g. Class 25 is “Clothing, Footwear and Headgear” and Class 38 is “Telecoms”), and attach a reproduction of the trademark.

Examination: OHIM first checks to see whether the application is complete and then assesses whether or not the proposed trademark qualifies as a mark. If the proposed mark is generic, descriptive, or relates to a well-known trademark owned by another party, OHIM will refuse registration of the mark on “absolute grounds.” To qualify for registration your mark must be distinctive, i.e., it must serve to distinguish the source your goods or services from those of other companies’.

Publication: If there are no "absolute grounds" for refusing registration, a company’s application is published in the Community Trade Marks Bulletin. Your company may choose not to proceed if the Community or national search reports on identical or similar CTMs or CTM applications reveal a potential conflict. OHIM will send your company this Community search report during the registration process, together with any national search reports provided by Member States. Please note that national search reports will become optional and subject to a separate fee for all applications filed on or after March 10, 2008. Applicants should conduct individual trademark searches prior to filing an application to ensure that the mark they have chosen is not already registered for use in connection with the same or related goods or services.

Opposition: Once the application is published, other companies or individuals have three months to challenge your proposed trademark on “relative grounds,” i.e., the existence of earlier trademark rights. Such “opposition” can only be based on prior rights such as CTMs, national trademarks, well-known trademarks, or “use based” trademarks. If there is a challenge, you will be notified and OHIM provides you and the challenger with a cooling off period before the formal opposition process begins. If no agreement is reached within two months, OHIM’s “Opposition Division” decides the merits of the challenge. It is worth noting that over 70% of all opposition cases are settled by the interested parties themselves at the cooling off stage without the involvement of OHIM.

Registration: If there is no challenge to your company’s application, or if the challenge is unsuccessful, your trademark enters the Register of Community Trade Marks and becomes an official CTM.

CTM direct or CTM via an international application – what difference does it make?

All the key advantages of the CTM system apply whether or not the application is made directly to OHIM (including via an EU national trademark office) or via the international route under the Madrid Protocol. However, there are some differences worth noting:

Fees: The cost of trademark protection will vary based upon a number of factors including the type of trademark that you want to protect and the number of international classes of goods and services selected.  For specific information on current fees, see the WIPO website for fee information and/or OHIM’s list of fee information.

Representation: The Community Trademark Regulation requires all non–EU applicants to designate an EU-based professional representative for all proceedings before the office. This representative can either be any legal practitioner established in the EU who is qualified to act before the national trademark office of the country where he or she is established, or can be drawn from a list of professional representatives collated by OHIM. However, you do not need an EU representative to file the initial application. If you apply for a CTM through the Madrid Protocol there is no requirement to use an EU-based representative when filing the international application. However, if OHIM raises an objection at any stage, then EU representation becomes compulsory.

US trademark ownership: You need to have a US trademark registration or application in order to apply for a CTM via the international route. Also, if you obtain a CTM through an international application based on a US trademark registration or application, then your CTM will be reliant on the continued validity of the US trademark for five years – after that it stands on its own merits. If your US trademark is refused or cancelled during this period then your CTM and any national trademarks obtained through the international registration will fail. It may be best to have a US trademark registration in hand before applying for an international registration through the Madrid Protocol in case the USPTO refuses to register the mark. If it does, then the international registration automatically fails. If the US registration/application that formed the basis of the international registration is cancelled or refused, then you can “transform” the international registration into national applications (including a CTM). The transformation request must be made in each individual country within a specified time period, paying new filing fees, and retaining attorneys in each country to assist. On the positive side, the original filing/priority date of the international registration will be maintained.

Classification of goods and services: If you apply directly for a CTM you can select the goods and services you wish to cover with your trademark. However, if you apply via the Madrid Protocol, the description of goods and services must be the same or less than those in the US application or registration. As product categories for trademark protection are typically more strictly defined in the US, filing an international application which requests CTM protection may cause you to have to limit the scope of your identification of goods and services more than you would otherwise have chosen to do. In other words, you need to be aware that applying for a CTM via the international route may result in protection that is narrower than you could have obtained had you filed individual national applications or a direct CTM application.

