by
Dennis S. Prahl, Esq. *

A number of changes in international trademark practice have occurred in the past few years at a pace that the practice has seldom seen. One of the most important was the arrival of the Community Trademark in the European Union. The development of the Community Trademark, a trademark registration system that would offer a single trademark registration to protect a trademark in all member states of the European Union, presently fifteen in all, was fraught with legal as well as political intrigue.

Any number of obstacles slowed the progress of the Community Trademark from its inception to its ultimate implementation. The concept of a Community Trademark appeared first in 1964, when a working group of the then Common Market prepared a draft "Convention on European Trademark Law," which was made public only nine years later in 1973. Thus it could be said that this is the 35th anniversary progress report, even though the Office has been functioning for a little more than 3 years. The first concrete proposal for a regulation on the Community Trademark appeared in 1980. In order to create an even landscape within which the Community Trademark could function, by achieving some degree of uniformity in practice by all national trademark offices as well as the Community Trademark Office ("the Office"), the European Communities first implemented the Harmonization Directive relating to Trademarks in 1989. This was followed by the Council Regulation of December 20, 1993 establishing the Community Trademark ("Council Regulation").

As some might recall, the final challenges to implementation of the Community Trademark boiled down to two questions: which language(s) could be used in connection with the Community Trademark and where the Office would be located. Ultimately, a somewhat complex set of rules providing for five official Community Trademark Office languages - while still providing for the use of all eleven official EU languages for certain purposes - and a site in Alicante, Spain, cleared the way for the opening of the Community Trademark Office.

Since the Community Trademark Office aspired to operate in eleven languages, its original mission was akin to building the Tower of Babel on the eastern coast of Spain. However, the Tower was finally constructed and started accepting trademark applications on January 1, 1996, with an official opening day of April 1, 1996.

Official estimates of the number of trademark applications that would be filed in the first year of operation underestimated the attraction of the Community Trademark system to trademark owners. Originally, it was estimated that the Office would receive approximately 15,000 applications during 1996. The reality was closer to 40,000, which initially overwhelmed the Office's resources.

I. Overview of Trademark Registration Procedure

To understand the progress of the Community Trademark, it is helpful to understand the Community Trademark application procedure. An application to register a Community Trademark may be filed with the Office, or may be filed with one of the national trademark offices which must then forward the application to the Office. The application form is fairly straightforward. Unlike in the United States, no statements need be signed by the applicant, only an Authorization (Power of Attorney), and no user information is required.

The application must be filed in two languages: the first may be any of the eleven official languages of the European Union (Danish, Dutch, English, French, Finnish, German, Greek, Italian, Portuguese, Spanish or Swedish) and the second must be an "Office language" (English, French, German, Italian or Spanish). The first Office language chosen will be used in communications that affect only the applicant and the Office, whereas opposition proceedings may be conducted in any Office languages claimed in the application, unless the parties agree otherwise. Thus an opponent wishing to oppose an application filed in English and French, may oppose in either English or French, whereas opposing an application filed in Greek and English would require that the opposition be filed in English.

An application may be filed in respect of any number of International classes, and may designate either the class heading of an International class, which is encouraged by the Office in order to facilitate translations, or specific goods or services. Specifications are examined only to ensure that the goods or services listed properly fall in the International classes claimed.

If the applicant already owns registrations in one or more of the European Union member states for an identical mark that covers, wholly or in part, the identical goods or services of the Community Trademark application, the applicant may claim "seniority" of the corresponding national registration or registrations. Such claims must be filed with the application, within two months of the filing date or anytime after the application issues to registration. Seniority claims must include documentary proof of the registrations being claimed. This topic is discussed in greater detail below.

Applications are examined for compliance with formality requirements and simultaneously undergo the process of translation into all eleven official languages of the European Union.

