- Relative unknown tops the overall representative ranking for EU trademarks, with all top filers benefitting from an influx from China.
- Increasing demand could jeopardise the EUIPO’s ability to honour its timeframe charter, while also cluttering the register.
- Further pressure on the office is coming from the European Commission.
Every year World Trademark Review (WTR) runs an in-depth piece focused on the EUIPO, analysing the evolution of office operations and updates on key projects. Last year this deep dive was published on 8 July, against the backdrop of the covid-19 pandemic. At that time, the office had just announced that the exceptional procedural deadline extensions granted to users by two decisions of EUIPO executive director Christian Archambeau (Decisions EX-20-3 and EX-20-4) had come to an end, with EUIPO staff making a tentative return to its Alicante HQ. The past year has been a busy one, with demand for EU trademarks on the rise and the office’s output remaining at a high level. Importantly, it is set to rise even further.
When looking back on the past 12 months at the EUIPO, it is hard to start anywhere other than the rising levels of EU trademark applications. Speaking to WTR in October 2020, Archambeau noted that covid-19 had an immediate impact on filing levels:
At the beginning of the crisis there was a significant reduction in filings. It was quite dramatic – more than 40% – and it came in waves; in the beginning of the year it started with China applicants and then when it came to Europe we saw a crash in filings from Italy, then Spain. You could track the collapse of filings alongside the spread of the virus and at one stage in the second quarter we were making contingency plans for a possible 20% drop in EU trademark applications over the whole year.
But then came the bounce back.
In 2020 trademark applications at the EUIPO hit a record high of 147,045. While filing levels at the office have been on an upward trajectory since 2016, the pace of growth accelerated steeply last year – with the register growing by 14%, compared to a yearly average of 8% between 2016 and 2019. This upward momentum continued through the first part of 2021. The data to the end of April recorded a 36% growth with 55,879 applications so far this year. As to where the demand is coming from, it will come as little surprise to trademark industry experts that the answer is: China.
How Chinese applications have affected the filing landscape
In 2020 China became the number one filing country for EU trademarks and number two for registered Community designs – with EU trademark filings from the country up a staggering 89% year on year. Chinese applicants were continuing to push the numbers up at the EUIPO this year, filing 10,669 applications to the end of April (a jump of 136% compared to the same period last year).
In the United States, rising demand from Chinese applicants has also been observed, with concerns over fraudulent filings reaching such a point that, earlier this year, the USPTO published a report directly questioning the quality and value of significant numbers of Chinese filings. Such concerns are related to the proof-of-use requirement in the United States, with many applicants filing false specimens of use in a bid to get around the rules. Absent the same requirement, there is less alarm at the EUIPO around the level of Chinese filings.
In fact, in contrast to the USPTO missive, the EUIPO’s report on the rise of Chinese filings stressed that the latest uptick was part of a long-term trend. Comparing the total number of filings for 2010 and 2019, the “China: EUTM & RCD Focus: 2010 to 2019 Evolution & 2020 COVID-19 Impact Analysis” report notes that the average annual growth rate for EU trademarks from Chinese applicants stood at 33.2%, with an overall growth rate of 1,028%, across that period. In total, throughout the decade more than 63,000 EU trademark filings, covering over 116,500 goods and services classes, were filed by more than 47,000 individual Chinese applicants. The central message was that the acceleration is unusual but not a cause of significant concern.
In October 2020 Archambeau told WTR:
The system in the EU is based on self-regulation by the marketplace through oppositions and cancellations. There has been a modest rise in opposition cases against Chinese trademarks, particularly by German companies, but the percentage of applications contested is not rising.
Going further, he noted that:
Chinese-based companies cannot file with us directly and there is a requirement to have a representative in Europe, which they do. We have had a few complaints from user associations that some Chinese applications are allegedly making use of EU front companies but for us this is marginal and most applications come through bona fide boutique firms that represent them on the European market.
This is reflected in the tables of top filers, presented below. The top representative filer, Lawgical, did not appear on last year’s top 50 list but has risen up the rankings this year from a standing start. Managing partner Guillermo Gutiérrez-Larraya told WTR in April that 2020 was the first year for the firm in terms of EU trademark filings, but it already had a foot in the door as one of its partners is from China and was dealing with Chinese clients in relation to other legal issues. Elsewhere, many of the names featured have appeared in the rankings over several years – even though this past 12 months they have benefitted in large part from work emanating from China. Last year’s top representative filer, Isabelle Bertaux, dropped to third this year, but her filings rocketed from 1,429 in last year’s table to 3,683 over the 12 months to the end of April 2021.
