COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Accompanying document to the Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending COUNCIL REGULATION (EC) No 207/2009 of 26 February 2009 on the Community trade mark and the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL to approximate the laws of the Member States relating to trade marks (recast)
Date: 2013-03-27
Institutions: European Commission
Subjects: EU trade mark, European Union Intellectual Property Office, approximation of laws, brand name, registered trade mark, trade-mark law

EUROPEAN 
COMMISSION 

Brussels, 27.3.2013  
SWD(2013) 95 final 

COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying document to the 

Proposal for a  
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending COUNCIL REGULATION (EC) No 207/2009 of 26 February 2009 
on the Community trade mark 

and the 

Proposal for a  
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

to approximate the laws of the Member States relating to trade marks (recast) 

{COM(2013) 161 final} 
{COM(2013) 162 final} 
{SWD(2013) 96 final}

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

3. 

Introduction .................................................................................................................. 5 

Procedural Issues and Consultation of Interested Parties ............................................ 9 

Procedural issues.......................................................................................................... 9 

External expertise and consultation of interested parties........................................... 10 

Policy context, Problem definition and Subsidiarity.................................................. 12 

3.1. 

Background and context............................................................................................. 12 

3.1.1.  Nature and size of the market concerned ................................................................... 12 

3.1.2.  Development in numbers of trade mark applications ................................................ 12 

3.1.3. 

Impact of the reduction of CTM fees on demand ...................................................... 13 

3.1.4.  Users of the CTM system........................................................................................... 13 

3.1.5.  Overview of legislative framework............................................................................ 14 

3.1.6.  Systemic coexistence, extent of the links and interaction between the systems ........ 15 

3.1.6.1.  Systemic coexistence ................................................................................................. 15 

3.1.6.2.  The extent of the links and interaction between the systems ..................................... 16 

3.2. 

Problem definition...................................................................................................... 18 

3.2.1.  Problem relating to divergent provisions of the existing regulatory framework ....... 18 

3.2.1.1.  Non-harmonisation of trade mark procedures............................................................ 19 

3.2.1.2.  Insufficient level of harmonisation as regards substantive law ................................. 23 

3.2.1.3.  Missing clear legal basis for cooperation................................................................... 26 

3.2.2.  Problem relating to the low level of cooperation between trade mark offices........... 27 

3.2.2.1.  Insufficient technical facilities of national offices ..................................................... 27 

3.2.2.2.  Lack of sustainable financing in medium to long term.............................................. 28 

3.2.3.  Adverse effects........................................................................................................... 29 

3.2.4.  Baseline scenario........................................................................................................ 34 

3.3. 

The EU's right to act................................................................................................... 39 

4. 

Objectives................................................................................................................... 40 

4.1. 

General, specific and operational objectives.............................................................. 40 

5. 

Identification of Policy Options ................................................................................. 41 

5.1. 

Divergent provisions of the existing regulatory framework ...................................... 41 

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5.1.1.  Approximation of trade mark laws and procedures ................................................... 41 

5.1.2.  Missing clear legal basis for cooperation................................................................... 43 

5.2. 

Cooperation capacity building ................................................................................... 43 

5.2.1.  Technical facilities ..................................................................................................... 44 

5.2.2.  Funding in general...................................................................................................... 44 

6. 

Comparison of options and analysis of Impacts ........................................................ 45 

6.1. 

Divergent provisions of the regulatory framework: comparison of options .............. 45 

6.1.1.  Approximation of trade mark laws and procedures – comparison of options ........... 45 

6.1.2.  Missing clear legal basis for cooperation – comparison of options ........................... 46 

6.2. 

Divergent provisions of the regulatory framework: impact of the selected option on 
stakeholders................................................................................................................ 48 

6.2.1. 

Impacts as regards the approximation of trade mark laws and procedures................ 48 

6.2.1.1.  Trade mark users (including SMEs) .......................................................................... 48 

6.2.1.2.  National IP offices...................................................................................................... 49 

6.2.1.3.  OHIM ......................................................................................................................... 51 

6.2.2. 

Impacts concerning the legal base for cooperation between IP offices ..................... 53 

6.2.2.1.  Trade mark users ........................................................................................................ 53 

6.2.2.2.  National IP Offices..................................................................................................... 53 

6.2.2.3.  OHIM ......................................................................................................................... 53 

6.3. 

Cooperation capacity: comparison of options............................................................ 54 

6.3.1.  Technical facilities – comparison of options ............................................................. 54 

6.3.2.  Funding ...................................................................................................................... 54 

6.3.2.1.  Financing in general – comparison of options ........................................................... 54 

6.3.2.2.  Financing from the OHIM budget – comparison of sub-options............................... 56 

6.4. 

Cooperation capacity: impact of the selected option on stakeholders and mitigating 
measures..................................................................................................................... 60 

6.4.1.  Technical facilities/tools ............................................................................................ 60 

6.4.1.1.  Trade mark users ........................................................................................................ 61 

6.4.1.2.  National offices .......................................................................................................... 61 

6.4.1.3.  OHIM ......................................................................................................................... 61 

6.4.2.  Financing of cooperation............................................................................................ 62 

6.4.2.1.  Trade mark users ........................................................................................................ 62 

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6.4.2.2.  National IP offices...................................................................................................... 63 

6.4.2.3.  OHIM ......................................................................................................................... 63 

6.5. 

6.6. 

Interaction between selected options ......................................................................... 64 

Further possible impacts of the selected options........................................................ 66 

6.6.1.  Consumers.................................................................................................................. 66 

6.6.2.  EU budget................................................................................................................... 66 

6.6.3.  Social impact.............................................................................................................. 66 

6.6.4.  Environmental impact ................................................................................................ 66 

6.6.5. 

International ............................................................................................................... 66 

7. 

7.1. 

7.2. 

8. 

8.1. 

8.2. 

9. 

Choice of the legal instrument ................................................................................... 67 

Approximation of trade mark laws and procedures ................................................... 67 

Cooperation capacity building ................................................................................... 68 

Monitoring and Evaluation ........................................................................................ 68 

Approximation of trade mark laws and procedures ................................................... 68 

Cooperation capacity building ................................................................................... 68 

Annexes...................................................................................................................... 69 

9.1. 

Annex 1: Glossary...................................................................................................... 69 

9.1.1.  European Observatory on Counterfeiting and Piracy ................................................ 69 

9.1.2.  Technical terms relating to trade marks ..................................................................... 70 

9.2. 

Annex 2: Proposals to be covered by the revision of the regulatory framework....... 72 

9.2.1.  Approximation of trade mark laws and procedures (addressed in the problem 

definition)................................................................................................................... 72 

9.2.1.1.  Principal procedural rules of the CTMR to become also part of the TM Directive... 72 

9.2.1.2.  Further substantive rules of the CTM Regulation to become part of the TM Directive

.................................................................................................................................... 73 

9.2.1.3.  Reduction of optional provisions in the TM Directive .............................................. 73 

9.2.2.  Cooperation capacity building (addressed in the problem definition) ....................... 73 

9.2.3.  Amending or removing outdated provisions (not addressed in the problem definition)
.................................................................................................................................... 73 

9.2.4.  Clarifying legislation and removing ambiguities (not addressed in the problem 

definition)................................................................................................................... 74 

9.2.5. 

Implementation of case law (not addressed in the problem definition) ..................... 74 

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9.3. 

Annex 3: Online services and degree of automation at national offices.................... 74 

9.3.1.  Availability of online services ................................................................................... 74 

9.3.2.  Degree of automation at national offices ................................................................... 75 

9.4. 

9.5. 

9.6. 

9.7. 

Annex 4: Overview of trade mark application and registration fees ......................... 75 

Annex 5: Procedural issues – opinions of the Impact Assessment Board ................. 76 

Annex 6: Cost of cooperation activities ..................................................................... 78 

Annex 7: Summary of the main statements made by user associations..................... 81 

9.7.1.  General position regarding the coexistence of the trade mark systems in Europe..... 81 

9.7.2.  National trade mark systems ...................................................................................... 81 

9.7.3.  National offices and cooperation with OHIM............................................................ 82 

9.7.4.  Community trade mark system .................................................................................. 82 

9.8. 

Annex 8: Findings of a Social Cost Benefit Analysis................................................ 83 

9.8.1.  Packet 1 projects ........................................................................................................ 84 

9.8.2.  Packet 2 projects ........................................................................................................ 84 

9.8.3.  Assumptions underlying benefit calculations ............................................................ 86 

9.8.4.  Comments on broader social impacts ........................................................................ 87 

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COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying document to the 

Proposal for a  
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending COUNCIL REGULATION (EC) No 207/2009 of 26 February 2009 
on the Community trade mark 

and the 

Proposal for a  
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

to approximate the laws of the Member States relating to trade marks (recast) 

1. 

INTRODUCTION 

1.1. 

Importance of trade marks and available systems of trade mark protection 

Trade  marks  are  indicators  of  business  origin,  distinguishing  products  and  services  of  one 
company from those of another. They enable consumers to recognize a product as one which 
they have liked, or disliked, in the past and thereby allow them to make an informed choice 
when making the purchase or asking for a service. Trade marks are also essential marketing 
tools  for  modern  business:  They  are  the  principal  instrument  used  by  businesses  for 
advertising their products, and offer a guarantee that all the goods originating from the same 
producer have a certain quality. In a world of increasing consumer sophistication, branding, 
supported by trade marks, can assist businesses of all sizes in their quest for innovation and 
entry into new markets. 

Trade  marks  are  territorial  rights.  They  guarantee  a  protection  to  their  owners  only  in  the 
territory  of  the  country  or  countries  concerned.  In  Europe,  several  systems  for  trade  mark 
protection exist.  

(a) 

National  trade  marks  are  registered  by  the  intellectual  property  (IP)  offices  of 
Member States on the basis of a harmonised system. Currently, there are 24 national 
offices, and one regional office – the Benelux Office for IP (BOIP)1
 . National trade 
marks  generally  serve  users  seeking  registration  in  one,  or  a  limited  number  of, 

1 

Hereinafter, the 24 national IP offices and the Benelux Office for IP are referred to jointly as "national 
IP offices" and the national and regional trade marks as "national trade marks". 

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(b) 

(c) 

countries,  as  well  as  users  that  want  to  obtain  much  broader  protection  in 
geographical terms but are not able2 or willing to opt for a Community trade mark.  

Community  Trade  Marks  (CTM),  available  since  1996,  grant  their  proprietors  a 
unitary IP right with an equal effect throughout the entire EU. They are registered by 
a specialised EU agency, the Office for Harmonisation in the Internal Market (Trade 
Marks and Designs) (OHIM) which was established in 1994 in Alicante, Spain. The 
CTM does not replace national trade mark systems, but provides an additional legal 
framework ("a 26th regime") for obtaining trade mark protection in the territory of all 
27 Member States. 

Finally,  international  trade  mark  registrations  are  administered  by  the  World 
Intellectual  Property  Organisation  (WIPO),  and  secure  protection  in  several 
countries,  through  the  system  of  the  Madrid  Agreement  and  the  Protocol  to  that 
Agreement. These trade marks can be obtained in a single procedure; however, once 
registered they do not become a single IP right, as the CTM, but split into a bundle of 
national  and/or  Community  trade  marks,  depending  on  the  choice  of  the  applicant. 
International  applications  have  limited  added  value  within  the  EU  and  are  more 
advantageous  for  users  seeking  trade  mark  protection  in  countries  outside  Europe 
and/or worldwide. 

The national, Community, and international trade mark systems not only coexist passively but 
are closely interrelated with each other3. 

1.2. 

Political context 

The  trade  mark  system  in  Europe  has  undergone  a  significant  development  over  the  last  20 
years.  This  process  started  with  the  harmonisation  of  national  trade  mark  laws  in  1989  and 
was followed by the creation of the CTM in 1994. Since then, it has not been subject to any 
major modifications4. 

The  business  environment,  however,  has  changed  significantly  over  the  past  two  decades, 
notably with the expansion of the internet and other electronic business tools. The numbers of 
trade  mark  applications  have  been  growing,  both  at  national  and  Community  levels5,  as  are 

2 

3 

4 

5 

Given  the  unitary  character  of  a  Community  trade  mark  (Article  1(2)  CTMR),  protection  cannot  be 
obtained if absolute grounds for refusal exist in any part of the EU (for example, trade marks that would 
be  purely  descriptive  in  one  of  the  EU  languages  and/or  would  be  contrary  to  public  policy  in  one 
Member State). Similarly, the existence of an earlier national trade mark in a single Member State can 
prevent the registration of a CTM for the whole territory of the EU. 
In principle, companies should be able to freely choose between registration at national, Community or 
international level, depending on their business needs and the type of protection that they want to secure 
for their trade mark rights. Ideally, their choice ought to be guided by considerations regarding plans for 
future  expansion,  existence  of  prior  rights  in  some  territories,  investment  in  IP  protection  etc.  In 
practice, however,  their free choice  is often  biased by  uneven  conditions  at  individual IP offices.  For 
more details about these issues see chapter 3.2, problem definition. 
The 1989 Trade Mark Directive was amended only once in 1992 as regards its transposition deadline. 
The  1994  CTM  Regulation  was  amended  in  2003  in  relation  to  the  EU  accession  to  the  system  of 
international trade mark registrations under the Protocol to the Madrid Agreement. In 2004, the CTM 
Regulation was subject to some further amendments on substantive law and procedures. Both the TM 
Directive  and  the  CTM  Regulation  were  codified  in  2008  and  2009,  respectively,  but  without  any 
changes on substance. 
For more details refer to section 3.1.2. 

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the  numbers  of  trade  mark  users.  Stakeholders  increasingly  demand  faster,  higher  quality, 
more  streamlined  trade  mark  registration  systems,  which  are  more  consistent,  user  friendly, 
publicly accessible and technologically up-to-date.  

In  2007,  when  addressing  the  issue  of  the  financial  perspectives  of  OHIM,  the  Council6 
recognised  that  it  was  over  a  decade  since  the  introduction  of  the  CTM  Regulation  and  the 
establishment of OHIM, and under the principles of better regulation, emphasised the need for 
an  overall  assessment  of  the  functioning  of  the  CTM  system.  It  invited  the  Commission  to 
start work on a comprehensive study on the overall functioning of the CTM system.  

The  Commission  committed  itself,  in  its  2008  "Small  Business  Act"7,  to  make  the  CTM 
system  more  accessible  to  SMEs.  Furthermore,  the  2008  Communication  on  an  Industrial 
Property Rights Strategy for Europe8 stressed the Commission's commitment to effective and 
efficient  trade  mark  protection  and  to  a  high  quality  trade  mark  system.  It  concluded  that  it 
was time for an overall evaluation which could form the basis for future review of the trade 
mark  system  in  Europe,  and  the  further  improvement  of  cooperation  between  OHIM  and 
national  IP  offices.  As  regards  the  international  dimension,  the  Communication  announced 
that the Commission would prepare the ground for the accession of the EU to the Singapore 
Treaty  on  the  Law  of  Trademarks  and  encouraged  Member  States  to  ratify  that  treaty.  In 
2010,  in  the  Communication  on  Europe  2020  strategy9  under  the  Flagship  Initiative: 
“Innovation Union”, the Commission committed to modernise the trade marks framework in 
order to improve the framework conditions enabling business to innovate. Finally, in its new 
IPR strategy for Europe10, the Commission announced a review of the trade mark system in 
Europe, with a view to modernising the system both at EU and national levels, by making it 
more effective, efficient and consistent as a whole.  

On  the  basis  of  interim  results  of  a  related  Commission  study  (see  section  2.2  below),  the 
Competiveness  Council  adopted  on  25  May  2010  conclusions  on  the  future  revision  of  the 
Trade Mark system in the EU11. The Council called on the Commission to present proposals 
for  the  revision  of,  respectively,  the  CTM  Regulation,  and  the  Directive  approximating  the 
laws  of  Member  States  relating  to  trade  marks,  and  flagged  up  those  issues  which  it  would 
like to see addressed therein.  

1.3. 

Scope of the impact assessment 

The  present  impact  assessment  looks  into  the  business  needs  of  trade  mark  users  in  Europe 
and  evaluates  them  against  the  current  conditions  resulting  from  the  EU  trade  mark 
legislation. It deals with the CTM Regulation12 and the Trade Mark Directive (TM Directive) 
and assesses the impact of their possible modification, as well as of other soft law measures. 
The  analyses  focus  on  major  problems  and  shortcomings  identified  in  the  current  system 
during  a  comprehensive  fact  finding  and  consultation  process  ("evaluation  process",  for 
details see chapter 2.2). 

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10 
11 
12 

Council Conclusions of 21 and 22 May 2007, Council document 9427/07. 
COM(2008) 394 final. 
COM(2008) 465 final. 
COM(2010) 2020 final. 
COM(2011) 287 final. 
Council document 2010/C 140/07. 
The  impact  assessment  does  not  look  into  provisions  of  the  implementing  measures  to  the  CTM 
Regulation. 

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Accordingly,  the  scope  of  this  report  was  shaped  on  the  basis  of  these  evaluation  results 
which primarily revealed considerable incoherence between the trade mark systems in the EU, 
and the inefficient procedures, inappropriate practices and missing and/or outdated tools and 
instruments.  Such  shortcommings  all  negatively  affect  the  access  to  trade  mark  protection, 
especially its speed and cost, as well as the legal certainty of trade mark users in general. All 
these  findings  demonstrated  an  urgent  need  for  modernisation  and  streamlining  of  the 
European trade mark system, both at EU and national levels. 

The  report  does  not  focus  on  the  issue  of  OHIM  financing  as  its  primary  content.  In 
accordance with the commitment made in an earlier impact assessment13, accompanying the 
2009  Commission  proposal  for  reduction  of  OHIM  fees14,  the  evaluation  process 
encompassed  an  assessment  of  OHIM's  fees  and  fee  structure15.  This  assessment  concluded 
that the current balance between the fees appears appropriate16. The study contractor noted in 
this  context  that  the  overall  level  of  fees  must  be  sufficient  to  cover  the  expenses  of  the 
present  and  any  future  tasks  of  the  Office,  and  any  payments  made  by  the  Office  to  the 
national offices. The level of fees should further suffice to establish and maintain an adequate 
reserve fund. In addition, it found that there is no objection in principle to fixing the fees at a 
level which takes into account additional considerations, such as facilitating a choice between 
CTMs and national trade marks, or the actual and potential value of the IP right granted by the 
Office.  As  long  as  the  overall  fee  level  is  sufficient  to  cover  the  Office's  operations,  the 
legislature was considered to have substantial discretion to fix the level of each individual fee. 
The  interests  to  be  taken  into  account  in  this  context  include  those  of  CTM  applicants  and 
proprietors, the interests of earlier rights owners, and also the interests of the EU as a whole 
and  of  its  Member  States  in  maintaining  an  adequate  balance  between  their  trade  mark 
systems and the CTM system. A CTM renewal fee, substantially higher than the application 
fee,  was  regarded  as  entirely  justified  in  view  of  the  value  of  an  existing  and  continuing 
registration  valid  in  the  whole  EU,  and  the  fact  that  it  may  contribute  to  preventing  CTMs 
being  renewed  which  are  not  used  at  all  or  are  of  only  marginal  value  to  their  owners. 
Therefore, this report does not address OHIM fees as an issue per se, but does so in relation to 
identified problems or considered policy options (see chapter 6.2.1.3). 

Where suitable, this report draws links to a recent impact assessment17 which accompanied the 
2011  proposal  for  a  Regulation  entrusting  the  OHIM  with  the  European  Observatory  on 

13 

14 

15 

16 
17 

This  2009  impact  assessment  addressed  the  issue  of  OHIM  budgetary  surplus  and  of  its  financial 
perspectives in general. As a first step, the report identified the need to stabilise the OHIM budget in the 
medium  term  and  to  avoid  a  further growing gap between  its  revenues and  expenditure.  As  a  second 
step, it announced a later, more comprehensive revision of OHIM's financial structure to be carried out 
in the context of a study on the overall functionning of the Community and national trade mark systems. 
See at http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2009/sec_2009_0419_en.pdf. 
Proposal for a Commission Regulation on the amendment of Commission Regulation (EC) No 2869/95 
on  the  fees  payable  to  the  Office  for  the  Harmonisation  in  the  Internal  Market  (Trade  Marks  and 
Designs), C(2009) 2322. This Regulation (EC) No 355/2009 was adopted on 31 March 2009. 
This assessment, carried out by the Commission contractor, the Max Planck Institute for Competition 
and  IP  law  (MPI),  included  questions  on  levels  of  various  OHIM  fees  (notably  application,  renewal, 
opposition, cancellation and appeal fees), the need for their further adjustment and/or changing the fee 
structure overall. In the context of this study and also as part of the overall evaluation exercise, led by 
Commission services, views of all interested parties were sought, in particular, that of trade mark users, 
national IP offices and OHIM. 
See MPI Study, pages 190-191. 
SEC(2011)  612,  http://ec.europa.eu/internal_market/iprenforcement/docs/observatory/sec_2011_0612_ 
en.pdf. 

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Counterfeiting  and  Piracy18.  It  should  be  clarified,  however,  that  whereas  the  Observatory 
Regulation  aims  at  extending  the  current  mandate  of  the  Office  by  entrusting  it  with  new 
competences in relation to IPR enforcement, the present impact assessment report looks into 
the core business of OHIM and national IP offices in the field of trade marks, notably their 
registration and administration. Accordingly, since the subject matter of these two initiatives 
is  substantially  different  and  not  directly  related,  the  number  of  potential  common  issues  is 
limited. 

Finally, the present impact assessment does not expressly scrutinize all possible amendments, 
in  particular  not  those  aimed  at  minor  adaptations  of  existing  provisions  with  little,  or  no, 
practical  impact,  nor  those  which  would  "clean"  both  pieces  of  legislation  from  obvious 
historical  leftovers19.  Nevertheless,  an  overview  of  the  proposals  for  amending  existing 
legislation is provided in Annex 2 (section 9.2). 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

2.1. 

Procedural issues 

The  preparation  of  this  impact  assessment  was  monitored  by  an  Inter-Services  Steering 
Group, composed of Directorates General Internal Market and Services (MARKT), Enterprise 
and Industry (ENTR), Joint Research Centre (JRC), Budget (BUDG), Secretariat-General and 
Legal Service. The Steering Group met on three occasions, on 30 June 2011, 20 July 2011 and 
12 September 2011. The minutes of the last Steering Group's meeting were sent to the Impact 
Assessment Board (IAB). 

A  draft  of  this  impact  assessment  was  submitted  to  the  IAB  on  21  September  2011  and 
discussed  at  the  Board's  meeting  on  19  October  2011.  The  IAB  issued  an  opinion  on  21 
October  2011  finding  that  the  draft  report  should  be  significantly  improved  in  several 
important aspects. The report has been substantially revised, improved and extended in order 
to completely comply with the opinion of the IAB20. 

The revised draft of this impact assessment was submitted to the IAB on 10 Januar 2012. The 
IAB  issued  a  second  opinion  on  that  revised  draft  on  3  February  2012,  confirming  that  the 
report had been improved to a significant extent along the lines of the IAB's first opinion. The 
report has been further revised and improved in order to address the remaining points raised 
by the IAB. 

After the second opinion of the IAB, the report was subject to further discussions with the DG 
BUDG  as  regards  its  parts  dealing  with  financial  matters  and  OHIM  budget.  Following  the 
recommendations  of  the  DG  BUDG,  some  new  elements  were  added  to  the  final  impact 
assessment,  leading  in  part  to  changes  in  the  originally  preferred  options  (for  details,  see 
Annex 5, section 9.5). 

18 
19 

20 

See glossary in Annex 1 (section 9.1). 
One  example  of  such  an  outdated  provision  is  the  definition  of  a  trade  mark  which  still  contains  the 
requirement of graphical representation for a sign to be registered as a trade mark. This definition is no 
longer suitable for new, non-conventional trade marks, for example sounds. 
For details regarding both IAB opinions and subsequent revisions of the impact assessment report see 
Annex 5 (section 9.5), 

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The  initiative  to  which  this  impact  assessment  relates  to  has  been  introduced  into  the 
Commission's agenda planning as 2011/MARKT/003. 

2.2. 

External expertise and consultation of interested parties 

The  drafting  of  this  impact  assessment  was  preceded  by  an  extensive  evaluation  and 
consultation process in which DG MARKT sought expertise of external specialists as well as 
views of interested parties.  

The evaluation process started in 2008 with a "consultation on trade marks" carried out via the 
European Business Test Panel (EBTP)21. It aimed at gathering views of companies, including 
small and medium sized enterprises (SMEs)22, about issues such as the added value of trade 
marks  for  companies,  the  awareness  of  the  potential  users,  the  costs  of  a  trade  mark,  the 
relationship between the national and the CTM systems, the efficiency of the systems and the 
protection of trade marks. 

The  main  component  of  the  evaluation  process  was  a  comprehensive  study23  commissioned 
by the Commission from the Max Planck Institute for Intellectual Property and Competition 
Law in Munich, Germany, and carried out between November 2009 and February 2011. The 
study was based on a non-exhaustive set of evaluation questions24 grouped around two main 
tasks:  assessment  of  links  between  the  CTM  and  national  systems,  and  assessment  of  the 
functioning  of  the  CTM  system.  The  aim  of  the  study  was  to  identify  potential  areas  for 
improvement, streamlining and future development of the trade mark system as a whole, both 
at Community and at national level. The study also established the potential for enlarging the 
scope of cooperation between OHIM and national IP offices.  

In addition to the expert analyses by the Max Planck Institute, which were complemented by 
an economic analysis of certain aspects of the CTM system by the institute INNO-tec25, the 
study  comprised  a  number  of  consultations  with  various  stakeholders.  First  of  all,  a  large 
online  survey26  among  users  of  the  CTM  system  was  performed  by  the  Institut  für 
Demoskopie Allensbach, Germany (Allensbach survey). The survey was based on a random 
sample of 1,599 users, and data was collected between February and March 2010. Secondly, 
user associations were invited to express their views on all evaluation questions, and to make 
further observations and suggestions. In total, 19 organisations representing trade mark users 
at  national,  European  and  international  level  sent  their  contributions27,  making  use  of  both 
listed evaluation questions and free submissions. Indeed, a number of issues that had not been 

21 
22 

23 

24 

25 

26 

27 

the 

the 

MPI 

final 

study, 

including 

http://ec.europa.eu/yourvoice/ebtp/consultations/2008_en.htm. 
In  terms  of  participation  there  were  391  replies  and  the  size  of  the  companies  that  replied  was  very 
variable, from small and medium enterprises to big companies (more than 500 employees). 
See 
http://ec.europa.eu/internal_market/indprop/tm/index_en.htm 
See 
http://ec.europa.eu/internal_market/indprop/docs/tm/090722_tender_en.pdf 
As  part  of  the  MPI  study,  an  empirical  assessment  of  the  development  of  the  CTM  system  and  its 
relationship with national trade mark systems was carried out by the Institute INNO-tec at the Ludwig-
Maximilians-Universität, LMU Munich School of Management. The final INNO-tec report, annex 1 to 
the MPI study, is available at http://ec.europa.eu/internal_market/indprop/docs/tm/20110308_inno-tec-
report_en.pdf. 
See  the  final  Allensbach  report  at  http://ec.europa.eu/internal_market/indprop/docs/  tm/20110308_al-
lensbach-report_en.pdf. 
For all received contributions refer to Annex 4 of the study: Statements of user organisations, available 
at http://ec.europa.eu/internal_market/indprop/docs/tm/20110308_statements-of-use_en.pdf. 

specification 

annexes, 

tender 

at: 

at 

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10 

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part of the initial tender were eventually considered by the Commission's services on the basis 
of users' comments. Moreover, a hearing with 15 major user organisations was organised by 
the Max Planck Institute in Munich on 8 and 9 June 2010. The purpose of this meeting was to 
give user organisations the opportunity to express their main ideas on the study and to discuss 
with them topics raised in the call for tender28. Finally, the Max Planck Institute consulted all 
national  IP  offices29  and  OHIM,  most  of  them  by  means  of  personal  visits,  the  rest  on  the 
basis of a written questionnaire. The results of all these consultations, surveys and hearings30 
were  taken  into  consideration  in  the  final  report  of  the  Max  Planck  Institute  and  by  DG 
MARKT when drafting the present impact assessment.  

The conclusions of the study endorsed the need for greater coherence between the CTM and 
national  systems  and  for  further  approximation  of  Member  States'  trade  mark  laws  both 
within and beyond the current scope of the TM Directive. While many aspects of the present 
CTM system were confirmed as functioning well, the study made a large number of proposals 
for  improvement  and  identified  areas  for  strengthening  cooperation  between  OHIM  and 
national IP offices. 

As  a  follow  up  to  the  study,  DG  MARKT  held  a  number  of  bilateral  meetings  with  user 
associations. Moreover, it organised a hearing with their representatives to seek their views on 
selected proposals of the study as well as to test some options identified as part of the impact 
assessment. The hearing took place on 26 May 2011 in Brussels and was attended by 18 user 
associations. Its results shaped and confirmed the preliminary analysis of the Commission. 

Finally, it should be mentioned that the TM Directive was subject to transposition checks by 
the  Commission  following  the  expiry  of  the  transposition  deadlines.  DG  MARKT 
commissioned in 1997 a study on the conformity of the trade mark laws in the 15 old Member 
States  with  the  Directive.  The  conformity  of  the  laws  of  the  12  new  Member  States  was 
assessed internally. Those studies did not reveal any significant problems in transposing the 
Directive. This result corresponds to the fact that there were no infringement procedures to be 
opened against Member States. Against this background, it is not surprising that the question 
of  proper  implementation  of  the  Directive  by  Member  States  did  not  play  any  role  in  the 
above later evaluation process. 

28 

29 

30 

For a combined presentation of the opinions of user associations per subject see MPI study p. 31-38. 
See  also  a  summary  of  the  statements  made  by  user  associations,  in  particular  in  relation  with 
problematic legal and capacity related issues, in Annex 7. 
A systematic presentation of the statements of national IP offices per question is included in the MPI 
Study, ‘Chapter 1: Interviews with, and information from, national trade mark offices’ p. 5 - 30. 
When carrying out these consultations, the Commission minimum consultation standards (Cf. "Towards 
a  reinforced  culture  of  consultation  and  dialogue  –  General  principles  and  minimum  standards  for 
consultation  of  interested  parties  by  the  Commission",  COM(2002)  704  final)  were  observed.  In 
particular, the consultation documents were drafted in a clear and concise manner and sufficient notices 
were given for both participation in meetings and responses to questionnaires. Given the very specific 
subject  matter,  there  was  not  an  open  public  consultation.  However,  all  relevant  target  groups  were 
consulted by means of appropriate tools and the consultation process was given a large publicity. 

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3. 

POLICY CONTEXT, PROBLEM DEFINITION AND SUBSIDIARITY 

3.1. 

Background and context 

3.1.1.  Nature and size of the market concerned 

Europe's  economy  relies  on  powerful  brands,  requiring  strong  and  effective  trade  mark 
protection. In the EU, the value of the top ten brands per country31 amounts to almost 10% in 
relation  to  their  GDP  (PPP)32.  The  percentage  is  even  higher  in  smaller  countries  with 
valuable brands where the figure can amount to over 30%33. As such, the economic value of 
trade marks serves as an indicator for the economic wealth of a country. The average value of 
the top ten brand values per Member State equals € 35 billion but amounts  to € 145 billion in 
Germany and  € 138  billion in the United Kingdom. Annual communication and advertising 
expenditure in Europe on brands of € 174 billion 34 benefits media as well as sport, arts and 
entertainment. 

In  microeconomic  terms,  trade  marks  are  important  and  valuable  business  assets  for 
companies across all sectors, and able to significantly increase in value as businesses expand 
and  grow.  With  regard  to  international  trade  dimension,  48%  of  EU  exports  are  upmarket 
branded goods35. 