In addition, copies of the application are sent to those member state trademark offices that have requested them, namely all except Germany, France, Italy and most recently Ireland, so that they may conduct searches of their own trademark registers. Such national search reports are sent to the Office which forwards them, together with the results of a search of its own register, to the applicant. The Office is unable to object to registration of an application on the basis of marks disclosed in the search reports; rather the reports are intended to serve as a guide to the applicant to determine whether any serious objections could be raised to the registration of its application.

A substantive examination for inherent registrability is also conducted, in accordance with Article 7 of the Council Regulation, which is reproduced as Appendix A hereto. If the Examiner issues an objection to registration of the mark, the applicant is granted a term of two months within which to respond, which term is generally extendable for a reasonable period of time at the discretion of the Office.

If the application is accepted, it is published for opposition in the Official Gazette in all eleven official languages of the European Union. Third parties may file a Notice of Opposition within three months of the date of publication. There is no possibility of extending the opposition term. In addition to the publication, the Office will notify the agents of record for any Community Trademark applications or registrations that were cited in its search report that the application is being published.

The Notice of Opposition is fairly straightforward, consisting of various entries to be completed and boxes to be checked. However, it is important to note in view of several Board decisions that the information must be completed accurately, since incorrect of missing information often serves as a ground for rejecting an opposition. An opposition may be based on any or all of the grounds specified in Article 8 of the Council Regulation, which is attached as Appendix B hereto. A conflicting prior right in only one member state is sufficient to defeat the entire Community Trademark application.

The Notice of Opposition must clearly state the grounds of the opposition, although supporting documentation, such as copies and translations of Certificates of Registration may be submitted subsequently.

The opponent must also choose whether to file the Notice of Opposition in the first or second language of the application, which choice will decide the language of the opposition proceedings, unless the parties agree to use another official language of the European Union.

Once the Notice of Opposition is filed, and provided that the Notice of Opposition is deemed admissible by the Office, the applicant is given notice of the opposition, whereupon the so called "cooling-off" period of two months commences. The cooling-off period is the period of time within which the applicant may either withdraw his application, delete the portion of his application against which the opposition is directed, or negotiate the withdrawal of the opposition, with the result that neither party will be ordered to pay the costs of the other party. The cooling-off period is extendible upon the consent of both parties. Once the cooling-off period expires, the adversarial portion of the proceeding commences and the applicant's reply to the Notice of Opposition is due within one month following the termination of the cooling-off period; this period is also extendible with the consent of both parties. Once the adversarial portion of the proceeding commences, the prevailing party is entitled to an award of its costs against the losing party.

The opponent is provided a further period within which to file additional supporting arguments and evidence and the applicant is then invited to file their observations in reply to whatever has been filed by the opponent.

Once an application is published for opposition, third parties may file "Observations" against the application on the ground that the mark is inherently unregistrable in accordance with Article 7 of the Council Regulation. Parties who file observations are not parties to the observation proceedings; rather the observations are considered by the examiner who, if he considers it appropriate, will issue a corresponding objection to which the applicant must reply.

Once the opposition period has passed without oppositions being filed, or once a final decision in opposition proceedings has been issued, the Office will request that the applicant attend to payment of the registration fee. If the applicant or his representative has an account with the Office, the registration fees will automatically be deducted from the account at the appropriate time unless payment is received in some other manner or the application is withdrawn.

After payment of the final registration fees, the registration is again published in the Official Gazette and the Certificate of Registration is issued.

In the event that a Community Trademark application is finally rejected or withdrawn, or a Community Trademark registration is canceled or withdrawn, the owner may within three months of the final action convert the application or registration into national applications, the application date of which will be the same as the application date of the original Community Trademark. Conversion applications may be filed in any member states which were not a cause for the rejection or cancellation of the Community Trademark.

In general, it should be noted that the Office prefers that all communications, where possible, be transmitted by telefax. Almost all communications issued by the Office to outside parties are sent by telefax. In addition, the Office discourages the sending of duplicate correspondence, such as the time-honored tradition of sending a letter by Fax and sending a confirmation copy by air mail.

