The Community trade mark gives its proprietor a uniform right applicable in all Member States of the European Union on the strength of a single procedure which simplifies trade mark policies at European level. It fulfils the three essential functions of a trade mark at European level: it identifies the origin of goods and services, guarantees consistent quality through evidence of the company’s commitment to the consumer, and is a form of communication, a basis for publicity and advertising.
The Community trade mark may be used as a manufacturer’s mark, a mark for goods of a trading company, or service mark. It may also take the form of a collective trade mark: properly applied, the regulation governing the use of the collective trade mark guarantees the origin, the nature and the quality of goods and services by making them distinguishable, which is beneficial to members of the association or body owning the trade mark.
The Community trade mark covers a market of more than 350 million consumers who enjoy some of the highest living standards in the world. The Community trade mark is obtained by registration in the Register kept by the Harmonization Office. When registered, transferred or allowed to lapse, the effect of such action is Community-wide. It is valid for a period of 10 years and may be renewed indefinitely. The rules of law applicable to it are similar to those applied to national trade marks by the Member States. Companies will therefore find themselves in a familiar environment, just on a larger scale.
Another advantage are the fees. The initial cost of filing an application to register a CTM is much less than filing separate national applications in all EU member states (which currently number 25). For filing purposes, the economic advantage of using the CTM system increases according to the number of member states where a trademark owner uses or proposes to use its mark. If a trademark owner will only sell products or deliver services in fewer than three or four member states, consideration should be given to seeking registration in these countries rather than applying for a CTM.
However, the economic advantage of using the CTM system will quickly dissipate if an application meets a serious objection from OHIM. This is because although the applicant for a failed CTM application may attempt to salvage the situation by converting the application into one or more national applications, the applicant cannot recover the costs of filing the CTM application and must in effect repay to file in each country where the CTM application is converted.
In addition, the increasing size of the EU increases the probability that there will be third parties who consider that a CTM application conflicts with their trademark rights, and oppose the application accordingly.