Select Committee on Trade and Industry Minutes of Evidence

Examination of witnesses (Questions 460 - 473)



Mr Butterfill

  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 with that?
  (Mr March) With the European trademark system?

  461. Yes.
  (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 wrong thing.

  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 think exist.
  (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 rights—America and Japan—have 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 at all.

Mr Hoyle

  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 done?
  (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 products?
  (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 legislation.

Mr Berry

  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.

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