A week has famously been said to be a long time in politics, but when measured against the prospect of perpetual legal protection even a year seems a fairly short time in trade mark law. In June 2012 Europe's trade mark fraternity was anxiously awaiting a ruling which, it seemed, would have monumental consequences for owners of granted national and Community trade marks, for applicants for new rights and for the operational and administrative side of trade mark grant and opposition processes. A year late, what has changed -- and what perhaps remains to be changed? In this thoughtful guest post, Katfriend Richard Ashmead takes us through the issues:
Before and after
IP TRANSLATOR
With the Appointed Person’s (“AP”) May 2013 appeal decision, CIPA’s
IP TRANSLATOR case is all but over, with the appeal being upheld. The AP concluded that
the refusal of the application was based on the erroneous assumption that
translation services fell within the scope of the class 41 heading words used in
the application, in essence as the “class-heading-covers-all” (“CHCA”) approach
to construing the list of services was incorrect in EU law while the
literal, “means-what-it-says” (“MWIS”), approach was. It is now time for some
thoughts on what has changed in law and in practice, and whether the two
agree.
Before IP TRANSLATOR
The core issue was how to construe the scope of the list of
goods/services in an EU application or registration. Not difficult, you might
think, in a system requiring a verbal claim to define the monopoly rights
sought, and indeed most intellectual property offices (IPOs) applied the literal MWIS approach to all applications
and registrations before them (eg UK,
France, Germany and Benelux). OHIM largely agreed but made a single exception
for Nice class headings in registrations, construing them as having the same
scope as “All goods in class XX” ie as
CHCA, while generally applying MWIS to all other registrations before it. This
two level approach, confirmed in OHIM’s Presidential Communication 4/03 (in
effect its practice guidance), was followed by some other IPOs too, eg Finland and Hungary.
This is the “class heading dispute”, really a matter of differing
IPO practices, but it had ramifications on infringement too although I have yet
to see any collated report of the attitudes of CTM and national courts to the
dispute. The current Trade Mark Directive (“TMD”) at recital 10 says that it is
“.... fundamental, in order to facilitate the free
movement of goods and services, to ensure that registered trade marks enjoy the
same protection under the legal systems of all the Member States”,
a statement supported
by a trenchant
UK court comment that:
“I do not think that there is room for them [ie MWIS and CHCA] to coexist within the framework established for the co-ordinated
protection of trade marks in the Member States and at the Community level”.
Recital
10 makes OHIM’s two level internal approach questionable at the least,
and makes the adoption across the EU of MWIS here and CHCA there a breach of a
fundamental harmonisation requirement. In practice we had no certainty in law
on the goods/services scope of EU class heading registrations, of which there
are many.
Angels, dancing and pin heads
Is the number of applications and marks based on class headings a real concern? A brief run through the
TMView database shows nearly a million CTMs accounting for about 37% of the trade mark coverage of Germany (ie nationals plus CTMs), 64% for UK and
96% for Slovenia, and an OHIM speaker recently reported that about one third of CTM
applications are based on class headings. I cannot say how uniformly that ratio
applies across the whole EU register, but it seems that somewhere around 300,000
class heading CTMs is a fair place to start, all effective in each EU member
state. Most if not all EU national IPOs also allow or encourage class heading
filings, and all class headings, being avowedly exemplary, are narrower
than their full class content, so applying the CHCA approach to class heading registrations
necessarily gives broader scope than MWIS. The numbers of class XX goods not within the class XX
heading wording may not be large but that can belie commercial importance, for
example for computer software, clearly in class 9 but not until recently in the
Nice class 9 heading. Significantly, the same OHIM speaker reported that 50% of
CTM oppositions have a class heading aspect. Uncertainty of the legal scope of
class heading applications and registrations certainly matters.
The IP TRANSLATOR case
Its substance is really of no
great import now, but it was designed to get a TFEU Article 267 reference to
the Court of Justice of the European Union (CJEU) for a ruling on which of MWIS and CHCA was correct in EU law. We
sought and expected no more than clarification of existing EU law in that
regard, ie did not see the likely outcome
as being new law. The case on appeal produced a neat progression of three reference
questions from the AP, Geoffrey Hobbs QC, which the CJEU answered in its June 2012 judgment.
The result was the demise of CHCA in application practice with a finding that
lists of goods/services must be clear and precise of scope as they stand on
filing whether class heading wordings or not (see answers 1 and 2 of the CJEU
judgment).
