Opinion of the European Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EC) No 40/94 on the Community trade mark"

(COM(2002) 767 final - 2002/0308 (CNS))

(2003/C 208/02)

On 17 January 2003, the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 4 April 2003. The rapporteur was Mrs Sánchez Miguel.

At its 399th plenary session on 14 and 15 May 2003 (meeting of 14 May), the European Economic and Social Committee unanimously adopted the following opinion.

1. Introduction

1.1. As a unitary system of protection in the European market, the European trade mark represented in legal terms a major improvement over national trade marks, not just because it simplified the acquisition of exclusive rights over distinctive marks for products and services, but also because it brought benefits for the market and for consumers and users.

1.2. The Community trade mark has had a significant impact on completion of the European single market. Making Community products and services readily identifiable has promoted the free circulation of goods. Compliance with European safety regulations has made it easier for consumers and users to trust certain brands, though not always to the same extent. We nevertheless believe that this dual objective of establishing an exclusive right of the trade mark proprietor and identifying products and services is effectively achieved with the Community trade mark.

1.3. The Commission and the Office for Harmonisation in the Internal Market (OHIM) have together monitored the development and impact of the Community trade mark so that improvements can be made and the best possible results achieved. In this context it has frequently consulted the Member States and organisations concerned.

1.4. The result is the present amendment to Regulation (EC) No 40/94(1), which is intended (i) to improve the functioning of the OHIM and (ii) to adapt the system to cope with the possible consequences of accession of new members with different legal systems.

2. Substance of the proposal

2.1. The proposed amendment basically concerns procedures. The purpose is to rectify those shortcomings that limit the effectiveness of the instruments introduced by Regulation (EC) No 40/94, and to improve the formalities for applicants for the Community trade mark. However, there are other changes that affect the recognition and protection of the distinctive mark. Hence it is necessary to bear in mind the possible overall impact of the proposal.

2.2. The proposed procedural changes can be classified under three headings:

2.2.1. Those that concern registration of the Community trade mark, which deal mainly with issues relating to the process by which a distinctive mark is authorised as a Community trade mark; the most important are:

- absolute grounds for refusal;

- relative grounds for refusal;

- presentation of the application;

- revision of decisions in ex parte or inter partes cases;

- revocation of decisions;

- apportionment of costs;

- continuation of proceedings;

- request for conversion;

- counterclaims.

2.2.1.1. It should be noted that two of the procedural changes have implications beyond the registration process:

- effects on the proceedings for insolvency of a Community trade mark proprietor, which are adapted in line with Regulation (EC) No 1346/2000(2);

- division of the application and the registration by introducing two new articles that simplify and facilitate the division of the Community trade mark so that it can be used as a distinctive mark for more than one product or service.

2.2.2. Changes designed to improve the functioning of the Boards of Appeal, and above all to cut the length of appeals. These include:

- appointment of Board of Appeal members by the OHIM Administrative Board;

- possibility for the position of chairman of the appeals department to be taken by a chairman of the Boards of Appeal;

- possibility in certain cases for appeals to be decided by a single member;

- taking decisions in an enlarged Board.

2.2.3. Abolishing of certain fees that do not provide the Office with real revenue, but make the procedure more cumbersome.

2.3. The other amendments proposed concern two important issues:

2.3.1. Extending proprietorship of the Community trade mark by abolishing the requirement that third country nationals who are not members of the Paris Convention or the WTO may only be proprietors if their country of origin has a reciprocal arrangement with the Member States.

2.3.2. The searching system, which is to be abolished because it does not add any real value to the Community trade mark system.

3. General comments

3.1. The Committee welcomes the content of the amendments proposed to Regulation (EC) No 40/94. Their objective is not just to adapt the administrative procedure for registering the Community trade mark to the new requirements of enlargement. It therefore considers it necessary to state its views on the other issues that are part of the package of amendments presented.

3.2. Proprietors of the trade mark

3.2.1. More flexibility

The Commission proposes to increase flexibility by abolishing the principle of reciprocity for proprietors of trade marks from third countries who wish to have access to the Community trade mark. Generally speaking the proposal benefits trade mark proprietors and their representatives by giving them the possibility to claim priority for an earlier Community trade mark, revocation of decisions based on material errors, continuation of proceedings in certain situations or clarification of costs.

3.2.2. Potential problems

This flexibility is not reflected in the freedom of choice of proprietors of distinctive marks. A problem may arise when the proprietor of a geographical indication or designation of origin applies to register this as a Community mark. Because this is one of the grounds for absolute refusal set out in Article 7, such proprietors are prevented, often for national reasons, from being allowed to use the mark although it genuinely differentiates their products and services.

