Select Committee on Trade and Industry Minutes of Evidence


Memorandum submitted by the Institute of Trade Mark Attorneys

  The Institute is pleased to note that the Trade and Industry Committee is undertaking an enquiry into trading, trade marks and competition. The Institute is pleased to submit the following Memorandum to the Committee which contains its preliminary comments upon the topics to be covered.

1.  "GREY" AND PARALLEL TRADING

  On this and some of the other topics being considered, the Institute has to emphasize at the outset that, as its members represent both brand owners and those with interests in parallel trading, its view has to be essentially impartial. It has, however, already expressed the view publicly that there can clearly be no objection in principle to parallel importing of branded goods, and that if a parallel-imported branded product is materially the same as the product put onto the market directly by the trade mark proprietor, that practice should be acceptable.

  The Institute believes that so-called "international exhaustion of rights" should not apply where there are material differences between the respective products. It is aware that, for example, in some cases the formulation of products is different in different markets. Whilst on price considerations alone, parallel importing of branded goods could be advantageous to consumers, material differences between the respective products could confuse or deceive consumers.

  The Institute is also concerned that, where there was such confusion or deception, it would be easier for counterfeit products (ie deliberate fake products) to be introduced and the task of enforcement agencies such as Trading Standards Officers made more difficult.

2.  CURRENT LEVELS OF BRAND PROTECTION

  The Institute believes in the existence of a strong level of protection for trade marks by registration and other means, such as the laws relating to passing-off and unfair competition. This is seen as being in the interests of brand owners and consumers equally. The Institute does not believe that trade marks are excessively protected under current laws applicable in the United Kingdom. Rather, in the case of so-called "lookalike" products, the level of protection given to affected marks and brands seems, at first sight, insufficient.

  Members of the Institute act for manufacturers who own trade marks as well as retailers and supermarkets which sell those goods as well as their own goods. Competition between the respective goods is clearly healthy and in the public interest. However, after considerable internal debate, the Institute has expressed its opposition in principle to the production of so-called "lookalike" products and a resolution of the Council of the Institute was passed in 1998 to the effect that the Council is opposed to the production of "lookalike" products ie those products that deliberately mimic the packaging of existing brands with the effect of misleading consumers.

  At a seminar on "lookalikes" organised by the Institute on 10th November 1998 at the Barbican Centre, that Council resolution was endorsed by a large majority. A range of views on this important subject was expressed but a majority of those attending felt that the current law was probably sufficient, but brand owners had not, to date, chosen to use the existing law to deal with the problem. One reason for their reluctance to do so was probably that, in any test case, the defendant would be, in all probability, a significant customer of the plaintiff.

3.  COUNTERFEIT GOODS AND PIRACY

  The Institute deplores all practices which involve counterfeiting and brand piracy and regularly supports the efforts of specialist groups such as the Anti-Counterfeiting Group in their initiatives against counterfeiting and piracy, which is an international problem. The Institute believes that the problem is principally one of establishing effective penalties and enforcement of the law. The Institute's experience of the activities of Trading Standards Officers in the United Kingdom has been good and it would support their being given further help in their activities. As mentioned before, the Institute is concerned that if there are further moves towards the introduction of full international exhaustion in the United Kingdom, the task of Trading Standards Officers will be made more difficult.

30 March 1999


 
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