National Registration. If your company targets three or fewer EU Member State markets, national registration is generally less expensive. However, since the costs of trademark protection in individual EU Member States will vary, companies are encouraged to check the current trademark fees of the relevant EU Member States before making a final decision as to the appropriate application method. Furthermore, if your company’s CTM application is refused, or your CTM registration is later revoked following a successful challenge, then obtaining national trademark protection from individual EU Member States is the way forward.

• Coverage

The CTM gives its proprietor protection against the reproduction or imitation of his trademark throughout the European Union. The CTM is also transferable and may be licensed.

The CTM gives its proprietor the right to prohibit all third parties who do not have his consent from using the same or similar marks for identical or related goods or services as those protected by the CTM. Similarity is judged by reference to the likelihood of confusing the public as to the source of the goods and services. The existence of a reputation in the EU enhances the protection given to a CTM. The prohibition from using identical or similar marks is extended to goods or services that are not similar to those for which the trade mark is registered if such use takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. Contractual licenses granted in respect of the CTM may be exclusive or non-exclusive and cover the entire EU or just specific Member States.

Where the proprietor of the trademark has proceeded or agreed to market goods under this trademark in an EU Member State, he cannot prohibit their free movement in the European Union. This limitation on the rights conferred by the Community trademark is derived from the rule of exhaustion of those rights within the Community, which is also applicable to national and international trademarks of Member States of the European Union. Parallel imports of products covered by the Community trademark from countries that are not members of the European Union are not subject to this rule and to this limitation, with the exception of those countries party to the Agreement on the European Economic Area.

The CTM may be transferred in respect of all or part of the goods or services for which it has been registered. The transfer does not necessarily involve a transfer of the company. However, such a transfer must not result in the public being misled, in particular with regard to the type, quality or geographic origin of the goods and services.

• Market Entry Planning

Companies should apply for trademark protection in the EU as soon as possible and must exercise any priority rights available so that the effect of the registration can be backdated. According to the terms of the WIPO Paris Convention for the Protection of Industrial Property, if you apply for a trademark in the US and then apply for a CTM within six months, the application date of your US mark will be taken as the priority date of your CTM. Because the CTM system is essentially first to file, it is important to make sure you exercise any available rights to an earlier filing date.

The cost of trademark protection will vary based upon a number of factors including the type of trademark that you want to protect and the number of international classes of goods and services selected. For specific information on current fees, see the WIPO website for fee information and/or OHIM’s list of fee information.

Combining Trademark Protection with other forms of IPR

A product’s “look” can be registered as a design and/or trademark. While the registered design protects the product’s novel and individual appearance, the trademark links it uniquely to the producer and helps distinguish it in the target market. In such cases companies should be careful of registering the trademark first since this can impact the novelty criterion for design registration. Sometimes design protection can provide a versatile alternative to 3-D trademarks when a company looks to protect the shape of its products. For example, a 3-D trademark cannot be registered if the shape of the product is essential to its function, whereas a design application can only be turned down on “functionality” grounds if the product can only work if it is designed in that way.

• Enforcement

In addition to the practical benefits of a single application in a single language with a single administrative center, the CTM also provides a single enforcement mechanism. If your registered mark is copied or imitated you can take the accused party to a CTM court (national courts designated to hear CTM cases) and get a decision that is valid across the EU-27. This means you will not have to litigate in individual countries, in different languages and under different national laws. The CTM also makes it easier to fulfill the "use or lose" requirement for EU trademarks because you only need to use the mark in one EU Member State to fulfill the use requirement. If you have separate national registrations you need to use the mark in each Member State’s market.

Enforcing a European trademark can be done both civilly and/or administratively. While there are international agreements, such as Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), that have the basic standards for effective IP enforcement procedures, under the EU’s Enforcement of Intellectual Property Rights Directive, enforcement is a Member State responsibility.  Under the Directive, Member States must provide measures, procedures and remedies necessary to ensure the enforcement of IPR that are fair and equitable. All EU Member States must provide “effective, dissuasive, and proportionate” remedies and penalties against those engaged in counterfeiting and piracy.

