Changes to trademark applications rules could have implications for small and medium-sized businesses.

When discussing intellectual property matters, I have in the past concentrated on patents. (On that front, the 15th - yes, 15th - draft of the ‘Preliminary set of provisions for the Rules of Procedure of the Unified Patent Court’ can be found here, on the new court’s website). But there has been considerable recent movement on trademarks, too.

A few months ago, the European Commission published a trademarks package involving three items: a recast of the 1989 Directive (now codified as 2008/95/EC), which brings about the approximation of laws of the member states; a revision of the 1994 Regulation (now codified as 207/2009/EC) on the Community trademark; and a revision of the 1995 Commission Regulation (2869/95) on the fees payable to the Office for Harmonization in the Internal Market (Trade Marks and Designs) – known as OHIM, which is based in Alicante.

There is a dual trademark registration system in the EU, whereby national registration and EU-wide registration are both possible. OHIM is the EU agency responsible for registration of the Community trademark, valid in all 28 EU member states. The dual registration system continues particularly because of small and medium enterprises (SMEs), which often want only a national registration. For the latest year for which figures are available (2011), there were 540,000 trademark applications, of which 105,000 were made to OHIM, and 435,000 were national trademark applications.

The most fuss over the new legislative package appears to concern the aspect which is, fortunately, easiest for non-specialists to understand. The third initiative mentioned above covers fees payable to OHIM, and in particular aims at their downward revision. It might be thought unusual that the Commission would turn fee revision into a key aspect of the package, but further reading shows that OHIM has been making a surplus on fees. (This is not unique: the Austrian court system also makes a profit out of its court fees.) The Commission is not happy with OHIM’s profits. In fact, it is threatening to remove the surplus to its own funds: ‘If this review does not lead to a reduction or modification in the level of fees which has the effect of preventing the further accumulating of a significant surplus, the surplus accumulated after the review shall be transferred to the budget of the Union.’ This threat is not universally popular.

Before taking such drastic action, though, it is proposing a principle of “one-class-per-fee” for both Community trademark applications and national trademark applications. In other words, the revised system will permit a trademark to be registered for one product class only, and at a cheaper rate. Under the current system, the fee for registering a trademark allows for the registration of up to three product classes. So businesses will pay substantially less when they seek to obtain protection for just one class.

There was a mini-hearing before the Legal Affairs Committee of the European Parliament just before the summer break, on 8 July. It appears that much of the discussion was on the fees issue. It also emerged that the member states unanimously reject the Commission’s legislative package, on the grounds principally that it overlooks the interests of SMEs, something denied vigorously by the Commission.

For those interested in reading further, two trademark organisations have recently published their responses. For every area of law, there are specialist bodies where practitioners or others gather together to discuss their practice area. In this field, there is the European Communities Trade Marks Association (ECTA), which is made up of trademark practitioners. Their views on the new package can be read here. There is also the International Trade Mark Association (INTA), which includes global trademark owners in its membership (for instance, its president comes from British American Tobacco). Being - I assume - richer, it has a jazzier website than ECTA, and the topic of the draft legislation has its own hot topic button, where its views can be read.

You thought trademarks was an oasis of calm? There are big battles ahead.

Jonathan Goldsmith is secretary-general of the Council of Bars and Law Societies of Europe