Explanatory Memorandum to COM(2013)161 - Amendment of Council Regulation (EC) No 207/2009 on the EC trade mark - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)161 - Amendment of Council Regulation (EC) No 207/2009 on the EC trade mark. |
|---|---|
| source | COM(2013)161  |
| date | 27-03-2013 |
The laws of the Member States relating to trade marks were partially harmonised by Council Directive 89/104/EEC of 21 December 1988, codified as Directive 2008/95/EC (hereinafter referred to as ‘the Directive’). Alongside and linked to the national trade mark systems, Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark, codified as Regulation (EC) No 207/2009 (hereinafter referred to as ‘the Regulation’), established a stand-alone system for the registration of unitary rights having equal effect throughout the EU. In that context the Office for Harmonization in the Internal Market (OHIM) was set up to be responsible for registering and administering Community trade marks.
A trade mark serves to distinguish the goods and services of a company. It is the mark through which a business can attract and retain customer loyalty, and create value and growth. The mark works in this case as an engine of innovation: the necessity to keep it relevant promotes investments in R & D, which leads in turn to a continuous process of product improvement and development. This dynamic process also has a favourable impact on employment. In an increasingly competitive environment, there has been a steady growth not only in the crucial role of trade marks for market success, but also in their commercial value and number. In 2012, a record number of Community trade mark applications were filed (over 107,900, against 98,217 in 2010 and 49,503 a decade earlier). OHIM also received its millionth application since starting operations in 1996 during 2011. This development has been accompanied by growing expectations on the part of stakeholders for more streamlined and high-quality trade mark registration systems, which are more consistent, publicly accessible and technologically up-to-date.
In 2007, when addressing the issue of the financial perspectives of OHIM, the Council i emphasised that the establishment of OHIM had been a great success and that it had contributed substantially to strengthening the competitiveness of the EU. It recalled that the Community trade mark system had been designed to co-exist with the national trade mark systems which continued to be necessary for those undertakings which did not want their trade marks protected at EU level. The Council further noted the importance of the complementary work of national trade mark offices, and called on OHIM to expand its cooperation with them in the interest of the overall functioning of the Community trade mark system. Last, it acknowledged that more than a decade had passed since the creation of the Community trade mark, and underlined the need for an overall assessment of the functioning of the Community trade mark system. It invited the Commission to start work on a corresponding study, in particular, with a view to intensifying and broadening the existing instruments of cooperation between OHIM and national trade mark offices.
In its 2008 Small Business Act i the Commission pledged to make the Community trade mark system more accessible to SMEs. Furthermore, the 2008 Communication on an Industrial Property Rights Strategy for Europe i underlined the Commission’s commitment to effective and efficient trade mark protection and to a trade mark system of high quality. It concluded that it was time for an overall evaluation which could form the basis for a future review of the trade mark system in Europe and for the further improvement of cooperation between OHIM and National Offices. In 2010, in the Communication on Europe 2020, under the Flagship Initiative ‘Innovation Union’, the Commission undertook to modernise the framework of trade marks in order to improve framework conditions for business to innovate i. Finally, in its 2011 IPR strategy for Europe[5], the Commission announced a review of the trade mark system in Europe with a view to modernising the system, both at EU and at national level, by making it more effective, efficient and consistent overall.
Considered together as a package, the main common objective of this initiative and of the parallel proposal for recast of the Directive is to foster innovation and economic growth by making trade mark registration systems all over the EU more accessible and efficient for businesses in terms of lower costs and complexity, increased speed, greater predictability and legal security. These adjustments dovetail with efforts to ensure coexistence and complementarity between the Union and national trade mark systems.
As regards this initiative to revise the Regulation, the Commission is not proposing a new system, but well-targeted modernisation of existing provisions, with these main aims:
· Adapting terminology to the Lisbon Treaty and provisions to the Common Approach on decentralised agencies (see section 5.1);
· Streamlining procedures to apply for and register a European trade mark (see section 5.2);
· Increasing legal certainty by clarifying provisions and removing ambiguities (see section 5.3);
· Establishing an appropriate framework for cooperation between OHIM and national offices for the promoting convergence of practices and developing common tools (see section 5.4);
· Aligning the framework to Article 290 of the Treaty on the Functioning of the European Union (TFEU) (see section 5.5).