3.1.2.  Development in numbers of trade mark applications  

The  demand  for  trade  mark  protection  is  constantly  high.  In  absolute  terms,  both  CTM  and 
national trade marks have grown between 1996 and 2008 (the most recent year for which data 
for all 26 offices are available). While the total number of trade mark applications in the 27 
current  EU  Member  States  increased36  by  about  8%  from  471,000  in  1996  to  509,000  in 
200837,  the  numbers  of  CTM  applications  have  more  than  doubled  during  a  similar  period 
from about 43,000 in 1996 to over 107,000 in 201238. 

An overall global decrease in activity was witnessed from 2007 to 2009, reflecting prevailing 
economic conditions. In 2008, a total of 3.3 million trade mark applications were filed world-
wide,  representing  a  0.9%  decline  compared  to  2007.  China  was  an  exception,  with  2009 
showing  a  21%  increase  in  filings  and  more  than  a  50%  increase  in  registrations  compared 
with the previous year. However, indications are that with the economic recovery trade mark 
filings have started to grow again. 

31 
32 

33 

34 
35 
36 

37 

38 

Source: European Brand Institute, www.eurobrand.cc. 
For  the  used  methodology,  refer  to  methods  of  brand  valuation  of  the  European  Brand  Institute  at 
http://www.icon-net.com/medialib/file/EBI_eurobrand%20Methoden_ISO_ON_Okt%202010.pdf. 
For  example,  this  was  the  case  of  Finland  in  2009;  see  "eurobrand2009  country  review"  at 
http://www.eurobrand.cc/studien-rankings/eurobrand-2009/ 
Source: http://www.aim.be/economic_aspects.htm 
Same as in footnote 34. 
Even more pronounced is the growth in applications filed at national IP offices by national (resident) 
applicants, which rose from 269,000 in 1996 to 364,000 in 2008. 
At the top of the ranking are the French IP Office (91,214 applications in 2011) and the German Patent 
and  Trade  Mark  Office  (69,117  applications  in  2011).  As  regards  the  national  registers,  the  German 
database contained in 2011 774,000 registered trade marks and the French one 1,010,260. Overall, the 
registers of Member States’ IP offices (without OHIM) contain almost 9 million trade marks. 
By the end of 2012, OHIM registered almost 900,000 CTMs and, in October 2011, the one millionth 
CTM application was filed.  

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3.1.3. 

Impact of the reduction of CTM fees on demand 

At the time of the Impact Assessment for the last CTM fee reduction in 2009, there was no 
evidence available for the previous 2005 fee reduction having led to an increase in volume of 
CTM  applications.  Therefore,  the  Commission  proceeded  from  the  assumption  that  the 
number of CTM applications would remain unchanged. According to the findings of INNO-
tec, the fee reduction instituted in 2005 had a strong positive effect on demand for the CTM. 
The second fee reduction in 2009 was too close to the end of the available data series to be 
evaluated as to its effects by the institute. However, against the 2005 experience it cannot be 
excluded  that  the  substantial  fee  reduction  in  2009  also  may  have  had  an  impact  on  the 
demand  of  CTMs  besides  possible  other  impacting  factors  (e.g.  the  start  of  economic 
recovery,  increasing  internationalisation  of  businesses  or  further  efficiency  improvements  at 
OHIM)39. This is confirmed by the difference between the 90,000 CTM applications per year 
forecasted in the Impact Assessment for the last fee reduction and the current over 105,000 
applications per year40. 

3.1.4.  Users of the CTM system41 

The  350,000  companies  from  170  countries  that  have  registered  CTMs  range  from  large 
multinationals to SMEs. From the beginning, the majority of the CTM applications originated 
from EU Member States. In recent years, these countries accounted for around 70% of total 
applications. Among the Member States, Germany, United Kingdom, Italy, Spain and France 
are  the  top  filers.  Among  non-EU  countries,  the  United  States,  Switzerland,  Japan,  Canada 
and Australia are the main users of the Community system. 

The  full  integration  of  the  12  Member  States  that  joined  the  EU  between  2004  and  2007  is 
still a work in progress, including the use by companies from those countries of the European 
IP rights provided by OHIM. Thus, the 12 new Member States account for about 12% of the 
total GDP of the EU at Purchasing Power Parities (2009, Eurostat data) but they represented 
only 5% of CTM applications in 2010. 

Looking  at  CTM  owners  by  company  size,  it  is  clear  from  the  chart  below  that  the  vast 
majority  of  new  CTM  owners  are  SMEs.  The  chart  shows  the  composition  of  new  CTM 
owners in each year, distinguishing between large-scale enterprises (LSE) and SMEs. In the 
early  years  of  OHIM’s  operation,  a  significant  share  of  new  owners  were  LSEs,  more  than 
35%  in  1996.  In  contrast,  in  recent  years,  the  SMEs'  share  has  been  well  over  95%.  This 
indicates that there was an initial rush of big companies, already operating on a pan-European 
scale,  to  protect  themselves  to  the  maximum  extent  possible.  By  now,  all  the  big 

39 

40 

41 

In the context of the INNO-tec economic study (footnote 25), the analysis also detected some evidence 
suggestive of competition between OHIM and national offices. However, it could shed only a limited 
amount of light on the extent of the effect that competition between the CTM and national trade marks 
has on demand for the latter. This rather unclear picture is confirmed by the relevant information which 
the MPI itself obtained from national offices. In fact, national offices were clearly not unanimous when 
asked  whether  the  fee  reduction  for  CTMs  has  had  any  impact  on  the  number  of  applications  for 
national  trade  marks  received  by  the  office  (for  more  details  see  paragraph  1.21  on  p.  9  of  the  MPI 
study  and  also  considerations  taken  into  account  in  the  IA  for  the  last  CTM  fee  reduction  in  2009 
(footnote 13), p. 16 under point 3.4.3 'Coexistence' and footnote 17 of this document under iii). 
While  in  2009  OHIM  received  88,209  CTM  applications,  and,  thus,  practically  the  volume  as 
forecasted  (90,000),  the  Office  got  11%  more  applications  in  2010  (98,313)  and  witnessed  a  further 
increase in 2011 (105,857). 
Source: report of Allensbach Institute (footnote 26); OHIM data and calculations. 

EN 

13 

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multinationals already have their CTMs. Most of the recent growth comes from SMEs, once 
again  reflecting  the  critical  role  such  companies  play  in  the  development  of  Europe’s 
economy and their growing internationalisation at a much earlier stage in their evolution. 

Figure 1: New CTM owners by company size 

100%

80%

60%

40%

20%

0%

LSE

SME

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: OHIM data and classes of Allensbach Institute 

3.1.5.  Overview of legislative framework  

The EU legislative framework is based on two main components, the Trade Mark Directive 
approximating the laws of Member States related to trade marks, and the Community Trade 
Mark Regulation.  

The aim of the Trade Mark Directive42 was to ensure that national trade marks registered with 
the  Member  States'  IP  offices  were  subject  to  the  same  substantive  conditions  of 
registrability43 and enjoyed the same protection under the laws of all the Member States. It did 
not  undertake  a  full-scale  approximation  of  laws  but  harmonised  only  those  (substantive) 
provisions of national law that most directly affected the functioning of the internal market, 
leaving  expressly  unharmonised  the  procedural  rules  concerning  the  registration,  revocation 
and invalidity of trade marks44. 

Alongside and linked to national systems, the CTM Regulation45 established a free-standing trade 
mark system which provides a single procedure for registering a unitary Community right having 
equal effect throughout the EU, instead of a separate procedure in each Member State leading to a 
bundle of national trade mark rights conferring protection only in their respective territories. The 

42 

43 

44 
45 

Originally  First  Council  Directive  No  89/104/EEC  of  21  December  1988,  now  codified  as  Directive 
2008/95/EC. 
This  means  harmonisation of  trade  mark definition  (i.e.  of  signs of which  a  trade  mark  may  consist), 
grounds for refusal of a trade mark application and for invalidation of a registered trade mark, further 
grounds for refusal or invalidity concerning conflicts with earlier rights etc. 
See the 4th and 5th recitals to the Preamble of the TM Directive. 
Originally the Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark, 
now codified as Regulation 207/2009. 

EN 

14 

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provisions  of  the  CTM  Regulation  were  further  specified  in  three  implementing  Regulations46, 
adopted as comitology measures in accordance with Council Decision 1999/468/EC. 

3.1.6. 

Systemic coexistence, extent of the links and interaction between the systems 

3.1.6.1.  Systemic coexistence 

The  coexistence  principle  is  expressed  in  the  6th  Recital  of  the  Preamble  to  the  CTM 
Regulation and is one of the cornerstones of the European trade mark system. According to 
that principle, CTM law does not replace the law of the Member States on trade marks, but 
solely provides an additional legal framework for obtaining effective and efficient trade mark 
protection  throughout  the  entire  Union,  with  the  result  that  the  Community  and  national 
systems exist alongside each other.  

However,  coexistence  does  not  mean  that  these  systems  merely  exist  in  parallel,  but  rather 
that  they  should  complement  each  other  harmoniously,  that  is,  in  a  way  that  allows  each 
system  to  attain  its  specific  purpose.  This  complementary  relationship  between  the 
Community and national trade mark systems mainly manifests itself on two levels:  

First, there is a significant degree of overlap between the two systems in terms of territorial 
coverage. Territorially, European trade mark systems are to a certain extent interchangeable 
in  the  sense  that  users  may  seek  trade  mark  protection  for  the  whole  or  part  of  the  EU,  by 
opting either for a CTM or for one or more national trade marks. In fact, the clear intention of 
the  Community  legislator  has  been  that  businesses  should  not  be  required  to  apply  for 
registration of their trade marks as Community trade marks if they do not want protection of 
their trade marks at Community level (see 6th Recital at the end).  

Therefore,  companies  should  be  free  to  choose  between  registering  of  their  trade  marks  at 
national or Community level (or international level) and be able to combine those trade mark 
filings where appropriate, according to their specific business needs and strategic interests. In 
practice, it is not unusual for a growing undertaking, seeking to expand its business beyond a 
national  or  regional  market,  to  escalate  its  trade  mark  protection  by  adding  a  CTM  to  its 
existing  portfolio  of  national  registration(s).  Finally,  it  also  happens  frequently  that  a 
company aiming at a large market may have to opt for registering its trade mark several-fold 
at national level instead of having a single CTM. This is due to the unitary character47 of a 
CTM, which does not allow the trade mark to be registered at all if there is an obstacle in any 
of  the  Member  States  (e.g.  existence  of  an  older  identical  or  similar  national  trade  mark48, 
descriptiveness  of  a  verbal  trade  mark  in  one  of  the  EU  languages49).  In  such  a  case,  the 
number  of  parallel  national  trade  marks  depends  on  the  company's  business  needs  in 
geographical terms and may range from 1 to 25 (excluding of course the territory or territories 
where a ground of refusal exists). 

46 

47 
48 
49 

Commission  Regulation  (EC)  No  2868/95  of  13  December  1995  implementing  Council  Regulation 
(EC)  No  40/94  on  the  Community  trade  mark;  Commission  Regulation  (EC)  No  2869/95  of  13 
December  1995  on  the  fees  payable  to  the  Office  for  Harmonization  in  the  Internal  Market  (Trade 
Marks and Designs) and Commission Regulation (EC) No 216/96 of 5 February 1996 laying down the 
rules  of  procedure  of  the  Boards  of  Appeal  of  the  Office  for  Harmonization  in  the  Internal  Market 
(Trade Marks and Designs). 
See also footnote 2. 
Example of a "relative" ground for refusal, see Art. 8 CTMR, see also Glossary in Annex 1. 
Example of an "absolute" ground for refusal, see Art. 7 CTMR, see also Glossary in Annex 1. 

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Second,  the  systems  are  legally  and  organically  linked  and  interact  with  each  other  in  a 
variety of ways50. First of all, trade mark owners in the EU can use their national trade marks 
in opposition, cancellation or Court proceedings to prohibit the registration or use of a later 
identical or similar CTM and vice versa. Moreover, CTM owners may also choose to abandon 
their  national  registration  and  claim  for  the  CTM  the  seniority51  of  the  national  trade  mark 
which has been left to lapse, while keeping the same level of protection in the Member State 
in which the latter was registered. Equally, companies who choose, or are forced to, abandon 
their  CTM,  can  transform  their  CTM  into  one  or  more  national  registrations,  through  the 
mechanism of conversion52. 

It  should  be  stressed  in  this  context  that  the  above  multi-filing  practices  of  companies  are 
natural  in  the  trade  mark  field  and  form  part  of  companies'  business  and/or  branding 
strategies, which may differ on a case-by-case basis in accordance with the economic purpose 
of  each  trade  mark  filed.  The  multi-level  trade  mark  system  in  Europe  has  been  shaped 
against  this  reality.  However,  the  choice  of  whether  a  company  should  opt  for  a  CTM  or  a 
national  mark  should  be  driven  by  its  business  needs  only  and  not  by  convenience 
considerations  or  other  extraneous  factors.  The  problems  described  below  in  the  problem 
definition  are  not  caused  by  the  multi-filing  itself,  but  are  often  due  to  legal  and  other 
distortions  which  result  in  a  sub-optimal  operation  of  the  EU  trade  mark  framework  for 
businesses.  

3.1.6.2.  The extent of the links and interaction between the systems 

There  is  ample  evidence  that  users  make  extensive  use  of  the  above  options  and  regularly 
exploit  the  links  between  the  various  systems,  both  when  determining  their  trade  mark 
strategies and when facing the need to protect or enforce their existing rights.  

According to the Allensbach survey53, 21% of SMEs and 30% of LSEs owning trade marks at 
OHIM,  answered  that  their  prevailing  practice  is  to  apply  for  both  national  and  CTM 
protection,  whereas  around  20%  of  them  (22%  of  SMEs  and  17%  of  LSEs)  answered  that 
they had no prevailing practice or that it was impossible to say whether they use mostly the 
CTM  or  national  systems.  According  to  the  INNO-tec  report54,  19%  of  Community  trade 
mark  applications  filed  at  the  OHIM  by  German  applicants  between  1997  and  2006,  i.e. 
15,440 trade marks, had also been filed as national trade marks in Germany. 

50 
51 
52 
53 
54 

MPI Study Part III, Chapter 1.A "Coexistence", pages 45-47. 
See Glossary in Annex 1. 
See Glossary in Annex 1. 
Allensbach survey (footnote 26), pages 16-18. 
See footnote 25. In the above text, reference is made to page 22 of the INNO-tec report. 

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Figure 2: Filing practice of SMEs and LSEs (among CTM users) 

Source: Allensbach report 

This practice is further attested by the fact that 93.216 CTM applications (roughly 10% of the 
total  until  May  2011)  have  been  filed  with  a  priority  claim  from  a  national  filing55. 
Furthermore, a comparative search carried out by OHIM in the TM View database has shown 
that out of a sample of 666.527 CTM applications (verbal marks only), 174.795 (that is 26,3% 
of the sample) had also been filed as national marks56.  

The extensive interaction between  the systems  is also clear from a number of  indicators: A 
query  on  the  number  of  national  rights  used  in  opposition  proceedings  against  CTM  has 
revealed  that  at  least  32%  of  the  earlier  rights  used  in  opposition  proceedings  before  the 
OHIM are national marks57. 

As  regards  seniorities  and  conversions,  figures  show  that,  from  the  inception  of  the  CTM 
system,  256.056  seniority  claims  were  filed  with  the  OHIM  until  May  201158  and  3.171 
conversion requests were made until the end of 201059. 

While the above figures demonstrate the extent of a simultaneous use of CTMs and national 
trade marks, similar statistics about multiple registrations at national level are not available. 
However, contacts with stakeholders have confirmed that, as explained in the previous section 
"systemic  coexistence"  (3.1.6.1),  it  is  a  common  practice  for  companies  to  seek  trade  mark 
protection in several Member States, notably when a CTM protection cannot be obtained due 
to existing absolute or relative grounds for refusal in a part of the EU.  

The  foregoing  shows  that,  depending  on  its  branding  strategy,  an  undertaking  wishing  to 
market  its  products  in  the  EU  may  opt  for  a  CTM  or  one  or  more  national  marks,  either 
alternatively or cumulatively,  and that,  in either case, it may be confronted with procedures 

55 
56 
57 
58 
59 

Source: OHIM data. 
Source: OHIM data. 
Source: OHIM data. 
Source: OHIM data. 
Source: OHIM data. 

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pertaining  to  another  system,  even  if  its  initial  choice  was  to  acquire  a  trade  mark  using  a 
different regime. For instance, CTM filers must search national registries to ensure that there 
are no prior rights opposable to their application, whereas national filers must check the CTM 
register for the same reason. 

Hence, in order to be able to make an informed choice and to be in a position to effectively 
protect  their  rights,  companies  need  to  have  a  sound  overview  of  the  rules  and  procedures 
applicable not only on Community level, but also in each and every Member State separately. 

3.2. 

Problem definition 

The  two  main  problems  identified  in  the  context  of  this  impact  assessment  relate  first  to 
divergent  provisions  of  the  existing  regulatory  framework  and,  second,  to  the  low  level  of 
cooperation between trade mark offices. 

3.2.1.  Problem relating to divergent provisions of the existing regulatory framework 

The  consulation  and  evaluation  exercise  has  revealed  that  the  business  environment  in  the 
trade  mark  field  remains  very  heterogenous  in  spite  of  the  partial  harmonisation  of  national 
laws  dating  back  to  early  1990s.  The  level  of  harmonisation  imposed  by  the  TM  Directive 
was quite low, focusing on a restricted number of substantive rules that were then considered 
to  most  immediately  affect  the  functioning  of  the  internal  market60,  whereas  an  important 
number  of  areas,  in  particular  relating  to  formal  requirements  and  procedures,  was  left 
unharmonised. Moreover, the CTM Regulation was enacted several years after the Directive, 
which means that at the time the Directive came into being there was no 'common benchmark' 
against  which  the  efficiency  of  national  proceedings  could  be  measured.  By  now,  however, 
the  procedures  followed  by  OHIM  have  been  in  place  for  more  than  15  years  and  are 
generally regarded as meeting business needs and expectations, in terms of timeliness, user-
friendliness and quality.  

As  a  result,  the  current  landscape  of  EU  trade  mark  law  is  still  characterised  by  a  wide 
divergence between national rules and procedures, both among themselves and in relation to 
the rules and procedures applied by the OHIM, while no attempt has ever been made to apply 
‘best practice’ with regard to procedures. 

As reported by user organisations61 during the consultation process the existing divergencies 
between national systems are regarded as significant. These divergences are due to three main 
causes related to the regulatory framework: 

• 

• 

• 

the fact that the TM Directive does not cover procedural aspects; 

the insufficient level of harmonisation as regards substantive law including optional 
provisions in the TM Directive; and 

the vague legal basis for cooperation.  

There is a broad agreement among users of the trade mark systems in Europe that the present 
level of approximation between national trade mark  laws,  as  well  as  with  the  CTM  system, 

60 
61 

See the 4th Recital of the Preamble to the TM Directive. 
MPI study, p. 32. 

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has not been sufficient. User organisations unanimously stated that further harmonisation of 
national trade mark laws, with regard to both substantive law and procedural issues, is needed. 

At  a  political  level  also,  the  Council62  appreciated  the  incoherence  between  the  CTM  and 
national regimes and called on the Commission to include in its proposals measures to make 
the TM Directive more consistent with the CTM Regulation and thus to further contribute to 
reducing areas of divergence within the trade mark system in Europe as a whole. 

3.2.1.1.  Non-harmonisation of trade mark procedures 

Due to the fact that procedural aspects where left completely unharmonised, the existing gaps 
affect a variety of procedural areas, including the conditions for granting a filing date63, the 
designation and classification of the goods and services for which protection is sought64, the 
range  of  goods  and  services  (number  of  classes)  covered  by  a  trade  mark  application65,  the 
extent  of  ex  officio  examination  of  grounds  for  refusal66,  the  possibility  of  submitting 
observations by third parties67, the existence or not of administrative procedures for opposing 
an  infringing  application  or  cancelling68  a  mark,  the  defenses  of  absence  of  genuine  use 
available to trade mark owners in the context of such proceedings, the duration/renewal of the 
registration69 and the option to divide a trade mark application or registration70. 

The  following  three  important  examples  illustrate  some  practical  problems  caused  by  the 
incomplete harmonisation of rules and practices.  

(a) Designation of goods and services and classification issues  

Trade mark protection is always granted in relation to a specific set of goods and/or services. 
The goods and services for which protection is sought determine to a large extent the scope of 
protection  afforded  to  the  trade  mark  owner,  and  also  affect  other  aspects  of  trade  mark 
protection such as the claiming of priority and seniority, insofar that in those cases a double 
identity of signs and goods and services is required. 

Article  28  of  the  CTM  Regulation,  in  combination  with  Rule  2  of  the  CTM  Implementing 
Regulation71,  imposes  on  the  Office  the  obligation  to  apply  the  Nice  Agreement72  to  the 
classification of goods and services, despite the fact that the European Union is not a party to 
that Agreement.  

62 

63 
64 
65 
66 
67 
68 

69 
70 
71 
72 

See Conclusions on the future trade mark review, document referred to in footnote 11, paragraph 14, 
last bullet point. 
See for the CTM Articles 26 and 27 of the CTM Regulation. 
See explanation given in the following under point (a). 
See explanation given in the following under point (b) 
See explanation given in the following under point (c). 
See for the CTM Article 40 allowing to submit observations on the basis of absolute grounds for refusal  
See for the CTM Articles 41 (opposition), 51 (revocation), 52 (absolute grounds for invalidity) and 53 
(relative grounds for invalidity) and furthermore the explanation given under point (d). 
See for the CTM Articles 46 (duration) and 47 (renewal) of the CTM Regulation. 
See for the CTM Articles 44 (division of the application) and 49 (division of the registration). 
For reference see footnote 46. 
International  Classification  of  Goods  and  Services  under  the  Nice  Agreement  Concerning  the 
International  Classification  of  Goods  and  Services  for  the  Purposes  of  the  Registration  of  Marks; 
available at http://www.wipo.int/classifications/nice/en/classifications.html. 

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On the other hand, the TM Directive does not create the same obligation for Member States. 
Although  all  countries  of  the  EU  are  parties  to  the  Nice  Agreement,  with  the  exception  of 
Cyprus  and  Malta,  who  apply  the  same  system  on  a  voluntary  basis,  there  are  no  common 
rules in the Directive as to how that agreement should be applied in practice. What is more, 
Article  2  of  the  Nice  Agreement  expressly  allows  the  contracting  parties  to  give  to  the 
classification the effect that suits best the requirements of their legal system, by providing that 
the  classification  is  not  binding  when  determining  the  scope  of  protection  afforded  to  the 
registration. 

As  a  result  of  a  lack  of  legal  provisions  in  that  regard,  OHIM  and  national  offices  follow 
different  rules  and  criteria  for  the  classification  of  goods  and  services.  This  has  led  to  the 
adoption of diverging classification practices across European IP offices to the detriment of 
consistence, clarity and legal certainty. In particular, different Member States regard various 
terms in the Nice Classification as not suitable, whereas others, including the OHIM, accept 
them  all.  Moreover,  while  OHIM  and  some  national  offices  have  been  applying  the  Nice 
Classification by assuming that its class headings are exhaustive and encompass all the goods 
or services falling into a given class of goods or services ("cover-all" approach), the majority 
of the IP Offices consider these headings as merely exemplary, concrete terms covering only 
goods  or  services  clearly  encompassed  by  their  specific  meaning  ("it-means-what-it-says" 
approach). 

Box 1: Classification – real life examples and practical consequences 

–  An  applicant  requesting  protection  at  OHIM  for  the  heading  of  Class  15  ("musical  instruments")  is  also 
deemed  to  have  protection  for  "stands  and  cases  adapted  for  music  instruments"  whereas  these  additional 
goods  will  not  be  protected  in  a  Member  State  following  a  different  practice,  unless  it  is  specifically 
enumerated in the specification. 

–  A CTM application for the heading of Class 25 ("clothing, footwear and headgear") is deemed to also cover 
"belts",  which  would  only  be  protected  in  a  different  system  if  the  applicant  takes  the  precaution  to  also 
indicate "belts"’ or at least "clothing accessories" when applying for protection. 

Practical consequences for the industry:  

–  The same term is interpreted differently in different jurisdictions within the EU, which leads to undesirable 
fluctuations in the trade mark's scope of protection in different territories and makes it impossible to secure 
uniform  trade  mark  protection  throughout  Europe.  To  avoid  this,  companies  have  to  express  the 
specification of their trade marks in different terms depending on the teritory of registration. 

–  In  the  case  of  conflict  between  trade  marks  having  been  registered  under  different  regimes,  this  does  not 
only create a great deal of legal uncertainty about the meaning of the registration and, by extension, about its 
scope of protection, but also leads to unreasonable distortions when trying to enforce the same trade mark in 
different territories, or when claiming priority, seniority or conversion. 

The consequence for IP offices: 

–  The  acute  legal  controversy  surrounding  this  area  has  the  effect  of  rendering  cooperation  between  OHIM 
and national offices in classification matters and/or the development of common tools and IT platforms near 
impossible. For instance, it is very difficult to create common classification databases if the acceptability of 
a given term is subject to different rules in different teritories. 

To remove the existing stalemate, the Appointed Person by the Lord Chancellor (United Kingdom) referred a 
preliminary ruling to the Court of Justice, aimed at clarifying the correct application of the Nice Classification 
to trade mark filings73. In its judgment of 19 June 2012 the Court of Justice indeed found that the TM Directive 
must be interpreted as meaning that it requires the goods and services for which the protection of the trade mark 
is  sought  to  be  identified  by  the  applicant  with  sufficient  clarity  and  precision  to  enable  the  competent 
authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by 

73 

Case C-307/10, The Chartered Institute of Patent Attorneys ("IP TRANSLATOR"). 

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the trade mark. Furthermore, it must be interpreted as meaning that it does not preclude the use of the general 
indications of the class headings of the Nice Classification, provided that such identification is sufficiently clear 
and  precise.  Finally,  that  an  applicant  for  a  national  trade  mark  who  uses  all  the  general  indications  of  a 
particular  class  heading  of  the  Nice  Classification  must  specify  whether  its  application  for  registration  is 
intended  to  cover  all  the  goods  or  services  included  in  the  list  of  that  class  or  only  some  of  those  goods  or 
services. If the application concerns only some of those goods or services, the applicant is required to specify 
which of the goods or services in that class are intended to be covered. 

(b) Number of classes of goods or services covered by a single trade mark application  

There are different rules in place in the Union as regards class fees74. Thirteen national offices 
operate  with  a  fee  structure  where  the  application/registration  fee  only  covers  one  class  of 
goods  or  services,  so  that  an  additional  (class)  fee  has  to  be  paid  for  any  extra  class.  By 
contrast, the other 12 national offices follow the CTM system where the basic application fee 
for a CTM automatically includes three classes of goods or services regardless of whether that 
number of classes is applied for by the applicant or not. In the latter case the applicant is only 
charged an additional (class) fee for any further class of goods or services beyond the third. 

As found in the MPI study75, easy accessibility of trade mark protection is of key significance 
for  the  proper  functioning  of  trade  marks  as  an  element  of  undistorted  competition.  The 
degree  of  accessibility  is  determined  not  only  by  the  overall  volume  of  prior  rights,  posing 
obstacles  to  protection  of  new  signs,  but,  also,  by  the  'space'  occupied  by  each  mark  in  the 
register (which depends on the specific range of goods and services in respect of which the 
trade mark is registered).  

The MPI study generally concluded that there is no sustainable documentation showing that 
access  to  trade  marks  is  substantially  impaired  by  congestion  of  registers76.  However,  it 
pointed  to  several  features  of  the  CTM  system  which  tend  to  invite  a  certain  amount  of 
'cluttering'  and  may,  therefore,  give  rise  to  problems.  One  problem  being  that  the  basic 
application fee, covering three classes, encourages applicants to apply for a broader scope of 
protection  than  actually  needed77.  This  is  clearly  corroborated  by  the  experience  of  the 
Spanish IP office, where the move to a 'one-class-per-fee system' (basic application fee only 
covering one class of goods of services) has led to a significant drop in the average number of 
classes covered by new trade mark applications78.  

A  basic  application  fee,  including  three  classes,  not  only  attracts  unnecessarily  broad 
specifications of goods and services for trade mark coverage, but also increases the likelihood 
of subsequent applicants finding access to trade mark protection barred by prior rights. This 
creates a problem between the CTM system and the national systems which operate with an 
application  fee  covering  a  single  class  only,  as  the  CTM  system  can  potentially  obstruct 
national filings. Moreover, such an approach also poses an internal issue for the CTM system, 
as CTM applicants are confronted with an aggregated number of prior rights existing both at 
the Union level and under national law. 

74 
75 
76 

77 
78 

For details refer to figure 9 under 6.2.1.2.  
MPI Study, p. 53, paragraph 1.32. 
MPI Study, p. 55, paragraph 1.39. For details on the views presented by stakeholders and on the related 
evidence gathered refer to p. 54, paragraphs 1.36 to 1.38 of the Study.  
See MPI Study, p. 169, paragraph 4.47. 
According to the MPI Study, p. 12, paragraph 1.24, the average number of classes covered by a trade 
mark application in Spain has gone down to 1,5. By contrast, according to OHIM the current average 
number of classes covered by a CTM application is 2,9, and thus twice the Spanish average.  

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The MPI study favoured having all IP Offices in the Union operating with an application fee 
covering one class only, as this would ensure a balanced and harmonious trade mark system, 
and reduce the potential for cluttering the trade mark registers. The special hearing organised 
by  DG  MARKT  on  26  May  2011,  and  subsequent  written  comments  on  the  MPI  study 
obtained  thereafter,  have  revealed  that  this  position  is  supported  by  the  majority  of  user 
associations79, provided that such a fee structure change would not involve an increase in fees 
(i.e. applicants would not have to pay more than they do now for a trade mark covering two or 
three classes). 

(c) Ex-officio examination of relative grounds for refusal 

Although the right to file an opposition to the registration of a later trade mark is in principle 
reserved for the holders of earlier rights, several national offices conduct, in addition, an ex-
officio examination of relative grounds for refusal80 concerning conflicts with earlier rights81, 
by raising the relevant objection even if the rightholder chooses not to do so. 

Box 2: Ex-officio examination of relative grounds – practical consequences 

The ex-officio examination of relative grounds is generally perceived as creating several unnecessary hurdles to 
the registration of trade marks:  

–  To the extent that such an objection may be overcome if the owner of the right gives its consent to the filing, 
it creates a complex and time consuming traffic in "letters of consent", whereby applicants need to contact 
the owner and request a clearence (which is not always granted for free), even if the owner would not have 
opposed the application of its own motion. Thus, companies are obliged to undergo unnecessary expenses 
and delays, not to mention that they often fall victims of extortion. 

–  In some cases the owners of the earlier rights might have gone out of business or may have transferred the 
mark to a third company who does not yet appear on the register. In such cases, applicants will not be in a 
position  to  locate  the  owner  in  order  to  obtain  a  letter  of  consent  and  might  not  be  able  to  get  their 
registration, even though, in practical terms, there is no real conflict. Moreover, the earlier right on which 
the objection is based may not be used by its owner, which means that the office raises an objection on the 
basis of a right that could not have validly been relied on by its proprietor to prevent the registration or use 
of  a  later  mark.  Hence,  the  system  gives  rise  to  artificial  disputes  and  distorts  competition  by  erecting 
unjustified barriers to enter a market. 

