WRITTEN QUESTION E-0363/00

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 import

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 in the light of 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 present discussion and looks into various options for changing the law, although without taking sides on retaining or amending the present principle of exhaustion.

1. What is the Commission's attitude towards the question of international exhaustion and towards amending Article 7 of the trade mark directive, and does it intend to propose an amendment to the Council and Parliament?

2. Does the Commission share the view of persons advocating a change in the law that reintroducing parallel imports could cut consumer prices for certain branded goods by 30-50 % and, in the light of the results of the n/e/r/a report, does it accept the calculation that savings in the order of EUR 35 to 40 billion would be possible for consumers EU-wide?

3. What is the Commission's attitude towards the argument currently being put forward by the branded industry that future parallel imports would lead to an increased incidence of product piracy? Does the Commission have any information, beyond that presented in its report of 1 December 1999, to suggest that the incidence of product piracy has diminished or increased since the ban on parallel imports in 1995?

4. What is the Commission's view of the argument put forwarded by the branded goods industry that a future introduction of parallel imports would result in a shift of jobs from the EU to third countries? Does the Commission not think that it is much more conceivable that the law as it stands at present is an inducement to shift production facilities abroad, with the loss of jobs in the EU?

(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.