Contents
- RESULTS OF CONSULTATIONS
- BUDGETARY IMPLICATION
- DETAILED EXPLANATION
- 1.2. Aim of the proposal
- WITH INTERESTED PARTIES AND IMPACT ASSESSMENT 2.1. Public consultation
- 2.2. Impact Assessment
- 3. LEGAL BASIS AND SUBSIDIARITY
- OF THE PROPOSAL
- 5.1. Adaptation of terminology and Common approach on Union decentralised agencies
- 5.2. Streamlining procedures
- 5.3. Increasing legal certainty
- 1. Rights conferred without prejudice to prior rights
- 2. Cases of double identity
- 3. Use as a trade or company name
- 4. Use in comparative advertising
- 5. Consignments from commercial suppliers
- 6. Goods brought into the customs territory
- 7. Preparatory acts
- 5.4. Framework for cooperation (Article 123c)
- 5.5. Alignment to Article 290 TFEU
This initiative is based on an evaluation of the way the trade mark system works in Europe as a whole and of extensive consultations with all major stakeholders involved.
The main component of the evaluation was a study the Max Planck Institute for Intellectual Property and Competition Law undertook on behalf of the Commission. The study was carried out between November 2009 and February 2011 i. In addition to expert analysis, the study involved consultations with various stakeholders. It included a survey among users of the Community trade mark system, contributions from organisations representing trade mark users at national, European and international level and a hearing in June 2010 involving these organisations. Lastly, the Institute consulted the National Offices of all the Member States and OHIM.
The Final Report concluded that the basics of the European trade mark system are solid. In particular, the procedures followed by OHIM generally met business needs and expectations. There was further consensus that the coexistence of Community and national trade mark rights is fundamental and necessary for the efficient functioning of a trade mark system that meets the requirements of companies of different sizes, markets and geographical needs. The Report nevertheless found that further convergence of trade mark laws and practices in the EU was required. It confirmed that many aspects of the current Community trade mark system were working well, and made a large number of proposals for improvement. It identified specific areas in which the OHIM and National Offices could enhance their cooperation.
Responding to the interim results of the study, the Council adopted Conclusions on 25 May 2010[7]. These endorsed the agreement reached in September 2008 within the OHIM governing bodies (Administrative Board and Budget Committee) on a set of budgetary measures intended to better balance OHIM's budget in the future. The Council agreed that these budgetary measures also contributed to modernising, streamlining, harmonising and strengthening the trade mark system in Europe as a whole. It called on the Commission to include in the revision the introduction of a specific provision to define the framework for cooperation between OHIM and the National Offices. This should make explicit that all EU trade mark offices should pursue harmonisation of practices and that the OHIM should facilitate their efforts to this end. It also called for the creation of a legal basis for distributing an amount equal to 50% of OHIM’s renewal fees to National Offices to be used for protecting, promoting and/or enforcing trade marks.
As a follow-up to the study, the Commission services convened a hearing of user associations on 26 May 2011. The results shaped and confirmed the Commission’s preliminary analysis.
The impact assessment identified one main problem the revised Regulation needs to address: the low level of cooperation among trade mark offices in Europe. As explained in the impact assessment, there are many links between the Community trade mark and national trade mark regimes, with direct consequences for both trade mark users and intellectaul property offices. These require a certain level of complementarity between the two systems. To achieve and ensure this, OHIM and National Offices should cooperate closely.
Efficient and effective cooperation between trade mark offices in Europe is currently seriously hindered by a number of obstacles:
· Lack of a clear legal basis for cooperation on EU trade mark legislation
· Lack of technical facilities in National Offices
· Lack of sustainable financing in the medium to long term.
The following options were considered to solve these problems and to achieve three corresponding objectives.
1. Providing an adequate legal basis for cooperation:
(a) Option 1: No specific legal basis for cooperation between intellectual property offices in Europe;
(b) Option 2: Legal basis allowing National Offices and OHIM to cooperate with one another (optional cooperation);
(c) Option 3: Legal basis obliging National Offices and OHIM to cooperate with one another (mandatory cooperation).
2. Technical capacity building at National Offices:
(a) Option 1: Each office to procure and develop the required facilities and tools;
(b) Option 2: Optional access to tools: the required facilities and tools accessible to IP offices within a framework of voluntary cooperation;
(c) Option 3: Mandatory access to tools: the required facilities accessible through a compulsory cooperation framework. This option overlaps with option 3 above regarding an adequate legal basis and option 3 below on long-term financing of cooperation activities.
