WRITTEN QUESTION E-0362/00

by Klaus-Heiner Lehne (PPE-DE) to the Commission

(14 February 2000)

Subject: The Commission's attitude towards the problem of the exhaustion of trade mark rights and the admissibility of parallel imports

The effect of Article 7 of the EU trade mark directive (89/104/EEC)(1) is that since 1995 at the latest the principle of international exhaustion of trade mark rights hitherto applied in many Member States has been replaced with the principle of European exhaustion in the trade mark law of the EU Member States. Since that date, and in particular with regard to the Silhouette and Sebago rulings of the European Court of Justice, there has been no room for parallel imports of favourable branded goods from outside the EU. In its report of 1 December 1999 the Commission summarises the discussion hitherto and looks into various options for changing the law, although without taking sides on retaining or amending the present principle of exhaustion.

1. In its assessment of the question of whether commercial parallel imports from outside the EU should be possible in the future, what importance does the Commission attach to the increasing supply of low-cost branded goods from EU third countries direct to the final consumer via the Internet? Does it agree that the increasing demand on the part of private customers via the Internet causes considerable problems for retailers and mail order businesses if the latter do not, obtain supplies of low-cost parallel imports and hence are not able to offer low prices?

2. Has the Commission taken note of representations by the sector affected that the legal position as it stands now results in permissible intra-European parallel trade in branded goods being effectively restricted and subject to uncertainties if stocks in hand include, unknown to businesses, products from impermissible third country imports which would result in legal action being taken by manufacturers of branded goods against such businesses? Does the Commission intend to draw conclusions from these representations in the near future and provide remedy?

3. In the light of the criticism expressed at the n/e/r/a report, does the Commission intend to arrange a further questionnaire or study to clarify matters before any decision is taken?

4. Does the Commission intend to make the issue of international rules on exhaustion of trade mark rights a topic for the forthcoming WTO negotiations? If not, why not?

(1) OJ L 40, 11.2.1989, p. 1.

Joint answer to Written Questions E-0362/00 and E-0363/00 given by Mr Bolkestein on behalf of the Commission

(7 April 2000)

The discussion on exhaustion continues on the basis of a Commission staff working paper, addressing certain key issues which has been submitted to the Council and the Parliament. In the light of these discussions and all other relevant factors, the Commission will define its position on the question of exhaustion of trade mark rights, as soon as appropriate and feasible.

The Honourable Member has raised an interesting and important question concerning the possible impact of e-commerce on the exhaustion issue. The Commission is currently examining this as a matter of priority. The situation concerning parallel trade into the Community depends on the outcome of the ongoing discussions on exhaustion. If a possible change of exhaustion regime did not solve this issue, the Commission might have to reflect on the need for other measures.

The Commission is happy with the national economic research associates (NERA) study and is using the study as a basis for the work on exhaustion. There is, at least for the moment, no immediate need for further studies to be carried out. The Commission staff paper lists several different options to change the current exhaustion regime. One of them is to raise this question at a bilateral or multilateral level with third countries. Whether or not the issue of exhaustion should be raised in the forthcoming World trade organization (WTO) negotiations will be examined when the Commission defines its position on the exhaustion question.

The Commission will take a position on international exhaustion after the current discussions have been finalised. It is therefore premature to react to the question of the Honourable Member. Concerning the Honourable Member's reference to re-introduction of parallel imports the Commission would underline that re-introducing parallel trade is not really the issue. The discussions concern the question of exhaustion of trade mark rights. Many other factors have an impact on parallel imports, such as import duties, import quota and vertical relationships. The calculation of possible effects on consumer pricing presented by the Honourable Member is not supported by the information provided in the NERA study.

The Commission considers the phenomenon of counterfeiting and piracy as a serious problem. The possible impact of exhaustion regimes on this problem has to be carefully analysed. The Commission has so far not received any information on the possible impact of a ban on parallel imports. The question of the possible impact on employment of a change in the exhaustion regime is still under discussion and it is too early to draw any conclusion from this discussion.