Philippines – New Declaration of Actual use for maintenance of trademark rights

In the Philippines there has been an important legislative change concerning the maintenance of trademark rights. The change involves a new Declaration of Actual Use (“DAU”), as established by the Intellectual Property Office of the Philippines (IPO) in Circular No. 17-010 (2017 Trademark Regulation), in effect since 1 August 2017.

It would seem that this change derives from the need to adapt Philippine trademark legislation in line with the provisions of the Madrid Protocol, although there may also be other reasons such as a desire to restrict exclusive rights from being obtained in defensive marks or perhaps even to introduce a new official fee. However, our task here is not to analyse the reasons for the changes but to explain them as simply as possible.

Up to now, to preserve trademark rights in the Philippines it has been necessary to attest to use by submitting a DAU and evidence of the use. Under the new Trademarks Act, it has been required to attest to use at different points in the lifetime of the mark:

• By the third anniversary of the filing date of the trademark application, 
• Between the fifth and sixth anniversary of the date of registration of the mark, and 
• Between the fifth and sixth anniversary of the date of renewal of the mark

Circular No. 17-010 establishes an additional DAU to those already required under the existing legislation, which must be filed within one year from the date of renewal of the mark.

The requirement to submit the DAU affects Philippine national marks, international marks designating the Philippines and subsequent designations of the Philippines for international marks. If a mark has been protected through the international registration system, while the term is also one year, it is calculated from the date of renewal of the international mark.

Circular No. 17-010 is certainly complex, as it appears to indicate that the requirement to submit the new DAU will be applied with retroactive effect to marks that have been renewed since 1 January 2017, and at the same time it appears to state that this requirement must be met for all marks within one year from its renewal date.

In practice, for each trademark that is to be kept in force in the Philippines, a DAU will have to be submitted within the established term of one year from the renewal date and that same formality will have to be carried out again at each 10-year cycle during the lifetime of the registration.

In the more immediate term, those owners of trademarks which were due for renewal from 1 January 2017 will have to satisfy the requirement of submitting the DAU before the end of the one year term from the date on which the registration was set to expire. Those owners that have renewed their marks in the course of 2017 and wish to keep them in force, will have to keep in mind that they must comply with this requirement within the time limit.

This retroactive effect will not really exist in relation to international marks because the Philippines acceded to the Madrid Protocol on 25 July 2012. Therefore, the first international marks designating the Philippines will not be due for renewal until 2022. In this regard, Article 14.5 of the Madrid Protocol establishes that with respect to international registrations made under the Protocol prior to the accession thereto of the State in question, subsequent designations of protection in that State are not possible, and therefore there would not be any subsequent designations of trademarks in the Philippines that would be affected retroactively by this new requirement. In the case of international marks, it is a change to bear in mind in the longer term.

Author: Cristina Arroyo

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Another round concerning revocation of trademarks on grounds of non-use: the CJEU's judgment of 19 December 2012 in the Leno Case

The use requirement for Community trademarks and the territorial scope of that requirement remain controversial issues. A recent judgment by the CJEU has formalized matters somewhat in ruling that "borders of the Member States should be disregarded" when assessing genuine use of a Community trademark in the Community in matters bearing on revocation. Even so, this seemingly unambiguous finding fails to dispel all the question marks.

The case has again raised the long-standing issue of whether use of a trademark in a single Member State (in this case, The Netherlands) suffices to fulfil the requirement for "genuine use in the Community". The reference for a preliminary ruling was made in opposition proceedings at the Benelux national office requiring the opposing party to submit proof of use, but the doctrine set forth in the judgment is deemed extensible to applications for revocation of rights entered at the OHIM or counterclaims for revocation entered in infringement proceedings citing Community trademarks.

The Court has explicitly rejected both the OHIM Guidelines and a Joint Statement deeming use in one country to constitute genuine use in the Community, on grounds that they were not binding legal acts. Yet, at the same time, it has not completely ruled out that interpretation. The Court acknowledges that since a Community trademark enjoys more extensive territorial protection, it should be used "in a larger area than the territory of a single Member State", only to go on to say, right afterwards, that it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a Community trademark has been registered "is in fact restricted to the territory of a single Member State". 

