European Union: The Community Trademark System Pays Off

May 28, 2009

The Community Trademark (CTM) system was introduced in 1996 by Regulation n°40/94. It allows one to obtain, under certain conditions and with only one application, a trademark that is valid within the entire European Union.

The Registration Office for the CTM is the Office of Harmonization for the Internal Market (OHIM), located in Alicante, Spain.

The CTM, like national trademarks, must be distinctive. Moreover, the sign must be available throughout the entire territory of the EU. Therefore, any prior right existing in any European country will prevail over the application. Similarly, if a ground for refusal exists in any country of the Union, the OHIM will not register the trademark.

The CTM grants its owner an exclusive right to use the sign to designate the products or services for which it is registered. This right covers the territory of the 27 Member States, and allows the owner of the CTM to prevent third parties from using an identical or similar sign on goods or services that are identical or similar to those for which the trademark has been registered.

This system has proved very interesting financially and administratively. It is much faster and cheaper than applications in each country of the Union would be (even though the national systems co-exist with the CTM), and has therefore been very popular among companies seeking protection.

In little more than 10 years, the OHIM has registered half a million trademarks, and the figure is increasing rapidly. At the same time, the registration process has become more and more efficient.

The success of the CTM is such that, in March 2009, Regulation n°355/2009 introduced a cut in the registration costs. The revenue generated by the OHIM via payment of registration fees by applicants is in effect so high that is goes against the objective of a balanced budget. The registration fees have therefore been set at zero euro, leaving only modified application fees (renamed « basic fees ») to be paid by the applicant. It is now as low as €900 for an individual trademark and €1800 for a collective trademark, which represents a reduction of almost 50% of the fees. In comparison, the registration of a French trademark costs €200 but only grants protection in one country.

This should ensure the CTM an even greater success, as the system will now be accessible to an even greater amount of users throughout the European Union.