43 Reforms to the EU's trade mark regime
| Committee's assessment
| Legally important |
| Committee's decision | Cleared from scrutiny; drawn to the attention of the Business, Innovation and Skills Committee
|
| Document details | (a) Draft Regulation amending Regulation 207/2009 on the Community trade mark
(b) Draft Directive to approximate the laws of the Member States relating to trade marks (recast)
|
| Legal base | (a) Article 118 TFEU; ordinary legislative procedure; QMV
(b) Article 114 TFEU: ordinary legislative procedure; QMV
|
| Department | Business, Innovation and Skills.
|
| Document numbers | (a) (34807), 8065/13 + ADDs 1-2, COM(13) 161
(b) (34813), 8066/13 + ADDs 1-2, COM(13) 162
|
Summary and Committee's conclusions
43.1 A trade mark is a sign which can distinguish the goods and
services of one undertaking from those of its competitors. European
trade mark law is currently enshrined in Directive 2008/95/EC
approximating the laws of the Member States relating to trade
marks, and in Regulation 207/2009 on the Community Trade Mark
(CTM).
43.2 The Regulation provides for an EU wide trade
mark,[ 340] administered
by the Office for Harmonisation in the Internal Market (OHIM),[ 341]
a self-financing executive and regulatory agency of the EU. A
CTM provides protection in all Member States. Alongside this,
national trade marks, providing protection in the Member State
of registration, are available from Member States' own national
intellectual property offices (IPOs).[ 342]
This dual system allows businesses to decide how they wish to
protect their trade marks to meet their business strategy —
in one Member State, in several Member States or across the entire
EU. According to the Government, business users are broadly happy
with the current regime.
43.3 These proposals make extensive, albeit largely
technical, changes to the two trade mark regimes, by aligning
them more extensively, improving co-operation between IPOs and
OHIM, and updating the governance of OHIM. Our first report on
these proposals sets out the details.
43.4 When our predecessor Committee last considered
these proposals it cleared them from scrutiny in anticipation
of a vote on a general approach in the Council, subject to the
conditions that (a) the text to be agreed would make no provision
for the transfer of OHIM surpluses to the EU general budget; and
(b) the percentage of OHIM revenue to be redistributed to Member
States would result in no decrease of such money being redistributed
to the UK. The Government, whilst supportive of the outcome of
negotiations in the Council, did not vote in favour of a general
approach in the Council because it retained provision enabling
OHIM's surplus to be paid into the EU general budget.
43.5 The Minister for Intellectual Property (Baroness
Neville-Rolfe) now provides an update on the outcome of the trilogue
negotiations with the European Parliament.
43.6 We thank the Minister for the further update.
We are grateful for the full and timely information both she and
her predecessor have provided this Committee and its predecessor.
43.7 We note that the Minster generally considers
the outcome of the negotiations satisfactory in most respects,
but that the UK will not vote in favour of the package as it permits
the surpluses of OHIM, derived from its fee income, to be distributed
to the EU budget.
43.8 We now formally remove the conditions from
our earlier clearance of these documents, although we anticipate
that the UK will continue to express its opposition to the redistribution
of OHIM surpluses. As the Regulation and Directive are likely
to be formally adopted later this year we draw them to the attention
of the Business, Innovation and Skills Committee.
Full
details of the documents:
(a) Draft Regulation amending Council Regulation (EC) No. 207/2009
on the Community trade mark: (34807), 8065/13 + ADDs 1-2,
COM(13) 161; (b) Draft Directive to approximate the laws of the
Member States relating to trade marks (Recast): (34813), 8066/13
+ ADDs 1-2, COM(13) 162.
The Minister's letter of 2 July 2015
43.9 In her letter the Minister confirms that a first
reading agreement for the adoption of both proposals was reached
between the Council and the European Parliament. They will be
formally adopted later this year, and are expected to come into
force in early 2016. The UK will then have three years to transpose
the Directive, which will require changes to the Trade Mark Act
1994.
