4 Reforms to the EU's trade mark regime
| (a)
(34807)
8065/13
+ ADDs 1-2
COM(13) 161
(b)
(34813)
8066/13
+ ADDs 1-2
COM(13) 162
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Draft Regulation amending Council Regulation (EC) No. 207/2009 on the Community trade mark
Draft Directive to approximate the laws of the Member States relating to trade marks (Recast)
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| Legal base | (a) Article 118 TFEU; QMV; co-decision
(b) Article 114 TFEU; QMV; co-decision
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| Department | Business, Innovation and Skills
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| Basis of consideration | Minister's letter of 18 December 2013
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| Previous Committee Report | HC 83-iii (2013-14); chapter 5 (21 May 2013)
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| Discussion in Council | No date set
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| Committee's assessment | Legally important
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| Committee's decision | Not cleared; further information requested
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Previous scrutiny
4.1 In our initial Report[17]
on these documents we set out the background and details of the
Commission's proposed reforms to the EU's trademark regime. We
noted that the Government generally welcomed the proposed reforms,
and that national law and practice were already consistent with
many of them. Nonetheless, we shared the Government's concerns
in relation to:
· the logic of Article 41 of the Directive
in precluding national offices from notifying applicants for new
trademarks where their trademarks conflict with registered marks.
Whist we did not think the subsidiarity argument raised by the
Government was strong, we were concerned that this provision would
have a disproportionate effect on SMEs, which the policy objective
did not appear to justify;
· compelling national offices to comply
with the outcome of projects arising out of the revised framework
of cooperation with the Office for Harmonisation in the Internal
Market (OHIM). We agreed with the Government that OHIM should
facilitate and support such cooperation activities but should
not be able to enforce the results; and
· the basis for calculating revenue to national
offices from the renewal of Community trademarks. The Council
agreed in 2010 that 50% of OHIM's renewal fees should be distributed
between Member States under a defined distribution key, the value
of which appeared to be considerably higher than for the Commission's
proposal. We thought that the Council Conclusions of 2010 should
form the basis for calculating this revenue.
4.2 We also asked the Government to send us a summary
of the responses received to its consultation and of the outcome
of its round-tables with stakeholders; and to be kept informed
of developments in the negotiations.
The Minister's letter of 18 December 2013
4.3 The Parliamentary Under-Secretary of State for
Business, Innovation and Skills (Viscount Younger) explains that
the Council completed an Article-by-Article analysis of the Directive,
and a first read-through of the Regulation, by the end of last
year. More working groups are planned in January and February
2014 under the Greek Presidency.
4.4 The Minister says that the European Parliament
has made its position known by publishing two draft reports with
suggested amendments to both proposals. He comments that the majority
of the proposed amendments are much closer to the Government's
position than the Commission's text.
4.5 The Minister then responds to our concerns on
the abolition of ex officio examination in Article 41 of the proposed
Directive, the mandatory cooperation framework in Article 123c
of the proposed Regulation and the issue of redistribution of
OHIM's funds.
4.6 He says that information coming out of Council
working groups suggests that the majority of Member States share
the Government's and our concerns regarding mandatory cooperation
and the impact that the proposed abolishment of ex-officio examination
on relative grounds would have on the search and notification
system. On the latter point, he explains that the Commission has
addressed UK concerns and confirmed that national offices will
not be precluded from notifying applicants where their trade mark
conflicts with registered marks. Provided that this approach is
reflected in an amended text, the Government would consider the
proposed provision acceptable.
4.7 The requirement for mandatory cooperation contained
in the Directive and Regulation has met with great resistance
from the vast majority of Member States, the Minister reports.
Like the UK they have identified the inherent weaknesses in a
system that will require participation in, and the adoption of
the outcomes of, projects which may be of no use to some national
offices. This will be counter-productive and may force national
offices to adopt technological solutions which are inferior to
their current systems. Given this level of resistance the Minister
is confident that cooperation will remain on a voluntary basis.
4.8 The issue of OHIM fees and finances is a key
area of debate. Discussions have demonstrated that all Member
States are opposed to the setting of fees being left to the Commission
and any provision that would allow a surplus at the OHIM to be
transferred to the general EU budget. The Minister does not expect
these proposals to survive, which is in line with the UK's position.
4.9 As for the summary of responses of the Government's
public consultation with stakeholders, the Minister reports that
many of them have reacted positively to the Commission's proposals.
However, they largely agree that some provisions in the current
proposals do not achieve the goal of creating a better EU trade
mark system or require further clarification. Their main concerns
mirror those of the Government.
4.10 Many of the matters raised by stakeholders are
largely of a technical nature, the Minister explains, and refer
to proposed changes to substantive and procedural trade mark law.
These include, for example, the proposal to include descriptive
foreign signs in the absolute grounds for refusal, wider protection
for trademarks with a reputation, treatment of small packages
and goods in transit, wider protection against bad faith, payment
of application fees at the time of filing and provisions on classification
of goods and services.
4.11 With regard to more strategic and political
issues such as mandatory cooperation, redistribution of OHIM fees
and delegated acts, stakeholders' comments were limited. In general,
while stakeholders share some of the UK's concerns on the Commission's
power to adopt delegated legislation to fix fees, they were more
positive on the proposed mandatory cooperation framework. As expected,
stakeholders unanimously oppose any move to shift future OHIM
surpluses to the central EU budget.
4.12 The Minister adds that our views and those of
stakeholders have been very useful in developing the Government's
thinking on the key issues arising from these reforms.
4.13 Having used these views to formulate a negotiating
position, the Minister has instructed UK officials to attempt
to build a consensus with like-minded Member States to amend the
Regulation and Directive to:
· minimise the use of delegated powers,
especially in relation to non-technical matters;
· pursue a balanced cooperation framework
with minimum mandatory adoption;
· keep the OHIM as managerially independent
as we can;
· look for a solution for the OHIM surplus
that, as far as possible, reflects that the funds are derived
from trade mark and design registration fees; and
· limit the impact on legitimate trade stemming
from measures to tackle counterfeit goods.
4.14 UK officials are also charged with working to
ensure that the overall package delivers technical changes that
work for SMEs, the Minister says.
4.15 Finally, the Minister undertakes to keep us
informed of key developments as negotiations progress.
Conclusion
4.16 We thank the Minister for his helpful response
to the concerns we raised in our previous Report and for the update
on the negotiations — we note the good progress his officials
have made. We ask the Minister to write again when there are significant
further developments to report. In the meantime, the documents
remain under scrutiny.
17 See headnote. Back
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