• Size Matters: Impact of Enlargement on CTM Rights

    With January’s admission of Romania and Bulgaria, the European Union expanded its borders for the second time since Community Trade Marks were introduced in 1996. Enlargement in May 2004 entailed important revisions to the CTM Regulation. Now that the E.U. has two new members, it seems timely to review the impact of a larger E.U. on CTM rights.

    • The first post-CTM enlargement of the E.U. took place on 1 May 2004 with the admission of Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

    • Romania and Bulgaria joined on 1 January 2007.

    • There are now 27 member states and 23 official languages.

    • Croatia, Turkey and the former Yugoslav Republic of Macedonia are candidates for future enlargement. Albania, Bosnia and Herzegovina, Montenegro, and Serbia including Kosovo are potential candidates, but accession criteria must still be met.

    • All CTMs filed prior to enlargement were automatically extended to the new member states as of their joining date. These “grandfathered” rights are referred to as “extended CTMs” and they include CTM designations under the Madrid Protocol. Protection in the new member states dates from the relevant enlargement date, however, rather than the filing date of the extended CTM.

    • Extended CTMs may not be refused or invalidated on the basis of grounds for refusal applying only as a result of the admission of new member states (eg a descriptive meaning or earlier right in Romania or Bulgaria).

    • Extended CTM applications filed between 1 July 2006 and 31 December 2006 can be opposed on the basis of prior national rights acquired in good faith in Romania or Bulgaria, provided those prior national rights pre-date the CTM. A national right filed before enlargement, but only after the CTM, is not enough. The holders of such national rights may still be able to object to the use of the CTM in their territory, however (see below).

    • CTM applications filed before 1 July 2006 cannot be opposed on the basis of prior national rights in Romania or Bulgaria.

    • However, the owners of pre-enlargement rights in new member states can sue to prevent the use of extended CTMs in their territories. Hence, an extended CTM may have legal effect in an enlargement country, but it may not be enforceable against prior right holders there, who may be able to obtain an injunction against the use of the CTM in that territory.

    • This applies even where the holder of a pre-enlargement national right could not have opposed the extended CTM because, for example, his earlier national right post-dated the CTM. As long as the national right pre-dated enlargement, a national right holder will still be able to sue to prevent use of an extended CTM in his territory.

    • Extended CTMs will not be published in Bulgarian or Romanian.

    • From 1 January 2007, it has been possible to file new CTMs in either new language, however, and CTMs filed from that date onward will be translated, examined and published in all official languages, including Bulgarian and Romanian.

    • Where extended CTMs are converted into national applications in enlargement countries, the conversion applications in those countries take the date of enlargement rather than the filing or priority date of the extended CTM.

     

    Comment

    The 2004 enlargement went smoothly and there is no reason to expect greater challenges from the recent, smaller extension. On a practical level, however, brand owners may need to make some small adjustments.

    Brand owners should note, in particular, that any E.U.-wide trade mark searches should now include Romania and Bulgaria. Enlargement is also a fresh opportunity to review watch services to ensure that all territories of interest are covered.

    Enlargement also has an impact on a brand owner’s ability to stop parallel imports into the E.U., as trade mark rights can be exhausted for the entire E.U. by placing goods on the market or consenting to their being placed on the market in just one member state. Brand owners should be aware that those member states now include Romania and Bulgaria.

    On the whole, however, brand owners will profit from this expansion of CTM protection without any increase in fees. Indeed, savings are likely to be made now that national applications or Madrid designations in Romania and Bulgaria are no longer essential, provided a CTM is filed or already exists. Time will tell how the political union will fare, but from most brand owners’ perspective, a bigger E.U. really is better.

     

    E.U. Member States

    Austria
    Belgium
    Bulgaria †
    Cyprus *
    Czech Republic *
    Denmark
    Estonia *
    Finland
    France
    Germany
    Greece
    Hungary *
    Ireland
    Italy
    Latvia *
    Lithuania *
    Luxembourg
    Malta *
    Netherlands
    Poland *
    Portugal
    Romania †
    Slovakia *
    Slovenia *
    Spain
    Sweden
    United Kingdom

    * Joined on 1 May 2004
    † Joined on 1 January 2007