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.
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
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.
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