II. Statistical Progress

1. Applications

As of the end of October 1999, 135,004 trademark applications have been received by the Office since it opened, 33,184 of which were received in 1999 alone.

A few interesting trends can be discerned from the statistics. About 61% of the applications filed have originated from applicants within the European Union, of which Germany, the United Kingdom and Italy are the top three sources of applicants. Less than 3 percent of applicants are from Japan, whereas more than 27% of applicants are from the United States, more than from any individual European Union member state.

The top four international classes of interest to applicants are, in order, Class 9, Class 42, Class 16 and Class 25. The least claimed classes are classes 13, 15 and 23. Approximately 41% of applications claim only one class, 16% claim two classes and 27% claim three classes.

Approximately 16% of applications have claimed seniority. The award for most seniorities claimed goes to a single application which claimed seniority in 236 prior national registrations.

2. Registrations

Of the total number of applications filed as of the end of October 1999, namely 135,004, 53,645 have issued to registration, 28,789 of which issued to registration in 1999.

3. Oppositions

As of October 1999, the Office had received 20,063 oppositions, an average of about one opposition filed for every four published applications. Of these, 8,032 were finally settled either by decision (864) or by withdrawal (7,168), while 12,031 oppositions remained pending. The vast majority of oppositions, approximately 77%, use English as the language of the proceedings, followed by German (11%), French (6%), Spanish (4%) and Italian (1.4 %).

United States applicants, on average 23%, are most likely to encounter oppositions, undoubtedly because they constitute the greatest pool of applicants by country, followed by the United Kingdom (17%) and Germany (16%). Opponents are more likely to be from Germany, from which 33% of opponents originate, followed by Spanish opponents (17%) and United States opponents (11%). Similarly, German firms file approximately 34% of oppositions, Spanish firms 27%, and United Kingdom firms 14%.

Therefore, on the assumption that trademark owners are choosing English as the first language of their Community Trademark applications, and wish to increase their chances that opposition proceedings, if any, will be filed in English, they should probably not choose German as a second language, but rather choose another second language whose national practitioners have experience, both historical and current, in prosecuting opposition proceedings.

Approximately 92% of oppositions are based on the ground of likelihood of confusion, although alternative bases may also be claimed.

4. Appeals

i. Boards of Appeal

As of the end of October 1999, 903 appeals had been filed before the Boards of Appeal, of which 57 had been terminated by interlocutory revision, and 243 had been concluded by decision of the Boards of Appeal, leaving 717 appeals pending. The average pendency of an appeal has increased from 5 months in 1998 to 6 months in 1999.

ii. Court of First Instance (European Court of Justice)

In 1998 a total of one appeal was brought before the Court of First Instance, and, as of October 31, 1999, nine additional appeals have been brought, representing only a negligible percentage of cases that are eligible for appeal. Whether this indicates an overwhelming satisfaction with the decisions of the Boards of Appeal, or whether it represents an aversion to appeal costs, is as yet undetermined.

5. Languages

Almost 43% of applications claim English as their first language, followed by approximately 19% of which claim German. The least used Office language is Spanish and the least used official language is Greek. With respect to second languages, over 52% of applications claim English as the second language, followed by over 29% that claim French.

III. Procedural Progress

1. Searches

As indicated above, during the examination procedure, the Office conducts a search of the Community Trademark register for prior conflicting marks and sends the search results, together with the national trademark office search results it receives (discussed further below), to the applicant for informational purposes. Unfortunately, the search results prepared by the Office do not contain representations of marks that consist of or contain figurative elements, and do not contain information concerning the exact goods or services covered by the marks. Such information must be obtained through secondary sources.

Another difficulty arises when Examiners issue registrability objections before the search reports are received, thereby in some cases depriving the applicant of potentially valuable information concerning other marks of a similar nature.

