When three is company: trilogue happy with proposed EU trade mark reforms

The European family of trade mark owners, practitioners, consumers, judges and administrators has been waiting patiently to find out what might be the fate of the European Commission's proposals for trade mark reform.  Today we have found out: both the EU Council and the European Parliament are, at least in theory, supportive.  This Kat reproduces today's media release below, with a few comments inserted in bold red print.  This is how it reads:

European Parliament and EU Council back European Commission trade mark reform package 

Trilogue: the Commission is in the middle ...

After two years of inter-institutional discussions, the Commission, the European Parliament and the Council have reached today in so-called "trilogue discussions" provisional political agreement ["political" here being more or less used as an adjective drawn from the word "policy": the trilogue is more concerned with the big picture than with matters of fine detail] on the trade mark reform package. The agreed measures will make trade mark registration systems all over the EU more accessible and efficient for businesses in terms of lower costs, increased speed, more predictability and greater legal certainty [this seems quite comforting, though this Kat sometimes wonders whether any amount of legal certainty can compensate for the uncertainties resulting from the application of even the best laws to facts that can be equally be construed in quite different ways]. The reform will improve conditions for businesses to innovate and to benefit from more effective trade mark protection against counterfeits, including non-authentic goods in transit through the EU's territory.

Dream Package for
IP enthusiasts ...

European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, Elżbieta Bieńkowska, said: "Trade mark intensive industries contribute enormously to economic performance and employment in the European Union. The agreement on the EU trade mark reform package will lead to a modernised and more efficient legal framework. This will promote entrepreneurship and competitiveness [an interesting question for economists is whether a good trade mark system promotes entrepreneurship and competitiveness more than a bad one], which is good news for Europe. And we will be better equipped to stop the flow of counterfeit products effectively."

The cornerstones of the trade mark reform are:

How much is being saved?

• Significant reductions of the fees for European Union trade marks covering all 28 Member States. The agreed changes will lead to savings of up to 37%, in particular for businesses that seek protection of their registered European Union trade marks beyond an initial period of 10 years [this is welcome, but let's remember that official fees are often only the tiny proportion of a business's spend on professional fees, search, clearance, monitoring legitimate and unauthorised use, litigation, marketing and the myriad other items that presumably will still cost the same];
• Streamlined, more efficient and harmonised registration procedures across all trade mark offices in the EU. Faster and less burdensome procedures will be a great improvement for successfully growing companies, mainly SMEs, which roll out their business beyond one Member State and seek trade mark protection in front of multiple national administrations [sounds impressive, but earlier conflicting national registrations do seem to be a problem for businesses which do all that rolling out across the EU, and plenty of those earlier national marks are bona fide ...];
• Strengthened means to fight against counterfeits in particular of goods in transit through the EU’s territory. This will prevent abuse of the EU as a distribution hub for illegal fake goods to world-wide destinations [this should have been a no-brainer, but the Court of Justice has had some difficulty in appreciating it: remember Nokia/Philips];
• Modernised rules and increased legal certainty by adapting trade mark rules to the modern business environment and clarifying trade mark rights and their limitations [maybe spelling out some rules on use of trade marks in parody, as metatags, in domain names, as search terms ...?].

The political agreement on the Trade Mark reform package reached by the three institutions in the so-called "trilogue discussions" still requires to be formally confirmed by the European Parliament and the Council, which is expected in the coming weeks. ...

Further detail is provided by this item on the Council's Consilium website, which states:

Under the agreement, a number of political principles will be incorporated in the new system, including:

• a new structure with a reduced level of fees to be paid by applicants and proprietors of trade marks; such a reduction is justified by the need to render the system more accessible to users [do we know how many people have found the current system (as distinct from OHIM's headquarters in Alicante) inaccessible?] and to balance OHIM's budget [surely this is the real reason], which has been producing considerable budgetary surpluses over the years; 

• the setting up of an offsetting mechanism to cover expenses incurred by national industrial property offices resulting from the handling of procedures involving EU trade marks. 5% of the OHIM annual revenue is foreseen for the offsetting mechanism, with the possibility of increasing this amount by another 5% in case of a substantive budgetary surplus [this is long overdue, from the perspective of sometimes under-resourced national offices which will welcome this step]; 

• closer cooperation between national offices and the OHIM in projects to promote convergence of practices and tools in the field of trade marks and designs. The maximum amount of funding for cooperation projects is set at 15% of the yearly revenue of the OHIM [OHIM and national offices have been very good about this, so further cooperation is very welcome]; 

• the improvement of the governance structure and the establishment of sound financial procedures in the OHIM [European Patent Office, take note!]; 

• the renaming of the OHIM to "European Union Intellectual Property Office" [Merpel wonders whether it will be the only Intellectual Property Office in the world that has no responsibility for patents. Come to think of it, it won't be responsible for copyright, plant breeders' rights, geographical indications, domain names ...]; 

• the implementation of efficient and expeditious administrative procedures by the national offices for revocation or declaration of invalidity of trade marks [much welcome, particularly if issues relating to burden of proof, standard of proof and admissibility of evidence are to be dealt with consistently across the Community trade mark and national marks]; 

• the adaptation of the designation and classification of goods and services to comply with recent EU case law, in conformity with the international classification established by the Nice agreement [many pixels have already been consumed in discussing this topic: the basic principle that an objective reading of the specification of goods and services for which a mark is registered should indicate what that mark covers -- and what it doesn't -- should be paramount].

And let's not forget the European Parliament's own statement, which adds little other than the news that

"Throughout the negotiations, MEPs stressed the need to ensure smooth transit of generic medicines to developing countries" [generic medicines shouldn't have too many problems getting to developing countries, where they are needed, if they don't find themselves taking circuitous routes through some of the more attractive markets in the European Union before heading out there, and if they are at less risk of falling of those transitory lorries ...]

Says this Kat, the system for trade mark registration, administration, enforcement and commercialisation is immeasurably better than it was in the 1970s, when Europe's finest were fretting about how to bring about a radical change to the feudal patchwork of autonomous jurisdictions which existed then.  However, the fact that there has been so great an improvement should blind no-one to the fact that the system could be a lot better.  He cautiously welcomes most of the current list of changes, believing that the European trade mark system, both for Community trade marks and for national marks, is very much "work in progress" and that we can expect to see at least two more such sets of reforms before we are left with nothing but fine-tuning ahead of us.  Most importantly, in his view, something should be done as a matter of urgency to speed the progress of trade mark litigation through Europe's courts (each of the General Court's three most recent rulings on an application to invalidate a mark were commenced over five years ago) and to process applications and oppositions far more swiftly through office procedures.  That, he thinks, is the best way to benefit businesses and remove the uncertainty that blights their business plans.