The CTM is a sign for identifying and distinguishing goods or services valid throughout the European Union and registered in the OHIM in accordance with the provisions of the CTMR.3 The OHIM is established by Article 2 of the CTMR.
The three basic principles of CTM law are "autonomy" — the CTM law is a body of European law not subject to national law unless specified; "coexistence" — CTM law does not replace or pre-empt national trade mark law, and CTMs coexist with national trade marks; and "unitary character" — CTMs are unitary and have the same effect throughout the European Community.4
The main benefit of the Community system is that it gives its owner a uniform right applicable in all Member States of the European Union through a single procedure which simplifies trade mark policies at European level. Traders are able to protect their marks throughout the Community on the basis of a single application, rather than having to file separate applications in each of the Member States. In other words, the CTM has a unitary character, meaning that it is valid in the entire European Community. The CTM is unitary in all respects: the application and the registration extend automatically to all
3 CTMR, supra note 1, at Art. 1(1): A trade mark for goods or services which is registered in accordance with the conditions contained in this Regulation and in the manner herein provided is hereinafter referred to as a ‘Community trade mark’.
4 Alexander Von Mühlendahl, Community Trade Mark Riddles: Territoriality and Unitary Character, (30)(2) E.I.P.R. 66-70 (2008).
Member States of the European Community indivisibly; the effect of an invalidation, a refused application, or the expiry of the CTM necessarily is for the entire Community.
That is, if a ground for refusal exists only in part of the Community, the OHIM will refuse the entire CTM application. Moreover, the CTM is one single asset and can only be transferred for the whole of the Community, not with respect to individual States.5 While the CTM presents certain obvious advantages to trade mark applicants, the unitary character of the CTM also presents certain risks, for example, a single invalidation action may cause the mark to be invalid for the whole territory of the European Union.6
The CTM may be obtained for a sign which is either applied for directly at the OHIM or which has been previously applied for through a national office. The national office is obliged to forward the application to the OHIM within two weeks.7 Those applying for a CTM must be a national of or domiciled or a business in an Member State or a country which is a party to the Paris Convention8 or to the World Trade Organization (WTO), or be a national of a state which accords reciprocal protection9. This application may be filed in any of the official languages of the European Union, but should also specify a second language (chosen from the five official languages of the OHIM: English, French, German, Italian, or Spanish) in which opposition proceedings may be conducted.
Examination at the OHIM is restricted to an inquiry of whether the application complies with the absolute grounds of refusal (for example, a lack of any distinctive character, or the fact that the shape results from the nature of the goods themselves, among others)10, which will apply to the mark across the whole Community, even if the
5 CTMR, supra note 1, at Art.1(2): A Community trade mark shall have a unitary character. It shall have equal effect throughout the Community: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. This principle shall apply unless otherwise provided in this Regulation.
6 Frederick M. Abbott et al., International Intellectual Property in an Integrated World Economy 379 (2007).
7 CTMR, supra note 1, at Art. 25(2).
8 See Paris Convention for the Protection of Industrial Property of March 20, 1883.
9 CTMR, supra note 1, at Art. 29.
10 CTMR, supra note 1, at Art. 38. Absolute grounds of refusal are set out in Art. 7(1).
absolute grounds of refusal only arise in one Member State.11 Where the application fails to comply with the absolute grounds for refusal, the application may be amended or withdrawn.12 Successful registration of the CTM at the OHIM lasts for ten years13 and may be renewed for further periods of ten years.14
Once an application has been successfully examined, it will then be published in the Community Trade Marks Bulletin.15 Within three months of publication, the application may be opposed on relative grounds. Only the owners of senior trade marks and their licensees, the owners of trade marks, and the owners of senior marks or signs are entitled to bring opposition proceedings.16 If the application to the OHIM is rejected or withdrawn, it may be converted back into a series of national applications which retain the filing date used at the OHIM.17
Furthermore, the CTM system leaves the national trade mark systems of Member States unaffected. Enterprises are free to file national trade mark applications, a CTM application, or both. National trade mark registrations and the rights conferred by it are not affected by the CTM. The CTMR does “not abolish national trade mark protection;
rather, it creates a mark that co-exists with national trade marks”.18 However, senior national trade marks possess senior rights against a CTM, and vice versa.
The CTM fulfills three essential functions of a trade mark at European level. First, it identifies the origin of goods and services, which is the most important function.
“Without trade marks, manufacturers would have no incentive to produce goods of high quality because consumers would have no way of identifying goods emanating from a particular source and would not be able to reward a supplier of quality products with their
18 Marshall A. Leaffer, The New World of Intellectual Trademark Law, 2 Marq. Intell. Prop. L. Rev 1, 25 (1998).
continued patronage.”19 Not only manufacturers and traders have an interest in preserving the origin function of trade marks, but customers as well share the same interest in avoiding confusion as to the commercial origin of goods and services.
But we see that the two most important pieces of Community legislation on trade marks, the First Trade Mark Directive (hereinafter, “First Directive”)20 and the CTMR, state in their preambles that the function of a trade mark is “in particular to guarantee the trade mark as an indication of origin”.21 The words “in particular” suggest that the origin function is not the only function. Indeed, another function of the CTM is to guarantee consistent quality through evidence of the company’s commitment vis-à-vis the consumer.
Lastly, it is a form of communication, a basis for publicity and advertising. Sometimes, the trade mark owner may be entitled to rely on the trade mark to prevent advertising by unauthorized dealers which might damage the reputation of the mark, without, however, creating any confusion as to the origin of the branded goods.22