The Office also sends notification to the trademark owners revealed in the search that the respective application is being published for opposition. Such notifications, however, suffer the same problems as the search results, namely, they do not provide sufficient information to be useful by themselves, but rather force trademark owners or their representatives to perform additional work to obtain relevant details. The new on-line access to the Office's trademark register database may ameliorate this situation, but it does not solve the problem.

2. Time Frame

The period of time from when a Community Trademark application is filed to when the Certificate of Registration is issued has decreased dramatically since 1996. Barring any impediments to registration, the registration process in the beginning could last for up to two years. Now, the same application would be registered within approximately 12 to 14 months. In view of various logistical considerations, such as allowing national trademark offices time to search their registers as well as publication schedules, and statutory requirements, such as the three-month opposition term, this period of time is unlikely to be further shortened. Trademark owners can expedite the process by up to six weeks by attending to payment of the final registration fees as soon as the notification requesting them is received.

3. Seniority

As indicated above, a significant number of trademark applicants have claimed seniority in prior national registrations. The advantage is that the national rights may be incorporated in the Community Trademark Registration so that the individual national registrations may be allowed to lapse when due for renewal, thereby saving trademark owners significant renewal costs.

The Office requires that national rights to which seniority is claimed must meet three criteria:

The first criterion was called into question in a decision of the Board of Appeal regarding a seniority claim involving the THINK PAD mark, where the national mark and the Community trademark differed insofar as one consisted of two words and the other consisted of a single word, in which the Board held that although this was a variation it was not a sufficient variation to defeat the claim for seniority. In addition, the third criterion required so much detailed examination that, unfortunately, the work involved in examining claims to seniority overwhelmed the Office, which in 1997 temporarily suspended the further examination of seniority claims.

In 1998 the Office decided to allow Community Trademark applications that claimed seniority to proceed to registration with only a cursory examination of the seniority documentation, which called into question the validity of the seniority claims involved and left most trademark owners to forego new seniority claims until the Office resolves the situation.

4. Opposition Procedure

In March of this year, the opposition procedure was modified so that applicants are now informed at an early stage whether an opposition has been filed, even before the opposition may be considered admissible. This provides applicants more time in which to approach the opponents with a view to determining whether some amicable arrangement may be made to resolve the dispute without proceeding with the opposition. Once the opposition is deemed admissible, the Office sends notification to the applicant, advising of the following relevant time periods:

5. Observation Procedure

On November 3, 1999, the Office issued a Circular Letter to International Non Governmental Organizations containing comments and proposals on the Observation procedure. Of particular interest are the following statements:-

These proposals were still under review as of the writing of this paper.

IV. Substantive Progress

1. Examination

i. Examiners

The Office examiners have now processed a significant number of applications and have issued a significant amount of objections and rejections, with the result that certain trends are emerging. An exhaustive list of marks that have been finally refused may be found on the Office's website at http://oami.eu.int/en/marque/refus.htm.

The definition of an inherently registrable trademark is contained in Article 4 of the Council Regulation, namely "a Community trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings." The practice with respect to what fulfills these requirements varies. The Office initially rejected marks which consisted solely of two letters, but subsequently changed its practice and allowed two-letter marks, or letter and numeral combination marks, provided that they are not otherwise descriptive.

Currently there are some difficulties in registering slogan marks, which may be readily accepted in other trademark offices, such as the USPTO. The line concerning what constitutes a distinctive slogan is still being drawn. Surnames appear to be inherently registrable as well as distinctive sound marks, such as the jingle made by an ice cream truck.

Marks may not be registered to cover "retail services", even though such protection is available in many of the European Union member state trademark offices.

An unfortunate, but hopefully aberrational situation, is the issuance by certain Examiners of rejections that have not been completely considered or do not take full account of the applicants' submissions. Fortunately, the Boards of Appeal appear to be ready to remedy this situation when presented although the appeal process adds unnecessary expense.