EU representatives top 50
EU trademark owners
The consequences of rising demand
Of course, while there is little concern at present about the nature of these applications, rising application numbers do have implications.
One is the potential to change the filings landscape from a representative perspective. This year the lists of top filers do contain largely familiar names, but the rankings order is shifting. As CompuMark’s director of government and content strategy, Robert Reading, told WTR in April: “It was only two years ago that a practice first passed the 1,000 applications mark at the EUIPO in a calendar year.” In 2020 there were 19 practices that filed over 3,000 applications each, with a majority of that work coming from China. This has resulted in significantly greater workloads at the firms in question, as well as a reshuffling of the established order.
The top trademark filers from Austria, Benelux, Denmark, Finland and France
Another consequence is potential clutter on the register. One observable trend in the US register has been applications for seemingly random collections of letters and numbers; a similar phenomenon has been taking place at the EUIPO, with applications for the likes of ‘CNFQ’, ‘P20S’, ‘MCBD’ and ‘FQGGJ’ among hundreds of such marks at the office. While they could eventually be removed from the register if not used in commerce, the sheer rise in numbers of applications could make it difficult for businesses to find unclaimed, effective trademarks.
The top EU Trademark Filers from Germany, Ireland, Italy and Poland
The immediate challenge for the EUIPO is handling the workload that such a demand creates. It is something that the office is acutely aware of, the report on China filings noting: “The office will closely monitor the evolution of filing volumes from China and other countries in order to properly adjust strategies and capabilities aimed at continuing to meet the needs of its users with excellent quality and timeliness.”
The good news is that the EUIPO has, to date, managed to pivot and handle these workloads, even while faced with the disruption caused by the pandemic.
In the first quarter of 2020, the office’s service charter results revealed that the EUIPO had still succeeded in meeting its timeliness, quality and accessibility commitments (only the timeliness in cancellation decisions remained in the ‘actions needed’ category). But in Q2, after the expiry of the temporary exceptional deadline extensions actioned when the pandemic first hit, the office had to handle what Archambeau described as a “tsunami of 21,000 registered trademarks that needed to be published over a period of weeks to avoid technical issues”.
This, combined with the publication of almost 5,000 international registrations, delayed re-examination tasks and a large accumulation of new opposition, cancellation and invalidity requests created a huge increase in the examination workload. This affected the timeliness of registrations of direct and international trademarks, pushing them into the red in terms of the Service Charter.
However, after that bump in the road, operations are now back to normal – with registration timeframes for direct and international registrations back on track.
The top EU trademark filers from Portugal, Spain, Sweden, the UK and other jurisdictions
A changing future
The fact that core operations are running smoothly will be a boon as the EUIPO moves forward, particularly given that the European Commission is increasingly focused on the IP ecosystem. In November 2020, for example, the commission published a new “Action Plan on Intellectual Property”, which sets out five key areas for development over the coming years.
The plan aims to improve the protection of intellectual property, ramp up IP uptake by SMEs, further the fight against counterfeits and promote a global level playing field – Commissioner for the Internal Market Thierry Breton declaring:
We are proposing to overhaul our intellectual property system to strengthen Europe's ability to develop next generation technologies, reflect advances in data and AI; allow companies to quickly pool their knowledge in times of crisis, and support Europe's path towards economic recovery and the green transition.
A number of the aspects under scrutiny will affect the EUIPO, and in some instances already have.
First, the planned modernisation of EU design protection could have numerous ramifications. The commission has already identified some shortcomings in the current regime, including certain key elements of design protection (subject matter, scope of rights and limitations), outdated or overly complicated procedures, inappropriate fee levels and structures, and a lack of coherence of the procedural rules.
Top 50 RCD filers
Top 25 RCD owners
Second, the European Commission’s emphasis on support for SMEs chimes with, and will shape, EUIPO focuses. In particular, the commission’s plan includes actions to help SMEs leverage their IP portfolios via an €20 million scheme provided by the EUIPO, which was approved by the office’s Management Board and Budget Committee in November 2020. The funding has been managed through a series of application windows, with the successful SMEs receiving support via IP vouchers that entitle the holders to 50% off EU and national trademark and design application fees, as well as 75% off IP pre-diagnostic services.
