WRITTEN QUESTION E-0488/00

by Werner Langen (PPE-DE) to the Commission

(24 February 2000)

Subject: Admissibility of parallel imports

Under Article 7 of the EU trade mark directive (89/104/EEC)(1) the European exhaustion principle has applied in the EU Member States' trade mark legislation since 1995 rather than the principle of international exhaustion previously applied in many Member States. There has been no room for parallel imports of branded goods from outside the EU since that time. In its report of 1 December 1999 the Commission does not commit itself on whether it is in favour of retaining or changing the current exhaustion principle.

This being the case:

1. What is the Commission's position on the question of international exhaustion and an amendment to Article 7 of the trade mark directive, and does it intend to propose a change in the law to the Council and Parliament?

2. Does the Commission agree with the argument advanced by the advocates of a change in the law that the reintroduction of parallel imports might lead to a significant reduction in the consumer prices of certain branded products of between 30 and 50 %, thus making annual savings of up to EUR 35 to 40bn possible for consumers throughout the EU?

3. In addition to the statements in its report of 1 December 1999, does the Commission have any information to indicate that the occurrence of product piracy has declined appreciably throughout the EU since parallel imports were prohibited in 1995, or does it have information to indicate that cases of product piracy have in fact increased since that time?

4. How does the Commission view the claims by the branded goods industry that, if parallel imports were permitted in the future, jobs would be relocated from the EU to third countries?

5. Does the Commission agree that growing demand from private customers through the internet will give rise to major difficulties for the retail and mail order trade in branded products unless these undertakings are themselves able to obtain supplies of cheap parallel imports and to offer goods at correspondingly low prices?

6. Does the Commission intend to make international exhaustion rules in trade mark legislation the subject of forthcoming rounds of negotiations at WTO level? If not, why not?

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

Answer given by Mr Bolkestein on behalf of the Commission

(10 April 2000)

The discussion on exhaustion is based on a Commission staff working paper(1), which addresses certain key issues. The working paper has been submitted to the Council and the Parliament. In the light of these discussions and all the 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 Commission would also refer to the answer given to other questions on the same issue (Mr Lehne, Written Questions E-0362-3/00(2)).

1. As indicated above the Commission will take a position on this issue once the discussions have been finalised. It is therefore premature at this stage to react to the question of the Honourable Member.

2. Concerning the Honourable Member's reference to re-introduction of parallel imports the Commission would underline that discussions have been focusing on the question of exhaustion of trade mark rights. Many other factors apart from trade mark rights have an impact on parallel imports, such as import duties, import quota and vertical relationships. The calculation on possible effects on consumer pricing

presented by the Honourable Member is not supported by the information provided in the study on exhaustion carried out for the Commission by the NERA research institute in London.

3. The Commission considers the phenomenon of counterfeiting and piracy to be a serious problem. The possible impact of exhaustion regimes on this problem has to be analysed carefully. The Commission has so far not received any information on the possible impact of a ban on parallel imports.

4. The question of the possible impact of a change in exhaustion regime on employment is still under discussion and it is too early to draw any conclusion from this discussion.

5. 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 studying this question as a priority issue.

6. 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 Organisation (WTO) negotiations will be examined when the Commission defines its position on the exhaustion question.

(1) SEC(1999) 2033.

(2) See page 139.