It has also become apparent that Examiners may not be giving due deference to the submissions of applicants in certain cases, instead relying on boilerplate language in their Office Actions. Often applicants, in responding to an inherent registrability objection, point to other examples of marks that have been considered eligible for registration and that possess similar characteristics. The Examiners, however, all too frequently rely on the wording of the Board of Appeals in such situations, simply remarking that, as noted in the Board decision in 'TELEPAELLA' of 16 June 1998 (R 54/1998-1), "each mark has to be assessed on the basis of the specific circumstances of the case and any irregularity which might have been committed in respect of other marks would not have the effect of eliminating the insufficiencies of the appellant's mark . . . None of the examples given by the appellant however exactly matches the mark the subject of the application, nor are the goods or services the same or similar, or even in a competitive relationship." In the face of such reasoning it must be asked why would a trademark owner adopt a trademark that "exactly matches" an earlier trademark for the same or similar goods. This standard is practically impossible for trade mark applicants to meet. Presumably, if there are already identical or similar marks on the relevant trade mark register(s) with respect to goods or services that are identical or similar to those of the applicant, the applicant which has good trade mark counsel would not be applying for such a mark or even adopting such a mark for fear of opposition and infringement proceedings being brought by the owner of such earlier conflicting trade marks. By adopting this standard, the Office has conveniently relieved the Examiners of the duty not to discriminate since applicants can hardly be in a position to establish such discrimination through inconsistent registrability decisions.

Examiners will generally accept for registration arguably descriptive or non-distinctive marks that also contain a device element or are highly stylized, even though the word mark itself may not be considered registrable per se.

Finally, in the opinion of the author, some Examiners do not give appropriate weight to national registrations that have been obtained by the applicant for the same mark, even though the Examination Guidelines indicate that if similarly situated trade marks are already registered in many or all the Member States of the Community, absolute grounds for refusal are unlikely to exist. However, applicants are met with language such as "decisions of national Offices of Member States may exercise some influence, since they reflect the process of harmonization of Community trade mark laws. However, the Community trade mark necessitates a new approach since it is a distinct intellectual property title producing effects throughout the entire area of the Community. Furthermore, it has been consistently held by the Boards, that even if the competent authorities in one or more Member States had held the trade mark to be sufficiently distinctive, the same findings would not necessarily had been reached by the examiner of the Office, who must in each case make his own assessment as to the existence of absolute grounds of refusal." Similar statements often appear in correspondence with the Examiners, without offering any detailed analysis of the documents submitted, thereby conveniently relieving the Examiner of the duty to justify their decisions with reasoned grounds.

ii. Opposition Boards

Many opposition decisions are available on the Office's website at http://oami.eu.int/en/marque/default.htm. Approximately 40% of the oppositions filed are rejected by the Opposition Boards before the merits are even decided, largely for failure to comply with formalities. In certain cases, these decisions reflect an inadequacy on the part of trademark owners and their representatives to comply with basic requirements, such as submitting an appropriate Authorization, providing full and accurate details of the rights on which the opposition is based, providing complete translations of documentation in the language of the proceedings. In other cases, the decisions represent a rather rigid attitude toward compliance with formalities.

Of those decisions that have addressed the merits of the opposition, it is apparent that the Opposition Boards are conducting an adequate examination and analysis of all the relevant issues, including an analysis of whether the goods and services on which the opposition are based are in fact confusingly similar to the goods and services of the application, having regard to the consumers involved and the trade channels. Also, a fairly thorough analysis with respect to similarity of the marks themselves is also conducted.

2. Boards of Appeal

Many of the decisions of the Boards of Appeal are also available from the Office's website, at http://oami.eu.int/en/marque/decis.htm. An analysis of these decisions has indicated that most of the Office decisions that are appealed on substantive grounds are upheld by the Boards of Appeal, although most of the Office decisions relating to procedural grounds are not upheld.

It is certainly not possible to review all of the decisions of the Boards of Appeal in this paper. However, it is interesting to note some of the following principles that have been held by the Boards.