–  This  approach  gives  rise  to  legal  uncertainty,  since  offices  applying  the  ex-officio  system  only  raise 
objections  on  the  basis  of  earlier  registered  rights,  that  have  been  filed  for  identical  or  similar  goods  and 
services. Accordingly, they cannot offer a guarantee that if an application successfully passes the ex-officio 
control,  it  will  not  subsequently  be  opposed  on  the  basis  of  a  mark  which  has  acquired  reputation  in  the 
marketplace  and  or  on  the  basis  of  an  earlier  unregistered  well-known  mark.  This,  however,  leads  to  an 
unacceptable duplication of procedures which are both time consuming and inefficient.  

79 
80 
81 

ECTA, GRUR, FICPI, UNION, ITMA, COAPI, CIPA, INTA, Marques, EFPIA and Vfa.. 
See Glossary in Annex 1. 
That practice was introduced in some EU jurisdictions as a consumer protection measure to ensure that 
they are not confused when making purchasing decisions. However, it is increasingly being abandoned, 
both in the EU and internationally, on the assumption that the protection afforded to prior right holders 
is  principally  aimed  at  protecting  the  interests  of  competitors  and  that,  at  any  rate,  consumers  are 
adequately  protected  through  the  action  taken  by  the  owners  of  prior  rights  against  later  confusingly 
similar  trademarks.  For  that  reason,  it  was  not  included  in  the  system  introduced  by  the  CTM 
Regulation.  While  in  the  EU  the  majority  of  Member  States  (including  all  bigger  countries  except 
Poland) follow the CTM approach in the meantime, there are still eleven Member States which adhere 
to the principle of relative grounds examination ex-officio (for details refer to figure 9 under 6.2.1.2). 
The  latter  approach  may  be  considered  as  reflecting  a  contradiction  between  the  nature  of  relative 
grounds,  aimed  at  protecting  private  property  or  rights,  and  the  fact  that  an  ex  officio  examination  is 
carried out as if they were absolute grounds, which are aimed at protecting the public interest.  

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(d) Absence of uniform rules and procedures in opposition and cancellation: 

The  availability  and  nature  of  opposition  and  cancellation  procedures  at  EU  and  national 
levels show major discrepancies. Proceedings may be administrative (at IP office) or judicial 
(at Courts) and may vary significantly in terms of length and complexity. Moreover, national 
rules not always offer the same range of defenses to trade mark applicants. 

Box 3: Opposition and cancellation – examples and practical consequences 

–  In some Member States, trade mark applicants and owners cannot challenge the validity or opposability of 
the earlier rights relied upon against their trade mark in the same proceedings, with the result that they often 
need to lodge separate legal remedies to that effect, often in a different forum, with all the delay and expense 
that this may entail. 

–  In  a  number  of  Member  States  it  is  only  possible  to  contest  the  validity  of  a  prior  trade  mark  in  court 
proceedings, which delays things even further and usually requires the appointment of a qualified lawyer to 
prosecute the case. 

Practical consequences for industry: 

–  The above systems are exceedingly long, cumbersome and expensive.  

–  In comparison, the administrative opposition and cancellation procedures, as applicable at OHIM and other 
national offices, are much simpler since the validity of earlier rights can be raised as a defense in the same 
proceedings and without need for professional representation. In practice, this means that a CTM applicant 
may  successfully  defend  itself  against  an  opposition  and  obtain  its  trade  mark  years  faster  and  with 
considerably less expense than a national applicant. 

3.2.1.2.   

Insufficient level of harmonisation as regards substantive law  

(a)  Non-harmonised issues  

Further to the procedural aspects, a number of substantive law issues remain unharmonised, 
namely  the  protection  of  geographical  indications,  the  rules  applicable  to  trade  marks  as 
objects of property, and the provisions relating to collective trade marks82.  

Firstly,  contrary  to  the  CTM  Regulation83,  the  grounds  for  refusal  contained  in  the  TM 
Directive  do  not  address  conflicts  with  protected  geographical  indications  (GIs).  In 
consequence, there can be no guarantee that the levels of protection afforded to GIs by other 
instruments of EU law84 are indeed applied in a uniform and exhaustive manner in trade mark 
examination throughout the EU, for instance, when applying absolute grounds for refusal.  

Likewise,  the  current  provisions  of  the  CTM  Regulation  fall  short  from  offering  the  same 
degree of protection as other instruments of EU law. Specifically, the prohibitions included in 
Article 7(1)(j) and (k) of the CTM Regulation apply only to trade marks filed for ‘the same 
type of product’, contrary to Articles 13 and 14 of Regulation 510/2006 and Article 45 (2) of 
Regulation 479/2008, which afford protection also in the case of ‘the same class of product’, a 
‘comparable product’ or even against any other kind of  product ‘insofar  as using  the name 

82 
83 
84 

See in this regard also Annex 2. 
See Article 7(1)(j) and (k) for absolute grounds and Article 8(4) for relative grounds for refusal. 
Notably  Council  Regulation  (EC)  No  510/2006  of  20  March  2006  on  the  protection  of  geographical 
indications  and  designations  of  origin  for  agricultural  products  and  foodstuffs,  Regulation  (EC)  No 
110/2008  of  the  European  Parliament  and  of  the  Council  of  15  January  2008  on  the  definition, 
description,  presentation,  labelling  and  the  protection  of  geographical  indications  of  spirit  drinks  and 
Council Regulation (EC) No 479/2008 of 29 April 2008 on the common organisation of the market in 
wine. 

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exploits  the  reputation  of  the  protected  name’.  Similarly,  Article  7(1)(k)  of  the  CTM 
Regulation  can  be  invoked  only  against  marks  which  ‘contain’  or  ‘consist  of’  a  GI,  but  not 
against  applications  reproducing  the  protected  indication  in  translated  form  or  merely 
‘evoking’ the same, contrary to Articles 13 and 14 of Regulation 510/2006. 

This, however, stands at apparent odds both with Article 164 of the CTM Regulation, which 
provides that the protection afforded to GIs under Regulation 510/2006 ‘shall not be affected’ 
by its provisions, and with the established case-law of the Court of Justice, which requires that 
existing rules of Union law protecting GIs are given full effect in proceedings relating to the 
registration of trade marks85.  

Second,  apart  from  some  basic  rules  concerning  licensing86,  and  unlike  the  CTM 
Regulation87, the TM Directive does not comprise provisions regarding other aspects of trade 
marks as objects of property, such as transfers88 or rights in rem. In consequence, vital aspects 
of the commercial exploitation of trade marks are regulated poorly or differently accross the 
EU. 

Indicatively,  the  TM  Directive  does  not  contain  rules  dealing  with  matters  such  as  (a)  the 
transfer of trade mark rights separately from the owner’s business89, (b) the inclusion of the 
company’s trade marks in the transfer of the entire undertaking, (c) the requirement, present 
in the CTMR, that trade mark assignment must be made in writing, and (d) the possibility for 
trade marks to form the object of rights in rem or to be levied in execution. In addition, the 
conditions  for  a  licensee  to  bring  infringement  actions  are  different  in  the  CTM  Regulation 
and the TM Directive, in that the latter does not allow licensees to intervene in infringement 
actions brought by the proprietor, so as to be able to claim their own damages. 

Box 4: Transfers and Licensing – example 

Company A is a producer of food-stuffs based in Member State X. It produces five different products, marketed 
under five distinct brand names. Two of these trade marks are protected as CTMs while the remaining three as 
national marks in all Member States. 

Due to the lack of harmonisation of the legal norms relating to transfers and licensing, the following risks may 
occur:  

(i)  In  order  to  enhance  its  growth,  Company  A  decides  to  merge  with  and  into  Company  B.  Althought  all  its 
CTMs  are  automatically  transferred  to  the  new  company,  its  national  marks  will  only  be  included  in  the 
assigment if the national law so stipulates, or if express provision is made in the merger agreement. 

(ii)  Company  A  markets  its  products  across  the  EU  through  locally  based  licensees-distributors,  one  in  each 
Member State. Company C launches a range of competitive products in a number of Member States, imitating 
the marks of Company A. The conditions under which A’s licensees can take preventive action against Company 

85 

86 

87 

88 

89 

See the Judgment of the Court of Justice of 14 July 2011 in joined Cases C-4/10 and C-27/10 ‘Bureau 
national interprofessionel du Cognac’ 
See  Article  8  of  the  TM  Directive  which  in  particular  does  not  regulate  whether  licensees  need  the 
consent of the proprietor to instigate infringement proceedings. 
The  CTM  Regulation  contains  in  Section  4  a  comprehensive  body  of  rules  dealing  with  CTMs  as 
objects  of  property  (see  Article  17  on  transfer,  Article  19  on  rights  in  rem,  Article  20  on  levy  of 
execution, Article 21 on insolvency proceedings and Article 22 on licensing). 
This  essentially  concerns  the  important  question  whether  a  registered  trade  mark  may  be  assigned 
separately from any transfer of the undertaking as so provided in Article 17(1) of the CTM Regulation. 
The need to allow for the separate transfer of trade marks is also imposed by Article 21 of the WTO’s 
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

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C differ, depending on whether the infringed right is a CTM or a national mark, with the risk that some of the 
actions brought by A’s licensees may be rejected as inadmssible. 

Third,  while  the  CTM  Regulation  encompasses  a  set  of  specific  provisions  regarding  the 
collective marks but not certification marks, the TM Directive refers to such rights but leaves 
this type of trade mark protection unharmonised in most of its aspects90.  

Collective marks (whether or not with elements of guarantee or certicication) designate goods 
which  share  specific  common  characteristics  (like  provenance  from  a  specific  locality),  or 
which  satisfy  particular  manufacturing  or  quality  standards.  Indications  of  this  kind  are 
protectable  as  trade  marks  in  a  number  of  Member  States  and  have  proven  particularly 
successful in protecting the economic value inherent in such commercial instruments.  

To  the  extent,  however,  that  collective  and  certification  marks  are  recognised  as  particular 
types  of  trade  mark  rights  only  in  some  Member  States  and  their  protection  can  differ 
substantially  from  one  legal  system  to  another,  industry  cannot  be  offered  with  a  uniform 
level of protection for such indications throughout the EU.  

For instance, OHIM objects to applications for collective marks which, in reality, are either 
guarantee  or  certification  marks91,  despite  the  fact  that  the  same  signs  would  have  been 
registered as trade marks e.g. in the Benelux, on the assumption that “certification marks in 
the  sense  that  one  individual  entity  unilaterally  sets  standards  with  which  the  goods  shall 
comply if they carry the mark, cannot constitute Community collective marks in the sense of 
the CTMR”92.  

Moreover, the possibility of invoking a national certification mark in opposition proceedings 
against a later CTM application is significantly complicated on a technical level by the total 
absence of provisions specifically regulating this type of mark in the CTM Regulation itself.  

These substantive issues were omitted during the first harmonisation round of the laws of the 
Member  States.  However,  both  the  Study93  and  user  associations  (which  were  explicitely 
asked for their opinion in the above mentioned special hearing organised by DG MARKT on 
26 May 2011) have expressed the view that the relevant provisions related to these issues are 
important  and  should  therefore  be  approximated  as  well,  in  order  to  achieve  a  harmonious 
system of trade mark protection in Europe. 

(b)  Optional provisions in the TMD 

Moreover, problems arise from the fact that the current Directive, contains several provisions 
which are only optional for Member States. In practice, this has also led to deviations from 
the CTM system and from the general need to align as much as possible the CTM Regulation 
with the TM Directive in all crucial areas of substantive trade mark protection.  

90 

91 
92 

93 

Article 15 of the TMD only allows to provide for additional grounds for refusal or cancellation, or to 
derogate from the non-descriptiveness requirement laid down in Article 3(1)(c). 
Manual concerning proceedings before the Office, Part B, Examination, Section 10.2. 
A recent example is CTMA N° 9 136 714, filed in the name of the EU, represented by the European 
Commission. 
See MPI study, p. 131, para. 2.314 (concerning geographical indications), p. 222 (on the protection of 
collective marks), and p. 225-227 (on the rules addressing trade marks as objects of property). 

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These  voluntary  provisions  concern  rules  directly  affecting  the  system  of  absolute94  and 
relative95 grounds for refusal, like the possibility to refuse registration to signs applied for in 
bad  faith  and  the  possibility  to  provide  for  protection  of  marks  with  reputation  against 
dissimilar goods and/or services96.  

Box 5: Gaps in protection due to the optional character of rules 

Company A is the holder of national trade mark N in Member State X, which has aquired a substantial reputation 
in that territory. Company B applies to register the similar sign N1 for dissimilar goods, both as a CTM and as a 
national mark in Member State X, in an attempt to take unfair advantage of the reputation of mark N. Company 
B also applies to register the sign N1 in Member States Y and Z, to which Company A was planning to expand 
its business, in apparent bad faith.  

The current lack of harmonisation of the relevant legal norms within the EU leads to the following unsatisfactory 
results:  

Firstly, although Company A can validly oppose the filing of the mark N1 as a CTM under Article 8 (5) of the 
CTM  Regulation  (which  extends  to  national  marks with a  reputation),  it  cannot prevent  the  registration of  the 
sign  N1  as  a  trade  mark  in  Member  State  X  (that  is,  in  its  home  territory),  unless  the  legislation  of that  State 
voluntarily protects reputed marks. 

Secondly, although Company A can cancel the registration of the sign N1 as a CTM and also in State Y, on the 
ground that it was filed in bad faith, it cannot validly challenge the registration of the same sign in Member State 
Z, if the latter has chosen not to transpose the relevant provisions of the TM Directive. 

As  part  of  the  MPI  study,  the  contractor  was  asked  to  gather  evidence  and  analyse  whether 
there  is  a  need  for  harmonising  these  optional  elements.  During  the  consultation  phase, 
Member States did not much comment on this issue97; only France was explicit in this regard 
while  being  supportive  of  further,  mandatory  harmonisation  regarding  specific  optional 
disposals. On the other hand, user organizations identified the optional provisions in the TM 
Directive  as  an  important  reason  for  persisting  divergences  between  the  national  systems98 
and suggested that the currently optional provisions of the TMD should be made mandatory99. 
Also the MPI in its conclusions100 preferred to remove a number of these optional provisions.  

3.2.1.3.  Missing clear legal basis for cooperation 

This  driver  has  clear  links  with  the  second  identified  problem,  the  low  level  of  cooperation 
(see below). It is presented here because of its regulatory nature. The CTM Regulation does 
not contain a clear legal base for cooperation. Such a gap has been observed in cooperation 
programmes with national offices since 2005, and most recently, with the Coooperation Fund. 

94 

95 

96 
97 
98 
99 

100 

Article  3(2)  TM  Directive  allows  Member  States  to  include,  in  addition  to  the  mandatory  absolute 
grounds  for  refusal  listed  in  Article  3(1),  further  grounds  for  refusal  into  their  national  law,  such  as 
under  point  (d)  concerning  applications  made  in  bad  faith  or  trade  marks  resulting  from  such 
applications.  
Article 4(4) permits Member States to include, in addition to the mandatory relative grounds for refusal 
listed in Article 4(1) and (3), further grounds for refusal into their national law, such as under point (a) 
relating  to  trade  marks  having  a  reputation  in  the  Member  State  which  are  applied  or  registered  for 
dissimilar goods and services. 
See Article 5(2) of the TM Directive. 
MPI study, p. 30. 
MPI study, p. 32, para. 2.4. 
For details, see MPI study, e.g. p. 32, paragraphs 2.5 – 2.6, p. 49, paragraph 1.18 and p. 95, paragraph 
2.148. 
MPI study, Part V, Chapter 1. 

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In  fact,  the  current  legal  base  for  cooperation  activities  is  very  vague  in  the  CTM 
Regulation101 and non-existent in the Directive. This causes difficulties for national IP offices 
to  participate  in  any  cooperation  projects  and  also  to  justify  use  of  financial  and/or  human 
resources. In the case of OHIM, the inappropriate legal base has led to some problems when 
validating its expenditure on cooperation in budgetary terms. 

3.2.2.  Problem relating to the low level of cooperation between trade mark offices 

The second main problem to be addressed within this impact assesment report is the low level 
of  cooperation  between  the  trade  mark  offices  in  Europe.  As  explained  previously  in  the 
context  part,  there  are  many  links  between  the  CTM  and  national  regimes  with  direct 
consequences  for  both  trade  mark  users  and  IP  offices,  which  require  a  certain  level  of 
complementarity  between  the  two  systems.  To  achieve  and  ensure  this  complementarity, 
OHIM and national IP offices should cooperate closely. At present, however, both the missing 
legal base for cooperation, as already mentioned in the context of the first problem, and other 
unfavourable  circumstances,  which  are  to  be  specified  in  the  following,  under  3.2.2.1  and 
3.2.2.2, seriously hinder specific and targeted cooperation. Additionally, the existing level of 
legislative approximation also has an influence on the extent IP offices cooperate with each 
other. In fact, it is clear that the more divergences exist in the regulatory framework, the less 
IP offices feel encouraged and able to cooperate with each other. This means that all problem 
drivers analysed in this impact assessment report are largely interconnected with each other. 

3.2.2.1.  Insufficient technical facilities of national offices 

The first main driver (besides a lack of clear legal basis) being responsible for the low level of 
cooperation between trade mark offices are the insufficient technical facilities, particularly IT 
equipment,  at  some  national  offices.  The  lack  of  technical  facilities  prevents  successful 
implementation of the envisaged cooperation projects. 

In this context one must refer to the available data on the state of IT developmement at trade 
mark offices in Europe, bearing in mind that the availability of electronic services at OHIM 
and  national  offices,  as  well  as  the  level  of  automation  of  their  internal  processes, 
significantly  influence  their  effectiveness  and  efficiency  both  internally  and  vis-à-vis  their 
users. The available data were obtained in 2009 in the context of launching the Cooperation 
Fund.  OHIM  carried  out,  with  the  assistance  of  the  consultancy  Gartner,  an  extensive 
evaluation  of  the  current  state  of  art  in  IT  at  national  offices.  The  evaluation  assesssed  the 
degree of process automation (back office) as well as the availability of online services that 
are provided to users (front office).  

The assessment revealed that the level of IT equipment is still low. The figure 3 demonstrates 
the  availability  of  e-services  at  individual  national  offices  (first  chart)  and  their  degree  of 
automation (second chart and figure 4). These overviews show that only five offices provide 
more than 50% of their services online and that a majority of offices are still far from being 
automated, whereas none of the considered standard processes (TM examination, opposition, 
cancelation, similarity search etc.) is fully automated at more than seven national offices.  

101 

Article 90 CTMR on 'administrative cooperation' reads: "Unless otherwise provided in this Regulation 
or in national laws, the Office and the courts or authorities of the Member States shall on request give 
assistance  to  each  other  by  communicating  information  or  opening  files  for  inspection.  Where  the 
Office lays files open to inspection by courts, Public Prosecutors' Offices or central industrial property 
offices, the inspection shall not be subject to the restrictions laid down in Article 88."  

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Figure 3: Availability of online services102 & degree of automation103 at national offices 

Source: OHIM data (2009), based on self-assessment of national offices 

Figure 4: Degree of automation 

Source: OHIM data (2009), based on self-assessment of national offices 

3.2.2.2.  Lack of sustainable financing in medium to long term 

The second major driver is that most national offices do not possess the necessary financial 
resources required to develop, launch and run, in the long term, common tools (for example, 
joint trade mark databases with online search facilities). This is often the consequence of the 
vast  majority  of  offices  not  having  statutory  financial  autonomy  enabling  them  to  deploy 

102 
103 

The relevant e-services considered in this context are specified in Annex 3, point 9.3.1.  
The relevant assessed processes are specified in Annex 3, point 9.3.2.  

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resources  without  direct  intervention  from  other  governmental  authorities.  Due  to  such 
dependency,  priorities  cannot  be  fixed  by  the  offices’  management  without  considering 
domestic  conditions  or  limitations  set  by  ministerial  authorities,  which  may  influence  the 
work plans of the national offices. As a result, offices may be led to concentrate resources on 
inmediate domestic interests, as opposed to spending resources to fulfil cross-border business 
needs resulting from the functioning of the Internal Market.  

For reasons of subsidiarity, the lack of financial autonomy of national IP offices is not tackled 
by  this  impact  assessment,  as  it  is  for  Member  States  to  determine  their  institutional 
structures104.  

However, it should be stressed that it is the lack of sustainable financing in medium to long 
term which represents the main problem in this context. Already today, the experience with 
the  Cooperation  Fund  and  other  common  projects  has  demonstrated  the  difficulty  of  some 
national offices to take part in these activities. This situation may worsen in the future due to 
economic  turmoil,  with  the  result  that  national  offices  will  not  be  able  to  join  all  of  these 
cooperation initiatives, because of lacking resources, and, in the worst case, abandon already 
running projects. 

3.2.3.  Adverse effects 

Given the legal and other links between the CTM and national systems (see the context part 
"systemic coexistence" above), all trade mark applicants in Europe have to  be familiar  with 
both  national  and  CTM  legal  systems  to  cope,  for  example,  with  possible  opposition 
procedures. 

Moreover,  as  explained  in  the  context  part  above,  many  enterprises,  including  SMEs,  make 
use  of  several  systems  in  parallel,  i.e.  they  opt  for  both  the  CTM  and  national  protection, 
and/or register a number of national trade marks, as part of their company's branding strategy. 

Finally,  users  of  a  single  national  system  may  also  be  negatively  affected  by  the  current 
situation. Indeed, the differences between the existing regimes, for example, the availability 
of  certain  procedures  and  tools,  legal  certainty  as  well  as  speed  of  registration,  lead  to  an 
unlevel playing field which is to the detriment of all users of the European trade mark system, 
regardless of the geographical scope of trade mark protection they seek to obtain. 

As  a  result  of  the  above  described  current  situation  (see  chapters  3.2.1.1  –  3.2.2.2),  a 
company,  planning  its  branding  strategy,  already  faces  a  multitude  of  unevenly  regulated 
regimes,  which  present  applicants  with  different  degrees  of  accessibility,  difficulty, 
predictability105 and speed in obtaining trade mark protection.  

104 
105 

See also MPI study, p. 257, para 23. 
The term ‘predictability’ is used to denote the ease with which trade mark applicants can successfully 
anticipate the result of the registration procedure, by predicting whether or not their trade mark will be 
granted.  Predictability  requires  legal  certainty  (i.e.  a  set  of  clear  and  unambiguous  legal  rules)  and  a 
uniform, consistent and coherent interpretation of these norms by trade mark authorities. Predictability 
is  greatly  enhanced  by  the  existence  of  common  practices  and  tools,  such  as  common  guidelines, 
databases  etc.  and,  in  order  to  be  sustainable  in  time,  it  requires  the  continuous  cooperation  between 
trade  mark  authorities  across  the  EU,  as  well  as  their  commitment  to  constantly  strive  for  an  ever 
increasing  convergence  of  their  practices.  This  is  all  the  more  so  in  view  of  the  fact  that  trade  mark 
examination  often  entails  a  high  degree  of  subjectivity,  which  can  only  be  eradicated,  or  at  least 
diminished, by a set of clear and detailed assessment rules. 

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Similarly,  when  facing  the  need  to  enforce  its  rights  or  defend  itself  against  alleged 
infringement, a company is faced with an overcomplicated regulatory framework which may 
give  rise  to  legal  uncertainty  and  increases  dependency  on  external  consulting.  Moreover, 
since it is outdated in some areas106, the trade mark system in Europe does not provide, from 
the  users'  perspective,  effective  and  efficient  solutions  which  respond  adequately  to  their 
expectations.  However,  even  in  case  where  trade  mark  offices  already  render  advanced  e-
services, their tools and other practices often differ from each other107. In addition, trade mark 
offices  neither  work  with  coordinated  (examination)  guidelines,  nor  the  same  quality  and 
in 
performance  standards.  This 
inconsistencies  and  negatively  affects  coherence,  integrity  and  reliability  of  the  European 
trade mark system as a whole.  

their  decision  making  practice,  results 

influences 

Therefore,  it  is  clear  that  the  negative  effects  resulting  from  the  divergent  regulatory 
framework are further aggravated by the lacking convergence of practices, tools and decision 
making at trade mark offices in Europe.  

Overall,  the  missing  common  tools  and  other  reasons  for  incoherence  in  administrative 
practices are summarised in the below figure 5. 

Figure 5: Missing common tools and other problems 

Problem 

Examples 

Missing common tools 

Common seniority database 

Online search facilities for trade marks of all IP offices in the EU 

Common classification database 

Tool on similarity of goods and services 

Discrepancies  in  tools  and 
practices 

Inconsistencies  in  decision 
making 

Non-harmonised quality/performance standards 

Non-harmonised forecasting methodology 

Discrepancies in examination guidelines 

Few common trainings 

Source: consultations with stakeholders and OHIM Cooperation Fund 

Box 6 shows that the number and scope of practical implications due to the heterogenity and 
divergences in trade mark tools and practices (including decision making) may be significant 
for a trade mark applicant/owner.  

Box 6: Examples of divergences in trade mark tools and practices 

When seeking trade mark protection for two identical trade marks at two IP offices the applicant will probably 
have to deal with different application forms (not always available in other languages than the language of that 
country),  provide  different  information  and  data,  face  various  classification  practices  (including  use  of  two 
different lists of goods and services), experience a different speed of procedures and thus an overall length of 

106 

107 

Notably  as  regards  trade  mark  tools  and  electronic  services,  e.g.  databases,  searching  facilities  etc., 
which are still not available at (all) IP offices – at present and as illustrated previously in figure 3, the 
development in this field is lagging behind the business environment of the 21st century which relies to 
a large extent on information technologies and where speed plays a key role. 
Source  OHIM,  based  on  the  evaluation  carried  out  with  the  consultancy  Gartner,  see  under  point 
3.2.2.1. 

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the registration process as well as uneven quality of office's decision (which directly impact the risk of future 
invalidation of such a trade mark), and face many other differences. 

Furthermore, the below case study (box 7) demonstrates how costly, lengthy and burdensome 
in terms of administrative procedures launching a new trade mark for a company may be, in 
particular for a SME, notably because of missing trade mark databases and common searching 
tools.  The  significant  extra  cost  related  to  clearance  of  prior  rights,  under  current 
circumstances  inevitable  because  of  lacking  alternative  solutions108,  appears  unjustified  in 
today's digital society. 

Box 7: Case study – lack of search facilities 

An Italian starter company F wants to sell its products EU-wide and has decided to protect its goods with two 
Community trade marks. Before applying for the CTMs the company would like to check whether identical or 
similar  trade  marks  already  exist  at  both  Community  and  national  level  to  avoid  later  oppositions  against  its 
application ("clearance"). The company has to check the 26 registers one by one. At OHIM and several national 
IP offices, trade mark registers are available online. In other offices, registers have not been (fully) digitalized 
yet, and are therefore less accessible for searches. This task is further complicated by the fact that some trade 
mark registers are available only in the respective national language. Given the complexity of such a task, the 
company F would not be capable of performing it on its  own and needs to engage one or, more often, many 
external consultants which implies substantial additional cost. 

To avoid cost and delay (the company is pressed to launch the product on the market to get a head start over 
competitors) the company decides to take the risk of applying for a CTM without clearing for prior rights. It 
pays 1800 EUR for the filing of two CTM applications. Unfortunately for the company, trade marks similar to 
the applications already exist in two Member States and their owners raise an opposition against the company’s 
applications. The company engages a TM attorney (cost) to evaluate the situation and decides to abandon one of 
its CTM applications (in spite of the fact that it cannot recuperate the paid fee of 900 EUR) and to defend the 
other one. Even though a professional representation is not obligatory in opposition proceedings, the company 
does not feel able to deal with the procedure on its own and hires a law firm (further extra money). 

At present, the opposition procedure is still pending. The trade mark in question has not been registered yet and 
company F has not put its goods on the market. 

Thus, the low level of harmonisation of trade mark laws and procedures as well as the limited 
convergence  of  practices  and  tools  at  IP  offices  due  to  the  low  level  of  cooperation  have  a 
series  of  significant  adverse  consequences  for  industry:  higher  costs  and  delays;  legal 
uncertainty; risk of unsustainable relationship between the CTM and national systems; limited 
accessibility of the trade mark systems. 

First,  there  is  a  direct  increase  in  costs,  because  industry  is  obliged  to:  (a)  increase  inhouse 
expertise  so  as  to  be  in  a  position  to  internalise  the  knowledge  necessary  for  effectively 
dealing  with  the  various  aspects  of  the  system  in  all  Member  States,  (b)  seek  expensive 
professional  advice,  often  in  the  form  of  an  international  network  of  external  consultants, 
especially when the issues involved require local legal expertise, and (c) develop and maintain 
overcomplicated  data  management  tools  in  order  to  manage  its  trade  mark  portfolio 
efficiently,  in  particular  since  it  has  to  deal  with  divergent  rules  as  regards  registration  and 

108 

In  this  regard,  the  CTM  Regulation  and  its  provisions  on  searches  appear  outdated  as  they  do  not 
provide a satisfactory remedy to this problem. According to Article 38(1) CTMR the Office draws up a 
Community search report citing those earlier CTM which might be in conflict with the application. The 
CTM  applicant  can  also  request,  against  payment  of  a  fee,  a  national  search  report  from  a  Member 
State’s IP office. This service, however, is offered currently only by 10 national offices. Furthermore, 
both search reports are elaborated only after the filing of a CTM, i.e. after the application fee was paid. 
The trade mark study confirmed that many users do not consider these searches reliable and therefore 
useful; see MPI study, p. 182. 

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renewal  fees,  term  of  protection,  calculation  of  renewals,  transfers,  licensing,  professional 
representation etc. 

Second, the low level of harmonisation also raises costs indirectly, because legal uncertainty 
often encourages companies to resort to unnecessary multi-filing practices in case one kind of 
trademark protection proves to be easier to obtain or more efficient than another. Indeed, the 
research conducted by the institute INNO-tec has confirmed such practice by revealing that it 
is  often  cheaper  for  companies  to  apply  for  several  trade  marks,  hoping  that  one  will  be 
registered, than to undertake an exhaustive search for all possible conflicts between marks on 
the OHIM and on national trade mark registers within the EU. As a result, firms often apply 
for more than one CTM at a time when they seek to ensure that they will have at least one 
trade mark in the register for a new product or service109. In addition the complexity and lack 
of transparency of the system leads to considerable delays in developing an appropriate trade 
mark strategy and, thus, slows down the marketing of new products and services and hampers 
the competitiveness of the company to a significant extent. 

Third, the lacking harmonisation of trade mark procedures110 as well as the limited use of IT 
tools  contribute  to  appearance  of  delays  in  registration  and  other  proceedings.  The 
consultations  with  national  offices  revealed  that  the  average  time  for  registration  varies 
considerably: trade mark protection can be obtained within the limits of 3 to 6 months in the 
"fastest"  offices  whereas  it  may  take  up  to  several  years  in  others111.  Similar  results  were 
obtained  for  average  times  of  opposition  and  cancellation  procedures112.  As  for  users,  they 
repeatedly  emphasised113  the  importance  of  processing  times  for  the  protection  of  their  IP 
rights.  For  example,  a  trade  mark  registration  within  a  year  or  a  year  and  a  half  which  is 
currently  the  average  across  the  EU  may  be  perceived  as  being  excessively  long  from  the 
perspective  of  a  company's  marketing  strategy  where  delays  of  several  weeks  or  months 
significantly  matter.  Accordingly,  not  only  the  currently  "slowest"  but  all  IP  offices  should 
aim at decreasing the speed of their processes. 

