Explanatory Memorandum to COM(2013)162 - Approximation of the laws of the Member States relating to trade marks (Recast) - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)162 - Approximation of the laws of the Member States relating to trade marks (Recast). |
|---|---|
| source | COM(2013)162  |
| 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. This is reflected in the increasing number of trade mark applications at both national and EU levels, and also in the number of trade mark users. 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 therefore 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 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. Finally, in its 2011 IPR strategy for Europe i, 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 the amendment to the Regulation 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.
Specifically, the present initiative to recast the Directive is driven by the following objectives:
· Modernising and improving the existing provisions of the Directive, by amending outdated provisions, increasing legal certainty and clarifying trade mark rights in terms of their scope and limitations;
· Achieving greater approximation of national trade mark laws and procedures with the aim of making them more consistent with the Community trade mark system, by (a) adding further substantive rules and (b) introducing principal procedural rules into the Directive in accordance with provisions contained in the Regulation;
· Facilitating cooperation between the offices of the Member States and OHIM for the purpose of promoting convergence of practices and the development of common tools, by putting in place a legal basis for this cooperation.
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. Modernising and improving existing provisions
- 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
- 5.2. Achieving greater approximation of substantive law
- 5.3. Achieving alignment of principal procedural rules
- 5.4. Facilitating cooperation between offices (Article 52)
This initiative is based on an evaluation of the way the trade mark system works as 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[6]. In addition to expert analysis, the study involved consultations with 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 Intellectual Property Offices of all the Member States and OHIM.
The Final Report of the MPI study 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 there was a need for modernisation and improvement of the system. It highlighted, in particular, the need to achieve greater consistency between the Community trade mark and national trade mark systems by further harmonising the trade mark laws of Member States both within and beyond the current scope of the Directive.
Responding to the interim results of the study, the Council adopted Conclusions on 25 May 2010[7]. While noting the existing inconsistencies between the Community trade mark and national regimes, these conclusions called on the Commission to include in its proposals measures to make the Directive more consistent with the Regulation, and thereby further contribute to reducing areas of divergence within the trade mark system in Europe as a whole.
As a follow up to the MPI study, the Commission services convened a hearing of user associations on 26 May 2011. The hearing confirmed that there was broad agreement among users of the trade mark system in Europe that the present level of approximation between national trade mark laws, as well as with the Community trade mark system, has not been sufficient. User organisations unanimously stated that further harmonisation of national trade mark laws was required, with regard to both substantive law and procedural issues.
The impact assessment carried out for both the review of the Regulation and of the Directive identified two main problems: the first relates to the divergent provisions of the existing regulatory framework, and the second to the low level of cooperation between trade mark offices in the Union. While the latter problem is due to be addressed in the review of the Regulation, the issue of divergent provisions must be dealt with in the review of the Directive.
The consulation and evaluation exercise has revealed that the business environment in the trade mark field remains very mixed in spite of the partial harmonisation of national laws dating back to early 1990s. The level of harmonisation imposed by the Directive was quite low, focusing on a restricted number of substantive rules that were considered at that time to affect the functioning of the internal market most immediately, whereas a large number of areas, in particular those relating to procedures, were left unharmonised. Moreover, the Regulation was enacted several years after the Directive, which meant that at the time when the Directive came into being there was no ‘common benchmark’ against which the efficiency of national proceedings could be measured. However, the procedures followed by OHIM have now been in place for more than 15 years, and are generally regarded as meeting business needs and expectations.
As a result, the current landscape of Union trade mark law is still characterised by a wide divergence between national rules and procedures, both among themselves and in relation to the rules and procedures applied by OHIM, and no attempt has ever been made to apply best practice with regard to procedures.
The existing divergences between national systems and the Community trade mark system are regarded significant. They are due to the fact that the Directive does not cover procedural aspects and that a number of important substantive law issues are not yet harmonised. Together with the limited convergence of practices and tools at trade mark offices - which is due to a low level of cooperation - the existing divergencies of trade mark laws and procedures limit accessibility to the systems of trade mark protection, involve a great deal of legal uncertainty, and endanger the complementary relationship between the Community trade mark and national trade mark systems. Furthermore, they prevent a level playing field for companies, with the consequent adverse impacts on the competitiveness of EU companies and the competiveness of the Union as a whole.
The following possible options for resolving the problem were considered:
· Option 1: No further approximation of trade mark laws and procedures;
· Option 2: Partial expansion of the approximation of national laws and their consistency with the Community trade mark system. This would include aligning the principal procedural rules with the relevant provisions of the Regulation, including those where existing difference create major problems from the users' perspective, and where such alignments are deemed indispensable for creating a harmonious, complementary system of trade mark protection in Europe. It would also cover the alignment of further aspects of substantive law in accordance with the provisions of the Regulation;
· Option 3: Full approximation of national trade mark laws and procedures. This approach would be based on option 2, embrace all of its components, but also include all remaining aspects of substantive trade mark law and procedures;
· Option 4: A single trade mark rulebook which would replace Member States' trade mark laws in their entirety, by setting uniform rules across the Union.
