UK: Radical Changes To Be Made To The United Kingdom Trade Marks System

At the heart of this consultation paper was the desire to have a UK national trade mark system, which provided a more affordable alternative to the increasingly popular Community trade mark system (CTM) and also to deal with the perceived problem of CTM applications and registrations which had not undergone a full examination on the basis of earlier rights 'clogging up' the UK national trade mark system.

The CTM system was introduced in 1996 and from that time up until the present day, UK national trade mark applications undergo a full examination based on prior applications and regulations on the UK, International and CTM Registers. The UK Trade Marks Registry is presently duty bound to prevent the grant of a UK national trade mark application, if it is perceived to conflict with rights on all the aforesaid Registers. Fifty percent of current citations against UK trade mark applications are prior CTM rights, and if no changes are made to the UK trade marks system this is expected to rise to nearly two thirds within five years and within ten years three quarters.

There is a perception at the UK Office that this is a problem because CTM applications do not undergo a full relative rights examination leading to the CTM Register containing conflicting rights and as a result the 'playing field' between the UK and CTM Register is not level. It is feared that the UK national trade mark system will increasingly become unattractive, as it literally grinds to halt with conflicting CTM Rights and traders will as result either not seek trade mark registration at all or alternatively increasingly migrate to the CTM system, where the relative rights examination process is less onerous than the present UK system.

The consultation document described the current examination system as ‘untenable’. Five options were proposed by the Trade Marks Registry in the consultation document ranging from maintaining status quo, an option which the Registry fiercely argued against, through a series of graded options which downgraded the relative rights examination system.

In August of this year, the Registry indicated how the system was to be altered following the consultation period. In essence, a half way house approach has been adopted. The examination of UK national trade mark applications will continue to take place on the basis of relative (prior rights), as well as absolute (distinctiveness) grounds, but the search conducted by the Registry as part of the examination process will now only be 'advisory' in a similar vain to the present CTM system. Therefore, UK applicants will be informed of potentially conflicting rights, but will need to make a commercial decision whether they continue with the application process in light of the rights revealed in the search. Further, the owners of any prior rights cited in the examination report will be informed of the potential conflict by the UK Office and they will thus be given an early warning and the opportunity to oppose the application when it is advertised for opposition purposes.

The abandonment of the existing relative rights examination system will also mean that the existing provisions relating to so-called 'honest concurrent use' will become defunct. It will be remembered that under the existing procedure in addition to overcoming citations by way of written or oral arguments or on the basis of consent from the owner of the prior rights owner, a citation can also be overcome by the submission of evidence of past 'honest' and 'concurrent' use of the mark forming the subject of the application with the cited mark. Such provisions will no longer be needed under the new system, as the UK Office will no longer to able to prevent the grant of a UK trade mark application on the basis of prior rights in the absence of a challenge from the prior rights owner itself at the opposition stage.

The UK Office hopes that the changes will reduce the costs of prosecuting UK trade mark applications. However, although undoubtedly the cost of taking an application through to the advertisement stage will fall, it appears likely that the number of oppositions will rise under the new system.

Based on experience of the CTM system, where a similar 'advisory' search system is in place, it is unlikely that many applicants will withdraw or amend their applications in the light of rights revealed in the examination report, and will simply 'take their chances' when the application is advertised and see whether the prior rights owner actively challenges and opposes the application. Therefore it is possible that the costs of defending a trade mark portfolio will increase and applicants will have to rely much more on their professional trade mark advisors to defend their trade mark rights.

Further, many traders may be tempted to file speculative trade mark applications which may not have been filed under the old system in the hope that the prior rights owner will not be willing to go to the expense of filing an opposition.

Although the UK Office presumably will still employ the same criteria in the new search system as that of the old for citing prior rights, it is strongly recommended that trade mark owners put in place trade mark watch services to monitor advertised applications, as one hurdle in the 'filtering' system of trade mark applications would appear to have been weakened.You now have only one opportunity to safeguard your rights against dilution with the UK Registry effectively withdrawing its potential for objecting to applications at the examination stage on the basis of prior rights.

It is planned that the new system of examining UK trade mark applications will come into force in October 2007.

The UK Trade Marks Registry has to put in place the legislative framework to bring about the proposed changes and in the words of the Registry 'flesh out' these changes, including setting up the administrative framework for notifying prior rights owners of potentially conflicting applications and how long the applicant will have to amend or withdraw the application before the prior rights owner is informed of the existence of the pending application.

Also it not yet clear whether the changes will be applied retrospectively to applications filed prior to October 2007.

The changes coming into force to the UK system of trade mark registration is indeed radical and no trade mark owner or their advisors should overlook these changes.