By Roberto Valenti, Annamaria Algieri and Andrea Michelangeli
Last year has brought some exciting new scenarios for trademarks! We look forward to assessing whether the trends emerged in 2019 will be followed or left behind.
In the meanwhile, here are our predictions for 2020!
- More precision in the indication of the goods and services for which trademarks are registered
In October 2019, the Advocate General Tanchev released his opinion in relation to a much awaited preliminary ruling judgement before the Court of Justice of the European Union (CJEU) pending between Sky, active in the satellite and digital television broadcast service, and Skykick, which supplies cloud migration information technology services.
The case started when Sky sued Skykick, before the High Court of Justice of the UK, for having allegedly infringed its EU trademarks consisting in the word “SKY” through the use of the sign “Skykick” and its variants. Skykick defended its side by objecting Sky’s allegations and by counterclaiming that Sky’s trademarks registered in class 9 for “computer software” are to be held invalid on the ground that the specifications of goods and services lack of clarity and precision, thus the relevant trademark applications were made in bad faith by Sky in the first place.
And indeed, according to the recent opinion of the Advocate General, the term “computer software” apparently lacks the precision requirement concerning the products and services for which a trademark is registered, since it covers goods that are variable in their function and field of use.
This is an application of the criteria established by the CJEU in the IP Translator case in 2012, where the CJEU stated that “some of the general indications in the class headings of the Nice Classification … are not such as to meet [the requirement of being sufficiently clear and precise] where they are too general and cover goods or services which are too variable to be compatible with the trade mark’s function as an indication of origin”.
In case the CJEU will judge the expression “computer software” too broad and generic to be validly protected in the EU, we expect that in 2020 the same approach will be adopted with regards to other generic expressions used nowadays in order to protect the goods and services involved in a trademark registration, such as the terms “publications” or “consulting services”. In other words, the same way trademarks are registered will be redefined, preventing the registrant from using terms and categories that are generic and too broad.
- The bona fide intention to use approach to fight bad faith trademark registrations in the EU
The opinion of Advocate General Tanchev released in October 2019 in relation to the Sky v. Skykick preliminary ruling judgment before the CJEU opens an important window to new perspectives in the trademark registrations scheme in the EU.
Indeed, the Advocate General considered that the UK’s requirement of a bona fide intention to use at the time of the application is compatible with EU law. Similarly, the CJEU, in one of its judgements held in 2017, already stated that a trademark application must encompass the intended uses of a mark, noting that a lack of intention to use a mark for all the goods claimed in the application constitutes bad faith in the registration.
In this scenario, we expect that in the (near) future the EU will implement a similar approach, which involves various activities that the applicant must perform in order to file a trademark application, to prove its good faith in the – present and future – use of the trademark. Such evidence should consist of preparing business or marketing plans, creating and preserving product prototypes, preparing schematics or instructional manuals, or identifying possible purchasers of the products or services involved.
- Increase of licensed EU trademarks (EUTMs) owned by SMEs
As intellectual property assets, trademarks play an increasingly important role in corporate strategy due to their potential to lead to higher profits and create value for companies. As such, the easiest way to derive economic benefit from trademarks is currently their licensing, thus granting permission to another entity to use the trademark in exchange for an economic consideration.
As shown by a new EUIPO report issued on 19 December 2019, the effective value of licensing EUTMs for SMEs has highly increased between 2013 and 2017: 7.5% of SMEs that own EUTMs now license them to others. As a result, the average annual revenue originating from the licensing of EUTMs has been estimated at nearly € 65.000 per firm, which is equivalent to 5.7% of the average turnover of EU SMEs, with an estimated total annual revenue from licensing out EUTMs by all SMEs in the EU equal to € 1.9 billion.
In this scenario, we expect a further increase of the licensing of EUTMs by SMEs, in light of which the advantage deriving from intellectual property rights will represent an always growing source of economic value for SMEs. Indeed, as shown by the results above mentioned, SMEs are more and more recognizing royalties deriving from the licensing of the owned EUTMs as a highly reliable asset, able to increase the firms’ income on a continuous basis, and thus contributing to building economic stability that SMEs need to develop new, and competitive corporate strategies for the market.
If you would like to know more about these topics and trademarks law in general, please contact roberto.valenti@dlapiper.com, annamaria.algieri@dlapiper.com and andrea.michelangeli@dlapiper.com.