The impact assessment concluded that option 2 would be proportionate and would best serve to achieve the objectives pursued.
Article 114 i of the Treaty empowers the European Parliament and the Council to adopt measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.
The problems identified in relation to the significant divergences in the regulatory framework either prevent, or substantially distort, the level playing field for EU companies with further adverse consequences for their competitiveness and that of the EU as a whole. It is therefore advisable to adopt measures capable of improving the conditions for the functioning of the internal market. Measures aimed at extending the current level of approximation through the Directive can only be taken at Union level. Furthermore, action at Union level is the only way to ensure consistency with the Community trade mark system.
In this context, it has to be borne in mind that the Community trade mark system is embedded in the European trade mark system - the latter being built on the principle of coexistence and complementarity between national and Union-wide trade mark protection. While the Regulation provides a comprehensive system in which all issues of substantive and procedural law are provided for, the current level of legislative approximation provided for in the Directive is limited to selected provisions of substantive law only. In order to be able to ensure effective and sustainable coexistence and complementarity between the components involved, it is therefore necessary to create an overall harmonious system of trade mark protection in the Union with substantially similar substantive rules and at least principal procedural provisions which are compatible.
The proposal will not have an impact on the European Union budget and is therefore not accompanied by the financial statement provided for under Article 31 of the Financial Regulation (Regulation (EU, 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 are presented in accordance with the objectives pursued by the recast of the Directive as set out in section 1.2 above.
- Definition of a trade mark (Article 3)
At present, signs must be capable of being represented graphically in order to be protected as a trade mark. This requirement of ‘graphic representability’ is out of date. It creates a great deal of legal uncertainty around the representation of certain non-traditional marks, such as mere sounds. In the latter case, 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 does not restrict the permissible means of representation to graphic or visual representation but leaves the door open to register 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.
- Rights conferred by a trade mark (Articles 10 and 11)
Neither the Directive nor the Regulation 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 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)[8], this proposal would make it clear that infringement claims are without prejudice to earlier rights.
The recognition of additional trade mark functions under Article 5(1)(a) of the Directive has created legal uncertainty. In particular, the relationship between double identity cases and the extended protection afforded by Article 5 i to trade marks having a reputation has become unclear[9]. In the interest of legal certainty and consistency, it is clarified that in cases of both double identity under Article 5(1)(a) and similarity under Article 5(1)(b) it is only the origin function which matters.
According to the Court of Justice[10], 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[11] 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 Directive 2006/114/EC 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.
It should be made clear that the importing of goods into the Union is also prohibited where it is only the consignor who acts 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 in particular over the internet.
According to the Court of Justice in the Philips/Nokia judgment[12], 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 Directive nor the Regulation contains any provisions allowing proceedings against the distribution and sale of labels and packaging and 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 Directive and the Regulation is appropriate to provide another practical, relevant and efficient contribution to the combat against counterfeiting.
- Limitation of the effects of a trade mark (Article 14)
The limitation in Article 14(1)(a) of the Directive is restricted in this proposal to cover the use of personal names only in accordance with the Joint Statement of the Council and the Commission[13]. For reasons of consistency, the limitation in Article 14(1)(b) is extended to cover also the use of non-distinctive signs or indications. It is also considered appropriate to provide in Article 14(1)(c) for an explicit limitation covering referential use in general. Finally, a separate paragraph clarifies the conditions under which the use of a trade mark shall not be considered as complying with honest business practices.
- Protection of geographical indications and traditional terms (Articles 4 and 5)
Contrary to the Regulation, the grounds for refusal contained in the Directive do not address conflicts with protected geographical indications, traditional terms for wines and traditional specialities guaranteed. Consequently, there is no guarantee that the levels of protection afforded to those rights by other instruments of Union law[14] are actually being applied in a uniform and exhaustive manner in trade mark examination throughout the Union, in particular, when applying absolute grounds for refusal. It is therefore proposed to insert corresponding provisions relating to geographical indications, traditional terms for wine and traditional specialities guaranteed in the Directive.
- Protection of trade marks with reputation (Articles 5 and 10)
Articles 5 and 10 convert extended protection into mandatory provisions in order to ensure that, in all Member States, national trade marks with reputation enjoy the same level of protection as that afforded to Community trade marks.