Fourth, legal uncertainty increases the exposure to legal risks, especially if a company, due to 
reduced  budget  or  time  pressure114,  decides  not  to  forego  an  exhaustive  EU  wide  priority 
search  (which,  due  to  the  current  lack  of  transparency  and  search  facilities,  can  prove  quite 
costly)  before  securing  trade  mark  rights.  Moreover,  and  more  importantly,  the  diversity  of 
prior rights opposable to a later trade mark in different territories may lead to strategic errors 
and could result in: (a) loss of trade mark rights (and of the expense that was incurred in order 
to secure them in the first place); (b) civil or even criminal liability and, by extension, high 
litigation costs and attorney fees; (c) the eventual need to redeploy the company’s marketing 

109 
110 

111 

112 

113 

114 

MPI study, p. 43, paragraph 4.13. 
In  particular,  as  regards  availability  of  administrative  opposition  and  cancellation  procedures  –  see 
examples given in box 3 above. 
See MPI study, p. 13, paragraphs 1.30 – 1.31, including a full overview of average registration times at 
individual offices While most of national offices reported that the average registration time falls in the 
limits of either 3 to 6 months (11 offices) or 7 to 18 months (12 offices), in two offices the registration 
takes up to 2,5 and 4 to 5 years, respectively. 
See  MPI  study,  p.  20,  paragraph  1.46,  including  a  full  overview  of  average  registration  times  at 
individual offices. 
The  consultation  via  the  EBTP  (see  footnote  21)  revealed  that  more  than  90%  of  the  replying 
companies consider speed to be a very important or fairly important aspect when assessing the work of 
an  IP  office.  This  view  was  subsequently  and  widely  manifested  by  trade  mark  users  throughout  the 
whole evaluation process. 
See above case study in box 7. 

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schemes  and  suffer  additional  costs,  in  case  a  given  product  has  to  be  withdrawn  from  a 
specific territory or has to be re-branded in order to avoid legal conflict with existing rights of 
third parties.  

Fifth, the different standards applicable in different jurisdictions lead to an increased danger 
of forum shopping, since companies are often tempted to use one system instead of another, 
not on the basis of their marketing needs, but rather on the basis of convenience criteria like 
the  ease  or  speed  with  which  trade  mark  registration  can  be  obtained  in  a  particular 
territory115.  For  example,  it  may  be  known  among  trade  mark  users  that  the  examination 
practice  is  more  rigorous  in  one  Member  State  than  in  another,  and  that,  consequently,  the 
trade mark protection can be obtained more easily (or at all) at the latter IP office. The same is 
valid  for  the  diverging  classification  practice  of  trade  mark  offices116,  which  ,not  only 
involves  a  great  deal  of  legal  uncertainty  but  may  also  encourage  such  forum  shopping117. 
Moreover, the average time for registration and/or availability of an administrative opposition 
and  cancellation  proceedings,  including  their  quality  and  speed,  may  play  a  role  when 
deciding on the use of one trade mark system or another. Since all the above considerations 
significantly matter for a branding strategy, they may be eventually more important from the 
applicant's  perspective  than  the  territorial  coverage  originally  intended.  As  a  possible 
consequence  thereof,  the  situations  of  some  national  offices  might  become  unsustainable  as 
they may not be able to keep pace with the development elsewhere in Europe. This would go 
against  the  intention  of  the  EU  legislator  whereby  national  trade  mark  systems  shall  not  be 
replaced  by  the  CTM  regime.  Consequently,  the  fundamental  principle  of  coexistence 
(including  harmonious  complementarity  and  free  choice)  between  CTM  and  national  trade 
mark system, which is so much supported by trade mark users, could be put at risk.  

The above mentioned deficiencies not only limit the accessibility of the systems of trade mark 
protection, involve a great deal of legal uncertainty to cope with, and put the complementary 
relationship  between  the  CTM  and  national  trade  mark  systems  at  risk,  but  obviously  also 
distort  the  level  playing  field  for  companies,  with  further  negative  consequences  on  the 
competitiveness of EU companies and the competiveness of the EU as a whole.  

It  should  also  be  noted  that  the  above  effects  are  more  accute  for  SMEs  and  individual 
applicants,  who  are  less  capable  of  hiring  expensive  teams  of  international  professional 
consultants to cater for their filing needs. This leads to discrimination and artificial barriers, 
since  small  companies  find  it  increasingly  difficult  to  compete  with  big  multinationals. 
Characteristically,  the  INNO-tec  report  has  come  to  the  conclusions  (a)  that,  overall,  larger 
firms are more likely to convert a trade mark application into a registered trade mark and (b) 
that,  already  by  2003,  large  firms  were  less  likely  to  face  oppositions  to  CTM  applications 
than smaller firms118. 

115 

116 
117 

118 

For further indications as regards the adverse effects of low harmonization, see in Annex 4 to the MPI 
study  (footnote  27)  the  contribution  of  European  Community  Trademark  Association  (ECTA)  of  14 
January 2010, pages 2-5. 
See explanations and examples provided above under 3.2.1.1, point a). 
So expressly the General Advocate in his opinion of 29 November 2011 in Case C-307/10, paragraph 
42. 
See INNO-tec report, pages 27-32.  

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3.2.4.  Baseline scenario 

Without appropriate changes the current sub-optimal conditions for European businesses and 
the under-developed complementarity between the various trade mark systems are not likely 
to  improve.  On  the  contrary,  the  existing  divergences  and  inconsistencies  at  IP  offices  in 
terms of practices and tools are likely to increase to the detriment of trade mark users. 

It  is  true  that  there  have  been  some  promising  attemps  to  find  practical  solutions  for 
facilitating cooperation between OHIM and national trade mark offices.  

Since  2005,  a  scheme  for  bilateral  cooperation  agreements  between  OHIM  and  national 
offices has been in place. These arrangements are aimed at financing specific information and 
advice  services,  relating  to  the  CTM,  provided  by  national  offices,  and  may  cover  costs 
related  to  fairs,  exhibitions  and  publications  as  well  as  organisation  of  seminars  and 
workshops. In 2005, when the scheme started, 13 national offices participated; in 2011, all 25 
offices were involved in some of the eligible actitivities. 

The  bilateral  agreements  have  represented  the  first  structured  effort  to  enhance  cooperation 
between OHIM and national offices. However, their bilateral nature and the kind of activities 
included in the agreements mean that their contribution to enhanced convergence is limited. 
Therefore, many multilateral119 cooperation projects have been launched in 2010/2011 as part 
of the € 50 million OHIM Cooperation Fund. The  creation of the Fund was agreed by OHIM 
governing bodies and the management of the Office, in September 2008, together with other 
measures,  aimed  at  better  balancing  OHIM’s  budget120.  The  funds  which  stem  from  a 
budgetary  surplus  of  OHIM  are  available  for  common  actions  between  OHIM  and  national 
offices and should be used for the projects closely related to harmonization and the protection, 
promotion and/or enforcement of trade marks and designs121. In legal terms, the Cooperation 
Fund is a line in OHIM operational budget; accordingly, any related expenditure is governed 
by  the  Financial  Regulation  of  the  Office122.  In  addition,  an  advisory  body  (Management 
Board)  has  been  established  in  order  to  assist  the  President  of  the  Office,  who  is  the 
authorising officer, on matters relating to the Cooperation Fund. The OHIM governing bodies 
(i.e. the Administrative Board and the Budget Committee123) are regularly informed, both by 
the  Office  and  by  the  Management  Board,  about  the  selection  of  projects  and  their 
implementation. Finally, users are associated with the operation of the Fund. 

119 

120 

121 
122 

123 

Two of these multilateral projects, namely the "TM View" and "Euroclass", started already in 2006 but 
were later on integrated into the Cooperation Fund.  
According  to  the  CTM  Regulation,  the  budget  of  the  Office  should  be  balanced.  However,  over  a 
number  of  years,  OHIM  was  accumulating  a  significant  surplus.  The  measures  agreed  in  September 
2008 were twofold. As regards the use of the accumulated surplus, these were the establishment of a 
reserve fund (currently kept at € 200 million) and the creation of the above Cooperation Fund. With a 
view to balancing the annual budget, it was agreed to reduce OHIM fees (applicable as of May 2009). 
Moreover, the idea of distributing a proportionate part of OHIM renewal fees to national IP offices was 
outlined in the context of the September 2008 agreement. 
See at http://oami.europa.eu/ows/rw/pages/QPLUS/OHIMCooperationFund.en.do. 
OHIM  financial  provisions  are  adopted,  in  accordance  with  Art.  143  CTMR,  by  the  OHIM  Budget 
Committee and aligned as much as possible with the financial regulations of the EU. See Regulation No 
CB-3-09  of  the  OHIM  Budget  Committee  of  17  July  2009  laying  down  the  financial  provisions 
applicable to the Office ("Financial Regulation"). 
The Administrative Board and the Budget Committee (ABBC), both composed of one representative of 
each Member State and one representative of the Commission and their alternates. Each representative 
has one vote except for the Commission which does not have the right to vote. 

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The  Cooperation  Fund  initiatives  include,  for  example,  the  project  TMView,  aimed  at 
providing online search facilities connecting trade mark databases of national IP offices and 
of  OHIM124,  and  the  Euroclass  project,  used  for  establishment  of  a  common  classification 
database.  The  Cooperation  Fund  is  also  aimed  at  developing  common  software  tools  and  at 
contributing  to  achieving  full  automation  and  e-business  administration  at  all  European  IP 
offices (for the state of play in this area see chapter 3.2.2.1 above). The trade mark users very 
much welcome the initiatives under the Cooperation Fund and emphasise the importance of 
their quick and full implementation125. 

At the same time, this recent experience reveals the clear shortcomings of the current legal, 
technical and financial framework for cooperation, as described above, and also confirms the 
shortcomings of cooperation achieved on a voluntary basis. It has to be stressed in this context 
that any common project can bring the desired results only if all IP offices participate. As an 
example, the common databases for searching purposes can be mentioned. Given the unitary 
character of a CTM (see explanation in box 7) such databases are useful only if they enable a 
trade mark applicant to check upfront all relevant registers with all possibly conflicting rights. 
Even though the preparation of the Cooperation Fund work programme followed a bottom-up 
approach, seeking views of all stakeholders, and having the support of  both national offices 
and users, eventually only three out of 18 projects have been joined by all IP offices. As for 
the  other  multilateral  projects126,  the  participation  rates  vary  between  10  and  20  offices  per 
project  with  a  significantly  lower  implementation  rate.  Moreover,  the  involvement  in  a 
particular  initiative  depends  at  present  on  the  choice  of  the  office  in  question.  Therefore,  it 
cannot be guaranteed that those offices that would most benefit from a particular project will 
indeed participate. 

It follows from all the above that despite existing cooperation initiatives, sustainable benefits 
are not secured. The current baseline thus has a double cost: the cost of possibly wasting the 
money and effort already invested in these projects and the loss of possible benefits if existing 
cooperation initiatives remain optional, uncoordinated and unsustained.  

It  should  be  added  that  with  regard  to  bilateral  cooperation  agreements  between  OHIM  and 
national  offices,  it  has  taken  6  years  to  involve  all  EU  offices  in  a  bilateral  mechanism 
representing  a  total  investment  of  € 7  million.  Because  of  the  reasons  explained  above  (see 
under  3.2.2.2),  this  mechanism  is  not  sustainable  per  se,  and  therefore,  results  cannot  be 
expected to stay. Such investment will definitively be lost without more stringent cooperation 
obligations. 

124 

125 

126 

The TMView has been operational since 2010 and currently provides full access to registers of OHIM, 
WIPO  and  of  the  offices  of  the  following  countries:  Bulgaria,  Benelux,  Czech  Republic,  Denmark, 
Estonia, France, Italy, Lithuania, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United 
Kingdom.  
As  regards  TMView,  see  the  support  expressed,  for  example,  by  AIM,  ECTA,  ICC  and  Marques  in 
Annex 4 to the MPI study, p. 10-11, 108+115, 169 and 226, respectively; as for seniority databases, see, 
for example, contributions by ECTA, EFPIA and INTA, pages 108, 130 and 187, respectively. 
As regards the bilateral arrangements, where the involvement of all 25 offices was recently achieved, it 
should be clarified that these agreements are substantially different from the multilateral ones. They are 
not shared among several offices and should rather be seen as delegation of some services from OHIM 
to national offices. Therefore, the high participation rate should not be overestimated and perceived as a 
new  trend  in  the  area  of  cooperation,  raising  unfounded  expectations  as  regards  the  other  common 
projects. 

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As far as the Cooperation Fund is concerned, OHIM has conducted a “cost-benefit” analysis 
(CBA)  of  the  investment  represented  by  the  various  activities  included.  Details  are  to  be 
found  in  Annex  8,  which  contains  an  explanation  of  how  estimates  for  potential  benefits 
generated  by  the  Cooperation  Fund  projects  have  been  derived  and  the  underlying 
assumptions. In assessing benefits, the method applied was the “social cost-benefit analysis” 
which offers a methodoloy for “monetising” benefits which are not purely financial (such as 
improved service by a governmental institution). 

Given the fact that these benefits will not materialise in the absence of further EU action, they 
are  presented  within  the  impact  analysis  of  the  relevant  policy  solution(s)  (see  sections 
6.4.1.1. and 6.4.1.2.). 

Some benefits of this programme are being generated already. For example, TMView: since 
its  entry  into  service  until  March  2011,  it  has been  used  to  search  for  471,683  trade  marks, 
meaning, in a 12-month period, some 257,282 trade marks. 

The  cost  of  searching  this  number  of  trade  marks  through  a  commercial  provider127  would 
have been more than € 500,000. This is part of  the benefit derived from TMview: a reduction 
of approximately € 2 per trade mark searched. In  other words, TMview could already serve to 
save  businesses,  in  one  year,  € 0,5  million  wh en  searching  for  0,25  million  trade  marks.  It 
should be noted that this is a very conservative estimate since it ignores the fact that usage of 
TMView is increasing as more and more countries are added to the tool (all 25 EU IP offices 
are  projected  to  be  in  the  tool  by  the  end  of  2012),  thus  making  the  tool  more  useful  and 
increasing the savings business can realise by using it. 

The first-cut CBA indicated, that over a period of 10 years (starting from the first investment), 
the investment in the Cooperation Fund projects could yield some € 73 million in benefits for 
both  users  and  IP  offices.  These  benefits  were  monetised  based  on  benefits  that  are  most 
valuable  for  end  users,  such  as  reduced  processing  times  or  greater  predictability  in  the 
service received. The CBA assessed the value that users would attribute to the improvements 
deriving from the projects in monetary terms, using a "willingness to pay approach".  

The  analysis  identifies  the  following  as  the  major  benefits:  improvement  in  efficiency 
(avoidance of errors in offices); enhanced IP protection for end users (easy to define a strategy 
and  track  portfolio);  saving  in  legal  fees;  full  range  of  business  improvements  possible  via 
standardized procedures, improved transparency and predictability; easy access to information 
and improved consistency across the members of the network. Each project of the Fund has 
been  analysed  in  how  it  contributes  to  yielding  these  expected  benefits  (for  example,  the 
Future software project of the Fund could yield some € 45 million in realised benefits to users 
and IP offices on a Net Present Value basis). 

However, these benefits will actually represent a cost if the limited and voluntary cooperation 
capacity  baseline  continues  as  it  is.  In  other  terms,  these  benefits  will  represent  “lost 
opportunities”  and,  therefore,  concrete  costs  of  the  existing  baseline,  because  the 
sustainability  of  the  investment  of  cooperation requires  that  the  national  IP  offices  have  the 
long term capacity to secure resources in order to properly run, maintain, repair and keep up 
to date the systems and solutions developed by the Cooperation Fund (e.g. IT tools). If not, 
the expected benefits will not materialise.  

127 

For  purposes  of  this  CBA,  the  rates  for  SAEGIS’  online  searching  have  been  considered  (Source: 
http://trademarks.thomsonreuters.com/price-list, being the price 2,65 US Dollars per search.). 

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This is why the cost of the current “low cooperation” baseline is captured in the potential loss 
of benefits that the initial investment is expected to yield. 

It should also be noted that the risk of upsetting the overall balance of the system is acute, in 
the sense that even if only a limited number of national IP offices fail to finance the continued 
operation of their part, the common tools will underperform as a whole. For instance, even if a 
small  number  of  national  IP  offices  fail  to  update  their  part  of  TMView,  all  the  benefits 
stemming  from  a  free,  rapid  and  reliable  EU-wide  search  or  trade  mark  clearance  will 
immediately disappear, since the timeliness and reliability of the search remains dependent on 
the  slowest  and  less  reliable  office.  In  other  words,  the  failure  of  only  some  offices  may 
effectively  cancel  the  cumulative  benefits  from  the  investment  of  all  other  offices  put 
together.  

In  addition,  it  is  clear  that  the  further  national  IP  offices  (due  to  their  non-involvement  in 
cooperation  projects  with  OHIM)  fall  behind  in  terms  of  automation,  timeliness,  reliability, 
predictability  and  user-friendliness,  the  less  attractive  they  become  compared  to  the  CTM 
system, with the risk that trade mark owners cease to use them altogether, opting for a CTM 
instead.  In  the  long  run,  this  may  threaten  the  viability  of  dysfunctional  national  systems, 
contrary  to  the  goal  of  preserving  national  trade  marks  alongside  CTMs  in  a  system  of 
harmonious and complementary coexistence which ensures the principle of free choice. 

Finally, the current status of harmonisation already achieved at the international level is not 
sufficient (i.e. EU action remains necessary). The main international treaties administered by 
WIPO  destined  at  simplifying  and  harmonizing  the  administrative  procedures  in  respect  of 
national  applications  (in  particular  Trademark  Law  Treaty  (TLT),  Singapore  Treaty  on  the 
Law  of  Trademarks,  Madrid  Agreement  and  Protocol,  see  also  section  5.1.1  below  and 
footnote  134),  either  fall  short  from  dealing  with  procedural  issues  in  a  comprehensive 
manner, or have not been ratified by all the Member States (for instance, whereas TLT, which 
mainly  seeks  to  harmonise  formal  requirements  has  been  ratified  by  18  Member  States,  the 
Singapore Treaty, which is aimed at enlarging and advancing this harmonisation further, has 
only been ratified by 13 Member States). 

Furthermore, while “harmonization” initiatives have been launched under the aegis of WIPO, 
none of them have resulted in the type and depth of results that the OHIM-led initiatives will 
yield  (e.g.  no  global  trade  mark  search  tool  currrently  exists  that  combines  trade  mark 
information  from  major  trading  partners  in  the  world,  users  having  to  make  recourse  to 
commercial services for covering such needs). 

However,  by  developing  tools  like  TMview,  the  European  Union  paves  the  way  for  more 
global convergence: a number of third countries (US, Japan, Korea, Russia, etc.) are exploring 
how to use TMview functions and render their trade mark data accessible through such a tool. 
This  would  render  the  tool  even  more  attractive,  thus  generating  further  benefits  to  right 
holders: the more countries make their data accessible free of charge, the greater the savings 
realised by businesses in search costs and associated effort. 

For  the  sake  of  completeness,  the  present  baseline  scenario  takes  into  account  the  positive 
synergies  that  may  be  expected  by  the  takeover  of  the  European  Observatory  on 
Infringements  of  Intellectual  Property  Rights  by  OHIM.  In  fact,  the  Observatory's  impact 
assessment  identified  some  similar  problems  in  relation  to  IPR  enforcement,  for  example, 

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insufficient coordination and exchange between responsible authorities in the Member States 
on  best  practices  as  well  as  insufficient  use  of  technologies  to  prevent  counterfeiting128. 
Accordingly, the Observatory Regulation129 entrusts the Office with some tasks and activities 
in this regard, aimed, for example, at providing mechanisms which help to improve the online 
exchange,  between  Member  States’  authorities  working  in  the  field  of  intellectual  property 
rights,  of  information  relating  to  the  enforcement  of  such  rights,  and  fostering  cooperation 
with and between those authorities (see Article 2(1)(g)). 

It can be expected that there will be some positive interference between OHIM tasks carried 
out under the Observatory Regulation and the cooperation activities considered in the present 
report,  for  example,  use  of  the  established  networks  with  national  IP  offices  and/or  of 
developed  patterns  for  cooperation  projects.  Such  an  interference,  however,  should  not  be 
overestimated  given  the  different  subject  matter  of  both  initiatives  (IPR  enforcement  versus 
core business, comprising the registration and administration of Community Trade Marks and 
Community Designs). 

Figure 6: Problem tree 

Missing 
procedural rules 
in the TMD 

Missing 
substantive 
harmonisation 
including op-
tional provisions 
in the TMD  

Missing clear 
legal basis for 
cooperation 

Insufficient 
technical 
capacity at 
national IP 
offices 

Weak 
medium/long-
term financing 

Drivers 

Divergent provisions of the existing regulatory framework 
between Community and national TM regimes 

Low level of cooperation between intellectual 
property offices 

Problems 

Not easily accessible TM systems: higher 
costs, limited speed and predictability 

Legal uncertainty for EU companies 

Risk of unsustainable relationship 
between EU and national systems 

Consequences 

Partly outdated TM system in Europe with negative impacts on the competitiveness of 
European companies and the EU as a whole: less growth and jobs. 

128 
129 

See the document referred to in footnote 17; chapter 3.1.3, p. 8, and chapter 3.1.6, p. 9, respectively.  
Regulation  (EU)  No  386/2012  of  the  European  Parliament  and  of  the  Council  of  19  April  2012  on 
entrusting the Office for Harmonization in the Internal Market (Trade Marks and Designs) with tasks 
related  to  the  enforcement  of  intellectual  property  rights,  including  the  assembling  of  public  and 
private-sector  representatives  as  a  European  Observatory  on  Infringements  of  Intellectual  Property 
Rights 

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3.3. 

The EU's right to act  

In  the  context  of  the  establishment  and  functioning  of  the  internal  market,  Article  118(1) 
TFEU  empowers  the  European  Parliament  and  the  Council  to  establish  measures  for  the 
creation of European intellectual property rights to provide uniform protection of intellectual 
property  rights  throughout  the  EU,  including  the  setting  up  of  centralised  Union-wide 
authorisation, coordination and supervision arrangements. 

Furthermore,  Article  114(1)  TFEU  empowers  the  European  Parliament  and  the  Council  to 
adopt  measures  for  the  approximation  of  the  provisions  laid  down  by  law,  regulation  or 
administrative  action  in  Member  States  which  have  as  their  object  the  establishment  and 
functioning of the internal market. 

The CTM is  a  self-standing  EU  intellectual property title which has been created  by an EU 
Regulation.  In  as  much  as  the  analysis  carried  out  as  part  of  this  impact  assessment  proved 
that the modification of certain provisions of the Regulation is necessary in order to improve 
and  streamline  the  CTM  system,  only  the  EU  legislator  is  entitled  to  make  the  necessary 
amendments.  The  same  goes  for  (simultaneously)  necessary  amendments  of  corresponding 
provisions which form already part of the TM Directive. 

Moreover,  taking  into  account  that  the  identified  problems  related  to  the  significant 
divergences  of  the  regulatory  framework  either  do  not  allow,  or  notably  distort,  a  level 
playing field for EU companies with further negative consequences on their competitiveness 
and that of the EU as a whole, it is advisable to adopt measures that can improve the relevant 
conditions for the functioning of the internal market. Such measures aiming at extending the 
current level of approximation through the TM Directive can only be taken at EU level, all the 
more so given the need to ensure coherence with the CTM system.  

It has to be considered in this context that the CTM system is embedded in the European trade 
mark  system  which  is  built  on  the  principle  of  coexistence  and  complementarity  between 
national  and  Union-wide  trade  mark  protection.  While  the  CTM  Regulation  provides  a 
complete  system  where  all  issues  of  substantive  and  procedural  law  are  provided  for,  the 
current  level  of  legislative  approximation  reflected  in  the  TM  Directive  is  only  limited  to 
selected provisions of substantive law. In order to be able to ensure effective and sustainable 
coexistence and complementarity between the components involved, it is necessary to create 
an  overall  harmonious  system  of  trade  mark  protection  in  Europe  with  substantially  similar 
substantive rules and at least principal procedural provisions which are compatible.  

Finally,  it  needs  to  be  noted  that  OHIM  is  a  regulatory  agency  of  the  EU  with  legal, 
administrative  and  financial  autonomy,  which  was  created  by  the  Council  to  administer  the 
CTM system (and later also that of the Community design).  

As  identified  above,  there  are  certain  unfavourable  framework  conditions  which  impede 
effective cooperation between OHIM and national IP offices even though such cooperation is 
essential to contribute to ensuring complementarity and interoperability between the CTM and 
national  trade  mark  systems.  It  is  clear  again  that  a  solution  for  this  problem  can  only  be 
found at EU level, including acknowledging the supporting and coordinating role OHIM has 
to play in this context. 

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The  above  needs  for  EU  action  were  also  expressly  recognised  by  the  Competitiveness 
Council in its conclusions of May 2010 on the future revision of the trade mark system in the 
European Union130. 

4. 

OBJECTIVES 

4.1. 

General, specific and operational objectives 

General  objective:  To  modernise  the  trade  mark  system  in  Europe,  thereby  enhancing  EU 
companies' competitiveness by 

• 

• 

• 

Improving  accessibility  of  TM  systems  =  decrease  costs;  increase  speed  and 
predictability 

Providing legal certainty for all businesses in the EU 

Ensuring coexistence and complementarity between EU and national systems 

Specific objectives:  

• 

• 

Increase convergence of the TM Directive with the CTM Regulation 

Increase level of cooperation between OHIM and national trade mark offices 

Operational objectives:  

• 

• 

• 

• 

Achieving greater approximation of trade mark procedures and substantive issues 

Providing adequate regulatory incentive for cooperation 

Technical cooperation capacity building at national TM offices 

Secure long term financing for cooperation activities. 

4.2.  Consistency with existing EU policies and horizontal objectives 

It  follows  from  the  above  that,  in  addition  to  the  aim  of  taking  the  level  of  legislative 
harmonisation of the EU trade mark system a decisive step forward in terms of consistency, 
efficiency and legal certainty, the objective of the review is to set the conditions enabling the 
creation  of  a  true  cooperation  network  between  OHIM  and  all  national  offices.  This 
cooperation  network  will  permit  further  improvements  of  the  Internal  Market  conditions  by 
reinforcing interconnection and interoperability among national trade mark systems (being by 
definition  territorial  in  scope)  and  between  them  and  the  CTM  system,  and,  by  facilitating 
access  to  the  network  for  all  users  (notably  SMEs).  It  is  clear  in  this  context  that  a  truly 
integrated market requires a seamless connection between all its component parts. To support 
this, relevant framework conditions need to be both created (legal base), equipped (tools) and 
supported (funding). 

130 

See under 3.2.1 above, last paragraph, and, under 6.1.2 below, last paragraph. 

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As regards coherence with other EU policies, it should be noted that the EU has taken such an 
approach for policy intervention in areas such as, for example, infrastructure and because of 
the need to close interoperability gaps. This is why the Trans-European Network (TEN) was 
created. Cross-border physical interconnections were lagging behind in the EU. Missing links 
between national infrastructure components caused dividing lines to grow between centre and 
peripheries.  These  effects  were  the  result  of  authorities  tending  to  prioritise  projects  of 
primary  national  relevance,  while  leaving  cross-border  projects  as  secondary  priorities.  The 
EU  intervention  behind  the  “TEN”  policy  provides  the  framework  conditions  to  overcome 
such  effects,  in  terms  of  facilitation  of  investment  through  sharing  best  practices  and  direct 
funding facilities. 

It  can  be  argued  that  the  current  low  cooperation,  derived  from  the  cooperation  capacity 
problem of members of the EU network, between coexisting trade mark systems, is causing 
systematic  gaps  similar  to  those  that  the  TEN  tries  to  overcome.  Therefore,  creating  the 
framework conditions to overcome the results of limited cooperation capacity are at the core 
of an intervention to overcome the costs of the current baseline scenario. 

In addition, the above objectives are clearly in line with the 2008 "Small Business Act", the 
2008  Communication  on  an  Industrial  Property  Rights  Strategy  for  Europe  (including  the 
announcement concerning the accession to the Singapore Treaty on the Law of Trademarks), 
the 2010 Commission Communication Europe 2020 and the 2011 IPR strategy131. Moreover, 
these  objectives  conform  to  the  Europe  2020  agenda,  especially  with  the  idea  to  promote 
smart and inclusive growth. They aim at making full use of information and communication 
technologies  in  trade  mark  offices.  They  try  to  ensure  that  once  innovative  ideas  are  turned 
into  new  products,  trade  marks  can  help  secure  protection  for  these.  This  is  particularly 
relevant  for  SMEs,  which  make  up  99%  of  all  EU  businesses  and  in  the  past  5  years  have 
created  80%  of  the  new  jobs.  Therefore,  if  this  trend  continues,  these  objectives  should 
contribute indirectly to fostering a high-employment economy delivering territorial and social 
cohesion. 

5. 

IDENTIFICATION OF POLICY OPTIONS 

In  the  following,  various  options  are  explored  with  a  view  to  the  achievement  of  the 
operational objectives identified in section 4.1.  

5.1. 

Divergent provisions of the existing regulatory framework 

5.1.1.  Approximation of trade mark laws and procedures 

When it comes to consideration of available policy options the necessary level and focus of 
approximation of national laws should be assessed. The options under consideration are the 
following: 

(1) 

(2) 

No further approximation of trade mark laws and procedures (baseline scenario). 

Expansion of the approximation of national laws and their coherence with the CTM 
system. This option ("partial approximation", option 2) would encompass a selected 

131 

For reference of all the mentioned communications see section 1.2 'political context' above.  

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number of trade mark law aspects which were kept out of the "first" harmonisation in 
1989, namely132 

– 

– 

– 

Alignment of the principal procedural rules with the relevant provisions of the 
CTM  Regulation,  including  those  where  existing  divergences  cause  major 
problems  from  the  users'  perspective  and  which  are  deemed  indispensable133 
for creating a harmonious, complementary system of trade mark protection and 
administration  in  Europe,  taking  also  into  account  relevant  harmonisation 
already  achieved  at  least  partly  through  international  instruments134  (in 
particular Trademark Law Treaty, Singapore Treaty on the Law of Trademarks, 
Madrid Agreement and Protocol). The areas where further approximation and 
coherence  of  trade  mark  laws  at  national  and  Community  level  is  urgently 
needed  were  identified  during  the  2010/2011  consultation  process  and  some 
examples135  are  described  above  in  section  3.2.1.1  of  the  problem  definition. 
Users136 identified the incoherence of these procedures as the most problematic 
and thus in a need for alignment. 

Alignment of further substantive law aspects in accordance with the provisions 
of  the  CTM  Regulation,  which  are  not  yet  addressed  in  the  TM  Directive, 
unless  differences  are  justified  by  important  legal  principles  and  traditions  in 
Member States137. 

Reducing the number of optional provisions in the TM Directive in alignment 
with  the  CTM  Regulation  and  to  the  extent  appropriate  by  rendering  them 
mandatory. 

Full  approximation  of  national  trade  mark  laws  and  procedures  (option  3).  This 
approach  would  be  based  on  option  2,  encompassing  its  above  components,  but 
include all remaining aspects of substantive trade mark law and procedures138. 

