The team is joined by: GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopoulou, Mathilde Pavis, and Eibhlin Vardy; by InternKats Ieva Giedrimaite, Rose Hughes, and Cecilia Sbrolli; and by Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Monday, 22 September 2008

STOP PRESS! OHIM fee scandal comes closer to resolution

The IPKat has just received a Press Release from MARQUES, the Association of European Trade Mark Owners, that is so hot it is absolutely sizzling! It contains information concerning the Extraordinary Joint Meeting of the Administrative Board and the Budget Committee of the OHIM [=Office for Harmonisation in the Internal Market], which took place on the Thursday and Friday of last week (while the MARQUES conference was in full swing). The Press Release goes as follows:

"How to better balance OHIM’s budget – the way forward”

MARQUES has actively participated in the debate regarding the CTM [=Community trade mark] fees since years before the first reduction in 2005. MARQUES supported the compromise to make the national searches undertaken in connection with CTM applications voluntary and accepted the set-up of the so-called cooperation agreements between the OHIM and the national offices which resulted in 2007 in a transfer of 1.8 million € to national offices for services performed in connection with the CTM and the RCD [=Registered Community design].

Notwithstanding the 2005 measures the surplus of the OHIM continued to grow.
MARQUES continued to push for benefits to industry, including a further reduction of fees, and to speak against diversion of fees, whilst at the same time taking the initiative to create the Trademark Users’ Forum that has met twice a year since 2005. The Forum focuses on supporting the work of national offices by analysing the needs of businesses and identifying relevant services in an attempt to bridge the gap between users and national offices on a European level.

The above extraordinary meeting was announced and discussed at the opening of
the MARQUES Annual Conference last week, and MARQUES wishes to inform
members, delegates and other interested parties of the compromise solution that is
being put forward as a result of the meeting.

You can find the summary on the MARQUES website at and at the OHIM website at

MARQUES will study the compromise in order to take a position later this week".

The compromise solution is contained in a two-page communique. Its main bit is as follows:

"On the abovementioned proposed package of budgetary measures, the results of the discussions are the following:

- As regards to the proposed fee reduction a new very straightforward proposal
emerged during discussions, which would not only substantially reduce the fees,
but simplify the fee structure and result in a significant reduction of administrative burden in relation to the handling of fees. This would consist of concentrating the impact of the fee reduction on the current registration fee, and bringing the combined value of the application and registration fees down to around €1,000 [this is welcome, says the IPKat, and 1,000 is a nice round sum that's easy for simple souls like CTM applicants to remember].

- Furthermore, as an alternative to the proposed automatic reduction mechanism of fees, Member States considered a regular biannual review of the financial situation of the Office by the Commission to be more appropriate in order to making the necessary proposals in the commitology [the IPKat couldn't find this word in his dictionary: it must be Eurospeak ...] procedure with a view to balancing the Office’s budget.

- Member States have supported the proposal of distributing to the National Offices of Member States an amount equivalent to 50% of the renewal fees in accordance with distribution criteria to be defined in a way which would guarantee a minimum amount for each Member State. It should be specified, in the Council Regulation 40/94, that the transfer of 50% of renewal fees should be done in a way that would ensure that the funds would be available to the Member States’ National Offices and would be used for the purposes closely related to the protection, promotion and/or
enforcement/combat counterfeiting of trade marks [the IPKat's sure that the Member States are pleased to see this money repatriated, but wonders what the businesses whose money it used to be it may be feeling. Merpel asks, can anyone tell her what national offices have done in the past hundred years to combat counterfeiting, and what difference this injection of cash is likely to make to that objective?].

- The vast majority of Member States have supported the proposal to allocate around 190 million euros to the Reserve Fund and to create a Cooperation Fund. This Cooperation Fund would be established with an allocation of 50 million euros and would phase out once the repartition [the WHAT? Repatriation, perhaps?] of renewal fees is in force. It should be specified that the funds for cooperation should be available to the Member States National Offices, and would be used for the projects closely related to harmonization and the protection, promotion and/or enforcement of trade marks and designs. Users should be associated with the operation of this fund in an appropriate way. The structure of the fund should be as light as possible and its access should be facilitated and avoid unnecessary administrative bureaucracy.

- Member States supported the idea of using the remaining surplus in the interests of users, and asked the Commission to study this issue in consultation with users within the context of the overall evaluation of the trade mark system to be conducted by the Commission.

Member States and the OHIM top management agreed that from the discussions held in this meeting, sufficient support was gathered around a number of basic elements, identified above, that should be included in a package of budgetary measures aiming at guaranteeing a balanced budget for OHIM in the future and took the decision to inform the European Commission accordingly, by way of formal joint letter from the Chairmen of the AB and BC and the President of the OHIM, to be considered within its forthcoming initiatives in this field".

The IPKat feels that this whole episode has been a wretched one from start to finish and he hopes that it will soon be resolved. Merpel just feels really vexed. How much, she wonders, has been spent in flights, hotel rooms, hospitality and the usual niceties that will have been indulged in while people have been shuttling around Europe in search of a solution to a problem that should never have been allowed to happen? And how much good could have been done with those resources in the meantime?


Anonymous said...

The repatriation of the fees stuff sounds like pure corruption. If National Offices receive less applications becasue the CTM system becomes cheaper and cheaper (and off course producer of less-quality trade marks), what is the ground for "repatriating the fees"? The President of the Office buys the delegation with such kind of measures. The Office has seen a reduction of staff over the past years, except in one area: Directors of Department. We have every two years one Director more, i.e. an A3 salary (10-12.000 euro free of taxes per month).

Everybody has a price, say some cynics. But, in OHIM, the price of the Natl Offices is quite cheap.

Anonymous said...

What's really un-understandable in all this story is why nobody even try to propose more hirings, especially examiners, in order to reduce that money surplus. While OHIM is losing quality (everybody knows it), there are no attempt to bring new legally qualified people "on board". Furthermore, more examiners would also mean reducing the timeframe of the decisions which would be quite nice for all of us.
I do not really care about whether the fee reduction will have any trascendence on the budget of the National Offices. But lesser fee also means higher number of applications and, consequently, more proceedings. I do not see that this has been duly taken into account in the proposal.
In any case, I believe that the "nicest" way to spend the money in a public organism is hiring qualified people, so that each employee might do the job for which he has been prepared to. This should be the essence of the public nature of EU agencies: giving a better service to the citizens while reducing the unemployment.

Anonymous said...

"'Commitology' may be defined as a process for adopting measures to implement legislative acts. In this process measures are adopted by the Commission, assisted by a committee of experts from the Member States".
according to, although in the heading to this document they spell it will one "m".
As to repatriation, perhaps the Italians need more money to advertise winning the World Cup two years ago, as that's what they've been using regional support funds for.

Anonymous said...

"what is the ground for repatriating the fees?"

The main ground is that national offices do the field work in Europe, promoting IP protection and giving advice to SMEs, much more than than OHIM does.

At the same time, fee income from national trademarks is lowering because of the success of the CTM. Currently, in many offices, the trademark division is being subsidized with the income from european patent annual fees, while at the same time OHIM has a huge budget excedent.

Lowering CTM fees to the maximum possible (as the budget permits) would even increase the problems.

The EU decided to keep national trademarks in parallel with the CTM, so it's logical that the national systems should be financed by trademark applicants, and not by patent owners or even tax payers.

Anonymous said...

Anonymous "Committology" is a fine linguistics expert; despite that, he says nonsense about Italy.
Why insulting a country, misleading people? The regional funds have no connection with the OHIM; moreover, Italy is more complex than the World Cup. This is not fair from you: next time, think before writing,please.

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