It is apparent from a number of decisions that the Boards execute their duty to be independent. The Boards have not only overturned a policy decision of the President of the Office with respect to an issue involving seniority claims, but have also overturned an Examiner's basis for rejecting a trademark application and issued their own rejection on other grounds.

Although there is provision for oral hearings before the Boards, such hearings have generally been discouraged.

The Boards have issued decisions with respect to unusual types of marks, accepting for registration olfactory marks (the smell of fresh cut grass for tennis balls), although rejecting singl colors absent a showing of acquired distinctiveness. The Boards of Appeal have not yet accepted a three-dimensional mark for registration.

3. Court of First Instance/European Court of Justice

The first published decision of the Court of First Instance with respect to Community Trademark applications involved the BABY-DRY trademark of Procter & Gamble Company and held that trademark applicants should have been allowed to introduce evidence of acquired distinctiveness before the Board of Appeal after an application for registration of a mark had been rejected by the examiner as lacking distinctiveness, even though no evidence of distinctiveness was produced during the initial examination. It is hoped that decisions of the Court of First Instance will continue to regulate the actions of the Office and Boards of Appeal so as to create consistency.

V. Interplay with the National Trademark Offices

A noticeable effect which the Community Trademark system has had on the national trademark offices is that the registration procedure in most national offices has, for the most part, become much faster. Applications in many offices are now being examined within just a few months from filing, with the result that, barring any serious impediments to registration, it is much faster to obtain national trademark registrations in many of the member states than it is to obtain a Community Trademark registration.

1. National Searches

Nine of the thirteen national trademark offices play a key role in the Community Trademark application process by conducting searches of their own national registers and sending the search results to the Office to send to the applicant. These searches provide information concerning, at a minimum, the marks revealed, the classes, and the application or registration numbers of the marks revealed. Unfortunately, the largest complaint of trademark applicants and practitioners is that these searches do not provide important information such as, for example, the owners of the marks cited, the goods and services covered, representations of the marks, or the status of the marks, information which must be obtained from other sources. The national trademark offices do not seem to be in any hurry to provide the additional information which would make their search results more useful. Ireland was one of the countries which also conducted searches of its register, although such searches were recently suspended.

2. Conversion

As indicated above, in the event that a Community trademark application is withdrawn or finally rejected, it is possible to convert the application into national applications and retain the priority filing date.

Unfortunately, the conversion procedure in practice is more expensive and cumbersome than filing national applications from the start. It is no surprise that neither national practitioners nor national trademark offices offer any discount in fees, official or otherwise, for Community trademark conversion applications. Therefore, in addition to the Office's fees for conversion, the basic costs of filing nationally remain the same. However, depending upon the language of the application and the country of conversion, there are additional costs for translating documents and additional administrative costs in coordinating the notifications of the Office to the representative and to the various national trademark offices with local counsel in those countries.

3. Substantive Inconsistencies

It should also be noted, although it is not surprising, that there remain inconsistencies in the treatment of trademarks between the Office and the national offices. Trademark owners and practitioners have always been aware that there has been disparate registrability standards between the trademark offices of the various member states, a situation which made the Community Trademark Office an attractive alternative. The Harmonization Directive relating to trademark law was intended to minimize such discrepancies. However, it is interesting that national applications that were converted from Community Trademark applications, which may have been deemed registrable by the Community Trademark Office, will still receive objections to registrability by the national trademark offices. Ultimately it is hoped that decisions of the European Court of Justice will bring all of these registrability standards into line. However, given the relatively slow rate of European Court of Justice decisions on trademark issues, this task will not be accomplished soon.

VI. New and Upcoming Developments

1. New Application Form

The Office will be publishing a new application form which may be used after January 1, 2000. The form will be available in .pdf format and may be completed on-line.

2. Electronic Filing

Although the Office is considering the possibility of accepting communications electronically, such as filings by e-mail, etc., the reality of such communications appears to be far away in view of the technological and logistical obstacles that must be overcome and the relative importance of such a project to other more pressing problems.