3. Securing long-term financing for cooperation activities:
(a) Option 1: Financing from Member States;
(b) Option 2: Financing from EU budget;
(c) Option 3: Financing from OHIM budget.
The impact assessment concluded that option 3 would in all cases be proportionate and best suited to achieving the objectives pursued.
In the context of the establishment and functioning of the internal market, Article 118 i TFEU provides for the creation of European intellectual property rights to provide uniform protection for these rights throughout the EU, including the setting up of centralised Union-wide authorisation, coordination and supervision arrangements.
The Community trade mark is a self-standing EU intellectual property title created by an EU Regulation. The analysis carried out as part of the impact assessment proved that parts of the Regulation need to be changed to improve and streamline the Community trade mark system. Only the EU legislator has the competence to make the amendments needed.
The proposal will not have an impact on the European Union budget and is therefore not accompanied by the financial statement required under Article 31 of the Financial Regulation (Regulation (EC, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002).
The proposed amendments to the Regulation are presented according to the objectives set out in section 1.2 above.
As a consequence of the entry into force of the Lisbon Treaty, the terminology of the Regulation is updated. This means changing ‘Community trade mark’ to ‘European trade mark’.
There is a range of measures to improve the governance and efficiency of existing agencies and agencies yet to be established in the common approach on decentralised agencies, agreed by the European Parliament, the Council and the Commission in July 2012. The Regulation needs to be adapted to take into account the common approach as regards its provisions on OHIM. Regarding the name of the agency, it is proposed to rename it as the ‘European Union Trade Marks and Designs Agency’ (hereinafter ‘the Agency’), to enhance the functions of its Management Board, to align selection procedures for senior officials and to provide for annual and multi-annual work programmes and regular evaluations.
- Filing of applications (Article 25)
National Offices hardly ever receive applications for European trade marks any more. Almost all applications (96,3% in 2012) are now directly filed through the OHIM’s e-filing system. In the light of this situation, given that applications can now easily be filed on line, the option for filing these at National Offices should be abolished.
- Filing date (Article 27)
Most European trade mark applications are nowadays examined before the expiry of the one-month period before applicants have to pay the application fee. This allows applicants to file ‘test applications’ and not to pay the fee if a deficiency or objection is raised by the Agency. Payments via current accounts are deemed to be have been made on the last day of the month, if applicants so wish. Article 27 is therefore amended to abolish the one-month period and to link the ‘obligation’ to pay with the filing of the application, so that applicants will have to provide evidence that they submitted or authorised their payment when they filed their application.
- Searches (Articles 38 and 155)
The present regimes on searches provide neither a reliable trade mark clearance tool, nor fully comprehensive monitoring of the Register. The weaknesses of national and EU searches have become more acute over time, while IT advances nowadays mean users can have access to better, faster and cheaper alternatives. Applicants now have very little interest in obtaining the results of national searches from National Offices taking part in the optional system. The Agency is in the process of developing, together with National Offices, a number of promising tools that offer far better means of conducting priority searches and monitoring the registry for infringements. Current search regimes are therefore abolished.
- Publication of the application (Article 39)
Abolishing the search system will also make it possible to abolish the current one-month period between the Agency notifying the applicant of search reports and publication of the application. This will speed up the registration procedure.
- Observations by third parties (Article 40)
To facilitate the submission of observations by third parties, Article 40 is amended by extending the period over which observations can be filed. The reference to the publication date is to be deleted, taking into account that European trade mark applications are already made available to the public in the Agency’s trade mark database ‘CTM online’ within a few days of filing. To streamline proceedings, third parties will be given the opportunity to file observations as soon as they become aware of an application. The deadline for filing observations will be at the end of the opposition period or once opposition proceedings have concluded, following current Agency practice.
- Revision of decisions inter partes (Article 62)
Article 62 has turned out to be of no practical relevance. Not a single inter partes decision has been revised under this provision to date. The main reason is that the other party has no interest in giving the approval required by Article 62 i. Given that there are sufficient remedies to correct an erroneous inter partes decision, Article 62 is deleted.