In the end the Court opted not to lay down a de minimis rule, admitting that it is impossible to determine a priori, and in the abstract, what territorial scope should be chosen and that it is up to the national courts to determine the genuine nature of use based on all the facts and circumstances in each individual case. The Court held that demonstrating whether "the commercial exploitation of the mark serves to create or maintain market shares for the goods or services for which it was registered" entails assessing the characteristics of the market concerned, the nature of the goods or services protected by the trademark, the territorial extent and scale of use, and the frequency and regularity of use. 

Now is thus a good opportunity to reflect on the consequences of the judgment and to review strategies with a view to the always difficult matter of choosing between national and Community trademarks, not only as grounds for opposition but also for portfolio maintenance.

Author: Miguel Ángel Medina

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The selection and use of a reputed trademark as a keyword with “due cause” does not constitute infringement of the rights of the trademark holder. Judgment of the CJEU of 22 September 2011, Interflora (C-462/09).

1.    Background.  Interflora, the famous network of independent florists with whom clients may place orders in person, on the telephone or via the Internet, brought legal action in the United Kingdom against Marks & Spencer (one of the main retailers in the United Kingdom) for having selected the registered trademark INTERFLORA, as well as other variants, as a keyword, which meant that when the term “Interflora” was entered into the Google search engine, Marks & Spencer advertisements appeared under the heading “sponsored links”.  The text of the advertisement did not, however, include the term “Interflora”, but it did contain references to M&S and <marksandspencer.com>.  The High Court of Justice (England & Wales), Chancery Division, stayed the proceedings and referred a number of questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling.  All of the questions were aimed at elucidating the extent to which Marks & Spencer’s conduct might constitute infringement of Interflora’s trademark rights.

2.    Findings.  The CJEU first of all refers to the doctrine enshrined in the judgments of 23 March 2010 (joined cases C-236/08 to C-238/08 Google) and 25 March 2010 (case C-278/08 BergSpechte), and stresses that the sign selected by an advertiser as a keyword constitutes use in trade.  The court confirms that the use of the mark is made in relation to the advertiser’s goods or services, even where the sign selected as a keyword does not appear in the advertisement itself, and in order for the trademark holder to be able to prevent such use, the existence of a double identity situation, as described in Article 5.1(a) of the “Trademark Directive”, will not suffice; rather, the use must have, or be liable to have, an adverse effect on the functions of the mark (the essential function ofguaranteeing the origin of the product to consumers and the advertising function), as well as the newly-coined trademark’s “investment” function which, despite overlapping with the advertising function to a certain degree, refers to the measures taken by a trademark holder “to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty”.

The second part of the judgment analyses the dispute from the standpoint of Article 5.1(b) of the “Trademark Directive” and from the perspective that the INTERFLORA trademark has a reputation.  The court finds that the holder of a reputed trademark is entitled to prevent the use of its mark by third parties where that use takes unfair advantage of the distinctive character or the repute of the trademark or is detrimental to that distinctive character or repute.  Based on case-law arising from the judgments handed down in cases C-408/01 Adidas and C-487/07 L'Oréal, the court holds that the selection of a sign identical or similar to a reputed trademark as a keyword within the context of an Internet referencing service does not necessarily contribute to a reduction in the sign’s distinctive character and its becoming a generic term.

In the final part of the judgment, the CJEU states that a trademark with a reputation selected within the context of an Internet referencing service by a party other than the trademark holder can be construed as having been used with due cause and within the scope of healthy and fair competition where the sponsored link advertisement proposes an alternative to the goods or services of the trademark holder without offering a mere imitation of the trademark holder’s goods or services, without causing dilution or tarnishment, and without adversely affecting the functions of the trademark in question. 

3.    Remarks.  This judgment once again tackles the boundaries of legality in the use of third-party trademarks as keywords, although it introduces two new aspects in respect of previous judgments.  On the one hand, it refers to the trademark’s “investment” function and, on the other hand, it tackles the dispute from the standpoint of a trademark with a reputation.  The court once again defends the principle of free competition, but provides the national courts with a series of guidelines and tools so that they can resolve any disputes arising between trademark holders (including holders of reputed trademarks) and those who select those marks as keywords based on the wording of the sponsored link and its content.

Author: Luis Baz

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