For details see list of proposals in Annex 2, point 9.2.1. 
The harmonisation of the principal procedural rules is also proposed by the MPI study (see p. 232, point 
2.49),  but  an  exception  is  made  in  respect  of  ex-officio  examination  of  relative  grounds  (see  issue 
described above under 3.2.1.1, point (c)). In that regard, the study admits that goods reasons speak in 
favour of abandoning such examination all over but that Member States should nevertheless be entitled 
to continue it. By contrast, the presented option of partial approximation would include the alignment of 
this issue, being considered indispensable for creating a harmonious and complementary European trade 
mark system overall, so that ex officio examination of a trade mark application is limited to absolute 
grounds both at CTM and national levels. This would be in line with the current trend (e.g. reflected in 
the corresponding amendment of the Spanish trade mark law in 2001, the similar  modification of the 
UK  law  in  2007  and  the  recent  change  of  the  Bulgarian  law),  which  is  to  abandon  ex-officio 
examination of relative grounds in order to create a level playing field between the CTM and national 
systems  and  so  also  to  ensure  that  businesses,  that  opt  for  the  national  registration  procedure  are  not 
treated worse than those that choose the CTM route.  
This harmonisation at international level covers inter alia the filing date requirements of a trade mark 
application, the possibility to divide a trade mark application or registration, the classification of goods 
and services, and the duration and renewal of registration. None of these issues are currently addressed 
in the TM Directive (see listed in Annex 2 under point 9.2.1.1). 
These areas are classification, ex-officio examination of relative grounds, opposition and cancellation.  
These issues were in particular addressed in the submissions of user organisations in the context of the 
MPI study and at the Commission hearing on 26 May 2011. 
As already mentioned under 3.2.1.2 this is also favoured by the MPI study (see footnote 93). 
For example the alignment of all deadlines, fee structures, representation before the office, examination 
of formal requirements, publication of the application, content of a notice of opposition, examination of 

(3) 

132 
133 

134 

135 
136 

137 
138 

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42 

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When  it  comes  to  options  2  and  3  it  should  be  furthermore  assessed  how  such  an 
approximation could be pursued. Even though this question touches upon the choice of legal 
instrument (chapter 7), it is considered that this issue is of crucial importance to addressing 
the effectiveness and efficiency of both policy options and should be tackled here. 

– 

– 

It  could  be  envisaged  that  the  approximation  would  be  carried  out  on  a 
voluntary  basis  (sub-options  2a  and  3a,  respectively).  In  such  a  case,  there 
would  be  no  further  approximation  in  formal  terms,  i.e.  no  changes  to  the 
harmonising  TM  Directive.  National  offices  would  be  encouraged,  by  non-
legislative means, to align their trade mark laws and procedures. To this end, 
the  Commission  would  issue  a  Communication  (Recommendation)  and/or 
Member States would agree to approximate their national laws on a voluntary 
basis. 

Alternatively,  the  approximation  could  be  mandatory,  i.e.  driven  by  an  EU 
legislative  measure  which  would  oblige  Member  States  to  align  their  trade 
marks laws (sub-options 2b139 and 3b, respectively).  

(4) 

A  single  trade  mark  rulebook  (option  4)  which  would  entirely  replace  Member 
States'  trade  mark  laws  by  setting  uniform  rules  across  the  EU.  As  a  result,  all 
national IP offices would apply identical provisions when it comes to their national 
trade marks. However, this option would be clearly disproportionate in view of the 
demonstrated needs. It would not take into account at all the historical development 
of  laws  in  Member  States  and  would  unduly  deprive  them  from  any  kind  of 
flexibility  at  national  level.  Accordingly,  this  option  will  not  be  considered  any 
further. 

5.1.2.  Missing clear legal basis for cooperation 

The options for consideration are the following: 

(1) 

(2) 

No  specific  legal  base  for  cooperation  between  IP  offices  in  Europe  (baseline 
scenario). 

Establish a clear legal base allowing national IP offices and OHIM to cooperate with 
each  other  (optional  cooperation)  with  the  aim  of  harmonising  practices  and 
developing common tools and databases (including identification and sharing of best 
practices etc.). 

(3) 

The same as in option 2, except that the legal base would oblige national offices and 
OHIM to cooperate with each other (obligatory cooperation). 

5.2. 

Cooperation capacity building 

Apart from the question of the missing clear legal basis, which due to its regulatory nature is 
already dealt with in the context of existing divergences of the legal framework, the problem 
definition  chapter  identified  inappropriate  framework  conditions,  in  terms  of  technical 

the opposition, multiple oppositions, registration of the trade mark including certificate of registration, 
appeals etc. 
For details on the proposed amendments see Annex 2, point 9.2. 

139 

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43 

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equipment and financial resources, as the main obstacles for cooperation between OHIM and 
national offices. Accordingly, the below consideration of available policy options focusses on 
how  to  strengthen  the  technical  capacity  of  IP  offices  to  cooperate  and  how  to  secure  long 
term financing of their common activities.  

5.2.1.  Technical facilities  

The options with regard to missing facilities and tools are the following: 

(1) 

(2) 

(3) 

Leave  it  for  each  IP  office  to  procure  and  develop  the  required  facilities  and  tools. 
This option corresponds to the “status quo”. 

Make possible that the required facilities and tools are accessible to IP offices within 
a  framework  of  voluntary  cooperation  which  pursues  the  very  aim  of  harmonising 
practices  and  developing  common  tools  (including  common  software  tools  and 
standards  and  practices  required  to  achieve  convergence  and  interconnectivity 
between procedures and systems etc.). 

Same  as  option  2,  but  ensure  that  the  required  facilities  are  accessible  through  an 
obligatory  cooperation  framework.  This  option  overlaps  with  the  respective  3rd 
options  retained  with  regard  to  the  missing  clear  legal  basis  and  the  financing  of 
cooperation activities. 

5.2.2.  Funding in general 

The options for financing cooperation activities between OHIM and national offices are the 
following: 

(1) 

(2) 

(3) 

Under this first option, each national office and OHIM would bear the entire cost of 
their cooperation activities. 

Alternatively,  the  cooperation  activities  of  national  IP  offices  and  OHIM  would  be 
financed  from  the  EU  budget.  An  appropriate  legal  base  would  be  established 
according to Article 310(3) of the Treaty on the Functioning of the European Union, 
on  which  basis  a  new  budget  line  would  be  created  as  part  of  the  DG  MARKT 
budget for the period of the relevant multiannual financial framework. 

Finally,  the  cooperation  activities  would  be  financed  from  the  budget  of  OHIM.  A 
part of OHIM annual revenue would be dedicated to financing common cooperation 
projects with national IP offices. Such a financial mechanism would cover both the 
setting up and running cost on a long term basis. In this context, it should be recalled 
that, in view of the revision of the CTM Regulation, the Commission was invited by 
the  Competitiveness  Council  to  establish  a  legal  basis  for  distributing  a  certain 
amount  of  OHIM  income  to  national  IP  offices  to  be  used  for  specific,  trade  mark 
related  purposes.  Should  this  last  option  3  be  retained  (see  section  6.3.2.1),  the 
present  IA  report  would  also  assess,  when  comparing  the  available  options  and 
analysing the impact of the selected one, the means and source of funding within the 
OHIM budget (see section 6.3.2.2). 

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6. 

COMPARISON OF OPTIONS AND ANALYSIS OF IMPACTS 

In this section, the following score system is used for the analysis of impacts of the options: 

• 

• 

• 

• 

Positive effect: from slightly positive (+) to strongly positive (++) 

Negative effect: from slightly negative (-) to strongly negative (--) 

Uncertain result (?) 

No impact: 0 

6.1. 

Divergent provisions of the regulatory framework: comparison of options  

6.1.1.  Approximation of trade mark laws and procedures – comparison of options 

The current scope of harmonisation of trade mark laws in Europe is significantly restricted as 
the Directive follows a minimum harmonisation approach by limiting its scope to substantive 
law  aspects,  including  several  optional  provisions  (baseline).  However,  the  persisting 
negative  effects  associated  with  this  option  have  been  clearly  described  under  the  'problem 
definition' section above. 

The  2010/2011  consultation  clearly  revealed 
the  most  relevant  areas  for  further 
harmonisation. Accordingly, the approximation exercise should focus on the most significant 
divergences in trade mark laws and procedures causing problems to the users at both national 
and EU levels, as described above in section 5.1.1 (option 2). Since only a limited scope of 
changes  would  need  to  be  done  in  Member  States'  laws  (usually  in  the  form  of  mere 
adjustments  of  existing  provisions  and  not  by  creating  new  rules),  it  is  expected  that  the 
alignment  exercise  could  be  done  within  a  reasonable  period  of  time.  Furthermore,  to  the 
extent  necessary  such  an  approximation  of  Member  States'  laws  could  be  pursued  together 
with identical modifications to the CTM regime which would ensure coherence between the 
two  systems.  This  was  not  possible  at  the  time  of  the  adoption  of  the  TM  Directive  as  the 
CTM Regulation was still at a draft stage and was only adopted 5 years later. In the meantime, 
the CTM system has proved well its merits and should therefore serve, as much as possible 
and appropriate, as a benchmark for future alignment of national laws140.  

Under  option  3,  the  scope  of  the  approximation  exercise  would  not  be  limited  to  particular 
aspects of trade mark laws but would encompass the whole range of provisions on substantive 
law, procedures and practices. Accordingly, the trade mark systems in Europe would evolve 
from  partially  coherent  and  aligned  to  fully  harmonised  regimes.  However,  the  analysis  of 
existing  problems  (chapter  3.2.1)  has  not  demonstrated  an  apparent  need  for  a  full  scale 
approximation of all trade mark provisions. As a result, option 3 would be disproportionate to 
the  actual  needs.  Moreover,  such  a  scenario  would  necessitate  far  reaching  changes  at 
Member  States'  level,  involving  not  only  amendments  to  national  trade  mark  laws  but 
possibly also to civil, administrative and other laws. 

When it comes to the implementation of options 2 and 3, one could consider that the desired 
approximation  of  trade  mark  laws  and  procedures  could  be  achieved  without  a  legislative 
intervention at the EU level. In this case, Member States would have to agree on a common 

140 

See MPI study and its Annex 4, as referred to in footnote 27. 

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45 

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approach/benchmark  and  align,  accordingly,  their  laws  and  procedures  on  a  voluntary  basis 
(sub-options 2a and 3a). However, the achievement of the operational objectives identified 
in section 3 is highly unlikely. Firstly, such a process would be very lengthy given the wide 
range  of  existing  divergences  between  national  laws.  The  duration  and  outcome  of  such  an 
exercise would fully depend on the commitment of all Member States and their willingness to 
find  common  approaches.  It  is  questionable  how  strong  the  incentives  for  this  would  be, 
taking  into  consideration  that  further  harmonisation  is  called  for  by  industry  but  not  by 
national  administrations.  Moreover,  it  would  be  very  difficult  to  arrive  at  a  unanimous 
decision  among  the  27  Member  States.  Therefore,  the  process  would  more  likely  result  in 
lowest common denominator solutions than the most appropriate ones. Moreover, it might be 
easier to find a common approach on the less controversial issues whereas there would not be 
any  guarantee  that  the  most  serious  problems  would  be  properly  addressed.  Finally,  the 
objective of achieving coherence between national laws and the CTM system would remain 
out of the reach of this exercise.  

Accordingly, it appears more appropriate to pursue harmonisation by means of an EU-driven 
action, i.e. a legally binding instrument, to ensure the achievement of the identified objective 
as regards substantive trade mark laws and procedures (sub-options 2b and 3b).  

Figure 7: Objective 1 – approximation of trade mark laws – comparison of options 

Options 

Assessment criteria 

Approximation of laws and 
procedures 

Effectiveness  
(achievement of 
objectives) 

Efficiency 

Overall 
assess 
ment 

Greater approximation of TM 
laws and procedures 

Time 
needed 

Overall 
cost 

Proportio 
nality 

1. Baseline 

0 

0 

0 

0 

0 

2. Partial approximation focused on 
main problems ("top priorities") 

2a. Voluntary partial approximation 

2b. Mandatory partial approximation 

3. Full approximation (option 2+) 

3a. Voluntary full approximations 

3b. Mandatory full approximation 

4. Single rulebook 

? 

++ 

? 

++ 

++ 

-- 

+ 

-- 

-- 

-- 

- 

- 

-- 

-- 

-- 

+ 

+ 

- 

-- 

-- 

- 

++ 

- 

+/- 

+/- 

6.1.2.  Missing clear legal basis for cooperation – comparison of options 

The analyses performed as part of the problem definition have demonstrated that the primary 
obstacle to an effective and  efficient cooperation between OHIM and national offices is  the 
absence  of  a  clear  legal  basis.  The  analysis  has  further  clearly  shown  the  shortcomings  of 
cooperation  achieved  on  voluntary  basis  (options  1  and  2).  As  long  as  there  is  no  legal 
obligation for IP offices in the EU to cooperate, it cannot be expected that all offices would 

EN 

46 

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participate in common cooperation projects, as is absolutely required for convergence of their 
practices and development of common tools141. 

Therefore, a proper legal framework must be adopted in order to create favourable conditions 
for cooperation at national and EU level, i.e. national offices and OHIM have to be obliged to 
cooperate  with  each  other  (option  3).  The  objectives  of  such  cooperation  should  be  clearly 
specified in order to enable monitoring of their achievement.  

As a result, participation of all national offices would be ensured and it would become easier 
for  them  to  justify  to  their  budgetary  authorities  the  allocation  of  financial  and  human 
resources for common projects with other IP offices.  

It  should  be  addded  in  this  context  that  the  Competitiveness  Council  called  on  the 
Commission to introduce, when presenting a proposal for the revision of the CTM Regulation, 
a specific provision defining the framework for cooperation between OHIM and the national 
offices.  In  the  same  context,  the  Council  also  requested  the  Commission  make  explicit  that 
harmonization of practice and tools is an aim which all trade mark offices in the EU should 
pursue and that efforts in this area should be supported and facilitated by OHIM. 

Figure 8: Objective 2 – providing adequate legal basis for cooperation 

Options 

Assessment criteria 

Providing legal basis for cooperation 

Effectiveness  
(achievement of 
objectives) 

Efficiency 

Overall 
assess 
ment 

Greater incentive for 
cooperation 

Time 
needed 

Overall 
cost 

Proportio 
nality 

1. Baseline 

2. Legal basis for optional cooperation 

3. Legal basis for obligatory cooperation 

0 

? 

++ 

0 

+ 

+ 

0 

+ 

+ 

0 

? 

+ 

0 

? 

+ 

141 

In  other  areas  of  EU  legislation  an  obligation  on  Member  States  to  cooperate  among  themselves  to 
ensure the efficient application of EU policies is recurrent. For example, Council Regulation (EU) No 
904/2010  of  7  October  2010  on  administrative  cooperation  and  combating  fraud  in  the  field  of  value 
added  tax  (recast)  or  Council  Regulation  (EC)  No  2006/2004  on  Consumer  Protection  Cooperation, 
which lays down the framework and general conditions under which Member States are to cooperate. 
Such obligation is sometimes followed by an obligation to cooperate using a specific instrument (e.g. IT 
system). In this respect, the recent Commission proposal for a Regulation of the European Parliament 
and of the Council on administrative cooperation through the Internal Market Information System (‘the 
IMI Regulation’) (COM(2011)522) require Member States to use a certain IT system in the application 
of  certain  Union  acts  governing  the  free  movement  of  goods,  persons,  services  and  capital  in  the 
internal market which require Member States to cooperate and exchange information with one another 
and with the Commission. 

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47 

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6.2. 

Divergent provisions of the regulatory framework: impact of the selected option 
on stakeholders 

6.2.1. 

Impacts as regards the approximation of trade mark laws and procedures 

The following sections analyse the impacts of option 2b (mandatory partial approximation) on 
various stakeholders, namely users of national and Community trade mark systems, national 
IP offices and OHIM. 

6.2.1.1.  Trade mark users (including SMEs) 

The  objectives  identified  on  the  basis  of  the  problem  definition  are  driven  by  the  business 
needs of trade mark users in Europe. They aim at modernising the framework for trade mark 
protection  at  both  EU  and  national  levels,  improving  the  level  playing  field  for  companies, 
especially  SMEs,  and  thus  enhancing  their  and  Europe's  competitiveness.  Accordingly,  the 
options  selected  to  best  contribute  to  the  achievement  of  these  objectives,  in  terms  of 
enhancing  harmonisation  of  trade  mark  laws  and  procedures,  are  expected  to  have  a 
overwhelmingly positive effect on all users of the trade mark system. This can be anticipated, 
for  example,  on  the  basis  of  the  great  support  from  user  organisations  who  represent  both 
large and small trade mark owners, as well as their agents142. 

Moreover,  there  are  indications  that  the  impact  of  the  proposed  changes  will  be  even  more 
significant  and  positive  for  SMEs  than  for  LSEs.  As  described  in  the  chapter  3.2  (problem 
definition),  given  the  current  low  level  of  harmonisation,  companies  who  seek  trade  mark 
protection under several national laws depend to a large extent on external expertise. In this 
context, it is generally perceived, on the basis of contacts with stakeholders, that SMEs, that 
do  not  have  in-house  IP  experts,  often  pay  more  than  double  the  amount  in  "advisers"  fees 
compared to larger companies which have experienced in-house employees. 

The  introduction  of  the  one-class-per-fee  system  will  also  be  beneficial  to  trade  mark  users 
and SMEs in particular. The new fee structure will be more adapted to their needs since they 
will not be obliged to pay for additional classes of goods and services which they do not need. 
Indeed, in line with the preferred option, the majority of user organisations indicated during 
the  consultation  phase  that  unnecessary  claims  to  three  classes  should  be  discouraged  by 
adjusting  the  fee  so  that  each  class,  in  addition  to  the  first,  costs  the  applicant  more143. 
Furthermore, users will also benefit from the anti-cluttering effect of the new system which is 
presumed to limit the space occupied by trade marks in the registers and thus to increase the 
amount of potentially available signs. 

As a result, the selected option anticipates significant benefits for the user community and it is 
not expected that there would be any obstacles preventing trade mark users from complying 
with the proposed changes once they have been implemented. 

142 

143 

MPI study p. 32 and 232, para. 2.47 and 2.49; for details: Annex 4 to the MPI study (as referred to in 
footnote  27). Examples  of  representatives of  large  companies  (International  Trademark  Association – 
INTA), small brand owners (European Brands Association – AIM) and agents (European Communities 
Trademark Association – ECTA) 
MPI study, p. 38, para. 2.41 

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48 

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6.2.1.2.  National IP offices  

Option 2b would imply the obligation for Member States to adapt, accordingly, their national 
legislations.  Considering  the  heterogenity  in  trade  mark  systems,  it  is  impossible  to  draw  a 
general conclusion, for example, as to whether these adaptations would be more burdensome 
for small national offices than for big ones or vice versa. The below table, however, provides 
an overview indicating which offices would need to change their current systems as regards 
the identified top priorities in terms of harmonisation of procedures. 

Figure 9: Current situation at national offices – top priorities for harmonisation 

Classification (class 
headings) 

"covers 
all" 

"means 
what it 
says" 
X 
X 

X 

X 

X 
X 

X 
X 

X 

X 

X 
X 
X 
X 
X 
X 

X 
X 

X 

X 

X 
X 

X 
X 

Availability of 
administrative procedures 
Opposition  Cancellation 

Yes 
Yes 
Yes145 
Yes 
Yes 
Yes 
Yes 
Yes148 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
Yes 
Yes 

Yes 
No (court) 
Yes 
Yes 
Yes 
Yes 
Yes 
No (court) 
No (court) 
No (court) 
No (court) 
Yes 
Yes 
Yes 
Yes 
Yes149 
No (court) 
No (court) 
No (court) 
Yes 
Yes 
No (court) 
No (court) 
No (court) 

Ex-officio 
examination 
of relative 
grounds 

No 
No 
No146 
Yes 
Partly Yes147 
No 
No 
Yes 
No 
Yes 
No 
No 
Yes 
No 
Yes 
No 
No 
No 
Yes 
Yes 
Yes 
No 
Yes 
No 

Fee system144  

1 
class 

3 
classes 

X 
X 
X 

X 
X 
X 

X 
X 

X 

X 

X 

X 

X 
X 

X 
X 

X 
X 
X 
X 
X 

X 
X 
X 

Austria 
Benelux 
Bulgaria 
Cyprus 
Czech Republic 
Germany 
Denmark 
Estonia 
Spain 
Finland 
France 
UK 
Greece 
Hungary 
Ireland 
Italy 
Lithuania 
Latvia 
Malta 
Poland 
Portugal 
Romania 
Sweden 
Slovenia 

144 
145 

146 

147 

148 

149 

Number of classes covered by the application/registration fee.  
In alignment with the CTM system opposition procedures were introduced by the recent amendments to 
the Bulgarian trade mark law that entered into force on 10 March 2011. See information provided under 
http://www.country-index.com/articles/article_103.pdf. 
Together  with  the  introduction  of  administrative  opposition  procedures  the  ex-officio  examination  of 
relative grounds was abolished. For source see footnote 145. 
Ex-officio examination of relative grounds is only available in relation to identical earlier trade marks 
which were applied or registered for identical goods and services. Accordingly, ex-officio examination 
would not cover similar trade marks and/or similar goods and services. 
In Estonia, oppositions are not handled by the IP office but by a specialised appeal body at the Ministry 
of Economic Affairs and Communications, see MPI report, p. 20, paragraph 1.45, third bullet point 
In Italy, however, the administrative cancellation procedure is available on the basis of a court request 
after a judgment concerning relative grounds. 

EN 

49 

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Slovakia 
OHIM 

X 

X 

Yes 
Yes 

Yes 
Yes 

Partly Yes150 
No 

X 
X 

Source: MPI study and OHIM data 

In terms of cost, because of the heterogenity of national trade mark systems, it is assumed that 
certain  national  offices  would  bear  variable  additional  costs  linked  to  further  harmonisation 
efforts in the short to medium term. Such costs and/or cost savings for each and every national 
trade mark system can only be calculated at national level in the light of the peculiarities of 
each trade mark system. However, most changes in the EU legislation would essentially bring 
more clarity, consistency and legal certainty without any significant impact on resources and 
structures (see Annex 2, section 9.2). While being in favour of reducing areas of divergence 
within  the  trade  mark  system  as  a  whole151,  national  offices  expressed  concerns  about  the 
speed  and  scope  of  harmonisation  of  procedural  rules152.  These  concerns  were  considered 
when assessing various options. 

The few changes that might have a significant impact on some national systems relate to the 
setting up of administrative opposition or cancellation procedures in the Member States where 
such  administrative  procedures  do  not  already  exist,  to  the  limitation  of  ex-officio 
examination  to  absolute  grounds  in  the  Member  States  also  examining  relative  grounds  on 
that basis, and to the introduction of a one-class-per-fee system (see for the three issues data 
provided in Figure 9).  

However,  the  cost  linked  to  the  setting-up  and  functioning  of  administrative  opposition  and 
cancellation  procedures  would  be  more  or  less  compensated  by  the  (parallel)  alleviated 
burden  for  national  Courts.  As  regards  the  proposed  abolition  of  ex-officio  examination  of 
relative grounds, it is reasonable to expect, from the experience of Spain and the UK153, that 
there would not be a huge rise in oppositions, hence, the savings, to the relevant IP offices, 
from  not  dealing  with  prior  rights  ex-officio,  would  (clearly)  outweigh  the  costs  in  dealing 
with  additional  oppositions.  Therefore,  in  the  long  term,  option  2b  would  contribute  to 
improving  the  efficiency  and  effectiveness  of  procedures  at  European  IP  offices  and 
eventually lead to significant cost savings. As such, it would also increase the competitiveness 
of national offices and allow them to extend the scope of cooperation with OHIM and other IP 
offices to the procedural areas concerned. Data supporting such costs and/or cost savings are 
however not available. 

Finally, the need to change the fee structure, so that the application fee covers only one class 
of goods or services in future154, leaves national authorities free to set the overall level of fees 
in such a manner as to avoid financial loss. Moreover, the anti-cluttering effect of the measure 
should  diminish  the  number  of  unecessarily  broad  specifications  of  goods  and  services 

150 
151 

152 
153 

154 

See the reasoning given for Czech Republic, footnote 147 above. 
Conclusions on  the future  trade  mark  review, document  referred  to  in  footnote 11, paragraph 14,  last 
bullet point. Also in contributions of national offices to the MPI study (not publicly available). 
MPI study, p. 232, para. 2.48 – 2.49. 
The background for the legislative changes in Spain and the UK concerning ex-officio examination of 
relative grounds including its economic and commercial relevance is described in detail in a reference 
study conducted by OHIM for the reviewers of the trade mark law of the People's Republic of China. 
The 
under 
is 
http://www.ipr2.org/storage/OHIM_Trademark_Examination_Systems_in_EU973.pdf. 
Such a move was explicitly supported by a number of national offices during the consultation phase, in 
particular  for  its  anti-cluttering  effect;  source:  contributions  of  national  offices  to  the  MPI  study 
(publicly not available).  

document 

available 

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50 

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covered by trade mark registrations, and thus reduce the conflict potential between them. This 
would strenghten the coexistence of the trade mark systems in the Union and ensure a more 
balanced and harmonious trade mark system overall.  

Further, linking the move to a one-class-per-fee system at OHIM level with a reduction of the 
basic  application  fee  would  not  put  coexistence  at  risk155.  Lowerering  the  application  fee, 
covering  one  class  proportionally  (so  as  to  be  € 775) 156,  but  leaving  the  price  of  a  CTM 
application covering three classes of goods or services unchanged, constitutes a necessary and 
fair adjustment to the reduced range of goods or services covered by a CTM application.  

It  is  true  that  this  further  fee  cut  would  bring  the  CTM  application  fee  level  closer  to  the 
application fee level of national offices for domestic filings. However, taking into acount that 
the  average  fee  to  be  paid  in  the  Union  for  a  national  application  covering  one  class  only 
accounts  for  € 143 157,  a  further  reduced  CTM  application  fee  would  still  keep  a  clear  and 
sufficient distance from the comparable fee at national level158. The aforesaid also applies if 
one  considers  the  highest  current  national  fees  for  one  class  applications  which  exceed 
€ 200 159.  Those  national  offices160  currently  charging  an  application  fee  including  three 
classes  of  goods  and  services161  would  be  free  to  follow  the  example  of  the  OHIM  and  of 
other  national  offices  and  to  adjust  their  fee  levels  accordingly  (by  reducing  the  basic 
application fee covering one class) and ensure a more favourable ratio compared to the OHIM 
basic application fee.  

6.2.1.3.  OHIM 

In  general,  the  approximation  of  laws  and  procedures  under  option  2b  (i.e.  using  the  CTM 
system as far as possible, and appropriate, as a benchmark for the alignment of national laws 
through  corresponding  amendments  to  the  TM  Directive  (see  above  under  6.1.1))  would  be 
clearly beneficial to OHIM. Such further harmonisation would also facilitate OHIM's task of 
supporting and coordinating efforts in converging practices and tools with national offices. To 
the  extent  that  the  harmonised  approach  would  not  match  with  current  OHIM  practice  and, 
thus,  have  an  impact  on  the  Office,  it  is  expected  that  any  potential  changes  would  be 
manageable,  provided  that  sufficient  time  (e.g.  coresponding  to  the  transposition  period  for 
Member States) is left for a smooth transition. 

Furthermore,  the  introduction  of  the  "one-class-per-fee"  system  requires  an  adjustment  of 
OHIM  fees  to  take  into  account  the  diminished  scope  of  trade  mark  protection  (one  class 
instead  of  three),  and  also  to  better  address  the  potential  risk  of  cluttering.  The  new  fee 
structure should follow some essential principles. First, it must be simple and transparent. The 

155 

156 
157 

158 

159 
160 

161 

The  level  of  OHIM  fees  is  generally  considered  to  be  one  of  the  key  elements  for  a  balanced 
coexistence  of  systems,  as  stressed  by  a  number  of  national  offices  in  their  contributions  to  the  MPI 
study (publicly not available). 
See in detail in figure 10 under next point 6.2.1.3. 
For  the  calculation  of  this  average  amount  the  application  fee  levels  of  all  national  offices  operating 
with an application fee covering one class of goods or services were considered. 
Annex  4  (section  9.4)  provides  an  exact  overview  of  the  trade  mark  application  and  registration  fees 
charged in the Union. 
This is the case for the application fee in Sweden (€ 209), the UK (€ 211) and Ireland (€ 247).  
As  also  reflected  in  figure  9,  this  is  the  case  for  the  offices  in  Austria,  Benelux,  Bulgaria,  Czech 
Republic Denmark, Finland, France, Germany, Hungary, Poland, Slovakia and Slovenia. 
The average amount of fees covering three classes is obviously higher than the average amount of fee 
for a one class application and consequently would come closer to a further reduced CTM application 
fee level. 

EN 

51 

   EN 

 
                                                 
model  should  be  the  same  for  both  application  and  renewal  fees,  i.e.  the  basic  fees  should 
contain one class, and a separate class fee should be paid as of the second class. Second, the 
class fees should be set so as to continue to dissuade against filing unnecessary classes. Third, 
the level of application/renewal fees should be adapted for the new fees to cover one and two 
classes. Fourth, the new fee structure should take due account of the principle of coexistence 
and  the  need  to  keep  a  sufficient  distance  from  comparable  national  fees.  Finally,  the  new 
system should be well balanced as regards the ratio between the application and renewal fees. 
It is considered that the renewal fee could be descreased to some extent to come closer to the 
level of the application fee. 

The  example  of  possible  fee  levels162,  as  shown  in  figure  10,  would  fulfil  all  the  above 
criteria. 

Figure 10: Current and potential OHIM fee structure 

Application fee 

Class fees 

2nd class 

3rd class 

4th and subsequent classes 

Total amounts  Application fee (1 class) 

Application fee (2 classes) 

Application fee (3 classes) 

Renewal fee 

Class fees 

2nd class 

3rd class 

-- 

-- 

4th and subsequent classes 

400 

Total amounts  Renewal fee (1 class) 

Renewal fee (2 classes) 

Renewal fee (3 classes) 

1350 

1350 

1350 

Current 

New 

900 (3 classes) 

775 (1 class) 

-- 

-- 

150 

900 

900 

900 

50 

75 

150 

775 

825 

900 

1350 (3 classes) 

1000 (1 class) 

100 

150 

300 

1000 

1100 

1250 

The impact of the above fee structure on OHIM budget is displayed in figure 11 (the effects of 
the fee model are included as of 2013). The calculations illustrate that the adjustment of fees 
would  lead  to  negative  budgetary  results  in  2013  –  2015  and  OHIM  budget  would  be  in 
balance  again  in  2016.  Taking  into  account  the  financial  reserve  that  the  Office  has 
accumulated  over  the  past  years  short-term  negative  budgetary  results  would  not  be  critical 
for OHIM operations, notably, as is the case below, if they were of temporary nature and not 
leading to long-term, structural deficits.  

Figure 11: Impact on OHIM budget – adjustment of fees 

Budgetary revenue 
Budgetary expenditure 
Operating result 
To be excluded from above result:  
Ad hoc expenditure 

2012 (m €)  
174,9 
202,0 
-27,1 

2013 (m €)  
160,7 
216,5 
-55,8 

2014 (m €)  
167,1 
223,0 
-55,9 

2015 (m €)  
177,8 
198,7 
-20,9 

2016 (m €)  
202,8 
186,5 
16,3 

32,4 

29,6 

35,3 

18,7 

6,2 

162 

These fee levels could be further combined with a discount to the CTM application fee for applicants 
using a common classification tool (see 6.4.1.3 and 6.5). 

EN 

52 

   EN 

 
 
 
 
 
 
 
 
 
 
 
                                                 
Operating  result  excluding  ad  hoc 
expenditure 

5,3 

-26,2 

-20,6 

-2,2 

22,5 

6.2.2. 

Impacts concerning the legal base for cooperation between IP offices 

6.2.2.1.  Trade mark users 

The objectives related to convergence of practices and tools at IP offices evidently follow the 
expectations  of  trade  mark  users  in  Europe.  The  users  expressed  their  support  for  closer 
cooperation  between  offices  to  enhance  harmonisation  of  practices  and  development  of 
common tools throughout the consultation process163. Therefore, it may be assumed that the 
selected  option  3,  which  aims  at  establishing  a  clear  and  obligatory  legal  framework  to 
facilitate  cooperation  between  all  IP  offices,  would  have  a  primarily  positive  effect  on  the 
European  users'  community,  as  quantified  below  under  6.4.1.1  in  relation  to  technical 
facilities  and  tools.  The  additional  benefits  include  making  the  basis  and  objectives  of 
cooperation between OHIM and national IP offices themselves more transparent.  