- Trade marks as objects of property (Articles 22, 23, 24, 25, 26 and 27)
Apart from some basic rules concerning licensing, and unlike the Regulation, the Directive does not comprise provisions regarding other aspects of trade marks as objects of property, such as transfers or right in rem. As a result, vital aspects of the commercial exploitation of trade marks are regulated poorly or differently across the Union. It is therefore proposed that the Directive be complemented by a corresponding body of rules addressing trade marks as objects of property as contained in the Regulation.
- Collective marks (Articles 28, 30, 31, 32, 33, 34, 35, 36 and 37)
In order to come into line with the Regulation, the amendments to these Articles of the Directive provide for a set of specific provisions for the registration and protection of collective marks. They are protectable in a number of Member States and have proved to be particularly successful in protecting the economic value inherent in such commercial instruments. Although at EU level, and in most Member States, collective marks require a holder – normally an association – whose members use the mark, this is not so in other Member States, and this makes it difficult to keep this type of trade mark clearly apart from certification marks.
- Designation and classification of goods and services (Article 40)
In line with the proposal on the Regulation, this Article lays down common rules for the designation and classification of goods and services. These rules follow the principles established by the Court of Justice[15], 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 competent authorities and businesses to determine the extent of protection the trade mark confers. The general indications of the class headings of the Nice Classification may be used to identify goods or services provided that such identification is sufficiently clear and precise. Article 40 further clarifies that the use of general terms has to be interpreted as including only all goods or services clearly covered by the literal meaning of the term.
- Ex officio examination (Article 41)
In line with the Regulation, this Article provides that the ex officio examination of whether a trade mark application is eligible for registration shall be confined to the absence of grounds concerning the mark itself. The ex-officio examination of relative grounds creates several unnecessary barriers to the registration of trade marks. Companies are obliged to undergo superfluous expenses and delays and they often fall victim to extortion. The earlier right on which the objection is based may not be used by its owner, which means that the offices concerned raise an objection on the basis of a right that could not have been validly relied on by its proprietor to prevent the registration or use of a later mark. Hence, the ex officio system leads to artificial disputes, and distorts competition by erecting unjustified barriers to market entry.
Finally, the ex officio approach creates legal uncertainty, since offices applying the ex-officio system raise objections, as far as earlier rights are concerned, only on the basis of earlier registered rights that have been filed for identical or similar goods and services. Accordingly, they cannot offer a guarantee that an application which successfully passes the ex-officio control will not subsequently be opposed on the basis of a mark which has acquired reputation in the marketplace and/or on the basis of an earlier well-known mark that has not been registered. However, this leads to an unacceptable duplication of procedures which are both time consuming and inefficient.
- Fees (Article 44)
In order to reduce the potential of cluttering of the registries, this Article aims at aligning the fee structure of offices by making the registration and renewal of a trade mark subject to the payment of an additional (class) fee for each class of goods and services beyond the first class which should be included in the initial (application/registration) fee.
- Opposition procedure (Article 45)
This Article requires Member States to provide for an efficient and expeditious administrative procedure to oppose the registration of a trade mark application on the basis of earlier rights before their offices. An administrative opposition procedure is already available under the Regulation and in almost all Member States.
- Non use as defence in opposition proceedings (Article 46)
In line with the Regulation, this Article enables the person applying for registration of a trade mark to raise the defence of non-use in relation to an opposition filed by the proprietor of an earlier trade mark where, at the filing date or date of priority of the later trade mark, the earlier trade mark has been registered for not less than five years.
- Procedure for revocation or declaration of invalidity (Article 47)
This Article obliges Member States to provide for an administrative procedure to challenge the validity of a trade mark registration before their offices. In some Member States, trade mark applicants and owners cannot challenge the validity of the earlier rights relied upon against their trade mark in the same proceedings, but need to contest the validity of a prior trade mark in court proceedings. This delays proeedings and usually requires the appointment of a qualified lawyer to prosecute the case. These systems are exceedingly long, cumbersome and expensive. In comparison, the administrative cancellation procedures, as applied at OHIM and the National Offices, are much simpler since the validity of earlier rights can be raised as a defence in the same proceedings and without the need for professional representation. In practice, this means that applicants for a Community trade mark may successfully defend themselves against an opposition and obtain a trade mark years earlier and at considerably less expense than a national applicant.
- Non use as defence in proceedings seeking a declaration of invalidity (Article 48)
In line with the Regulation, this Article enables the person in whose name a trade mark has been registered to raise the defence of non-use in proceedings for a declaration of invalidity based on earlier trade mark, where at the date of the application for a declaration of invalidity the earlier trade mark has been registered for not less than five years.
As a complement to the legal framework for cooperation proposed in the context of the review of the Regulation, Article 52 provides a legal basis to facilitate cooperation between OHIM and the intellectual property offices of the Member States for the purpose of promoting convergence of practices and the development of common tools.
ê 2008/95/EC (adapted)