- Continuation of proceedings (Article 82)
The application of Article 82 has led to some problems in practice and gave rise to a Communication of the President of the Agency, No 06/05[8]. Article 82 is amended to streamline its application and to incorporate the contents of that Communication. As both Article 25 i and Article 62 are deleted, all mentions of them are also deleted from the list of excluded time limits. The mention of Article 42 is also deleted to enable all time limits in opposition proceedings to continue, with the exception of the opposition period laid down in Article 41 i and the period for payment of the opposition fee set out in Article 41 i.
- Opposition period for International Registrations (Article 156)
As there is no need to maintain the six-month-long period currently provided for, Article 156 is amended to shorten the time between publication under Article 152 i and the start of the opposition period for international registrations to one month.
- Definition of a European trade mark (Article 4)
Article 4 is amended to remove the requirement of ‘graphic representability’. The prerequisite that it should be possible to produce a graphic representation of the sign applied for is out of date. It creates a great deal of legal uncertainty with regard to certain non-traditional marks, such as mere sounds. In the latter cases, representation by other than graphical means (e.g. by a sound file) may even be preferable to graphic representation, if it permits a more precise identification of the mark and thereby serves the aim of enhanced legal certainty. The proposed new definition leaves the door open to registering matter that can be represented by technological means offering satisfactory guarantees. The idea is not to go for a boundless extension of the admissible ways to represent a sign but to provide for more flexibility in that respect while ensuring greater legal certainty.
- Protection of geographical indications and traditional terms (Article 7)
Article 7(1)(j) and (k) do not offer the same degree of protection to geographical indications as provided in the following:
· Articles 13 and 14 of Regulation (EU) No 1151/2012 of 21 November 2012 on quality schemes for agricultural products and foodstuffs[9];
· Articles 118l and 118m of Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products, as amended by Regulation (EC) No 491/2009 of 25 May 2009[10];
· Article 16 of Regulation (EC) No 110/2008 of 15 January 2008 on the protection of geographical indications of spirit drinks[11].
To ensure that EU law protecting geographical indications is given full effect in proceedings relating to the registration of European trade marks, the relevant absolute grounds for refusal are fully aligned with the EU law on geographical indications and streamlined in the Regulation. Moreover, for reasons of coherence, grounds for refusal are extended to cover protected traditional terms for wine and traditional specialities guaranteed.
- Rights conferred by a European trade mark (Articles 9 and 9a)
Neither the Regulation nor the Directive contains a clear rule stating that the trade mark proprietor cannot successfully invoke his rights against the use of an identical or similar sign which is already the subject of an earlier right. In line with Article 16 i of the TRIPS Agreement[12], Article 9 of the Regulation is amended to clarify that infringement claims are without prejudice to earlier rights.
The recognition of additional trade mark functions under Article 5(1)(a) of the Directive (Article 9(1)(a) of the Regulation) has created legal uncertainty. In particular, the relationship between double identity cases and the extended protection afforded by Article 5 i of the Directive (Article 9(1)(c) of the Regulation) to trade marks having a reputation has become unclear[13]. In the interest of legal certainty and consistency, it is clarified that in cases of both double identity under Article 9(1)(a) and similarity under Article 9(1)(b) it is only the origin function which matters.
According to the Court of Justice[14], Article 5 i of the Directive is applicable where the public considers the use of a company name as (also) relating to the goods or services offered by the company. It is therefore appropriate to treat trade name use of a protected trade mark as an infringing act, if the requirements of use for goods or services are met.
Directive 2006/114/EC of 12 December 2006 concerning misleading and comparative advertising[15] regulates the conditions under which advertising, which explicitly or by implication identifies a competitor or goods or services offered by a competitor, is permissible. The relationship of this instrument to the legislation on trade marks has given rise to doubts. It is therefore appropriate to clarify that the trade mark owner may prevent the use of his trade mark in comparative advertising where such comparative advertising does not satisfy the requirements of Article 4 of Directive 2006/114/EC.
Amendments are proposed to clarify that goods may not be imported into the EU even if only the consignor is acting for commercial purposes. This is to ensure that a trade mark owner has the right to prevent businesses (whether located in the EU or not) from importing goods located outside the EU that have been sold, offered, advertised or shipped to private consumers, and to discourage the ordering and sale of counterfeit goods over the internet.