6.2.2.2.  National IP Offices 

Establishing the above legal framework for cooperation according to option 3 would result, in 
short to medium term, in an increased workload for all IP offices in the EU. In the medium to 
long term, this option would lead to significant gains in efficiency and cost (see example of 
the Euroclass tool in 6.4.1.2). In spite of the need to deal with new projects and the increased 
workload it is considered that national offices are already prepared for such a development. 
Many cooperation activities aimed inter alia at developing common tools have already been 
successfully  launched,  in  particular,  in  the  context  of  the  Cooperation  Fund.  Therefore, 
national offices would be able to build on this experience and further develop and extend the 
existing  framework  which  would  certainly  contribute  to  a  smooth  transition.  During  the 
consultation  phase164,  all  national  offices  strongly  supported  the  incentive  for  cooperation 
with  OHIM.  They  confirmed  their  involvement  in  certain  forms  of  cooperation  which  they 
consider important and worth maintaining, but in need of further improvement. 

6.2.2.3.  OHIM 

Option  3  would  lead  to  enlargement  of  the  current  scope  of  common  projects  with  national 
offices. This might imply an increase in staffing and other needs due to the management of 
these projects and thus re-deployement of existing workforce and/or some new recruitment at 
OHIM.  Based  on  the  experience  so  far  with  cooperation  activities,  notably  the  Cooperation 
Fund,  the  Office  clearly  demonstrated  its  capacity  to  deal  effectively,  and  within  a  short 
timeframe,  with  such  large  scale  projects.  Given  the  largely  positive  budgetary  situation  of 
OHIM, no difficulties for the Office would therefore be expected as regards the managing of 
new  tasks  under  option  3.  At  the  same  time,  the  Office  may  also  benefit  from  the  common 
tools, by increasing its efficiency and decreasing cost (see 6.4.1.3). 

163 
164 

MPI study, p. 33, para. 2.11 – 2.13; Annex IV to MPI study (as referred to in footnote 27) 
MPI study p. 23, chapter II. 

EN 

53 

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6.3. 

Cooperation capacity: comparison of options 

6.3.1.  Technical facilities – comparison of options 

Under  option  1,  it  would  be  left  for  national  offices  to  procure  and  develop  the  necessary 
technical  means.  This  option  corresponds  to  the  status  quo,  where  technical  capabilities  are 
the result of resource constraints and policy decisions at national level, in view of domestic 
priorities, which may not necessarily drive offices towards increased automation. 

Therefore,  it  is  clear  that  the  first  option  does  not  meet  the  set  objectives.  To  meet  the 
objectives,  there  would  have  be  some  conditions  in  the  way  offices  are  equipped.  While 
option  2  would  only  offer  offices  the  possibility  of  enhancing  their  technical  capabilities 
within  a  framework  of  voluntary  cooperation,  option  3  would  ensure  that  all  offices  benefit 
and commit to the development of common tools and databases.  

indexing  schemes 

Interoperability requires, as a starting point, common standards in areas such as development 
of  new  filing  tools,  use  of  teleconference  equipment,  or  sharing  of  search  tools  built  using 
common  data 
(e.g.  TMview).  The  use  of 
videoconferencing facilities, for example, illustrates this. Options 1 and 2 would for example 
not necessarily ensure a large degree of interoperable equipment between offices, each being 
free to adopt this or that solution. This may render travelling between European capitals more 
frequent. Option 3 would, however, articulate a convergent solution in the use of equipment 
that can save monies and reduce the climate impact of hundreds of business trips among the 
different offices of the network.  

for  pooling  data 

Figure 12: Objective 3 - Technical capacity building at national TM offices 

Options 

Assessment criteria 

Providing regulatory incentive 

Effectiveness  
(achievement of 
objectives) 

Efficiency 

Overall 
assess 
ment 

Greater security for obtaining 
facilities 

Time 
needed 

Overall 
cost 

Proportio 
nality 

0 

? 

++ 

0 

? 

+ 

0 

+ 

+ 

0 

+ 

+ 

0 

? 

+ 

1. Baseline 

2. optional access to tools 

3. mandatory access to tools 

6.3.2.  Funding  

6.3.2.1.  Financing in general – comparison of options 

Under  option  1,  the  experience  so  far  with  regard  to  bilateral  and  multilateral  cooperation 
projects165,  as  well  as  the  Cooperation  Fund,  has  revealed  that  some  national  offices  would 
not be able to invest any funds in cooperation activities. At present, this difficulty is further 
accentuated by the on-going financial crisis and is not expected to improve in the near future. 

165 

See Annex 6 (section 9.6). 

EN 

54 

   EN 

 
 
                                                 
As  a  result,  it  would  be  impossible  for  some  Member  States  to  take  part  in  cooperation 
schemes  and,  accordingly,  this  option  would  not  provide  an  effective  response  to  the 
identified objectives. 

Alternatively, funding from the EU budget (option 2) would ensure the implementation of the 
cooperation  objectives.  At  the  same  time,  however,  there  would  be  a  number  of  obstacles 
which  would  render  this  option  very  difficult  if  not  unfeasible.  In  particular,  it  would  be 
highly unlikely that (i) a substantial contribution from the EU budget could be made available, 
considering the current budgetary restrictions, and that (ii) any new posts could be allocated to 
DG MARKT in order to manage the programme given the zero growth policy. In the light of 
this, even if such a programme was created, it is far from certain that the entire sum needed 
would be made available. 

By contrast, common cooperation activities of national offices and OHIM could be financed 
from  the  OHIM  budget  (option  3).  Over  the  past  years,  the  Office  has  accumulated  a 
substantial surplus, part of which is already used for cooperation projects with national offices 
within  the  framework  of  the  Cooperation  Fund.  Moreover,  OHIM  annual  budgetary  results 
constantly exceed, by several million, the operational expenditure of the Office (see Figure 13 
below). Accordingly, the new cooperation activities could either be financed from the annual 
income and/or from the existing surplus, thus ensuring the availability of sufficient financial 
means.  At  the  same  time,  OHIM  could  build  on  its  extensive  experience  in  managing  large 
cooperation projects in the field of trade marks and designs, including employment of highly 
qualified  staff,  as  well  as  on  the  existing  networks  with  national  offices.  This  would  be  a 
further added value of option 3, compared to options 1 and 2. 

Figure 13: OHIM annual budgetary results (‘000 €) 

Source: OHIM 

It  is  estimated  that  the  cost  of  cooperation  activities  between  OHIM  and  national  offices 
would amount to € 17 – 20 million a year 166. This is equivalent to about 10% of OHIM yearly 
income.  The  forecasts  featuring  in  figure  17  in  section  6.4.2.3  ("Impact  on  OHIM  budget  – 
funding of cooperation activities") show that option 3 would not cause an imbalance in OHIM 
budget. 

166 

Source: OHIM; for more details refer to Annex 6 (section 9.6). 

EN 

55 

   EN 

 
 
                                                 
In addition, one should keep in mind that the cooperation activities constitute mutual services 
of 'Community' nature. They do not only reflect the coexistence between the Community and 
the national trade mark systems but contribute to ensuring their complementary relationship 
and necessary interoperability, on which the European trade mark system as a whole depends. 
As already pointed out, the development and maintenance of efficient and all-encompassing 
common  tools  and  databases,  such  as  the  online  search  facilities  for  trade  marks  of  all  IP 
offices in the EU or the required common seniority database167, entirely depend on the active 
participation  of  all  national  IP  offices.  Without  the  contribution  of  the  latter,  inter  alia  by 
providing and permanently updating the  relevant  data  sourced  from their national registries, 
these common projects are neither feasible nor sustainable. 

Obviously, under this option, safeguard and control mechanisms would have to be introduced 
in order to ensure that the relevant OHIM funds are effectively used by the national offices for 
the specific earmarked purposes and subject to compliance criteria. This could be achieved, 
for example, by using grants to finance the common activities. This issue is addressed more 
specifically  in  the  following  further  analysis  of  this  option  as  regards  the  mechanism  and 
source of funding within the OHIM budget.  

Figure 14: Objective 4 –– Secure long term financing for cooperation activities 

Options 

Assessment criteria 

Securing long term financing 

Effectiveness  
(achievement of 
objectives) 

Efficiency 

Overall 
assess- 
ment 

Greater security of financing 

Time needed 

Overall cost 

1. Financing from MS 

2. Financing from EU budget 

3. Financing from OHIM budget 

0 

? 

++ 

0 

? 

++ 

0 

0 

0 

0 

- 

++ 

6.3.2.2.  Financing from the OHIM budget – comparison of sub-options 

As the selected option 3 implies the establishment of a financing mechanism using the budget 
of  the  Office,  the  following  chapter  provides  its  further  analysis,  notably  as  regards  the 
mechanism and source of funding within the OHIM budget.  

The  analysis  also  takes  due  account  of  the  conclusions  of  the  joint  meeting  of  the  OHIM 
Administrative Board and Budget Committee (ABBC) in September 2008168, endorsed by the 
Competitiveness  Council  in  May  2010169,  that  OHIM  should  share  part  of  its  renewal  fees 
with  national  offices  "for  the  purposes  closely  related  to  the  protection,  promotion  and/or 

167 
168 

169 

For further examples see figure 5 in chapter 3.2.3 above. 
Conclusions of the OHIM Administrative Board and Budget Committee of 18 and 19 September 2008 
as  regards  agenda  item  "How  to  better  balance  OHIM's  budget  –  the  way  forward",  available  at: 
http://oami.europa.eu/ows/rw/resource/documents/OHIM/institutional/ABBC/summary_joint-meeting-
18-09-2008_en.pdf. 
See reference in footnote 11 

EN 

56 

   EN 

 
 
 
                                                 
enforcement/combat counterfeiting of trade marks". The Council called on the Commission to 
include in the revision of the CTM Regulation "the creation of a legal basis for distributing an 
amount  equivalent  to  50  %  of  OHIM's  renewal  fees  to  the  National  Offices  in  accordance 
with  fair,  equitable  and  relevant  distribution  criteria,  to  be  defined  in  a  way  which  would 
guarantee, inter alia, a minimum amount for each Member State, as well as the introduction of 
appropriate  mechanisms  which  have  due  regard  to  the  financial  arrangements  applicable  to 
individual  National  Offices,  to  ensure  that  these  funds  will  be  available  to  the  National 
Offices  and  will  be  used  for  purposes  closely  related  to  the  protection,  promotion  and/or 
enforcement of trade marks, including combating counterfeiting". 

Funding mechanism 

There  are  two  possible  funding  models.  On  the  one  hand,  contributions  can  be  allocated  as 
lump  sums  on  the  basis  of  agreed  distribution  criteria  (sub-option  3.1a),  on  the  other,  the 
funding mechanism can be project driven and based on grants (sub-option 3.2a).  

Sub-option  3.1a  would  first  require  the  creation  of  a  distribution  key.  There  are  several 
alternatives regarding how to distribute the available sum among national IP offices. Either to 
divide  the  overall  amount  into  equal  shares  of  which  each  office  would  receive  one  or  to 
differentiate the individual share for each office according to a quantitative criterion, such as 
the number of trade mark applications and/or registered trade marks, size of the country, its 
GDP, votes in the Council etc. Moreover, these two basic options could also be proportionally 
combined.  The  MPI  study  indeed  suggested  to  combine  both  approaches  and  to  base  the 
distribution  key  on  two  different  elements170.  Should  the  option  3.1a  be  retained  further 
consideration will be given to possible allocation criteria.  

Under  this  option,  the  amount  available  for  cooperation  in  a  given  year  would  then  be 
distributed  among  national  offices  in  accordance  with  the  agreed  key.  The  concrete 
contributions would be paid in exchange for offices' participation in cooperation activities but 
their amount would not depend on the cost of these projects, i.e. there would not be a direct 
link  between  the  cost  of  the  activity  and  the  money  paid.  The  model  would  also  imply  the 
establishment  of  precise  compliance  criteria  (e.g.  key  performance  indicators)  and  control 
mechanisms  to  check  that  funds  are  used  for  the  earmarked  purposes.  In  case  of  failure, 
payments could be (partly or fully) suspended or annulled.  

Sub-option 3.2a would follow a grant procedure. After the decision on projects to be run and 
financed during a given period, the terms for participation (including  financing, compliance 
criteria  and  control  mechanisms)  would  be  defined  in  accordance  with  the  Financial 
Regulation.  The  concrete  contributions  to  national  offices  would  be  determined  along  with 
these terms and be in relation with the cost of the respective cooperation activity.  

In  relation  to  sub-option  3.2a,  it  was  also  considered  whether  grants  would  be  the  most 
appropriate instruments or whether the financial contributions could follow another procedure 
of  the  Financial  Regulation.  The  analysis  showed  that  public  procurements  could  also  be 
envisaged  for  some  cooperation  projects;  however,  given  the  objectives  to  be  achieved  and 
the  nature  of  these  activities,  financing  via  grants  appears  more  suitable  overall.  Such  a 

170 

The  MPI  believed  that  the  key  should  be  composed  of  a  "minimum  amount"  distributed  on  an  equal 
share to all Member States and a "proportionate amount", based on the numbers of national trade mark 
applications in that respective country. The amounts dedicated for (i) and (ii) would represent each 50% 
of the overall available sum. 

EN 

57 

   EN 

 
                                                 
conclusion is consistent with the EU approach on financing of comparable common actions 
involving national authorities in the area of European statistics171.  

Comparing both options, the first difference is the accuracy of the payment. A scheme based 
on  a  distribution  key  (option  3.1a)  would  be  more  rigid  and  therefore  less  suitable  to 
appropriately cover the specific funding needs of each IP office. It might imply some risk that 
national offices would not receive the required funding, inasmuch as they could get less than 
needed or vice versa. 

Furthermore,  the  procedures  would  be  substantially  different.  A  model  based  on  grants 
(option  3.2a)  would  follow  a  standard  funding  procedure,  ensuring  simple  processes,  sound 
financial  management  of  EU  money  as  well  as  a  high  degree  of  transparency.  The  grant 
procedure  provides  for  flexible  arrangements  to  meet  the  funding  needs.  For  example,  for 
simplification  purposes  grants  awarded  to  the  national  offices  may  take  the  form  of  lump 
sums,  in  particular  to  cover  costs  incurred  by  the  national  offices  while  participating  in 
cooperation projects related to existing databases, search tools etc. In option 3.1a, the funding 
mechanism  would  need  to  be  created  which  would  not  only  render  the  whole  exercise  very 
complicated but could also cast doubt upon its processes and methods.  

Figure 15: Use of OHIM budget – funding mechanism - comparison of options 

Options  related  to  the  financing  from 
OHIM budget  

Funding mechanism 

Effectiveness 
(objective: 
securing long 
term funding)

Efficiency 

Overall 
assessment 

Accuracy of 
funding  

Complexity and 
transparency 

1a. Lump sums based on distribution key 

2a. Project driven funding based on grants 

+/- 

++ 

- 

++ 

- 

+ 

- 

++ 

Source of funding within OHIM budget 

There are three sub-options to be considered as possible sources for funding: financing from 
OHIM operational budget in general, funding from a specific OHIM income and further use 
of the accumulated financial reserve. 

Firstly,  cooperation  activities  could  be  financed  from  OHIM's  general  budget  as  any  other 
operational  expenditure  of  the  Office  (sub-option  3.1b).  In  such  a  case,  the  financial  needs 
would  be  covered  by  OHIM  annual  income  generated  from  fees  and  other  revenue,  as 
forecasted  when  adopting  the  budget.  The  final  expenditure  would  depend  on  concrete 
cooperation projects in a given year. 

Alternatively,  funding  could  come  from  a  specific  OHIM  revenue  stream,  generated  in  the 
previous  budgetary  year,  for  example,  the  CTM  renewal  fees,  as  mentioned  in  the  2010 
Council Conclusions (sub-option 3.2b). Under such an option, the available funds would be 
known  upfront  and  the  concrete  cooperation  activities  for  the  coming  year,  in  particular,  as 
regards development of new projects, could be shaped and decided accordingly. 

Finally,  it  could  be  envisaged  that  the  cooperation  projects  would  be  financed  from  the 
accumulated  OHIM  surplus  (sub-option  3.3b),  e.g.  by  extending  the  Cooperation  Fund, 

171 

See COM(2011) 928 final and Regulation (EC) No 223/2009 

EN 

58 

   EN 

 
                                                 
currently allocated with € 50 million. This option might be suitable – for the time being – for 
cooperation initiatives aimed at development of new tools and/or the launch of new projects, 
but would be inappropriate for long-term financing of running costs. Moreover, in spite of the 
currently high volumes of OHIM's financial reserve these funds are expected to be used for 
other  purposes172  and,  in  general,  would  not  be  able  to  serve  as  a  never-ending  source  of 
funding. As a result, the sub-option 3.3b would not meet the identified objectives with a view 
to achievement of a proper, stable and long-lasting cooperation capacity of national IP offices 
and OHIM and was excluded from further analysis. 

Comparing sub-options 3.1b and 3.2b means confronting two approaches that imply either an 
ex-ante or an ex-post calculation. In option 3.1b, the upfront selection of cooperation projects 
would  determine  the  financial  envelope  in  the  year  to  come;  in  option  3.2b,  the  envelope 
would be known in  advance (being a part of OHIM revenue  collected  in  the previous year) 
and the scope of common activities would be shaped in accordance with the available money. 
As a result, option 3.2b could imply a risk of inappropriate and/or excessive funding. It might 
lead to situations where the scope of cooperation activities is not driven by cooperation needs 
but  the  amount  of  money  available.  This  could  be  an  incentive  to  artificially  inflate  the 
common activities, by adding further projects with no or limited added value, only to justify 
the use of all available funds.  

Another critical feature of sub-option 3.2b lies in assigning a specific part of OHIM income to 
a  specific  spending.  First,  OHIM  budget  is  not  based  on  an  "assigned  revenues"  system  in 
which the income from concrete fees would be spent for particular expenditures. Option 3.2.b 
would  hence be  in contradiction  with  this budgetary  principle. Second, there is no pertinent 
link between cooperation with national offices and OHIM renewal fees (nor any other OHIM 
income) except for the fact that the estimated cost of cooperation would broadly correspond to 
50%  of  renewal  fees'  income.  The  choice  of  a  specific  fee  income  appears  therefore  fully 
arbitrary and not justified in the given context. Third, using an OHIM fee to fund activities of 
national offices might be perceived as an (inadmissible) tax levied on companies. Fourth, as 
repeatedly highlighted by user representatives, if the renewal fees were tightly associated with 
a permanent expenditure it would be very unlikely that these fees would decrease in future. 
Last but not least, combined with the above option 3.1a (funding based on a distribution key), 
the  option  3.2b  could  be  interpreted  as  an  "automatic"  entitlement  of  national  IP  offices  to 
receive  a  share  of  OHIM  renewal  fees  which  has  been  seen  very  critically  from  the 
perspective of EU financial and budgetary rules. 

Finally, due consideration was given to the impact of both options on the OHIM budget. In 
this regard, option 3.1b based on budgetary forecasts appears slightly riskier than option 3.2b 
which would operate with actual financial results, minimising thus the risk of putting at stake 
OHIM budgetary equilibrium. Moreover, a large volume of cooperation projects under option 
3.1b  could  also  have  a  major  impact  on  OHIM  budgetary  results.  Both  risks  could  be 
mitigated by setting a cap (a limit) for yearly spending on cooperation. Taking into account 
the  estimated  cost  of  cooperation  activities  (€ 17  –  20  million  a  year 173),  it  might  be 
appropriate to set this cap at 10% of OHIM annual income which (i) would match with the 
financial  needs  for  cooperation  and  (ii)  would  be  bearable  by  the  Office  while  keeping  its 
budget in balance (see figure 17 in section 6.4.2.3).  

172 
173 

See under 6.4.2.3. as regards projects under the OHIM strategic plan. 
Source: OHIM; for more details refer to Annex 6. 

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Figure 16: Use of OHIM budget – source of funding – comparison of options 

Options  related  to  the  financing  from 
OHIM budget  

Source of funding 

Effectiveness 
(objective: 
securing long 
term funding)

Efficiency 

Overall 
assessment 

Accuracy of 
funding  

Relevance 
(source vs. 
purpose)  

Risk for 
OHIM 
budget 

1b. Funding from operational budget 

2b. Funding from specific income (renewal 
fees) 

3b.  Use  of  surplus  (increase  in  allocation 
to the Cooperation Fund) 

++ 

++ 

-- 

+ 

- 

+ 

0 

- 

0 

+/- 

0 

0 

+ 

0 

- 

Taking  into  account  all  above  considerations,  it  appears  more  appropriate  to  finance  the 
cooperation  activities  from  the  OHIM  general  budget  and  not  to  draw  a  link  to  a  particular 
OHIM income and to its actual revenue. 

Combined effect of selected sub-options 

Based  on  the  above  comparison,  combined  sub-options  3.2a  and  3.1b  appear  fittest  to 
achieve  the  identified  objectives.  Furthermore,  it  is  believed  that  these  options  would  be  in 
line with the May 2010 Conclusions of the Competitiveness Council. The approach suggested 
by  the  Council  was  carefully  analysed  and  accommodated,  where  necessary  for  legal  and 
budgetary  reasons,  while  fully  preserving  the  aim  of  the  future  financial  scheme.  Also  the 
allocation  of  funds  remains  consistent.  As  mentioned  above,  it  is  estimated  that  the  cost  of 
cooperation  activities  between  OHIM  and  national  offices  would  amount  to  € 17  –  20 
million174 a year which corresponds to the "cap" to be set at 10% of OHIM annual income. At 
the  same  time,  this  amount  is  also  equivalent  to  50%  of  income  from  trade  mark  renewal 
fees175. 

Finally,  having  discarded  the  financing  from  a  specific  OHIM  income  (renewal  fees), 
including  the  need  to  establish  a  distribution  key,  the  Commission  services  did  not  further 
consider suitable (relevant, fair and equitable) distribution criteria. 

6.4. 

Cooperation  capacity:  impact  of  the  selected  option  on  stakeholders  and 
mitigating measures 

6.4.1.  Technical facilities/tools 

Convergence in the way offices use and have access to technical facilities, from examination 
tools to conference equipment is expected to produce a positive impact on stakeholders, in as 
much as technology creates efficiencies in labour intensive processes such as those involved 
in IP rights examination and registration.  

174 
175 

See Annex 6 (section 9.6) 
It  is  expected  that  the  income  from  OHIM  renewal  fees  should be  close  to  € 40  million  a  year.  Over 
years, the renewal rate remains stable at 55%. 

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6.4.1.1.  Trade mark users 

Users  can  expect  to  face  convergent,  technologically  updated  IT  solutions,  where  the  same 
user experience is enhanced thanks to a certain degree of harmonised solutions, both at “front 
office” and at “back office” level. Common tools can enhance cooperation in the way offices 
serve  the  interests  of  users,  such  as  for  example,  the  way  technology  can  improve 
performance indicators from offices cooperating in developing and installing common e-filing 
tools. Moreover, the fact that users when dealing with IP offices at national and Community 
level  are  using  common  tools  will  result  in  increased  accessibility,  enhanced  efficiency  and 
reduced costs. In their contributions to the MPI study, user organisations were unanimous that 
all offices should further improve and harmonise their use of technology, especially as regards 
IT tools176. 

It is important to recall in this context the very telling and positive outcome of the cost benefit 
analysis (CBA) OHIM conducted in relation to the cooperation projects financed through the 
Cooperation Fund (see specified in more detail in Annex 8 ). This CBA indicated, that over a 
period of 10 years (starting from the first investment), the investment in the CF projects could 
yield in excess of € 935 million in benefits for bo th users and IP offices. These benefits were 
monetised based on benefits that are most valuable for end users such as reduced processing 
times or greater predictability in the service received.  

6.4.1.2.  National offices 

IP  Offices  can  benefit  from  enhanced  cooperation  thanks  to  improved  access  to  IT 
development.  Individually  developed  systems  do  not  generate  the  same  economies  of  scale 
that  cooperation  in  a  large  development  project  brings.  This  view  is  broadly  shared  by 
national offices who consider the modernisation of IT facilities and tools as one of the main 
areas where cooperation should be further improved177. As already mentioned in the previous 
chapter  in  relation  to  users,  the  potential  benefits  to  national  offices  were  impressively 
substantiated by the relevant CBA, conducted by OHIM in connection with the Cooperation 
Fund, an explanation of which is to be found in Annex 8. 

The  expected  gains  in  efficiciency  and  cost  is  demonstrated  by  the  example  of  a  common 
database for classification of goods and services ("Euroclass")178, being developed under the 
Cooperation Fund framework. The tool contains a comprehensive list of pre-validated terms 
for  goods  and  services  which  are  guaranteed  to  be  accepted  when  filing  a  trade  mark 
application.  Accordingly,  when  the  Euroclass  tool  is  used,  the  IP  office  does  not  need  to 
examine  the  terms  describing  the  goods  and  services  for  which  trade  mark  protection  is 
sought. This significantly reduces the administrative examination and can considerably speed 
up the registration procedure. 

6.4.1.3.  OHIM 

There can be no doubt that this option would be benefitial also to OHIM. The possibility for 
OHIM to succesfully play a supporting and coordinating role in achieving and ensuring a true 

176 
177 
178 

MPI study, p. 33, para. 2.13; Annex IV to the MPI (as referred to in footnote 27). 
For example, MPI study, p. 24. 
In 2012, the Euroclass database was available to users of OHIM and of 8 national offices who adopted 
the harmonised list of goods and services (currently containing 90.000 terms). The remaining national 
offices are expected to join by the end of 2013. 

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complementarity  and  interoperability  between  the  CTM  and  national  trade  mark  systems 
essentially  depends  on  the  use  of  standard  technological  facilities  shared  by  all  national 
offices. 

The example of the common classification database, as mentioned under 6.4.1.2., will have an 
additional positive effect on OHIM. Since the database aims to contain the same set of terms 
in all official EU languages, it will be able to automatically translate the goods and services 
for  a  given  CTM  application.  For  OHIM,  obliged  to  publish  CTM  applications  in  all  EU 
languages (Art. 120 CTMR), this would mean major savings in terms of translation costs and 
time.  Accordingly,  a  more  frequent  use  of  the  classification  tool  could  be  expected  and/or 
promoted. For example, the significant cost and efficiency gains could be taken into account 
when  adjusting  OHIM  fees.  It  could  be  envisaged,  for  instance,  that  database  use  could  be 
encouraged  (and  rewarded)  by  a  discount  to  the  application  fee  (e.g.  € 50 179;  for  details  see 
chapter 6.5).  

6.4.2.  Financing of cooperation 

The  following  sections  analyse  the  impacts  of  the  selected  option  3  (financing  from  OHIM 
budget)  on  various  stakeholders,  namely  users  of  national  and  CTM  systems,  national  IP 
offices and OHIM. 

6.4.2.1.  Trade mark users 

As stated above under 6.2.2.1 in relation to the necessary regulatory incentive for cooperation, 
the  pursued  objectives,  related  to  convergence  of  practices  and  tools  at  IP  offices,  clearly 
follow  the  expectations  of  trade  mark  users  in  Europe.  However,  given  the  financial 
implications  of  option  3,  some  consideration  must  be  given  to  possible  side  effects  of  this 
solution. 

During the 2010/2011 consultation exercise, the idea of distributing a part of OHIM income to 
national offices was repeatedly tested with users' representatives180. Most user organizations 
maintain  that  any  transfer  of  funds  should  not  be  automatic  but  should  be  substantiated  by 
appropriate tasks which benefit the users. Examples of such tasks coincide with lacunae in the 
current  system  identified  as  part  of  the  problem  definition,  for  example,  maintenance  of 
seniority databases by the national offices, developing e-tools and e-capabilities. These users' 
expectations  largely  meet  the  goals  of  the  selected  options.  As  described  above,  the 
contribution to national offices through OHIM financial contribution would indeed enable the 
financing of specific cooperation projects and initiatives. 

The effect of additional expenditure from the OHIM budget on the overall financial needs of 
the Office and on its fee structure should also be assessed. The analysis carried out in section 
6.4.2.3  clearly  demonstrates  that  the  Office  would  be  able  to  take  on  these  additional 
budgetary obligations without any major difficulties. Accordingly, there is no risk that OHIM 
income  (i.e.  fees  paid  by  users  of  the  system)  would  need  to  increase  in  order  to  cover  this 
spending. 

179 

180 

Combined  with  the  new fee  structure,  following  the  introduction  of  the  one-class-per-fee  system  (see 
6.2.1.3),  the  application  fee  (covering  one  class)  with  the  discount  for  using  the  classification  tool 
would be € 725, the fee covering two classes € 775 and three classes € 850. 
See MPI study, p. 34, paragraph 2.17; Annex IV to the MPI study: Statements of User Organizations – 
contributions  from  AIM,  APRAM,  ECTA,  EFPIA,  FICPI,  ITMA  and  VFA.  The  issue  was  also 
discussed at the Commission's hearing with user organisations on 26 May 2011. 

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6.4.2.2.  National IP offices  

The fact that sufficient funds would be provided to finance the cooperation activities would 
allow national IP offices to participate in and commit to common cooperation projects  on a 
long-term basis. 

In  the  context  of  this  option,  the  impact  of  the  new  funding  mechanism  for  cooperation 
activities  on  the  financing  of  national  offices  also  has  to  be  assessed.  Indeed,  some 
representatives of users have expressed their concerns that these funds would disappear within 
the budget of the respective national office or in the general budget of that Member State, in 
the  case  of  financially  non-autonomous  offices,  and  never  be  used  for  harmonisation 
projects181. However, these concerns might be mitigated by (i) the legal obligation of national 
offices to take part in cooperation activities and (ii) clear earmarking of these funds, both in 
the  legislation  and  when  it  comes  to  their  implementation  (following  the  grant  procedures), 
including the establishment of effective monitoring mechanisms. 

6.4.2.3.  OHIM 

The structured and long term financing of the cooperation activities would have a significant 
impact on OHIM budget. Annex 6 (section 9.6) deals in detail with the particular aspects of 
such a financing mechanism, notably the estimation of the cost of cooperation activities. 

Based  on  these  calculations,  the  impact  on  the  overall  OHIM  budget  can  be  assessed.  The 
below  figure  17  shows  the  estimates  for  OHIM  operational  revenue  and  expenditure.  When 
evaluating the capacity of OHIM to finance cooperation with national offices, the following 
should be considered. First, the amount of 10% of OHIM annual income is reduced from the 
respective annual budgetary result as of 2015 when the mechanism could be first put in place, 
following  the  adoption  of  the  amendment  to  the  CTM  Regulation.  Second,  there  will  be  a 
number  of  ad  hoc  costs,  related  to  the  implementation  of  OHIM's  strategic  plan,  e.g. 
construction of a new building, and of the Cooperation Fund which can be covered from the 
accumulated surplus182. Accordingly, these specific investments should not be included when 
considering the impact of the new funding mechanism on OHIM operational budget and have 
been  excluded  from  the  below  figure.  Third,  as  regards  the  Observatory,  transferred  to  the 
Office as of 2012, its running cost has been fully integrated in the forecasted expenditure.  

Figure 17: Impact on OHIM budget – funding of cooperation activities 

Budgetary revenue 
Budgetary expenditure 
Operating result 
To be excluded from above result:  
Ad hoc expenditure 
Operating  result  excluding  ad  hoc 

2012 (m €)  
174,9 
202,0 
-27,1 

2013 (m €)  
180,7 
216,5 
-35,8 

2014 (m €)  
187,7 
223,0 
-35,3 

2015 (m €)  
200,2 
198,7 
1,5 

2016 (m €)  
231,2 
186,5 
44,7 

32,4 
5,3 

29,6 
-6,2 

35,3 
0,0 

18,7 
20,2 

6,2 
50,9 

181 

182 

Accordingly,  as  part  the  study,  the  contractor  analysed  the  financial  status  in  interviews  with  the 
national  offices  and  discussed  possible  accounting  mechanisms:  MPI  study,  p.  5,  29  –  30  and  263. 
Contributions of national offices to the MPI study (publicly not available). 
In  budgetary  terms,  this  spending  will  be  part  of  a  single  expenditure  heading  together  with  the 
"regular" operational expenditure. As a result, the operating result (annual income/annual expenditure) 
is  expected  to  be  negative  for  a  couple  of  years  –  see  line  4  in  figure  17.  However,  given  the 
accumulated surplus (which appears in the budget on the revenue side as "title 3: balance from previous 
financial year") the total budget will remain balanced. 