The latter sees IP professionals work with the business to identify the value of its IP assets, as well as offering guidance on how to develop the portfolio and resulting IP strategy.
The top RCD filers from Austria, Benelux, Denmark, France and Germany
Elsewhere, the European Commission anticipates that the EUIPO will develop a platform, the European IP Information Centre, which will offer access to all relevant information not only on IP formalities, but also on related services (eg, filing for domain name protection, the registration of company names, etc).
The top RCD filers from Ireland, Italy, Spain and Sweden
All of this comes at a time when legislative moves could further affect the office’s focuses. For instance, in November 2020 the office launched GIview, a search database for all geographical indications (GIs) protected at EU level. The tool also contains information on non-EU GIs protected at EU level through bilateral and multilateral agreements, and on EU GIs protected in non-EU countries. However, the EU GIs regime is set to expand.
At the end of April 2021, The European Commission opened a public consultation on creating a system for the EU-wide protection of GIs for non-agricultural products. The move is part of the roadmap to introduce a new regulation focused on non-agricultural products, the commission stating: “There is currently no EU-wide system for protecting the geographical indications of non-agricultural products (such as handicrafts and industrial goods). However, such products are often an important part of local identity, attract tourism and create jobs.” It contends that a uniform system will help producers to remain competitive in niche markets, provide consumers with better information about the authenticity of products and boost regional economies.
The move is not without controversy, with the consultation launched the day before the Office of the US Trade Representative published its latest Special 301 Report – its first under the Biden administration. That publication hit out at the European Union’s GI regime, which it stated is “highly concerning” because it “significantly undermines the scope of trademarks held by US producers and imposes barriers on market access for US-made goods that rely on the use of common names, such as parmesan or feta”. It also sent a warning about future efforts by the European Union “to expand its harmful GI system… beyond agricultural products and foodstuffs to encompass non-agricultural products, including apparel, ceramics, glass, handicrafts, manufactured goods, minerals, salts, stones, and textiles”.
However, should the new regulation become a reality despite pressure from outside the European Union, GIview would be significantly expanded.
EUIPO steps into the e-commerce landscape
Staying in the legislative arena, also looming is the European Commission’s Digital Services Act, which seeks to create a future rulebook for digital services. The consultation covers the two work strands announced by the commission – the first relating to the fundamentals of the EU E-commerce Directive (in particular the freedom to provide digital services across the EU single market in accordance with the rules of the place of establishment and a broad limitation of liability for content created by users) and the second focused on “market imbalances” and the creation of general rules for all platforms of a certain scale.
While the e-commerce world is technically outside the EUIPO’s core beat, the office has become increasingly involved in the space. Speaking to WTR in October 2020, Archambeau revealed that the EUIPO had engaged in workshops with platforms offering brand registration systems. He explained:
It is a new field of activity for us. We have seen the development of these ecosystems and the idea of a parallel eco-system of brand registries has limitations. First, it is duplication as each platform has its own system. Second, it is okay if companies only operate exclusively online but it doesn’t help them elsewhere. Trademarks provide much wider protection, including in physical shops.
Therefore, he sees an opportunity for the office to act as an “honest broker”, noting:
We could provide platforms with information from our registry, to supply the information on existing rights that will help with enforcement. In return we can ask platforms to actually promote the IP system and the registrations. So it is another vehicle to reach SMEs, as many have moved to online business models.
As part of this focus on the online world, the EUIPO observatory has already published research into the registrar and registry practices towards the misuse of domain names for IP infringement activities, as well as the volume and frequency of IP infringement on social media.
Following the covid-19 pandemic, the European Commission is increasingly focused on the IP environment and many of its projects will inevitably pull the EUIPO even deeper into its orbit. However, as the past few years have shown, the office is responsive to change.
Methodology for filing tables
The data kindly supplied to WTR focuses on the filings of all offices filing 20 or more EU trademarks or registered Community designs. It lists the EU trademark and Community design filings originating from individual offices, with each designated a unique representative code. This means that a single firm can have multiple entries under the same firm name in the same jurisdiction, as the named firm filed via a range of individual offices, each with its own unique representative code. Where a firm applied (via different offices) under the same name multiple times in one jurisdiction, we have added these applications together to obtain a firm-wide picture in that jurisdiction. The country assignation is recorded as supplied by the EUIPO. While every care has been taken to guarantee that all relevant figures were considered, WTR accepts no responsibility for any errors in the data sets or tables.