Examination of witnesses (Questions 460
TUESDAY 11 MAY 1999
MR B MARCH,
MR J SLATER
and MR K HAVELOCK
460. You were referring earlier to the European
trademark system and I got the impression from what you were saying
that you thought that had been reasonably effective in terms of
the way it can be enforced through the EU. Are there any problems
(Mr March) With the European trademark system?
(Mr March) The system has been extremely popular.
Over 100,000 applications have been filed, way beyond anyone's
expectations. The office have difficulty in staffing, particularly
staffing with people with English as their first language. At
the moment approximately 25 per cent of all trademark applications
at the European Union are being opposed. That is creating a lot
of opposition files. Those are labour intensive to handle. That
is the big problem, or the challenge that the Community trademark
office has to deal with: how they are going to handle this large
number of oppositions which are piling up. They have made great
strides in catching up with the backlog of trademark applications
which have been filed. They are now publishing those applications
at a tremendous rate of about 1,000 a week, but 250 of those are
then being opposed.
462. Some people have said to us that it is
a bit of a cumbersome procedure and frankly it is easier just
to choose the national markets in which you are interested and
apply directly to the national authorities. Would you say that
is still the case or do you think there is a big future?
(Mr March) No, I would not say that because if I were
one of the 75 per cent whose application went through to registration,
I would be absolutely delighted because I would have a registration
which was an extremely effective weapon to use against people
copying me, that was effective throughout the European Union and
that I was able to obtain at a fraction of the price of registering
nationally in each of the member states.
(Mr Slater) One of the factors, one of the difficulties,
is that in the European system there is no examination for relative
rights, there is no investigation of the rights of prior owners.
It is left to someone interested to oppose. That sort of system,
if it goes through is fine, if it does not there is a perception
that this is a cheap system. It is not a cheap system; if you
get involved in expensive opposition procedures, in fact it becomes
quite expensive. Here I would put in a plea for what is happening
in the UK. The UK still has a search, still examines on relative
rights and that is a good system. There is a suggestion in a few
years' time that the Patent Office is going to review this and
I think the UK search is a good thing.
463. May I look at the interface with the Madrid
agreement? Do you think that there is a prospect of an ultimate
link between the Madrid system and the European system?
(Mr March) Yes, that has been in prospect for quite
a few years. It has not happened yet and it is not on the point
of happening now, but both sides have said that is what they want.
464. What is holding it up?
(Mr March) Essentially it is being held up for political
reasons, voting rights.
465. Would you care to enlarge upon that or
would you prefer not to?
(Mr March) I would prefer not to, only because I do
not have exact details and I would hate inadvertently to say the
466. Could you let us have a note perhaps?
(Mr March) Yes, I should be delighted to.
467. Just letting us know what obstacles you
(Mr Havelock) One of the problems is that the Madrid
system and the European Community trademark system are codified
systems in accordance with the continental civil code of law.
Some of the major countries, not ourselves, which still recognise
common law rightsAmerica and Japanhave not yet joined
the Madrid arrangement and that is one of the big goals that when
they come in it will be much more popular and then there will
be integration, probably, between the two systems. In the UK we
are still relying on common law rights and these are just not
recognised in mainland Europe and that is one of the reasons why
our clients are having to take the European route and obtain Community
trademark registrations and not being able just to rely, as they
could in the past, on national registrations or indeed no registrations
468. I am interested in an earlier comment to
the Chairman, especially on labelling and without owner's consent.
It seems to me that the Americans want it both ways: do as I say
and not as I do. They certainly do not want their beef actually
marked down to be produced with hormones. I have some sympathy
with you there and certainly believe that the Americans want the
best of both worlds. I should like to move on to look-alikes.
I notice from your evidence that you really do have worries there.
Briefly, why do ITMA believe that the level of protection given
to brands against look-alikes is insufficient? What needs to be
(Mr March) We feel that something needs to be done
because look-alikes are out there. The existing law, whatever
it is, is not evidently proving to be sufficient to defeat the
problem. A lot of other elements come into play when you consider
look-alikes It is in a sense a battle of the giants, the large
brand owners with the brand leaders having their products imitated
by the large and powerful supermarkets. We think that one of the
reasons why look-alikes continue to exist is that the brand owners
are reluctant to bring legal action against the supermarket because
the supermarket is a very large customer of the brand owner. Having
said that, our Institute had an interesting and stimulating debate
on this last year. We could not carry the membership to recommend
new legislation but we are looking. Our view is that the law there
at the moment, the law of passing off, should be sufficient to
win a case, but we are waiting for a big brand owner to build
up the courage to bring that case and either win it or lose it
and thereby highlight the things which are missing from the law
of passing off which may need to be put in place to help remove
the look-alike scourge.
469. Do you believe look-alikes are inferior
(Mr March) I certainly have not tasted or bought or
used every look-alike product, but I do think that look-alikes
are getting a free ride on the back of the brand leaders' investment
in the brand and the look-alike is sending out in some cases a
subliminal message to the consumer that this is just as good as
the brand leader, so buy this because it is 20p cheaper. That
is unfair and actually it is an insult to trademark attorneys
because it is an abuse of the brand that currently people are
allowed to get away with.
470. Do you share CIPA's concerns that additional
brand protection against look-alikes will disadvantage those wishing
to search the register on trademarks?
(Mr March) I am not sure that we do, no. No, we do
not share those concerns.
(Mr Slater) Perhaps it is worth mentioning that the
1994 Trademarks Act is much broader in its protection for brand
owners. The situation so far is that the courts have been reluctant
to interpret it in a broad way. It is still being interpreted
very much on the lines of the 1938 Act in my view. Others might
disagree with that but I believe the legislation is there to protect
brand owners against look-alikes if courts chose to apply that
471. Could we turn from look-alikes to counterfeits?
Would you agree that the issue of how best to deal with counterfeit
goods should not be confused with the issue of the pros and cons
of parallel importing?
(Mr March) I think that the two items are separate
and should be kept separate. I have heard in the past parallel
imports being called counterfeits and that is wrong. It is a wrong
use of the expression. They are separate but we think, as you
will see from our submission, that there are one or two points
where they come together.
472. You refer to the difficulty of trading
standards officers and so on. Given what you have just said, do
you think there are better ways of dealing with counterfeit goods
than restricting parallel or grey imports?
(Mr March) We seem to have a system in this country
which is on the whole pretty effective. Counterfeits are not a
major problem in the UK. To me that says that the existing systems
and procedures are working quite well. The fear is that if there
is a large increase in the volume of trade, volume of import/export,
that might provide an opening or an opportunity for the counterfeiter
to slip his goods in and because of the increased traffic of trade
in and out there is more likelihood that it will get past and
get out onto the market. That is a fear we have.
473. But the better way of dealing with counterfeiting
presumably is not to reduce international trade, it is to take
direct measures, whether it is additional resources for trading
standards officers or whatever.
(Mr March) Absolutely, yes.
Chairman: Thank you very much. I think we have
covered all the areas. Your answers have been very concise and
to the point and we are very grateful. Thank you very much.