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expenditure 
10% of annual income 
Result  after  deduction  of  10% 
income to finance cooperation 

5,3 

-6,2 

0,0 

0,2 

27,8 

-20,0 

-23,1 

It  should  be  noted  that  the  launch  of  the  funding  scheme  in  2015  coincides  with  the 
Cooperation Fund investment. This coincidence is explained by the fact that the Cooperation 
Fund  investment  cycle  is  estimated  to  conclude  in  2015,  when  the  last  phases  of  the 
programme  cycle  are  exhausted,  namely  (i)  the  integration  of  tools  developed  in  2012  and 
2013 in the IP offices and (ii) the final development and integration of the last work packages 
of  the  software  programme.  At  the  same  time,  Cooperation  Fund  projects  that  have  been 
implemented  in  the  IP  offices  by  2014/2015  will  already  require  maintenance  expenditure 
from  that  years  onwards.  It  is  crucial  that  the  contribution  to  the  financing  of  the  ongoing 
operations  of  the  Cooperation  Fund  projects  is  in  place  as  soon  as  the  investment  phase  of 
each project is finished. Otherwise, there is an acute danger that the projects would wither and 
die,  thus  depriving  users  and  national  offices  of  the  very  significant  benefits  outlined  in 
Annex 8. 

It can be concluded that the OHIM budget would be able to take the additional expenditure 
related to cooperation with national offices from its annual operational results. Accordingly, 
option 3, sub-options 3.2a and 3.1b, would not cause an imbalance in OHIM budget. 

6.5. 

Interaction between selected options 

The selected options will complement and reinforce each other. The further approximation of 
trade mark laws and  procedures will  create even  more  favourable  framework  conditions  for 
fruitful  cooperation  between  OHIM  and  national  IP  offices.  This  enhanced  cooperation 
between  OHIM  and  national  IP  offices  in  the  core  business  will  also  profit  from  the 
cooperation  framework  to  be  set  up  in  the  context  of  the  takeover  of  the  European 
Observatory  on  Counterfeiting  and  Piracy  by  OHIM  (and  vice  versa).  Moreover,  the  new 
cooperation scheme will help to remove persisting divergences between IP offices in Europe 
which could not, for practical reasons, be achieved when harmonising national laws by means 
of a legal instrument. 

Overall,  the  retained  options  will  also  enhance  the  complementary  relationship  between  the 
CTM and the national systems. As confirmed by all stakeholders in a remarkably unanimous 
manner,  the  principle  of  coexistence  between  Community  and  national  trade  mark  rights  is 
fundamental and necessary for the efficient functioning of a trade mark regime that meets the 
requirements of companies of different sizes, markets and geographical presence. The use of 
both systems is continuous and high, as demonstrated by the filing statistics at both national 
offices and OHIM183, as well as the number of trade marks in their registers184. While SMEs 
have become important users of the CTM system185 they still regularly tend to prefer national 
systems186.  Indeed,  for  SMEs  and  local  companies,  national  trade  marks  would  generally 

183 

184 

185 
186 

In  2011,  yearly  filings  amounted  to  550.000  altogether  –  OHIM  received  over  105,000  CTM 
applications  and  Member  States‘  offices  about  435,000  national  trade  mark  applications.  See  also 
section 3.1.2, footnotes 37 and 38. 
There are 9,8 million of trade marks in registers of European IP offices – almost 1 million of CTMs at 
OHIM  and  almost  9  million  of  national  trade  marks  at  Member  States‘  IP  offices  (2013).  See  also 
section 3.1.2, footnotes 37 and 38. 
As regards new CTM owners, SME largely prevail; see figure 1 in section 3.1.4. 
E.g. MPI study, p. 234. 

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better  meet  their  business  needs.  Moreover,  while  the  CTM  would  be  a  natural  choice  for 
companies with activities at the scale of the EU, for those of them who may not obtain a CTM 
due to its unitary character187 national trade marks provide the indispensable alternative. The 
existence  of  26  trade  mark  registers,  covering  different  geographical  areas,  increases  the 
accessibility of and the opportunity for IP protection. Also, the limitation of the geographical 
scope  diminishes  the  vulnerability  of  trade  marks  registered  locally  vis-à-vis  subsequent 
applications inasmuch as any trade mark has to be genuinely used (in the relevant territory) to 
enjoy legal protection. Accordingly, the duality of the trade mark system in Europe offers to 
users a number of choices. Users indeed exploit these opportunities188, both when determining 
their trade mark strategies and when aiming to protect or enforce their existing rights. 

The  selected  options  will  significantly  improve  the  shortcomings  in  the  current  situation 
where the CTM and national systems coexist, being closely linked and interacting with each 
other, but without a number of important common grounds189. The new measures will provide 
for  a  genuine  European  trade  mark  system,  based  on  a  harmonious  complementarity  of 
different regimes. These measures will primarily serve the Union interest190 and be beneficial 
for users of either trade mark regime. As a consequence, the new setting will improve access 
to trade mark protection for all users, regardless of their location, size or market. It will also 
contribute to increasing legal security, limiting the risk of litigation, and improving the level 
playing field for European business, thus enhancing the competitiveness and attractiveness of 
the EU internal market. 

Finally, some of the selected options will have an impact on the OHIM budget, notably the 
adjustment  of  OHIM  fees,  the  discount  for  use  of  classification  tool  and  the  funding  of 
cooperation activities191. The combined effect of these options on the budgetary results of the 
Office is shown in the below figure 18. The temporary deficits in 2013 – 2015 and budgetary 
recovery in 2016, as described in relation to the adjustment of OHIM fees, can be observed 
also  in  the  combined  model.  As  regards  the  discount  of  € 50  (see  section  6.4.1.3)  the 
calculation  is  based  on  the  assumption  that  50%  of  applicants  would  use  the  electronic 
classification tools. Under such a scenario, the budgetary results appear slightly in deficit but 
still within the limits of a balanced budget. In reality, however, more positive outcomes could 
be  anticipated,  taking  into  consideration  the  cost  savings  at  OHIM  and  therefore  some 
decrease in its expenditure. Overall, it can be concluded that the budget of the Office would 
be  able  to  bear  the  consequences  of  the  selected  options  while  preserving  its  budgetary 
equilibrium. 

Figure 18: Combined impact on OHIM budget: adjustment of OHIM fees, including the 
discount for use of common classification database, and funding of cooperation activities 

2012 (m €)  

2013 (m €)  

2014 (m €)  

2015 (m €)  

2016 (m €)  

187 
188 

189 

190 

191 

See footnote 2 and section 3.1.6.1. 
21% of SMEs and 30% of LSE owning trade marks at OHIM, confirm that their prevailing practice is to 
apply for both national and CTM protection; see section 3.1.6.2, figure 2. 
E.g. Non-existent regulatory framework for cooperation between IP offices in Europe, missing Union 
wide databases. 
The foreseen measures, both cooperation activities and harmonisation efforts, will primarily serve the 
Union interest and not that of the national offices or OHIM. E.g. a common trade mark database does 
not provide a particular added value for a single IP office, if seen in isolation. For its users, however, as 
economic operators on the internal market, these databases will make a significant difference, allowing 
them  to  properly  evaluate  the  situation  and  to  make  informed  choices  when  determining  trade  mark 
strategies. 
Sections 6.2.1.3, 6.4.1.3 and 6.4.2.3, respectively. 

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Budgetary revenue 
Budgetary expenditure 
Operating result 
To be excluded from above result:  
Ad hoc expenditure 
Operating  result  excluding  ad  hoc 
expenditure 
10% of annual income 
Result  after  deduction  of  10% 
income to finance cooperation 

174,9 
202,0 
-27,1 

32,4 

5,3 

158 
216,5 
-58,5 

29,6 

-28,9 

164,3 
223,0 
-58,7 

35,3 

-23,4 

5,3 

-28,9 

-23,4 

6.6. 

Further possible impacts of the selected options 

174,9 
198,7 
-23,8 

18,7 

-5,1 
-17,5 

-22,6 

199,8 
186,5 
13,3 

6,2 

19,5 
-20,0 

-0,5 

The following sections analyse the impacts of the selected options on other stakeholders. 

6.6.1.  Consumers 

As  mentioned  above  in  the  introduction  (see  under  1.1),  trade  marks  enable  consumers  to 
distinguish  products  from  different  undertakings.  In  this  context  trade  marks  help  them  to 
recognize  a  product  as  one  which  they  have  liked  or  disliked  in  the  past  and  thereby  allow 
them  to  make  an  informed  choice  when  purchaising  goods  or  services.  Being  the  principal 
instrument used by undertakings for advertising their products, trade marks offer a guarantee 
that all the goods originating from the same producer have a certain quality. Therefore, trade 
marks  allow  consumers  to  lower  their  search  costs.  Moreover,  in  as  much  as  trade  marks 
foster  product  differentiation,  they  allow  consumers  to  benefit  from  a  wider  variety  of 
products.  Against  this  background,  it  may  be  concluded  that  the  modernisation  of  the  trade 
mark system in Europe will also have an indirect positive impact on consumers. 

6.6.2.  EU budget 

OHIM is a regulatory EU agency. It is fully financed from fees paid by its users and does not 
receive  any  subsidy  from  the  EU  budget.  OHIM  enjoys  a  full  financial  independence,  its 
budget  is  not  part  of  the  EU  budget  and  its  budgetary  authority  is  the  Budget  Committee. 
Against this background, the selected options will have no impact on the EU budget.  

6.6.3. 

Social impact 

Because  of  the  new  cooperation  activities,  the  selected  options  may  have  an  impact  on  the 
staffing  needs  at  national  offices,  resulting  in  an  increase  of  their  employees  dealing  with 
these  cooperation  matters.  At  the  same  time,  the  proposed  measures  aim  at  improving  the 
level of efficiency and effectiveness of trade mark procedures which, in turn, should result in 
decreased staffing needs in these core business departments. All in all, it can be expected that 
in the medium to long term the employment rate at national offices would remain stable but 
there would be a shift in allocation of human resources.  

6.6.4.  Environmental impact 

The selected options will not have any direct environmental impact.  

6.6.5. 

International 

All  selected  options  aim  exclusively  at  the  internal  market  and  are  therefore  not  meant  to 
produce  any  direct  effect  beyond  the  EU  borders.  However,  any  economic  operator  from 

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outside  the  EU  will  benefit  from  the  proposed  measures  in  the  same  way  as  Europeans. 
Accordingly,  since  the  business  environment  in  the  trade  mark  field  is  expected  to  become 
more  favourable  for  companies,  the  position  and  attractiveness  of  the  EU  as  foreign  sales 
market and investment location would be increased.  

The selected options do not imply changes to the functioning of the procedural mechanism for 
the registration of international marks provided under the Madrid system192. However, taking 
into account the close interconnection existing between this system and the CTM and national 
trade mark systems of EU Member States193, it is expected that the international trade mark 
system  administered  by  WIPO  would  indirectly  also  benefit  from  the  modernisation  of  the 
European trade mark system as a wole. 

In  addition,  the  approximation  of  trade  mark  laws  and  procedures  under  option  2b  would 
render  the  European  trade  mark  system  as  a  whole  (i.e.  at  EU  and  national  levels)  more 
consistent  with  the  existing  international  legal  framework  on  trade  marks,  and  so  also 
facilitate  the  ratification  of,  or  the  accession  to,  the  relevant  treaties  in  place,  such  as  in 
particular the  Trade Mark Law  Treaty and the Singapore Treaty  on  the Law of  Trademarks 
(see  above  under  1.2  on  the  2008  IPR  Communication  which  makes  reference  to  that 
international dimension). 

7. 

CHOICE OF THE LEGAL INSTRUMENT 

This  chapter  considers  what  legal  instruments  would  be  most  appropriate  for  each  of  the 
selected options. 

7.1. 

Approximation of trade mark laws and procedures 

The analysis carried out in chapter 6.1.1 clearly showed that the achievement of the identified 
objective  cannot  be  ensured  by  non-legislative  means  (options  2a  and  3a).  Moreover,  the 
options  3b  and  4,  that  would  imply  a  maximum  harmonisation  Directive  and  a  Regulation, 
respectively, have been discarded as disproportionate.  

The  selected  option  2b  aims  at  mandatory,  (further)  approximation  of  some  aspects  of 
national trade mark laws; therefore, a Directive would be the most suitable legal instrument 
for  its  implementation.  Since  national  trade  mark  laws  have  already  been  partially 
harmonised,  this  further  approximation  should  be  done  by  means  of  a  recast  of  the  existing 
TM Directive194. 

Moreover, if the harmonisation of national laws did not match with the current CTM system, 
the  CTM  Regulation  would  also  need  to  be  amended  accordingly,  for  the  sake  of 

192 
193 

194 

See referred to above under point 1.1 (c). 
The  major  link  is  reflected  in  the  fact  that,  on  one  hand,  an  international  trade  mark  registration  is 
obtained by extending trade mark protection to countries being party to the Madrid system on the basis 
of a national basis application or registration (including a CTM) and, on the other, that the protection of 
a foreign (i.e. non EU) trade mark application or registration can be extended to cover the territory of 
one or more Member States of the EU or the latter as a whole. 
For details on the necessary amendments see Annex 2, point 9.2. 

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consistency195.  Finally,  the  OHIM  fee  regulation196  should  also  be  adapted  to  the  new  fee 
structure. 

7.2. 

Cooperation capacity building 

As established in the sections 6.1.2 and 6.3, there is a need to establish a clear legal, technical 
and  financial  framework  for  mandatory  cooperation  between  the  OHIM  and  the  national  IP 
offices in order to facilitate convergence of practices and tools. 

The  necessary  legal  basis  would  best  be  achieved  by  explicit  provisions  in  the  CTM 
Regulation.  Such  a  rule  would  also  serve  as  a  basis  for  the  funding  from  OHIM  budget  in 
terms  of  financial  regulations.  These  primary  provisions  to  be  introduced  into  the  CTM 
Regulation  should  be  further  complemented  by  corresponding  amendments  to  the  TM 
Directive. 

8. 

MONITORING AND EVALUATION 

The methods and timetable for monitoring and evaluation would depend on the objective to 
be achieved and the choice of legal instrument. 

8.1. 

Approximation of trade mark laws and procedures  

Three years after the expiry of the transposition deadline, Member States should submit to the 
Commission a report on the implementation of the Directive. On the basis of these inputs, the 
Commission could draw up a report on the application of the new provisions of the Directive, 
including  an  assessment  of  the  effectiveness  of  the  measures  taken.  OHIM  and  national  IP 
offices would provide the Commission with any assistance it may need when drawing up such 
a report. 

The  Commission  report  could  then  be  transmitted  to  the  European  Parliament,  the  Council 
and the European Economic and Social Committee. It may be accompanied, if necessary and 
in  the  light  of  developments  in  the  EU  legal  order,  by  proposals  for  amendments  to  this 
Directive. 

8.2. 

Cooperation capacity building 

If a decision is taken to establish at OHIM a funding mechanism with a view to facilitating 
cooperation  activities  with  national  IP  offices,  then  the  use  of  this  money  will  need  to  be 
monitored  and  evaluated  in  order  to  ensure  that  it  has  achieved  its  intended  objectives,  in 
accordance to the financial rules applicable to the Office, notably as regards grant procedures. 
In  addition  to  the  requirements  stipulated  by  the  Financial  Regulation,  the  OHIM 
Administrative Board and the Commission will be informed and involved in the procedures, 
as appropriate, and a summary report will be prepared by OHIM on an annual basis. 

Furthermore, five years after the entry into force of the amendments to the CTM Regulation, 
the  Commission  will  review  the  new  legal  framework  for  cooperation,  with  particular 

195 

196 

This concerns the main criteria for the classification of goods and services, see Annex 2, point 9.2.1.1, 
footnote 199.  
See footnote 46. 

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attention to the grants based funding scheme. To this end, the Commission shall establish an 
evaluation report and transmit it the European Parliament and to the Council.  

This report would be composed of: 

(1) 

(2) 

(3) 

(4) 

An assessment of the results that will be published by the Office in its annual reports; 

An assessment of the funding model as such; 

Any  audit  reports  carried  out  by  OHIM  on  its  cooperation  activities  with  national 
offices;  

Any public surveys of trade mark users on their perception of progress with regard to 
the convergence of practices and tools at OHIM and national offices. 

Figure 19: Indicators 

Objectives 
Objective 1: Approximation of trade mark laws 
and procedures 

Objective 2: Increased cooperation capacity 

Indicators 
– 

of 

remaining 

differences 
laws  (transposition 

Number 
between  national 
check) 
Evolution  in  companies'  direct  cost  for 
IP advice 
Average  time  needed  to  register  a  trade 
mark (including average time needed for 
an  opposition  procedure)  –  possible 
benchmark:  average  time  in  5  best 
performing offices 
Number of running and new cooperation 
projects 
Number  of  IP  offices  participating  in 
cooperation projects 
Number  of  IT  tools  used  by  all  and/or 
several IP offices 
Number of common training schemes  

– 

– 

– 

– 

– 

– 

9. 

ANNEXES 

9.1. 

Annex 1: Glossary  

9.1.1.  European Observatory on Counterfeiting and Piracy 

The  European  Observatory  on  Counterfeiting  and  Piracy  was  launched  in  2009.  Its  main 
objectives  are  to  collect  and  report  data  on  the  economic  and  societal  implications  of 
counterfeiting and piracy and to create a platform for representatives from national authorities 
and  stakeholders  to  exchange  ideas  and  expertise  on  best  practices.  The  initial  work  of  the 
Observatory  has  triggered  positive  responses  from  the  European  Parliament,  the  Member 
States and private-sector stakeholders but also showed that there is need to expand the current 
work. 

However, under the original set-up, the Observatory was unable to fulfil its full potential and 
to  take  on  new  tasks.  In  May  2011,  therefore,  the  Commission  presented  a  proposal  for  a 

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Regulation  transferring  the  Observatory  to  OHIM  in  order  to  provide  it  with  a  more 
sustainable  infrastructure  and  thus  allow  it  to  fulfil  a  broadened  range  of  tasks.  The 
Observatory Regulation197 was adopted in April 2012 and came into effect on 5 June 2012. 

In  the  future,  the  Observatory  should  focus  increasingly  on  operational  tasks,  such  as 
organising training for enforcement authorities (customs, police and judicial authorities etc.), 
setting up a database of national and European case law and fostering cooperation with and 
support for those third countries which are particularly vulnerable to counterfeiting and piracy 
and are used by complex criminal networks as manufacturing and distribution bases. 

9.1.2.  Technical terms relating to trade marks 

Absolute  grounds  for  refusal:  These  grounds  constitute  the  first  type  of  grounds  on  which 
registration of a trade mark may be refused. They are due to the lack of inherent registrability 
of  the  mark  and  do  not  depend  on  the  existence  of prior rights of third  parties ("absolute"). 
These grounds are set out in Article 7 CTMR (Article 3 TMD) and are examined ex officio 
during  the  registration  procedure.  The  main  absolute  grounds  are  that  the  mark  lacks  any 
distinctive  character  or  that  it  is  descriptive  as  to  an  essential  characteristic  of  the  goods  or 
services applied for.  

Cancellation:  Trade  mark  rights  can  be  revoked  (Article  51  CTMR/Article  12  TMD)  or  be 
declared  invalid  (Articles  52,  53  CTMR/Articles  3,  4  TMD).  ‘Cancellation’  refers  to  both 
types  of  proceedings.  A  registered  trade  mark  can  inter  alia  be  revoked  in  the  absence  of 
genuine use. Furthermore, it may be declared invalid on application to the Office where it has 
been registered contrary to absolute (including acting in bad faith when filing the application) 
or  relative  grounds  for  refusal.  OHIM  has  exclusive  jurisdiction  with  regard  to  direct 
revocation  or  invalidity  applications.  Courts  in  Member  States  of  the  European  Union, 
however,  may  revoke  or  declare  a  CTM  invalid  when  the  issue  is  put  to  them  as  a 
counterclaim in an infringement action based on the CTM. 

Clearance of prior rights: Prior to the registration and use of a trade mark in any jurisdiction, 
it is vital that appropriate trade mark clearance is conducted to ascertain whether the mark is 
available  for  such  purposes.  Its  main  objective  is  to  make  sure  that  the  proposed  use  of  the 
mark does not infringe prior trade mark rights of others.  

Collective  trade  marks:  This  category  of  trade  marks  is  to  be  differentiated  from  individual 
trade  marks,  which  are  used  by  an  individual  company  to  distinguish  its  own  goods  or 
services,  from  those  of  its  competitors  (see  also  'types  of  trade  marks').  By  contrast,  a 
Community  collective  mark  is  a  mark  which  is  used  collectively  by  members  of  an 
association to indicate that they form part of that group. 

Conversion: The mechanism  of  conversion (Art. 112  – 114 CTMR)  allows CTM  applicants 
(or proprietors) to convert their CTM applications (or registrations) that cannot be registered 
(or  maintained)  at  EU  level  into  a  national  trade  mark  application  while  preserving  the 
original filing date of the first application. Conversion may be requested in two cases. Firstly, 
when the CTM application is (fully or partly) refused or withdrawn, for example, because of 
the existence of a similar prior national trade mark registered for identical goods and services. 
In  such  a  case,  the  applicant  may  convert  its  CTM  application  into  a  national  trade  mark 
application  in  those  Member  States  where  there  is  no  conflict  with  an  older  trade  mark. 

197 

For reference see footnote 129. 

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Secondly, conversion into a national trade mark may be requested when a CTM registration 
ceases to have effect, for example, when the rights of the proprietor have been revoked on the 
grounds  of  non-use  in  the  Community  pursuant  to  Art.  51  CTMR.  As  the  CTM  may  have 
fulfilled  the  requirements  of  genuine  use  in  a  Member  State,  it  does  not  have  to  disappear 
from the market but may be converted into a national trade mark. 

Genuine  use:  A  trade  mark  has  to  be  put  to  genuine  use  within  a  period  of  five  years 
following registration. Otherwise the trade mark proprietor may not invoke his rights against 
third parties (non-use defence). 

Opposition:  This  refers  to  the  legal  procedure  that  allows  third  parties  to  oppose  the 
registration of a trade mark application by submitting a notice claiming that it conflicts with 
their  earlier  rights  (see  "relative  grounds  for  refusal").  Under  the  CTMR  (Article  41), 
opposition  may  be  lodged  within  three  months  following  the  publication  of  the  trade  mark 
application.  In  the  absence  of  an  opposition  or  in  the  event  of  refusal  of  an  opposition,  the 
trade  mark  application  proceeds  to  registration.  Although  holders  of  earlier  rights  may  also 
object  to  such  registration  thereafter  within  the  framework  of  invalidity  proceedings  (see 
"cancellation"), there is an interest in preventing the inclusion of such later, conflicting trade 
mark in the CTM register by means of the opposition procedure. 

Registration: The formal procedure through which a new trade mark is entered in the Register. 
The registration of a trade mark has the effect of securing its proprietor the exclusive right to 
use it for the goods and/or services that it covers and to prevent third parties to use, without 
consent,  the  same  or  a  similar  mark  for  identical  or  similar  goods  and/or  services  as  those 
protected by his mark. 

Relative grounds for refusal: These grounds constitute the second type of grounds on which 
registration of a trade mark may be refused. They are based on a likely conflict with certain 
earlier rights, especially trade marks, as set out in Article 8 CTMR (Article 4 TMD). Contrary 
to  the  situation  in  some  Member  States  where  relative  grounds  for  refusal  are  examined  ex 
officio in addition to absolute grounds198, in the CTM system an earlier right can only cause a 
bar  to  the  subsequent  registration  of  a  trade  mark  if  the  owner  of  the  earlier  mark  files  a 
formal “opposition” (see "opposition").  

Seniority:  The  seniority  system  can  be  described  as  the  possibility  of  "merging"  earlier, 
identical  trade  marks  registered  in  one  or  more  Member  States  into  CTMs.  It  enables  the 
duplication of registrations to be avoided, but not the loss of the earlier national registration 
date. CTM applicants who are already owners of an earlier national trade mark may switch to 
the CTM system by claiming the seniority for the same trade mark and for the same goods or 
services.  The  effect  of  seniority  is  that  if  and  when  an  earlier  trademark  is  surrendered  or 
allowed to lapse (for example, when the registration of an earlier national trade mark is not 
renewed  for  a  further  period  of  10  years),  the  rights  provided  by  this  prior  trade  mark  are 
maintained  in  the  Member  State  of  its  national  registration,  provided  the  CTM  remains  in 
force. 

Seniority  database:  The  Seniority  database  includes  the  data  of  any  earlier  trade  mark 
registered  in  a  Member  state  or  in  the  Benelux  countries,  or  registered  under  international 
arrangements  having  effect  in  a  Member  state  for  which  seniority  has  been  claimed  while 
filing a CTM. National Offices need to maintain the records of those national filings to ensure 

198 

See chapter 3.2.1.1.(b). 

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full transparency of the legal situation and since the invalidity or revocation of an earlier mark 
may be established after it has been allowed to lapse (Article 14 TMD).  

Types  of  trade  marks:  The  European  concept  of  a  trade  mark  (both  as  to  the  TMD  and 
CTMR)  has  an  open  nature.  It  may  consist  of  all  signs  that  may  be  used  to  distinguish  the 
goods  and/or  services  of  one  undertaking  from  those  of  other  undertakings,  such  as  verbal 
marks (consisting of words, including personal names, letters and numerals), figurative marks 
(consisting of designs, logos and labels), colour marks (being a figurative mark in colour or 
comprising  a  colour  per  se  in  the  abstract),  or  sound  marks  (being  an  audible  sign  such  as 
music or vocal sounds). 

Unitary character: The essence of a CTM is that it is given uniform protection and that it has 
effect throughout the entire territory of the EU. A CTM can only be registered, surrendered, 
transferred,  revoked,  or  invalidated  for  the  entire  territory  of  the  EU  (Article  1(2)  CTMR). 
This means that if there are circumstances (related to absolute or relative grounds for refusal) 
that prevent protection in just one Member State, no CTM can be obtained or maintained for 
the other states either. 

9.2. 

Annex 2: Proposals to be covered by the revision of the regulatory framework 

9.2.1.  Approximation  of  trade  mark  laws  and  procedures  (addressed  in  the  problem 

definition) 

9.2.1.1.  Principal procedural rules of the CTMR to become also part of the TM Directive  

–  Regulate requirements for obtaining a filing date; 

–  Regulate  main  criteria  for  the  classification  of  goods  and  services  including  the  use  and 

interpretation of class headings199; 

–  Regulate  that  ex  officio  examination  of  a  trade  mark  application  is  limited  to  absolute 

grounds for refusal; 

–  Regulate that it must be possible for third parties to submit to the office prior to registration 
of a trade mark application observations, explaining on which absolute grounds the trade 
mark shall not be registered;  

–  Regulate that it must be possible to oppose a trade mark application in proceedings before 

the office (mandatory administrative opposition procedure); 

–  Regulate that it must be possible to request the  invalidation or revocation  of a registered 
trade  mark  in  proceedings  before  the  office  (mandatory  administrative  cancellation 
procedure); 

–  Regulate  that  it  must  be  possible  to  raise  the  defence  of  absence  of  genuine  use  both  in 

opposition and cancellation proceedings; 

–  Provide for rules on duration of protection and renewal; 

–  Regulate that it must be possible to divide a trade mark application and registration. 

199 

As  the  relevant  CTM  provisions  are  incomplete,  this  will  require  also  amendments  of  the  CTM 
Regulation.  

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9.2.1.2.  Further substantive rules of the CTM Regulation to become part of the TM Directive 

–  Clarify the provisions of the CTMR in relation to Geographical Indications (see also 9.2.4 

below) and insert corresponding provisions in the TM Directive; 

–  Complement  the  TM  Directive  by  a  body  of  rules  addressing  trade  marks  as  objects  of 

property (transfer, licensing, rights in rem, levy of execution and insolvency); 

–  Provide for a set of specific provisions concerning the registration of collective marks. 

9.2.1.3.  Reduction of optional provisions in the TM Directive 

–  Render  mandatory,  with  regard  to  cancellation proceedings, the optional absolute ground 

for refusal of bad faith applications; 

–  Render mandatory the relative ground of refusal applying in case of conflict with a trade 

mark with reputation; 

–  Render  mandatory  the  trade  mark  rights  concerning  extended  protection  for  trade  marks 

having a reputation. 

9.2.2.  Cooperation capacity building (addressed in the problem definition) 

–  Establish  in  the  CTM  Regulation  a  clear  legal,  technical  and  financial  framework  for 
mandatory cooperation between the OHIM and the national IP offices in order to facilitate 
convergence of practices and tools. 

–  Complement 

the  above  amendments 

to 

the  CTM  Regulation  by  corresponding 

amendments to the TM Directive. 

9.2.3.  Amending or removing outdated provisions (not addressed in the problem definition) 

–  Definition of a trade mark (Art. 4 CTMR, Art. 2 TMD): A registered (Community) trade 
mark may only consist of signs capable of being represented graphically. The requirement 
of  graphic  representability  is  only  apt  for  conventional  trade  marks  which  are  visually 
perceptible, such as words or designs. For new types of trade marks, such as those which 
are  perceived  by  the  sense  of  hearing  (i.e.  sound  marks),  representation  by  other  than 
graphical means  (e.g. by  sound  recordings)  allow for a more precise identification of the 
mark.  Therefore,  it  is  appropriate  to  replace  the  requirement  of  graphic  representability 
both in the TM Directive and the CTM Regulation by the more flexible criteria established 
by the CJEU in the Sieckmann case (C-273/00). 

–  Filing of CTM applications through national offices (Art. 25 CTMR): The option to apply 
for  a  CTM  through  a  national  IP  office  has  been  foreseen  by  the  CTM  Regulation  as  a 
temporary  measure  (see  Art.  25(5)).  The  gradual  decline  of  relevant  national  filings  has 
reached  a  point  where  applications  received  through  national  offices  have  become  near 
extinct. Therefore, the option of filing a CTM through national offices should be abolished. 

–  National  and  community  searches  (Art.  38,  155  CTMR):  The  search  regimes  on  prior 
CTMs and national trade marls do neither provide a reliable trade mark clearance tool, nor 
a  fully  comprehensive  watch  of  the  Register.  Therefore,  the  relevant  provisions  in  the 
CTMR should be deleted.  

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–  Registration  fee  (Article  45  CTMR):  The  registration  fee  was  de  facto  abolished  by  the 
2009  fee  reduction  when  its  level  was  set  at  €  0.  Since  then,  the  simplified  fee  structure 
with  an  application  fee  only  has  proved  successful  with  both  OHIM  and  its  users. 
Accordingly, the provision on a registration fee has become redundant. 

9.2.4.  Clarifying  legislation  and  removing  ambiguities  (not  addressed  in  the  problem 

definition) 

–  Geographical  indications  as  absolute  and  relative  grounds  for  refusal:  The  scope  of 
absolute and relative grounds related to protected geographic indications contained in the 
CTM Regulation is partly unclear and inconsistent with specific legislation protecting such 
indications. 

–  Rights  conferred  by  a  trade  mark  (Art.  9  CTMR,  Art.  5  TMD),  including  for  goods  in 
transit: The provisions laying down the rights conferred by a (Community) trade mark are 
not completely clear. For the sake of legal clarity it is necessary, inter alia, to clarify the 
scope  of  trade  mark  rights  as  regards  goods  in  various  situations  throughout  the  EU 
customs territory as well as to spell out that the rights conferred are without prejudice to 
the rights of proprietors of earlier rights acquired before the filing date or the priority date 
of the (Community) trade mark. 