The abovementioned Directive has led many states to adopt national provisions on civil remedies more closely in line with “best practices” standards. These standards include procedural protection, which covers evidence and protection of evidence, and provisional measures such as injunctions and seizure. There is also a “right of information” that allows judges to gain access to names and addresses of those involved in distributing the illegal goods, and the details about the amount of goods involved and the prices. Remedies include the infringing product’s destruction, recall of illegal material, and permanent removal of that product from the EU market. The legitimate trademark holder may be entitled to damages and/or injunctive relief. Thus far, the EU has no criminal remedy available.

Under the EU Regulation concerning customs action against goods suspected of infringing certain IP rights, the right-holder may file a written complaint with the relevant customs authorities seeking suspension of the release of imported merchandise. Such an application for action must include accurate and detailed descriptions of the product in question, information about the nature of the fraud, and the trademark holder’s contact information. The law applicable when deciding whether an intellectual property right has been infringed is that of the Member State where the presumably infringing product was discovered. Member States may also enable the customs authorities to have the infringing product destroyed.

The law applicable when deciding whether an intellectual property right has been infringed is the law in force in the Member State where the goods were found. In accordance with national provisions, and with the right-holder's agreement, the Member States may now set up a simplified procedure to enable the customs authorities to have the goods destroyed. If the infringement of an intellectual property right is not established within a set deadline, the detention order is lifted and the goods are released once the necessary customs formalities have been discharged. The deadline is shorter in the case of perishable goods.

Companies wishing to bring a claim for infringement have two options: using a Member State court where an infringement occurred or using the Member State’s court where the alleged infringer is domiciled.

Under the first option—the court of the Member State where the infringement occurred—the court will have jurisdiction to the extent that the act was committed within the territory of the Member State where that court is situated. The second option—choosing to use the court of the Member State where the defendant is domiciled—is advantageous because it allows a party to join all claims in a single proceeding. This is the case because the Member State court has jurisdiction over all infringement acts within the territory of the European Union. Judges sitting at EU trademark courts are specialized in trademark claims and their decisions are enforceable in all EU Member States.

• Conclusion

US exporters should always carefully consider seeking intellectual property protection in foreign markets in which they wish to do business. The European Community Trademark provides an effective means of protecting your trademarks across the EU’s 27 Member States. It is an opportunity that has not been lost on US companies: almost one-fourth of the CTMs registered between 1997 and 2004 originated from applications by US companies—nearly 58,000 trademarks.

• Helpful Links

International Legislation

Parties to the Madrid System:
http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/madrid_marks.pdf

EU legislation relating to trademarks

Community Trade Mark Regulation
Council Directive on Approximating Member States Trademark law
 

The Community Trademark

Office of Harmonization in the Internal Market – OHIM:
http://oami.europa.eu

Electronic Renewal of Community Trademarks
http://oami.europa.eu/en/erenew.htm

FAQs on the Community Trademark:
http://oami.europa.eu/en/mark/marque/question.htm  

Ten Good Reasons for Using the Community Trademark:
http://oami.europa.eu/en/mark/role/raisons.htm  

OHIM’s Community Trade Mark Bulletin:
http://oami.europa.eu/bulletin/ctm/ctm_bulletin_en.htm  

OHIM’s Online Community Trademark Application:
https://secure.oami.europa.eu/efiling/efservlet?langId=EN&result=init&reloadable=YES#top

Community Trademark Statistics:
http://oami.europa.eu/pdf/office/SSC009%20-%20Statistics%20of%20Community%20Trade%20Marks%202005.pdf

International trademark applications

USPTO Guide to the Implementation of the Madrid Protocol in the US: http://www.uspto.gov/web/trademarks/madrid/madridguide.htm

OHIM and the Madrid Protocol:
http://oami.eu.int/en/mark/madrid/default.htm

Member State Law

Applicable Trademark Law in Member States:
http://oami.europa.eu/en/mark/aspects/natlaw/default.htm

General

The Paris Convention for the Protection of Industrial Property: http://www.wipo.int/treaties/en/ip/paris/

World Intellectual Property Organization’s website for SMEs:
http://www.wipo.int/sme/en/

The US Patent and Trademark Office:
http://www.uspto.gov/

DG Internal Market – dedicated website on Trademark legislation:
http://www.europa.eu/comm/internal_market/en/indprop/tm/index.htm