Facebook’s much-publicised name change in October did not come entirely trouble free.
Hebrew-speaking social media users were quick to point out that the company’s chosen name of Meta sounded similar to the Hebrew word for ‘dead’ מֵת (mét).
Luckily for Facebook, this does not seem to have been a grave error, and another rebrand is not on the cards just yet. But the mishap could point to a wider problem – trademark depletion.
Europe-based sources at Puma, Shaneel and DSM, as well as private practice attorneys, say depletion in the EU – the threat of unique trademarks simply running out – is high.
One source says that the difficulty of adopting a new brand name only increases due to pro-filing incentives such as limited examinations and low costs, causing an overcrowded register. Another says overcrowding is likely to get worse.
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The question was considered by Barton Beebe, professor of intellectual property law at New York University (NYU), in a lecture at University College London earlier this month in which he discussed his analysis of nearly two million EU trademark (EUTM) registrations.
Beebe found that nearly 80% of the 20,000 most common English-language words identically match an EUTM. Many of the remaining words carry negative connotations that brands may be wary of, therefore discouraging registration.
The proportion of matching EUTMs and words increases to 91% when translational similarities, as was the case with Facebook, are taken into account.
Beebe said in the lecture: “The most significant challenge the global trademark system will face this century will likely be trademark depletion. The problem is that nearly every good trademark has already been claimed.”
Kai Schmidt-Hern, partner at Lubbeger Lehment in Berlin, agrees. He tells Managing IP: “We see it in trademark clearance searches – there is never a situation without any risk from earlier registrations.”
‘Littered’ with registrations
Speaking to Managing IP, in-house sources generally agree with this notion.
Olena Moroz, trademark manager at Puma in Germany, says depletion is going to continue to be a challenge for brand owners, particularly with the number of registrations rising each year.
“The supply of words for trademarks is not inexhaustible. It will be more and more difficult to find a unique trademark name which doesn’t overlap with already existing trademarks.”
She adds: “Of course, it will be possible to manoeuvre in terms of the same mark being registered in different classes, but only to some extent and not forever.”
Not only are there too many registrations, it is too easy to register a mark in the first place, sources suggest.
Jocelyn Clarke, a UK-based senior IP counsel at Shaneel, which produces fragrances including the self-branded Jennifer Lopez and Naomi Campbell lines, says it is so easy and inexpensive to gain exclusive rights to a potential brand name.
Because of this, the EUIPO is “littered with registrations”.
“As time progresses, the difficulty of adopting a new brand name increases due to this filing incentive.
“EUTMs are filed as a matter of course, as a cost-effective means of getting rights in all 27 member states, though registered owners rarely use their brands across the entirety of the EU, or even a large part of it.
“This means contending with registrations that would not otherwise exist if it weren’t for the ease of gaining EU-wide protection,” Clarke says.
No quick fix
In his lecture, NYU’s Beebe suggested several options that the EUIPO might wish to try if it is to ensure there are enough trademarks to go around.
These include introducing an ex-officio review (including on prior use) of applications, setting narrower specifications, and charging more for shorter or more common words. He also suggested having stricter intent-to-use requirements like in the US, where IP owners must use their marks in commerce and periodically prove that they are in use.
However, sources are split on the merits of these ideas.
Petra Herkul-Schneiders, head of trademarks at healthcare company DSM in the Netherlands, says she is against an ex-officio review of applications because they would put another burden on trademark owners.
She notes that in jurisdictions that do take this approach, such as China, it results in huge numbers of non-use cancellations.
“The trademark prosecution and non-use cancellation action are not aligned, resulting in a decision on the prosecution before a decision on the non-use cancellation.”
Moroz at Puma believes an intent-to-use requirement is “perhaps the most effective” solution to combat depletion. However, she says that it would add a lot of work and worries to right owners as it would be more difficult to get a registration and the specification of goods would be narrower.
Combatting clutter
Schmidt-Hern adds that the existing five-year grace period, after which brand owners must (if challenged) provide evidence of genuine use, can offer some comfort to brand owners.
“Often, a lack of genuine use of earlier registrations helps companies seeking to use and register similar or identical marks,” he says, adding that this does not solve the problem of overcrowding entirely.
“Because of the situation, prudent advisers tend to be more cooperative when it comes to negotiating co-existence with the owners of similar or identical marks.”
Willem Leppink, partner at Ploum in the Netherlands, and Clarke at Shaneel note that case law, including Hasbro v EUIPO (on trademark ‘evergreening’) and Sky v SkyKick (on broad filings) have gone some way to mitigating the over-cluttering issue.
Leppink adds that other EU initiatives have helped manage (though not fix) the situation, including increasing the price of registrations and renewals when applicants seek protection in multiple classes.
Before the 2017 EUTM Regulation, applicants could apply for an EUTM covering up to three classes for €900 ($1,016). Now, it costs €850 for one class, an additional €50 for a second and €150 for a third.
This change was sparked in part by a 2011 study by the Max Planck Institute on the Overall Functioning of the European Trademark System, which discussed de-cluttering ideas, Leppink notes.
However, Annette Kur, a research fellow at the institute and one of the study’s authors, tells Managing IP that while the register is crowded, there is “no clear and resilient evidence or data” to support an opinion on either side of the debate on whether trademarks are running out.
Any shortage of availability depends on the market sector and on the type of sign, she tells Managing IP.
She adds: “Of course, trademarks that are in limited supply anyway – such as colours, or suggestive or allusive signs barely passing the hurdle of descriptiveness – are more easily overcrowded than others.”
Signs of the times
This focus on EUTMs beyond merely words leads counsel to debate whether brands would be best placed choosing non-traditional marks.
Herkul-Schneiders says the lack of word options could pose an opportunity to consider more creative trademarks.
“Fully fictive words, although they may require more investment in marketing and promotion, can be protected and defended better than existing vocabulary,” she says.
Moroz at Puma believes that even though non-traditional marks are harder to obtain, combination marks (with a word and logo) are the strongest and most popular.
“These will be the top priority for applicants, whereas non-traditional ones will be sought additionally as secondary marks,” she predicts.
Leppink agrees that non-traditional marks, such as signs or position marks (which outline the specific way in which a mark is placed on a product), would not immediately take up space occupied by word marks.
However, he is not convinced by the argument that it is especially challenging to ensure these types of marks meet distinctiveness requirements.
“Lawyers would easily say that [word marks are the most traditional and easily digestible form of mark], but the reality is that as a consumer I recognise so many products in the supermarkets because I recognise either the colours or the logo.”
Despite the many thousands of words out there, they are becoming exhausted at the EUIPO (if Beebe’s theory is right). Perhaps, then, counsel would be best placed turning their attention to images – it may be a while before all those options run out.