3.3. One aspect which has given rise to different interpretations and decisions by the courts is the expression "of more than mere local significance" in Article 8(4) of the Regulation. It is therefore suggested that the new legal text define exactly what is meant by "local" in this context.

3.4. Legal representatives

3.4.1. The Commission report looked at how the representation system works, highlighting the obstacles that currently exist to the free movement of services. To satisfy this right it is necessary to facilitate access throughout the internal market for people representing clients before the OHIM. The proposal would make it possible for professional representatives not to have to maintain their place of work in the Member State in which they are entitled to represent the interests related to trade marks, but to obtain in one Member State the power to act in all of them.

3.4.2. Although the changes introduced with respect to representation are simplifications, the final terms will be determined by the Commission when the Regulation is implemented. It is therefore difficult for the EESC to take a position on the above-mentioned proposal because information is lacking on the criteria that will have to be met for recognition as a representative.

3.4.3. At all events the EESC believes that the Commission should assess the different options currently existing in some Member States, e.g. passing an examination, administrative authorisation based on special qualifications, or entry on a list provided by the Member States. It should be borne in mind that at present conditions are not uniform, and the Commission must therefore take a position on the matter.

3.4.3.1. One possibility, apart from the Implementing Regulation, would be to adopt codes of conduct, as proposed by the Commission, which would enable representatives to comply on a voluntary basis, without entailing any increase in costs or administrative work, and would make it easier for the system to operate uniformly in all the Member States.

3.5. From the EESC's point of view, the issue most relevant to the proposed reform is the abolition of the search system. The reason given in clause (4) of the preamble to the proposal is that "it does not add any real value to the Community system, but rather results in exorbitant costs, slows down the procedure and causes other problems".

3.5.1. The differences between national practice, together with the fact that some countries (Germany, France and Italy) currently do not participate in the search system, could be one reason for abolishing it. The OHIM's links with national offices are limited, and the outcome is not always satisfactory given that the content of searches is not uniform.

3.5.2. Furthermore, the cost of the search report would double, from EUR 270 to EUR 592 per request after enlargement, according go the OHIM's calculations.

3.5.3. Notwithstanding the above comments, the EESC thinks that the Commission should consider two important questions:

1) the potential effects of abolishing the search system on SMEs, which can only defend their trade marks through the opposition procedure;

2) the impact on consumers, in so far as the situation may arise where a Community trade mark co-exists alongside national trade marks.

3.5.4. The EESC feels that a less radical solution than abolishing the search system should have been found. For instance, the possibility might have been considered of voluntary implementation based on a request from the applicant, who would bear the cost, especially since the EESC believes that SMEs are discriminated against compared with large businesses which can afford private searches.

3.6. Another point which gives rise to unnecessary conflicting interpretation and is obviously pointless, is the expression "and if rectifying the error is more in the public interest than not doing so" in Article 77a of the Regulation; it is therefore suggested that this be deleted.

3.7. Articles 127(2), 129(2) and 130(2) of the Regulation should, wherever "a single member" is mentioned, stipulate that this person "must be legally qualified". Indeed - given that the Regulation already expresses the appropriate concern for "at least one member [to be] legally qualified", in the event of decisions being made by a group - it does not make sense, in the event of decisions being made "by a single member", for this member not to be legally qualified, especially on a Board of Appeal (Article 130(2)).

3.8. An issue not covered by the amendments to the Regulation on the Community trade mark is how it relates to international treaties, especially the Madrid Protocol, which would grant the EU equal rights to other signatory states. The Council is currently blocking EU accession, which was proposed in 1996. As a result, the Community trade mark does not have international protection vis-à-vis our competitors, which diminishes its status on the international market. Furthermore, if the Community does sign the protocol, the Regulation would have to be amended again.

3.9. Finally, the Committee would point out that there are two main challenges facing the Community trade mark. First, enlargement of the internal market to 25 Member States, which means that more resources - both human and material - are needed for the OHIM. And second, the use of new technologies for all Community registers; although this would facilitate access to information contained in the registers, it is important to bear in mind that protection systems must be employed to maintain the legal security of the register contents.

4. In conclusion, the Committee reiterates that the flexibility the proposed amendments are intended to achieve should not result in a decrease in the legal certainty that the Community trade mark guarantees, particularly for SMEs. For this reason the EESC considers that the deletion of Article 39 should not be defended solely on economic grounds. Moreover, the Community trade mark has an added value in so far as it certifies that a production system abides by Community rules and standards, which guarantee the quality of products and services for European consumers.

Brussels, 14 May 2003.

The President

of the European Economic and Social Committee

Roger Briesch

(1) OJ L 349, 31.12.1994.

(2) OJ L 160, 30.6.2000.