We have added information about the reforms proposed by the European Commission in March 2013.
The Overview describes what a trade mark is, and provides links to practice notes on trade mark registration and portfolio management; infringement; exploitation (including competition law issues); cancellation of trade mark rights; and comparative advertising.
This overview gives information about the nature of trade marks, the reasons why they can be commercially significant, and the type of material that is likely to be suitable for registration and use as a trade mark. There are several other PLC practice notes that cover specific areas of trade mark law and practice. These are:
Practice note, Trade marks: Registration and portfolio management (www.practicallaw.com/0-505-3578): why and how to register a UK or European Community trade mark or an international mark under the Madrid system, what can be registered, and how to maintain a portfolio of marks.
Practice note, Trade marks: Infringement and offences (www.practicallaw.com/6-505-3580): the law relating to infringement of trade marks and criminal offences relating to trade marks.
Practice note, Trade marks: Exploitation (www.practicallaw.com/1-505-3587): law relating to the sale and licensing of trade marks, and competition issues that can arise from the use of trade marks.
Practice note, Trade marks: Cancellation (www.practicallaw.com/3-384-6938): ways in which a trade mark proprietor can lose rights in trade marks.
Practice note, Comparative advertising (www.practicallaw.com/6-383-9837): the legal landscape relating to comparative advertising (in which the advertiser refers to one or more rival brands in a comparative way).
The words "trade mark" and "brand" are often used interchangeably. Both refer to signs which are used by traders to differentiate their goods from those of other traders. Of the two expressions, "brand" contains within it a clue to the origin of branding. One common definition of "brand" is a "mark made by a hot iron": in other words, a means for one herdsman to "mark" his animals and so distinguish them from those of his neighbour. More simply stated, branding was, and still is today, a way of saying "this is mine".
A development of this was for early potters to mark their pots with a thumb print or symbol: a simple way of communicating to others, including customers, the message "I made this".
Today, brands or trade marks may be more sophisticated in design and expression, but they operate in essentially the same way as they did centuries ago. Brands communicate information about the product, or service, to which they are applied and the basic message remains, "I made this".
Many memorable and, as a result, successful brands are simple symbols, but a brand may also be encapsulated in a name, a label, a slogan, a jingle or simply the distinctive packaging or "get-up" of a product. Brands are now not only more sophisticated in form but in the information they communicate. A brand provides the consumer not only with reassurance about the origin of the product but also about other features such as quality, luxury or economy.
Corporate takeover battles often centre on the value of the brands at stake and so highlight their commercial value. Brands can even account for a majority of a company's assets. In a recent survey of the world's most valuable brands, the value of the top ten brands ranged from around US$30 billion to US$78 billion (see box, Top ten brands).
Interbrand Best Global Brands 2012, October 2012
The diminishing differences between products in terms of quality and ingenuity have also accentuated the importance of brands and, in particular, brand loyalty, to manufacturers and retailers alike. In a climate of rapidly developing technology and seemingly unlimited means of communication, no product is new for long. Therefore, consumers look to brands to give them reassurance as to their primary concern when deciding whether or not to buy, whether that concern is about the quality, the price or the novelty of the product.
Brand loyalty is a highly-sought prize and presupposes the existence of a trade mark to which such loyalty can attach. Trade mark creation, management and protection are therefore critical to any business seeking to obtain and maintain brand loyalty and ensure commercial success.
In the UK, a trade mark proprietor's rights can be protected both at common law, by means of a passing off action (see Practice note, Trade marks: Registration and portfolio management: Relative difficulty of protecting unregistered trade mark (www.practicallaw.com/0-505-3578)), and by statute, through an action for trade mark infringement. It has been possible to register trade marks for goods in the UK since 1875, and for many years such trade marks were governed by the Trade Marks Act 1938 (the 1938 Act). In 1986, registration of service marks, and therefore statutory protection, was introduced by the Trade Marks (Amendment) Act 1984.
However, the greatest changes came as a result of the UK's membership of the European Union (EU), the creation of the Common Market and the push for harmonisation of trade mark laws in all member states of the EU in parallel with the introduction of a unitary Community trade mark (CTM) system.