3. Seniority Claims

As discussed above, the complete examination of seniority claims has been temporarily suspended for over two years. The Office is expected to issue a new policy which is to become effective in March of next year. Under the new policy, seniority claims that are filed as of March 2000, will be examined for identity of marks, although it appears that the identity of goods and services as well as the identity of ownership may not be examined. In addition, the documentation acceptable to prove the existence of national trademark rights will become less strict, so that trademark applicants need no longer submit either Certificates of Registration that are less than 6 months old or, alternatively, certified copies of Certificates of Registration and renewal. Seniority claims that were filed prior to March 2000 will apparently not be examined and trademark owners may be advised to resubmit such claims as post-registration claims.

4. Access to Online Trademark Register Database

The Office currently makes available to subscribers its entire database on CD-ROM. In view of the significant cost of the subscription, there are only a few dozen subscribers, most of which are commercial search companies who then incorporate the data into their own search systems for access by their own subscribers. As of December 3, 1999, the Office has made available a rudimentary search engine which may be used to obtain complete particulars of registrations and applications. Searches may be conducted by trademark or by application or registration number.

5. New Filing Receipt Procedure

The Office will soon be establishing a new filing receipt procedure which, unlike the current procedure which simply acknowledges that documents were received and then issues a filing date and application number, will confirm the complete details of the application, including specifications, so that mistakes may be rectified at an early date.

6. Link to the Madrid System

One of the reasons for the intensified efforts in the late 1980s and early 1990s to make the Community Trademark system a reality was the fear that the Madrid Protocol, to which all European Union member states were expected to become members, might overtake the relevance of the Community Trademark. Likewise, an important feature of the Community Trademark would be a link to the Madrid System, so that the owner of an International registration under the Madrid Protocol would be able to extend the International registration to the Community Trademark Office (thereby eliminating the need to extend to all thirteen national trademark offices individually) and, similarly, a Community Trademark application or registration could serve as a basis for Europeans to obtain an International registration under the Madrid Protocol. Much work has been accomplished on integrating the two systems, although integration has not yet been completed since the European Union has not yet, itself, become party to the Madrid Protocol. Interestingly, United States trademark owners may remember that it is the possibility of European Union membership and voting in the Protocol that is preventing the United States government from becoming a party to the Protocol.

7. Who may apply

Although the Community Trademark system is open to trademark owners from all European Union member states, all member states of the Paris Convention and of the World Trade Organization, there remain a small number of countries who, for whatever reason, remain outside these major agreements, in particular a few countries which are attractive jurisdictions for establishing so-called "off-shore companies." The tax gain for such companies has resulted in a trademark loss since applicants from such countries are not entitled to apply for or own a Community Trademark registration, unless it is established that there is reciprocity between the European Union member states and that country. Although this situation does not arise very often, those who represent the trademark portfolios of such applicants are left with few options: applications may be filed and held in abeyance pending the issuance of a decision on reciprocity by the Office with respect to the applicant's country of origin; applicants may prove that they have sufficient contacts with a World Trade Organization or Paris Convention member state, such as a real and effective commercial or industrial establishment, to legitimize their status; or applicants may assign applications to a party that has standing to file the applications. Unfortunately, there has been little progress on this issue, which remains a significant obstacle to certain trademark owners.

The Community Trademark system has been one of the most important trademark developments in this decade and the system will continue to play an increasingly important role in the trademark arena in the next century. Although the Office is not even four years old, the Office has become an attractive alternative for trademark owners for protecting their marks in the European Union. Certainly, however, there is still much room for maturation ahead which will come with time, experience, and guidance from the courts, trademark owners and practitioners.

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The author is a partner resident in the New York office of the multinational intellectual property law firm of Ladas & Parry and specializes in international trademark clearance, prosecution and enforcement. The author gratefully acknowledges the invaluable assistance of Dr. Alexander v. Mühlendahl, Vice President of the Office of Harmonization in the Internal Market.