Unfortunately the court failed specifically
to answer the AP’s third reference question, essentially “Is OHIM’s CHCA
practice correct in law?” possibly seeing “No” to be implicit from its answers
1 and 2, but OHIM rescinded its practice guidance 4/03 immediately after the
court’s judgment. What the court did though was to present, in place of an answer to
the third reference question, a wholly new application practice whereby an applicant
can file with a class heading wording but indicate that it wants that wording to
be construed instead as some or all of the wording of the alphabetical list
for the relevant class. So a class XX heading application is read by default
as MWIS as any other list of goods/services, but if the applicant says that
what it meant on filing was the current Nice class XX alphabetical list, that
is acceptable – as another form of special case treatment for class headings.
All the classes’ alphabetical lists contain goods/services which are not within their class heading wordings, so add scope (although may also narrow
in other ways), resulting in widespread concern among practitioners and IPOs
that this new practice is in conflict with the court’s answers 1 and 2, and may
(and probably does) involve broadening .
The IP TRANSLATOR case necessarily targeted CHCA. Although
not stated as such reference question 1 reading
“Is it necessary for the various goods or services covered by a trade
mark application to be identified with any, and if so what particular, degree
of clarity and precision?”
was aimed
at setting the scene at why CHCA was not good in law, with eyes on the Sieckmann requirements for mark-definitions
and on the fundamental TMD requirement for registrations to enjoy the same
protection under the legal systems of all the Member States. The new
alphabetical approach to determining goods/services scope from rather
than in the applicant’s wording merely seeks to replace one example of special
case treatment (CHCA) with another, and with it less clarity and precision.
After IP TRANSLATOR
The CJEU judgment has, sadly, not fully settled the
class-heading dispute. It has been accepted throughout the EU as requiring MWIS
as the base approach to construing the scope of a list of goods/services, and
has for the most part been taken to kill CHCA, but IPOs around the EU are
struggling with how to implement the court’s anomalous third answer.
Most have put in hand an official practice allowing an option on filing to use
a class XX heading wording with an indication of intent to cover the class XX
alphabetical list -- whereupon the application will be amended by the IPO
concerned to the wording of the class XX alphabetical list, probably with a
degree of resignation that the will of the CJEU must be heeded, albeit likely
to cause challenge at some point. Interestingly Germany has not introduced this
new “class-heading-covers-alphabetical-list” filing practice as unclear in the
light of the third answer’s conflict with answers 1 and 2. OHIM has
made several attempts to adopt it, currently now amending a class XX heading on
the applicant’s request to the totality of the wording of the class XX heading
and the class XX alphabetical list, with no apparent concern on broadening.
OHIM has though gone further in an official view that
existing CTM class heading registrations benefit from the court’s alphabetical-list application practice and can now be deemed to
have been intended (eg in 1996
pre-IPT or 2004 post-IPT) to mean not the full class content under CHCA, but
the same as the relevant class alphabetical list. OHIM’s justification seems to
be that the court’s June 2012 judgement established new law so that CHCA as an
opinion made official practice still stands as legally correct at the time.
I mentioned earlier that, in designing the IP TRANSLATOR case, we sought and expected no more than clarification of existing law, and I
confess that my expectation was that CHCA would not prevail, eg in view of legal problems like its
rendering similar goods in a class as identical goods through being “directly
related” (thus over-riding the concept of similarity within a class), its
inconsistency with the Sieckmann mark
criteria, and its scope broadening effect. It is no surprise, then, that I see the
court’s requirement for clarity and precision as a statement of correct
pre-existing EU law against an incorrect CHCA opinion, ie not as a statement of new law.
An AP’s decision may not cast a long shadow across the EU,
but I would suggest that the views of an AP with the personal experience and
authority of Geoffrey Hobbs QC are worth serious thought. He found in his
appeal decision that the CJEU’s judgment gave no temporal limit to its effect so
that its requirements for clarity and precision applied as EU law throughout
the term of the current Directive and CTMR. That, if correct, means the CJEU killed
CHCA as an impermissible special case treatment for any EU application or
registration, including all extant CTMs, and must likewise render stillborn the “class-heading-covers-alphabetical-list” approach in the same way, whatever
OHIM thinks.
That said, OHIM evidently wants to keep some sort of
broadening class heading special treatment if it possibly can. I have come
across suggestions of an OHIM liability in effect for mis-selling class XX
heading CTMs as covering “All goods in class XX”, although I am unclear whether
there is any such liability in law. Liability or no, I have heard OHIM and
others proposing that existing class XX heading registrants may be entitled to
“All goods in class XX” coverage under a legal right of expectation based on OHIM’s
official espousal of the CHCA approach in 4/03 and, less formally, earlier. The extra scope of CHCA “lost” through the
affirmation of MWIS could indeed be a concern for some registrants, but what of
the equivalent expectation of a third party who correctly assessed an
infringement risk on the basis of the MWIS approach? Should the latter now be
found to infringe?
Further AP guidance?
