In February 2014, the European Parliament voted on the revision of the European trademark system as proposed by the European Commission in March 2013. The adopted amendments contain some interesting modifications on the proposed texts. For instance, controversial changes regarding the registration of trademarks and double identity have been reversed, which is good news for actual and prospective trademark holders.

Absolute grounds for refusal: foreign descriptive terms no longer banned. The Commission's proposal implied that grounds for non-registrability included descriptiveness in a foreign language or upon transcription. This would severely limit the possibilities of applicants when choosing a trademark. However, the European Parliament carried an amendment in which the Commission's proposal was deleted.

It did the same for another controversial proposal in the Directive. Absolute grounds for refusal would also apply regardless of whether they were obtained in a member state other than where the trademark application was originally filed. Consequently, trademarks could not be registered if they conflicted with the public order or morals of any member state. This would pose a considerable burden in the examination process and would notably increase the costs for applicants.  These possibilities have been averted by the European Parliament's amendment.

Double-identity: all trademark functions protected
In the Commission's proposal, the origin function of the trademark had to be affected by the use of a sign which is identical to the owner's trademark in order for this use to be infringing. As mentioned in last October's In context, this limitation on protection contravenes ECJ case law and unduly raises the burden of proof for the trademark holder.  The trademark owner should not have to prove detrimental effect. Instead, the defendant should have to prove that no trademark function was adversely affected. The removal of this requirement under the amended proposals is good news for actual and prospective trademark holders.

Limitations on the effects of a trademark
A trademark will not entitle the proprietor to prohibit a third party from using the trademark in the course of trade for the purpose of identifying or referring to goods or services as those of the proprietor of the trademark. In this connection, the Regulation and Directive – as proposed by the European Commission – referred in particular to accessories or spare parts. The amended text offers four additional examples of the allowed use of a trademark.

First, use is allowed in cases where the trademark is being used in comparative advertising that meets the legal standards for this type of advertising. Second, use is also allowed where it draws attention to the resale of genuine goods. Third, it is allowed to use the trademark when a legitimate alternative to the goods or services of the trademark holder are offered. And last, use of a trademark is allowed in cases of parody, artistic expression, criticism or comment. The amended text also contains a whole new limitation: the proprietor of a trademark will not be entitled to prohibit a third party with due cause from using the trademark for non-commercial purposes.

The extended limitations have far-reaching effects, especially where a trademark could be used to advertise an alternative product other than as part of comparative advertising, Also, the last limitation would to a large extent harmonise other uses of the trademark, something that several parties have called for, but which was denied by the Commission until now.

When will the new trademark system come into effect?
The revisions to the European trademark system have been carried out within the ordinary legislative process of the European Union, formerly known as the co-decision procedure. This means that both the European Parliament and the Council of the European Union are individual legislators, and each has to adopt the revision of the European trademark system. It is now up to the Council and Parliament to compromise. The aim is still to have the proposals adopted in 2014. Click here for the amended Regulation and here for the amended Directive.

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