The first harmonisation directive (89/104/EEC) set out a programme for the approximation of national trade mark laws throughout the EU. A codified harmonisation directive (2008/95/EC) replaced the first harmonisation directive as of 28 November 2008 (see Legal update, Consolidated Trade Marks Directive published (www.practicallaw.com/9-384-0085)), but did not make any substantive legislative change to it; all the substantive articles of the new directive (Trade Marks Directive) have the same numbering as the previous directive.
The UK government implemented the first harmonising directive in the UK through the introduction of the Trade Marks Act 1994 (TMA). The Trade Marks Rules 2008 (SI 2008/1797) (2008 Rules), which are the main secondary legislation made under the TMA, set out procedural and operational requirements which apply to trade marks and trade mark applications (see Legal update, Trade Marks Rules 2008 published (www.practicallaw.com/8-382-5740)).
CTMs, which have effect in the UK as well as the other member states of the EU, are regulated by Council Regulation (EC) number 207/2009 of 26 February 2009 on the Community trade mark, which replaced Regulation no 40/94/EEC as of 13 April 2009. This is commonly referred to as the "CTM Regulation". Commission Regulation 2868/95 (the Implementing Regulation) sets out detailed rules of procedure relating to CTMs.
In March 2013, the European Commission published provisional draft revisions to the Trade Marks Directive and the CTM Regulation, as well as proposals for changes to fee structures for registering and renewing trade marks. The main objectives of these proposals are to:
Streamline and harmonise registration procedures within and between OHIM and national registries.
Improve the legislation by amending outdated provisions, removing ambiguities, clarifying trade mark rights in terms of their scope and limitations, and incorporating European case law.
Stop counterfeit goods being taken through the EU in transit.
The Commission says that it hopes to adopt the proposals by spring 2014, and that member states will then have two years to transpose the new rules of the Directive into national law. It expects to implement the changes to fees by the end of 2013. For more information about the detail of the proposals, see Legal update, European Commission publishes proposals for reform of trade mark law (www.practicallaw.com/9-525-4775).
Trade mark rights arise from the date of application for a UK mark, and from the later date of publication for a CTM (section 9(3), TMA and Article 9(3), CTM Regulation), although they cannot be enforced until the registration process is complete and the mark has been placed on the register. In order to remain in force, a trade mark must be renewed every 10 years.
A registered trade mark confers on the proprietor the statutory right to the exclusive use of the mark in connection with the goods or services for which it is registered (section 9, TMA and Article 9, CTM Regulation). Registration therefore gives the proprietor the right to sue for trade mark infringement any person who uses an identical or similar mark in connection with identical or similar goods without authorisation, where the use has caused or is likely to cause confusion (section 10(2), TMA and Article 9, CTM Regulation). If the mark has a reputation, there is also a right to prevent others from using the same or similar marks for dissimilar goods or services, where that use leads to an unfair advantage or causes detriment to the registered mark. Examples of the kind of "use" that can constitute infringement are listed in section 10 and Article 9, and include, for example, putting the offending sign on goods or packaging, importing goods under the sign, and using the sign in advertising.
The registered proprietor can authorise or license others to use the mark (section 28, TMA and Article 22, CTM Regulation).
Under the TMA and CTM Regulation, any sign which can be represented graphically and which is capable of distinguishing the goods or services of one undertaking from those of another is prima facie registrable as a trade mark, subject to the "absolute" and "relative" grounds for refusal (see Practice note, Trade marks: Registration and portfolio management: What can be registered as a trade mark? (www.practicallaw.com/0-505-3578)).
A mark may consist of:
Words (for example, KODAK for cameras or JAGUAR for cars).
Slogans (for example, JUST DO IT for Nike sportswear).
Designs (for example, a harp for Guinness stout).
Letters (for example, RBS in respect of banking services).
Numerals (for example, 501 jeans).
Internet domain names (for example, amazon.com).
The shape of goods or their packaging (for example, the shape of a Coca Cola bottle, registration of which was denied by the House of Lords under the 1938 Act, or the triangular shape of Toblerone chocolate).
Smells (for example, Sumitomo Rubber Industries' registration of a floral fragrance reminiscent of roses as applied to tyres).
Sounds (for example, the Intel four-note musical jingle).
Colours (for example, Heinz's registration of the colour turquoise for use on tins of baked beans).
Gestures (for example, a finger tapping a nose has been registered by Derbyshire Building Society).
Moving digital images (for example, the Intel "leap ahead" animated logo).