Readers will have taken on board my feeling that the views
of Geoffrey Hobbs QC on trade mark legalities are most likely to be
authoritative and, well, right, but I do have some trouble with one aspect of
his June 2013 appeal decision. The main interest by then was whether the
court’s third answer could be ignored as anomalous, if not whether it
had any effect on the straightforwardness of answers 1 and 2, and whether a
re-reference was needed to resolve the conflict. My trouble, perhaps more
puzzlement, was that I could not see how the court’s answers could be
reconciled. The AP did not re-refer the case as he did not accept that the:
“…. judgment of the Court is unclear
or inconsistent with regard to any of the matters on which there appear to be
differences of approach between and among the competent authorities”.
In that his point seems to be that a class heading
application may in itself lack the required clarity and precision because of
the existence in parallel of two conflicting interpretation approaches (ie MWIS and CHCA) such that a class
heading list of goods/services
“might or
might not be intended to identify less than 100% of the goods or services
falling within the relevant class”.
With due deference I am not convinced
that the currency of two irreconcilable opinions, one of which has now been
held by the CJEU to be incorrect, needs to be accommodated in a new filing
procedure which itself introduces a lack of clarity and precision. Why not just
tell applicants as part of the filing procedure that CHCA, and any other
special interpretation of class headings, is now dead in law and that all lists
of goods/services will only be read literally to means what they say? Significantly Article 40(5) of the new
directive proposal (discussed below), which the AP may well not have seen when
concluding his decision, is specific on that, reading thus:
“The use of general terms, including the general indications of the
class headings of the Nice Classification, shall be interpreted as including
all the goods or services clearly covered by the literal meaning of the
indication or term. The use of such terms or indications shall not be interpreted
as comprising a claim to goods or services which cannot be so understood”.
Does that wording, if it becomes law, kill the
ongoing attempts to use the court’s third answer to afford class
heading applications/registrations special case treatment of scope?
In conclusion (nearly)
The need we faced in bringing the IP TRANSLATOR case was to
target the CHCA practice and support MWIS, for application and registration
practice. The case has given us a CJEU
judgment which endorses MWIS and probably kills CHCA legally, but has left us
in its third answer with:
·
a new application procedure allowing special
case treatment of class headings not that dissimilar to CHCA, and
·
wording in which OHIM and others see support for
a continued special case, broader, reading of class heading registrations.
This is all, I suspect, the result of the court failing to spot
or road-test the legal and practical consequences of conflict between answers 1 and 2
and its third answer, the latter having been conjured in-house without
relevant argument or evidence before it on current practices, legalities or indeed
treaty requirements. The appointment by the court of its own volition of the
case to a Grand Chamber seemed a good sign of its view of the importance of the
issue, but the arrival out of the blue of the third answer has, I am
afraid, served the trade mark world ill, and left us overall with more problems
than clarification.
The new alphabetical list filing practice is of course
optional, and as such perhaps a bit of a side-show. Provided the official IPO systems
make clear on the official record that a list of goods of an application or
registration has come from a class heading list under the new practice I doubt
that much harm will result to third parties, although I wonder whether
the innate inconsistencies within an approach to use one form of wording to
mean another are much more than a legal accident waiting to happen.
Construing the scope of existing CTM class XX heading
registrations as some or the entire class XX alphabetical list is another
matter. If my earlier rough calculations from TMView are reasonable there are
over 300,000 CTM class heading registrations in the UK’s total registration
cover (about 21% of nationals plus CTMs), all of which may have a different
scope than shows from their wordings, and possibly a broader one. I doubt that
UK IPO, or the courts here, would apply that construction to goods/services
scope, but it will most certainly be argued.
New CTM top-up provisions
There is finally (really) a further sting in the European Commission's proposal for the new Community Trade Mark Regulation (CTMR). It contains at Article 28 provision for CTM class
heading registrants to request a top-up of their list of goods beyond the
literal meaning of their class heading wordings, based I assume on OHIM’s view
that all class heading CTMs from before the IP TRANSLATOR judgment can be
deemed to have been made with an intention to obtain full class goods scope. The
likelihood of there being upwards of 300,000 class heading CTMs dated before
June 2013 gives a measure of how many CTMs could be topped-up into a broader
goods/services scope. Would the UK IPO and courts have to apply those CTMs as
broadened?
I gather that wording similar to this top-up provision may also
have been in some recent earlier drafts of the new Directive, but it is not now
and the published Directive proposal seems pretty fixed on MWIS across the
board, eg at Article 40(5) mentioned
above. Does that mean that the EC
approves of a CTMR broadening top-up provision inconsistent with its own
Directive provisions, or that it does not but was prepared to go along with
OHIM liability etc concerns to
develop a debate? If the latter I truly hope the debate follows lest we find in
all EU member states numbers of past user decisions based on MWIS being turned
from arguable similarity matters to unarguable infringement for identical goods
under new CTMR Article 28.