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Members of the European Union have adopted important new trademark legislation that makes it possible for trademark owners to consolidate and possibly expand their trademark rights in Europe.

The European Community Trademark Act (CTM Act), which took effect on April 1, sets forth a system to unify trademark law and procedure throughout the European Union. The CTM Act allows trademark owners to secure unitary trademark protection throughout the 15 EU countries, by requiring only one application, registration fee and renewal fee per mark, and by allowing a trademark owner to maintain trademark rights throughout the EU by using its mark in only one EU country.

The 15 countries that currently are members of the EU are Austria, Belgium, the Netherlands, Luxemburg, Denmark, Finland, Germany, Greece, Ireland, Italy, Portugal, Spain, Sweden, and the United Kingdom.

Before the CTM Act was implemented, a trademark owner wishing to ensure protection for a mark throughout the EU had to file 13 separate applications (one application can be made with the Benelux Trademark Office to cover Belgium, Luxemburg, and the Netherlands), understand and work with 13 national trademark laws, and face the possibility of dealing with 11 official languages. Because the CTM Act provides an alternative to the complexities of national trademark laws and procedures, it should substantially affect trademark protection opportunities and strategies.

Since the United States is a member of the Paris Convention, U.S. citizens and companies may file applications to register their trademarks under the CTM Act. The obtain CTM registration, it is necessary to file an application with the European Community Trademark office (CTMO) (formally; the Office for Harmonization in the Internal Market of the European Union), which has been established in Alicante, Spain. The application fee for up to three international classes, including search fees, is approximately US$1,268 (ECU975) plus US$260 (ECU200) for each additional class.

The application may be filed in any of the 11 official EU languages. Additionally, the applicant must choose one of five official CTMO languages (English, French, German, Italian, or Spanish) to be used for opposition, revocation or invalidity proceedings.

Various provisions and strategies can be implemented to ensure that English will be used to carry out the majority of communication with the CTMO. Additionally, applicants from countries outside of the EU must designate a professional representative from the EU.

A CTM applicant may claim Paris Convention priority based on a regular national application filed no more than six months before, in a country that is a party to the Paris Convention or to the World Trade Organization.

In addition, a CTM applicant may claim seniority based on a previously existing national registration for the same mark in one or more EU countries. This allows the owner to maintain the rights of the previously existing national registration. Once the CTM application is registered, the owner may then permit the national registrations to lapse and thus avoid paying multiple national renewal fees or assignment recordals.

The examination procedure consists of two phases: examination as to inherent registrability and examination based on relative grounds of refusal. In the first phase, the CTMO will examine formalities and the inherent registrability of absolute grounds for refusal (lack of distinctiveness, descriptiveness, etc.).

The CTMO will consider the meaning of the mark in all 11 official EU languages. Upon completing the first phase of the examination, the CTMO may refuse the application, accept the application as to inherent registrability, require a disclaimer, or partially refuse the application's specified goods/services.

While inherent registrability is being examined, the CTMO will search prior CTM applications and registrations. The individual national offices may also perform searches. The results of the national searches that are communicated to the CTMO will be passed to the CTM applicant with the CTMO search results.

When the CTM application is published in the Community Trademark Bulletin, the CTMO will also inform the owners of similar previously filed CTM applications and registrations. Weather the national offices will communicate their results to third-party owners of similar marks is unclear.

In the second phase of the examination the CTMO will consider third parties' prior rights (relative grounds for refusal) based upon oppositions made by the owners of such rights during the three-month opposition period. (The CTMO will not examine relative grounds of refusal ex office).

An opposition may be based on a prior CTM registration; national registration; international registration under the Madrid Agreement; or other right, such as a common law mark (e.g., in the U.K.). The opposition filing fee is approximately US$455 (ECU350).

The major potential disadvantage of the CTM system is that a successful opposition from a third party in only one country will prevent a mark from being registered under the CTM Act. (Similarly, an injunction against infringement granted in a CTM court and based on a CTM registration will be enforceable throughout the EU.) Furthermore, the loser in an opposition is required to pay at least partial opposition costs.

While these are very real concerns, please note that the CTM procedures encourage settlement during the two-month (extendible) period following notice of opposition. Furthermore, an applicant may choose to withdraw upon notice of opposition without being obligated to pay the opposer's fees. Finally, a CTM applicant may convert its application to a national application(s) upon withdrawal, rejection, or abandonment while maintaining the original CTM filing date.

There is an official fee of US$260 (EUC200) to convert a CTM into one or more national applications. Once the applicant converts the application into national application(s) with the applicable national trademark office(s), the application is subject to national trademark laws and fee requirements.

If the CTM application passes examination phases one and two, the CTMO will grant registration upon payment of the official registration fee. The official registration fee is approximately US$1,430 (ECU1,100) for up to three classes and US$260 (ECU200) for each additional class. The registration will be published in the Community Trade Mark Bulletin and will be valid for 10 years from the filing date.

As expiration approaches, the owner may file to renew the registration. Owners will only be required to pay a single renewal fee for each CTM to secure trademark protection for additional 10-year periods. Renewal fees are approximately US$3,250 (ECU2,500) for up to three classes plus US$260 for each additional class. This renewal fee is comparable to the cost of four or five national renewal fees, but is significantly less than the cost of renewing the national registrations in all 15 countries.

Furthermore, an applicant may simply renew its CTM and allow its earlier national registrations for the same mark to lapse, thereby avoiding multiple renewal fees for the same mark. This is one of the primary reasons to take advantage of seniority claims.

With all of the potential advantages of the new European Community Trademark Act, counsel should review their clients' current trademark portfolio and determine whether registration under the CTM Act may benefit them.

This article is produced by Interlaw, Ltd., An International Association Of Independent Law Firms In Over 75 Commercial Centers. Member firms are represented in Europe, the Americas and throughout the Asia-Pacific region. More information on this topic may be obtained from the Interlaw Secretariat

Interlaw Ltd. is not in any way affiliated with the Lectric Law Library or the authors of any other content contained therein, and does not endorse any materials appearing on this site which are not specifically identified as originating with Interlaw, Ltd. or its members. This document should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult an attorney concerning any legal questions you may have.