Study on the overall functioning of the European trademark system published

On 8 March 2011, a study on the overall functioning of the trademark system in Europe – commissioned by the European Commission from the Max Planck Institute for Intellectual Property and Competition Law – was published on the European Commission’s website. The aim of the study was to analyze current functioning of the EU Trademark Legislation and identify potential areas for improvement – in particular the Community Trademark Regulation (“CTMR”) and the Trademark Directive (“TMD”) – for the benefit of users and society as a whole.

As far as competition policy is concerned, the study recalls that the protection of trademarks is an intrinsic part of the system of undistorted competition. The study, however, points out elements in the CTMR that could have negative effects on competition, notably the protection of certain kind of trademarks, such as:

i.        color marks (available only in limited quantity),

ii.        shape of product marks (which lead to an exclusive right to the appearance of a specific product), and

iii.        combination marks with a low level of distinctiveness (which should be afforded a narrow scope of protection).

The study highlights that the interests of all the stakeholders (proprietors, but also consumers and competitors) should be taken into account in the assessment of the validity of such trademarks and that they should only be registered if they have acquired distinctiveness through use in the market within the community.

The study also points out that registration of a sign exclusively consisting of features which confer on the proprietor a monopoly on technical solutions or functional characteristics which a user is likely to seek in the products of competitors should be excluded.

The study also includes other innovative proposals, such as the introduction in the CTMR and TMD of

i.        a clause specifying that infringement claims are without prejudice to earlier rights (no such general provisions exist at present and it would settle a number of issues);

ii.        a provision providing a better definition of the borderline between private and commercial use, which would take into account  whether the use is made for commercial gain rather than private matter and whether it took place in the alleged infringer’s own commercial communication;

iii.        a broad clause exempting honest referential use (including for instance the use for purposes of parody, indicating replacement or service, and commentary and criticism) from infringement, or even the introduction of a fair use clause; and

iv.        a clause providing for the liability of legal persons for acts committed on their behalf (in line with general rules of tort law or civil liability applicable in most if not all EU countries). [Béatrice Martinet Farano]