43.10 She characterises the overall outcome as "a
good one for the UK" — except for the provisions in
the proposed Regulation to permit the transfer of budget surpluses
of OHIM to the EU general budget, to which she objected on the
grounds that this surplus is derived from trade mark and design
registration fees which should be retained for the benefit of
users of intellectual property.
43.11 On a previously outstanding point raised by
our predecessor concerning the potential change in the amounts
redistributed by OHIM to IPOs, the Minister explains that currently
Member States are only able to bid for funds to implement common
projects. Therefore the redistribution of OHIM revenue would be,
effectively, new funding. She further explains:
"The final text does include using part
of OHIM revenue to offset costs incurred by national offices resulting
from procedures related to the EU trade mark system. This is capped
at 5% of OHIM revenue, but in the event of a budgetary surplus
may be increased up to 10%. The agreed text includes a condition
introduced by the European Parliament, that offsetting of costs
should not cause a budgetary deficit for OHIM. This provision
is likely to have implications in determining the years in which
payments to national offices may be payable."
43.12 Other issues arising from the trilogues are
the following:
· The
European Parliament succeeded in restoring the use of the delegated
legislation procedure[ 343]
for some of the powers conferred on the Commission to adopt EU
subordinate legislation. Nevertheless the final text includes
fewer than 20 delegated legislation powers. The majority of non-technical
delegated legislation powers including, crucially, a power for
the Commission to set the level of fees, has been removed.
· There
will be a variation in application fees reflecting the fact that
a separate application will have to be made for each class of
goods or services to be protected by the trade mark. The result
is a slight reduction for applications concerning one class of
goods or services, but an increase for three classes. The Minister
describes the overall outcome as "a sensible balance between
reducing the costs to businesses and maintaining the integrity
of the system".
· The
UK had previously opposed mandatory cooperation between OHIM and
IPOs. In what the Minister describes as "a significant negotiating
win" the requirement will be for OHIM and IPOs to cooperate
to promote convergence of practices and tools in the field of
trade marks, but permits IPOs to opt-out, restrict or temporarily
suspend their cooperation in projects.
· The
outcome of trilogue negotiations has resulted in slightly less
managerial independence for OHIM than the UK was aiming for in
negotiations. There will be two Commission representatives and
a European Parliament representative on the Management Board,
with votes. Previously there was one Commission representative
who did not have a vote. European Parliament representation is
consistent with the Common Approach to decentralised agencies,
and the other concessions are balanced by (a) the fact that the
Commission will have less control over candidates for the post
of President of OHIM, (b) the Executive Board will not be reduced
in size (which would have increased the risk of Commission influence)
and (c) the fact that all Member States have a seat, with voting
rights, on the Management Board.
· The
outcome also protects the Council's earlier approach to goods
in transit, namely that it would be a defence in any action against
infringing goods in transit through the EU for the owner to prove
that the trade mark is not protected in the country of destination.
· The
package will still involve a change in name of OHIM to the European
Union Intellectual Property Office albeit that this was not a
priority for Member States and not favoured by OHIM itself.
· The
Minister regards the small number of other more detailed technical
changes resulting from the trilogue as improvements.
Previous Committee Reports
Thirty-seventh Report HC-219-xxxvi (2014-15), chapter
20 (18 March 2015); Thirteenth Report HC 219-xiii (2014-15), chapter
7 (15 October 2014); Eighth Report HC 219-viii (2014-15), chapter
2 (16 July 2014); Forty-fourth Report HC 83- xxxix (2013-14),
chapter 4 (26 March 2014); Third Report HC 83-iii (2013-14), chapter
5 (21 May 2013).
340 Currently called a "Community trade mark"
but to be renamed a "European trade mark". Back
341 To be renamed the European Union Trade Marks and designs Agency. Back
342 With the exception of the Benelux countries which offer a combined
regional trade mark. Back
343 Article 290 TFEU; under this procedure a proposal by the commission
for EU subordinate legislation can be blocked by the European
Parliament (by a majority of its members) or the Council acting
by qualified majority). Back
| 