According to the Court of Justice in the Philips/Nokia judgment[16], the entry, presence and movement of non-EU goods in the customs territory of the EU under a suspensive procedure does, under the existing acquis, not infringe intellectual property rights as conferred by substantive law of the Union and its Member States. Such goods can only be classified as counterfeit once there is proof that they are subject of a commercial act directed at EU consumers, such as sale, offer for sale or advertising. The implications of the Philips/Nokia judgment have met with strong criticism from stakeholders as placing an inappropriately high burden of proof on rights holders, and hindering the fight against counterfeiting. It is evident that there is an urgent need to have in place a European legal framework enabling a more effective fight against the counterfeiting of goods as a fast-growing activity. It is therefore proposed to fill the existing gap by entitling right holders to prevent third parties from bringing goods, from third countries, bearing without authorization a trade mark which is essentially identical to the trade mark registered in respect of those goods, into the customs territory of the Union, regardless of whether they are released for free circulation.
Neither the Regulation nor the Directive contains any provisions allowing proceedings against the distribution and sale of labels and packaging or similar items which may subsequently be combined with illicit products. Some national laws have explicit rules covering this activity. Including a rule on this in the Regulation and the Directive is appropriate to provide another practical, relevant and efficient contribution to the combat against counterfeiting.
- Limitation of the effects of a European trade mark (Article 12)
The limitation in Article 12(1)(a) is restricted to cover the use of personal names only in accordance with the Joint Statement of the Council and the Commission[17]. For reasons of consistency, the limitation in Article 12(1)(b) is extended to cover the use of non-distinctive signs or indications. It is also considered appropriate to provide in Article 12(1)(c) an explicit limitation covering referential use in general. Finally, a separate paragraph clarifies the conditions under which use of a trade mark is not considered as complying with honest business practices.
- Designation and classification of goods and services (Article 28)
Article 28 is amended to provide essential rules concerning the designation and classification of goods and services in the Regulation. These rules are introduced into the Directive. They follow the principles established by the Court of Justice[18] according to which goods and services for which protection is sought need to be identified by the applicant with sufficient clarity and precision to enable the relevant authorities and businesses to determine the extent of protection the trade mark confers. The general indications of the class heading of the Nice Classification may be used to identify goods or services provided that such identifications are sufficiently clear and precise. The amendment clarifies that the use of general terms has to be interpreted as including all goods or services clearly covered by the literal meaning of the term. Finally, the amendment allows proprietors of European trade marks which were filed before the date of publication of the Agency’s new classification practice[19] to adapt their specifications of goods and services in accordance with the case law of the Court of Justice in order to ensure that the content of the register meets the requisite standard of clarity and precision.
- European certification marks (Articles 74b - 74k)
While various national systems offer protection for certification marks, the European trade mark system currently provides only for the registration of individual and collective marks. Some public and private bodies that do not meet the conditions to be eligible to obtain collective trade mark protection also need a system for protection of certification marks at EU level. Such a system would also remedy the current imbalance between national systems and the European trade mark system. It is proposed to add to the Regulation a specific set of rules covering the registration of European certification marks.
- Tasks of the Agency (Article 123b)
To ensure comprehensive cover, legal certainty and greater transparency, all the Agency’s tasks are defined in the new Article 123b, including those which stem from other legal acts and are not related to the EU trade mark system.
Article 123c provides a clear framework for mandatory cooperation between the Agency and Member State intellectual property offices with the aim of promoting convergence of practices and the development of common tools. It states that the Agency and Member State offices are obliged to cooperate, and stipulates the main areas for cooperation and specific common projects of Union interest the Agency will coordinate. It further sets up a funding mechanism enabling the Agency to finance those common projects by means of grants. This funding scheme represents a legally and financially feasible alternative to the approach suggested by the Council in its May 2010 Conclusions.
The Regulation confers powers on the Commission in order to adopt certain rules. Those rules are currently provided in the Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark[20], Commission Regulation (EC) No 2869/95 of 13 December 1995 on the fees payable to the Office for Harmonisation in the Internal Market[21], and Commission Regulation (EC) No 216/96 of 5 February 1996 laying down the rules of procedure of the Boards of Appeal of the Office for Harmonization in the Internal Market[22]. The entry into force of the Lisbon Treaty makes it necessary to align the powers conferred upon the Commission under the Regulation to Article 290 of the Treaty (new Articles 24a, 35a, 45a, 49a, 57a, 65a, 74a, 74k, 93a, 114a, 144a and 161a).