–  Limitation of the effects of a trade mark 

–  Intervening  rights  of  the  proprietor  of  a  later  trade  mark  (Art.  57(2),  (3)  CTMR,  no 

provisions in the TMD) 

9.2.5. 

Implementation of case law (not addressed in the problem definition) 

–  Protection of trade marks with reputation (Article 8(5) CTMR, Art. 4(3) TMD): The Court 
of Justice clarified in its Judgments in Davidoff (C-292/00) and Adidas (C-408/01) that the 
extended protection for trade marks with reputation apply also in case where the goods or 
services  under  comparison  are  identical  or  similar.  Both  the  TM  Directive  and  CTM 
Regulation need to be amended to reflect this. 

9.3. 

Annex 3: Online services and degree of automation at national offices (figures 3 
and 4) 

9.3.1.  Availability of online services 

The  following  e-services  were  considered  in  the  context  of  the  evaluation  referred  to  in 
section  3.2.2.1:  e-Searching  –  availability  and  maturity  of  online  search  capabilities  and 
functionality  for  users,  e.g.  different  search  functionalities  for  trade  mark  and  designs,  also 
simple and extended professional searches; e-Filing – electronic process for the application of 
trade marks and designs registrations online; e-Opposition – availability to file an opposition 
electronically  and  further  electronic  process  support  for  the  user;  e-Renewal  –  electronic 
process  to  renew  online,  also  included  e.g.  electronic  reminders  to  users  and  online 
availability  of  status  of  renewals  and  deadlines;  e-Payment  –  possibility  to  pay  registration 
and  renewal  fees  electronically;  e-Enforcement  –  if  the  office  has  any  enforcement  powers, 
this would mean that there is electronic support for processes; otherwise electronic support for 
awareness  campaigns  of  IP  enforcement  etc.;  e-Access  –  availability  of  all  documentation 
online  regarding  registered  trade  marks  and  designs.  Electronic  support  for  communication 
between  users  and  national  offices  or  between  national  offices,  e.g.  standardised  email-

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communication;  e-Administration  –  all  electronic  processes  inside  the  national  office  to 
support  the  trade  mark  and  design  handling;  e-Authentication  –  possibility  to  work  with 
electronic signatures inside the national office or as a user. 

9.3.2.  Degree of automation at national offices 

The assessed processes were: trade mark examination - the process of examination (absolute 
grounds  /  relative  grounds)  to  determine  if  the  trade  mark  application  is  valid  and  can  be 
registered; trade mark opposition - the process of opposition in which an user (or trade mark 
holder)  files  an  opposition  against  an  announced  registry  of  a  trade  mark;  trade  mark 
cancellation  -  the  process  of  cancellation  of  already  approved  trade  marks;  trade  mark 
similarity search - the process (or service) that determines the degree of similarity of the trade 
mark application with the already registered trade marks; trade mark renewal - the process of 
renewal of already registered trade marks; design examination - the process of examination to 
determine if the design application invalid and can be registered; design invalidation - since 
there is no opposition process for designs, it is possible to do an ‘invalidation’ to declare the 
design invalid throughout the life-cycle of a design; design renewal - the process of renewal 
of already registered designs; fee management - the process of management of the user fees of 
the  provided  services  by  national  offices  (e.g.  registry,  renewal,  additional  services  like 
similarity searches); appeals - the process of the handling of user or trade mark holder appeals 
against a made decision by the national office; recordals - the process of administration of the 
owner details for trade marks and designs. 

9.4. 

Annex 4: Overview of trade mark application and registration fees 

Figure 20: Trade mark application and registration fees200 charged in the EU 

Offices with one-class-per-fee system 

Offices with application fee covering 
three classes 

Application + 
registration fee 
covering 1 class 
€26 
€185 
€110 
€247 
€101 
€180 

Cyprus201 
Estonia203 
Greece205 
Ireland207 
Italy209 
Latvia211 

Fee for any 
additional 
class 

Total amount 
of fees for 3 
classes 

Application + 
registration fee 
covering 3 classes 

€26 
€45 
€20 
€70 
€34 
€29 

€78 
€275 
€150 
€387 
€169 
€237 

202 
Austria
204 
Benelux
206 
Bulgaria
Czech Republic
210 
Denmark
Finland

212 

€359 
€240 
€278 
€199 
€315 
€215 

208 

200 

201 
202 
203 
204 

205 
206 
207 
208 
209 

210 
211 

Listed amounts of fees concern the cheapest filing option by electronic means where available and are 
rounded to the nearest euro. 
http://www.mcit.gov.cy/mcit/drcor/drcor.nsf/trade_mark_charges_en/trade_mark_charges_en 
http://www.patentamt.at/Media/Infoblatt_Gebuehren.pdf 
http://www.epa.ee/client/default.asp?wa_id=953&wa_object_id=1&wa_id_key 
https://www.boip.int/wps/wcm/connect/6b3cf080474b73a8b9ddbf578c655cb7/BnlTariffs200701.pdf? 
MOD=AJPERES&CACHEID=6b3cf080474b73a8b9ddbf578c655cb7 
https://www.marques.org/class46/default.asp?D_A=20121109 
http://www.realandintellectualproperty.com/wp-content/uploads/2011/08/TARIFF.pdf 
http://www.patentsoffice.ie/en/trademark_schedule.aspx 
http://www.upv.cz/en/ip-rights/trade-marks/fees.html 
http://www.uibm.gov.it/index.php?option=com_content&view=article&id=2005075%3Acome-
richiedere-la-registrazione-di-un-marchio&lang=it 
http://iprights.dkpto.org/trademark/prices-and-payment.aspx 
http://www.lrpv.lv/index.php?lang=EN&id=28 

EN 

75 

   EN 

 
 
 
                                                 
Lithuania213 
Malta215 
Portugal217 
Romania219 
Spain221 
Sweden223 
UK225 
Average 

€70 
€116 
€120 
€150 
€140 
€209 
€211 
€143 

€35 
€116 
€30 
€50 
€91 
€105 
€62 

€55 

€140 
€348 
€180 
€250 
€322 
€419 
€335 

€253 

France
Germany
Hungary
Poland
Slovakia
Slovenia

214 

216 
218 

220 

222 
224 

Average 
OHIM 

€200 
€290 
€264 
€121 
€166 
€250 

€241 
€900 

9.5. 

Annex 5: Procedural issues – opinions of the Impact Assessment Board 

A  draft  of  this  impact  assessment  was  submitted  to  the  IAB  on  21  September  2011  and 
discussed  at  the  Board's  meeting  on  19  October  2011.  The  IAB  issued  an  opinion  on  21 
October  2011  finding  that  the  draft  report  should  be  significantly  improved  in  several 
important aspects. The report has been substantially revised, improved and extended in order 
to completely comply with the opinion of the IAB. 

The IAB indicated that the report should better explain the scope of the report by particularly 
explaining why the curent OHIM fee levels appeared to be appropriate overall. In this respect, 
the  relevant  section  was  extensively  amended  and  restructered  to  make  reference  to  the 
commitment  made  in  the  previous  impact  assessment  on  the  fee  reduction,  and  to  provide 
details on the assessment of OHIM's fees and fee structure carried out within the framework 
of  the  Max  Planck  Institute  (MPI)  Study226.  Moreover,  the  relation  to  the  Observatory's 
impact assessment is clarified, and the measures aligning the TM Diective are now covered by 
the scope of the present report. 

The IAB also recommended that all the problematic legal issues should be presented upfront, 
distinguishing  them  clearly  from  the  capacity-related  issues  and  corraborating  them  better, 
using  evaluation  and  consultation  results.  To  this  effect,  the  problem  definition  section, 
including the problem tree at the end, was substantially restructured, modified and expanded 
by  better  defining,  distinguishing  and  substantiating  the  relevant  problem  drivers,  the 
corresponding problems and the adverse consequences they cause. The drivers relating to the 
divergences  of  the  regulatory  framework  (including  the  missing  clear  legal  basis  for 
cooperation)  are  kept  clearly  apart  from  those  concerning  the  cooperation  capacity  of  IP 
offices.  With  regard  to  the  technical  cooperation  capacity  of  offices,  the  revised  draft  now 

212 
213 
214 
215 
216 
217 

218 
219 
220 
221 

222 
223 
224 
225 
226 

http://www.prh.fi/en/tavaramerkit/hinnasto/hakemusmaksut.html 
http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=151225&p_query=&p_tr2=2 
http://www.inpi.fr/fr/marques/deposer-une-marque/combien-coute-un-depot.html 
https://secure2.gov.mt/ipo/Intellectual_Property_Office_Malta/FAQ.aspx?ct=1 
http://www.dpma.de/english/trade_marks/fees/index.html 
http://www.marcasepatentes.pt/files/collections/eng_US/28/29/30/Table%20of%20Industrial%20 
Property%20Fees%202012-2013.pdf 
http://www.hipo.gov.hu/English/vedjegy/vedjegy_dijtablazat_en.pdf 
http://www.osim.ro/index3_files/trademarks/amountt.pdf 
http://www.uprp.pl/oplaty-zgloszeniowe/Lead05,173,1755,4,index,pl,text/ 
http://www.oepm.es/export/sites/oepm/comun/documentos_relacionados/Tasas/Tasas_Signos 
Distintivos_1_Julio_2012.pdf 
http://www.indprop.gov.sk/?administrative-fees-trademarks 
http://www.prv.se/en/Trademarks/Fees-and-payment/ 
http://www.uil-sipo.si/sipo/addition/resources/fees/trademarks/ 
http://www.ipo.gov.uk/types/tm/t-formsfees.htm 
See footnote 23. 

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provides substantial evidence (reflected in the new figures 3 and 4) demonstrating the limited 
availability of e-services at national offices and their low degree of automation. 

The IAB further recommended that the report present a full baseline scenario that reflects the 
established practice of OHIM to cooperate with national offices bilaterally, the improvements 
generated  by  the  Cooperation  Fund,  and  the  synergies  created  by  the  takeover  of  the  above 
Observatory by OHIM. The relevant baseline section was significantly amended to this effect, 
and all the aspects recommended by the IAB are now addresed therein.  

The IAB also recommended that the subsidiarity section should better demonstrate the need 
for  further  harmonisation  of  the  trade  mark  systems  in  Europe  and  alignment  of  the  TM 
Directive  with  the  CTM  Regulation.  The  relevant  section  was  substantially  revised  and 
extended to meet that request. 

The IAB as well recommended that the report present policy objectives and options that better 
correspond  to  the  identified  problem  drivers  in  order  to  establish  a  clear  intervention  logic. 
The relevant objectives section was redrafted to more clearly indicate the scope and goals of 
the proposed revision of the European trade mark system. Both the newly defined operational 
objectives  and  the  respective  options  offered  now  entirely  correspond  to  the  identified 
problem drivers. As further recommended by the IAB in this context, the specific measures 
included  in  each  of  the  policy  options  are  now  described  in  greater  detail.  Moreover,  as 
regards  the  related  recommendation  to  consider  additional  options,  the  revised  report  now 
considers  the  option  of  redistributing  the  remaining  surplus  by  increasing  the  budget  of  the 
Cooperation Fund. In compliance with a further recommendation, the revised report now also 
makes clear (not least by reference to a new Annex 2) for each element of the policy options, 
if  a  modification  of  the  CTM  Regulation  and/or  the  TM  Directive  is  necessary.  As  further 
recommended by the IAB, the available options on financing cooperation activities from the 
OHIM  budget  are  now  presented  as  self-standing  options  and  their  analysis  structured 
accordingly.  

The  IAB  also  recommended  that  the  impacts  of  the  selected  options  be  better  analysed.  To 
this effect, the relevant sections of the revised report now fully justify the need to make the 
cooperation  between  national  IP  offices  and  OHIM  mandatory,  and  demonstrate  better  that 
the  preferred  policy  option  would  not  cause  an  imbalance  in  the  OHIM  budget.  Moreover, 
particular focus was given on strenghtening the important international impacts.  

The revised draft of this impact assessment was submitted to the IAB on 10 Januar 2012. The 
IAB  issued  a  second  opinion  on  that  revised  draft  on  3  February  2012,  confirming  that  the 
report had been improved to a significant extent along the lines of the IAB's first opinion. The 
report has been further revised and improved in order to address the remaining points raised 
by the IAB. 

The IAB recommended that the problems related to the problem drivers (i.e. non-harmonised 
substantive law issues and optional provisions in the TM Directive) should be explained and 
corroborated with evidence, as is done in the case of the missing procedural rules in the TM 
Directive.  To  this  effect,  the  relevant  section  explaining  the  insufficient  level  of 
harmonisation  as  regards  substantive  law,  including  optional  provisions,  was  substantially 
extended so as to substantiate the individual problems related to the protection of geograhical 
indications,  the  rules  applicable  to  trade  marks  as  objects  of  property,  the  provisions 
concerning  collective  trade  marks,  and  optional  provisions.  The  IAB  further  recommended 
making  clearer  the  provisions  not  addressed  in  the  problem  definition  due  to  their  limited 

EN 

77 

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impact.  In  this  respect,  Annex  2  was  improved  in  order  to  make  it  clearer  which  proposed 
amendmends  are  addressed  in  this  impact  assessment  and  which  are  not.  Moreover,  in 
response  to  the  recommendation  to  better  explain  the  aspect  of  predictability  of  trade  mark 
systems, a detailed definition of predictability was added in a new footnote, the first time it is 
referred to in the text.  

With regard to the cost-benefit analysis carried out by OHIM in relation to the Cooperation 
Fund projects, the IAB further recommended that the report should explain in detail how the 
estimates for potential benefits have been derived, and should list the underlying assumptions. 
To this effect, a new Annex 8 was added to chapter 9. Moreover, the IAB recommended to 
present those benefits within the impact analysis of the relevant policy solutions. The text in 
the  relevant  sections  was  adjusted  accordingly.  Furthermore,  the  baseline  scenario  was 
complemented  by  detailed  explanations  of  the  benefits  generated  by  the  projects  already 
launched under the Cooperation Fund, as further advised by the IAB. Upon recommendation 
of  the  IAB,  the  base  line  scenario  was  finally  also  revised  to  make  reference  to  the 
harmonisation already achieved at the international level. 

The IAB further advised better justification of the lack of alternative policy solutions. To this 
effect, it was clarified in the text of the chapter identifying the options that the latter resulted 
from  the  outcome  of  the  evaluation  of  the  overall  functioning  of  the  European  trade  mark 
system.  Moreover,  upon  recommendation  of  the  IAB,  the  correlation  between  the  launch  of 
the new funding mechanism for cooperation activities and the apparent ongoing existence of 
the Cooperation Fund was better explained.  

Overall, the report has been revised in order to provide greater transparency on the views of 
stakeholders,  as  recommended  by  the  IAB.  Both  appropriate  cross  references  to  the  MPI 
Study  and  an  extra  Annex  7  summarising  the  most  relevant  statements  made  by  user 
associations were added.  

Finally,  the  impact  assessment  took  into  account  recommendations  from  DG  BUDG 
regarding the parts dealing with financial matters and OHIM’s budget. The options related to 
funding  of  cooperation  under  the  OHIM  budget  were  reconsidered.  The  revised  report  took 
into  account  further  (legal  and  budgetary)  elements  which  resulted  in  a  change  in  the 
originally  preferred  option  (i.e.  funding  from  the  OHIM  operational  budget  by  means  of 
grants instead of a distribution mechanism based on renewal fees). Moreover, to the problem 
definition  part,  non-harmonisation  of  trade  mark  procedures,  new  paragraphs  were  added 
dealing with drawbacks linked to potential congestion of registers. The analysis of available 
options  was  completed  accordingly  (new  element:  harmonisation  of  number  of  classes  of 
goods and services to be covered by a single trade mark application, including the necessary 
adjustment of some OHIM fees). The preferred option remained the same in this case. 

9.6. 

Annex 6: Cost of cooperation activities 

When estimating the cost of future cooperation activities between OHIM and national offices, 
aimed  at  convergence  of  practices  and  development  of  common  tools,  the  cost  of  several 
existing frameworks was taken into consideration. 

– 

Bilateral  cooperation  agreements:  These  arrangements  are  aimed  at  financing 
specific  information  and  advice  services  related  to  the  CTM.  They  may  also  cover 
costs  related  to  fairs,  exhibitions  and  publications  as  well  as  organisation  of 
seminars, workshops etc. Finally, some national offices co-fund by these means their 

EN 

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seniority  databases.  Bilateral  cooperation  agreements  between  OHIM  and  national 
offices first started in 2005 when 13 offices participated. The below table shows the 
expenditure  related  to  these  activities  in  the  past  years  as  well  as  the  number  of 
participating offices. 

Figure 21: Expenditure for bilateral cooperation agreements in 2009 – 2012 

2009 

2010 

2011 

2012 (estimated cost) 

OHIM 
contribution 
(80%) 

OHIM 
contribution 
(80%) 

OHIM 
contribution 
(80%) 

Overall cost 

OHIM 
contribution 
(80%) 

Number of participating offices 

20 

22 

25 

25 

25 

TOTAL 

1,818,721.43  2.371.147,58  2,113,590.48  3,052,238.45 

2,441,790.76 

Source: OHIM 

– 

– 

Cooperation Fund: As mentioned in previous parts of this report, the creation of the 
Cooperation  Fund  was  agreed  in  2008,  including  its  allocation  of  €50  million.  The 
implementation  of  first  projects  under  this  Fund,  including  financial  engagements, 
started  in  2011  and  it  is  expected  that  the  final  project  will  be  completed  by  2015. 
The  Cooperation  Fund  itself  covers  only  the  operational  cost  of  particular  projects. 
The  cost  related  to  the  management  of  the  programme  as  a  whole  and  of  each 
particular  project  are  borne  by  OHIM  from  its  operational  budget.  The  Office 
estimates  that  this  additional  management  cost  will  amount  to  approximately  €5 
million  in  total  (€1  million  a  year).  More over,  the  overall  cost  of  the  agreed 
projects227 may exceed the original budget of € 50 million. The Office has committed 
to allocate further money to to this programme, if needed.  

Multilateral  cooperation  projects:  In  parallel  to  the  above  bilateral  agreements,  a 
number  of  multilateral  projects  between  OHIM  and  national  IP  offices  have  been 
launched since 2006, namely TMView and Euroclass. As these initiatives have been 
taken  over  by  the  Cooperation  Fund  the  cost  of  their  set  up  is  not  specifically 
included  when  calculating  the  current  expenditure  on  cooperation.  In  this  context, 
only their "running" cost is taken into account. The running (or maintenance) cost is 
the expense which offices participating in a particular cooperation project incur, once 
it has reached its cruising speed. In principle, this cost is due to the need to maintain 
available  data  (e.g.  via  website  services)  and  to  update  them  regularly.  It  may 
encompass  expenditure  related  to  IT  administration  (staff  managing  the  servers, 
supporting  incidents  and  solving  problems),  hardware  acquisition  (renting  or 
depreciation  of  hardware  cost),  maintanance  support  for  hardware  (maintenance  of 
servers, 24x7 support, utilities such as space, power and cooling) as well as regular 
(daily) communication of data from national offices to the central hub (database) at 
OHIM. Based on the OHIM calculations, the running cost for a big project (such as 
the TMView) amounts on average to € 132.000 a  year. Accordingly, if all 25 national 

227 

In  total,  18  cooperation  projects  have  been  identified  to  be  financed  out  of  the  Cooperation  Fund. 
However, the overall cost of the whole programme cannot be precisely forecasted at this stage since it 
would  depend  to  a  large  extent  on  the  numbers  of  national  offices  participating  in  each  particular 
project. It should be noted in this context that national office do not need to participate in all projects 
and are able to join also in the course of the project's implementation. 

EN 

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offices participate in such a project their running costs in total will be € 3,3 million a 
year.  

The overall cost linked to the ongoing cooperation activities is summarised in the below table.  

Figure 22: Overview of current cost of cooperation (rounded figures in million €) 

Overall cost (where applicable) 

Cost per year 

Bilateral agreements 
Cooperation Fund – projects 
Cooperation Fund – management 

50,0+  

Multilateral projects – running cost 
TOTAL 

3,0 
10,0+  
1,0 
2,0+ per project  
(e.g. 3,3 for TMView ) 
16,0++ 

Source: OHIM 

With a view to the future cooperation scheme, the following issues should be clarified: 

First,  the  Cooperation  Fund  and  existing  bilateral  and  multilateral  cooperation  projects  will 
cease to exist with the launch of the new funding mechanism for cooperation, based on grants. 
It is foreseen that the current common actions will be covered from this income in the future. 
In terms of cost, it is expected that the expenditure related to the current bilateral agreements 
will remain at the same level (€ 3 million a year). 

Second,  it  is  planned  that  with  the  funds  already  allocated  to  the  Cooperation  Fund  the 
development of a number of valuable projects will be finalised. In order to ensure that these 
common  databases  and  other  tools  really  achieve  the  intended  objective  and  remain  "alive" 
(see section 3.2.2.2) it is of utmost importance to ensure their stable and long-term financing 
in  order  to  cover  the  "running  cost".  Accordingly,  upon  the  completion  of  the  Cooperation 
Fund  there  may  be  a  significant  change  in  the  funding  needs.  It  is  expected  that  the 
expenditure  on  development  will  decrease  (depending  on  the  number  of  new  common 
initiatives,  see  below)  and  the  running  cost  increase.  For  example,  if  only  five  projects, 
currently under development, were up and running upon the closure of the Fund, their funding 
needs by then could be estimated, based on current experience, at € 10 million a year. 

Third,  the  implementation  of  the  Cooperation  Fund  has  revealed  that  the  current  common 
projects are limited to a number of selected initiatives. When preparing the work programme 
for  the  Cooperation  Fund,  for  example,  proposals  for  126  cooperation  actions  (including 
overlaps)  were  submitted  from  user  organisations  and  national  IP  offices.  Eventually,  the 
Fund was deemed to be able, mainly for budgetary reasons, to encompass only 18 initiatives. 
This  experience  indicates  that  the  finalisation  of  the  Cooperation  Fund  will  not  be  an  end 
point,  but  that  there  will  be  need  for  additional  common  projects  in  the  future.  It  is  not 
expected, however, that these new initiatives will be as great as the Cooperation Fund. When 
estimating  the  cost  of  future  cooperation  activities,  therefore,  only  one  third  of  the  related 
current expenditure (setting up plus management cost) was taken into account (€ 3 million a 
year).  Last  but  not  least,  many  national  offices  have  not  been  able  so  far  to  join  several 
cooperation projects for the reasons of budgetary and/or other restrictions. Therefore, it might 
be  expected  that  as  soon  as  an  appropriate  legal,  technical  and  financial  framework  is 
provided the participation rate will significantly increase which in turn may further increase 
the cost of setting up new projects.  

EN 

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Based  on  the  above  figures  and  other  considerations,  it  might  be  estimated  that  the  overall 
amount needed to finance cooperation activities between OHIM and national IP offices would 
slightly increase compared to today's situation and be in terms of € 17 – 20 million per year 
and possibly higher. 

9.7. 

Annex 7: Summary of the main statements made by user associations 

9.7.1.  General position regarding the coexistence of the trade mark systems in Europe  

User  organizations  agree  that  the  coexistence  of  CTMs  and  national  trade  mark  rights  is 
fundamental  and  necessary  for  the  efficient  functioning  of  a  trade  mark  system  capable  of 
meeting the needs of businesses. Despite the generally positive view on the structure of  the 
two systems, a number of user organizations express concerns that the relationship between 
these two systems is not well balanced. It is noted that following the current legal regulation 
and practice, users have been encouraged to seek exclusive rights in Community trade marks 
beyond their realistic scope of interests, i.e. without the intention and possibility of using them 
in  the  whole  of  the  EU  (ECTA,  COAPI,  FICPI).  User  organizations  indicate  several  issues 
which  should  be  reviewed  in  order  to  facilitate  a  proper  balance  between  the  systems. 
(Source: MPI study, Chapter 2, paragraphs 2.2 - 2.3). 

9.7.2.  National trade mark systems  

According  to  user  organizations  significant  divergences  between  the  national  systems  still 
exist. These divergences are due to the optional provisions in the TM Directive and the fact 
that the Directive does not cover procedural aspects and rules on trade marks as property (e.g. 
assignment,  licensing).  Furthermore,  national  offices  tend  to  interpret  legal  provisions 
differently. User organizations unanimously state that further harmonization of national trade 
mark  laws,  with  regard  to  both substantive law and procedural issues, is  needed.  Regarding 
substantive law, user organizations suggest that the currently optional provisions of the TMD 
should  be  made  mandatory  (AIM,  AIPPI  Belgium,  APRAM,  ECTA,  FICPI).  According  to 
MARQUES,  provisions  governing  the  possibility  to  base  an  opposition  or  a  request  for 
cancellation  on  a  well-known  national  mark  (Article  4  (4)  (a)  TMD)  should  be  made 
mandatory;  ECTA  indicates  that  Article  3  (2)  (d),  Article  3  (3)  and  Article  4  (4)  (a)  TMD 
should  in  particular  be  made  mandatory.  According  to  INTA,  harmonization  of  provisions 
relating  to  trade  marks  as  property  should  also  be  considered,  including  such  aspects  as 
recordal in the trade mark register of assignments and licenses, or the right of the licensee to 
take legal action against trade mark infringements (source MPI study, paragraphs 2.4-2.5 and 
2.8). 

Regarding  procedural  issues,  user  organizations  suggest  the  harmonization  of  inter  alia  (a) 
whether relative grounds are examined ex-officio or only upon opposition (e.g. AIM, AIPPI 
Belgium, MARQUES propose the abolition of examination of earlier rights ex-officio; ECTA 
also  suggests  that  national  offices  should  only  examine  absolute  grounds);  (b)  whether  a 
system  of  pre-registration  or  post-registration  opposition  should  be  adopted  (most  user 
organizations  generally  express  support  for  pre-registration  oppositions  (AIM,  AIPPI 
Belgium,  APRAM,  COAPI,  FICPI,  GRUR,  ITMA,  LESI);  (c)  the  possibility  to  deal  with 
opposition, revocation and cancellation proceedings at the national offices without having to 
refer  to  long  and  costly  court  procedures  (APRAM,  ECTA,  INTA);  user  organizations 
indicate  the  necessity  of  uniform  guidelines  concerning  registrability  and  proof  of  use 
requirement  (MARQUES).  ECTA  proposes  to  provide  for  request  for  proof  of  use  in 
cancellation proceedings and opposition proceedings (MPI study, paragraphs 2.9-2.10). 

EN 

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Besides  legal  aspects,  user  organizations  stress  the  necessity  of  better  harmonisation  of 
national offices’ practices, processes and procedures as well as the interpretation of legal rules 
by  the  courts.  A  number  of  particular  measures  have  been  suggested  to  facilitate  the 
harmonization  of  practices  throughout  the  EU,  including  closer  cooperation  and  the 
development  of  common  guidelines;  creation  of  a  single  repository  for  all  CTM  court 
decisions  to  be  translated  into  the  major  languages  of  the  EU;  establishment  of  common 
performance  standards  between  the  offices;  education  and  seminars,  better  communication 
and exchange of information, development of common tools etc. Regarding E-business tools 
user  organizations  are  unanimous  that  all  national  offices  should  further  improve  and 
harmonize  their  use  of  technology  and  their  accessibility  to  users,  thereby  becoming  more 
transparent  in  their  procedures.  Such  E-business tools should include unique online systems 
providing options for e-filing, online access, e-renewal, e-payment and e-oppositions as well 
as  easily  searchable  databases.  The  possibility  of  a  single  EU  databank  which  contains  all 
trade  mark  rights  or  “one-stop”  online  searching  should  also  be  considered  (ECTA,  INTA) 
(MPI study, paragraphs 2.11-2.13). 

9.7.3.  National offices and cooperation with OHIM  

All user organizations agree that the main role and mission of the national offices and OHIM 
should  be  the  fast  and  efficient  delivery  of  a  legal  title  to  trade  mark  protection,  and  the 
resolution of conflicts amongst trade marks, as well as related rights by handling opposition 
proceedings,  cancellation  and  invalidation  requests,  in  a  timely  and  cost  efficient  manner. 
ECTA, AIM, MARQUES stress the importance of financial autonomy of national offices as it 
provides a stimulus to seek improvement of services rendered at the best cost / benefit ratio 
(e.g.  by  the  use  of  new  common  IT-tools  (AIPPI  Belgium,  MARQUES).  Most  user 
organizations  maintain  that  any  distribution  of  part  of  the  OHIM  renewal  fees  to  national 
offices should not be automatic but should be substantiated by appropriate tasks to the benefit 
of the users (AIM, APRAM, ECTA, EFPIA, FICPI, ITMA, VFA (MPI study, paragraphs 2.14 
and 2.17). 

9.7.4.  Community trade mark system  

Regarding the issue of graphical representation of trade marks, COAPI and ECTA state that 
the requirement should be maintained. In that context it is suggested to think about how non-
traditional  trade  marks  (e.g.  olfactory  marks,  taste  marks,  etc.)  could  be  represented  (e.g. 
GRUR,  MARQUES).  AIM,  APRAM,  GRUR,  INTA  propose  that  the  system  should  be 
opened to other possibilities or the establishment of new conditions to represent new forms of 
trademarks (e.g. sound file as computer file). FICPI is also in favour of a broader definition. 
INTA indicates that currently there seem to be inconsistencies in the application of standards 
for registration and requirements for graphic representation that vary between national offices 
and OHIM (MPI study, paragraph 2.22). 

Most  user  organizations  (AIPPI  Belgium,  COAPI,  ECTA,  EFPIA,  FICPI,  GRUR,  INTA, 
ITMA, LESI, MARQUES) do not support the OHIM’s practice of encouraging lists of goods 
and services corresponding to the Nice class headings, indicating that it leads to unnecessarily 
broad specifications of goods and services for which the applicant has no intention to use the 
mark, or they claim at least that further conditions should apply so as to ensure a precise and 
uniform use of the classification system (AIPPI Belgium). On the other hand, AIM is of the 
opinion that the current practice should not be changed as it meets business needs (MPI study, 
paragraph 2.28). 

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Most  user  organizations  are  in  favour  of  the  current  OHIM  practice  whereby  no  ex-officio 
examination  of  relative  grounds  is  being  performed  (AIM,  AIPPI  Belgium,  ECTA,  EFPIA, 
GRUR, LESI, MARQUES, VFA), although different opinions also exist. The majority of user 
organizations are also in favour of the current preregistration opposition system, as opposed to 
post-registration  opposition  (AIM,  APRAM,  COAPI,  ECTA,  FICPI,  LESI,  ITMA,).  INTA 
has expressed a general position that systems which only examine for absolute grounds should 
maintain pre-registration opposition systems to ensure that relative grounds can be considered 
prior to the registration of trade marks (MPI study, paragraph 2.34). 

9.8. 

Annex 8: Findings of a Social Cost Benefit Analysis 

This is an excerpt from the Social CBA analysis carried out by OHIM between July 2010 and 
June  2011  for  the  Cooperation  Fund  projects.  As  any  CBA  analysis,  it  is  intended  to  be  an 
estimate  based  on  assumptions  and  parameters which  may  not  always  prove  to  be  accurate. 
The estimate can only be considered a first approach to identifying possible social benefits of 
investments, without giving either a guarantee or a commitment for specific benefits.  

This  CBA  adopted  the  point  of  view  of  society.  This  means  that  it  considered  not  only 
tangible  results,  such  as  cost-savings,  but  also  indirect  impacts  on  beneficiaries,  such  as 
satisfaction and time-saving for businesses. It also assessed how cost and benefits would be 
distributed  among  stakeholders:  OHIM,  national  IP  offices  and  businesses  using  their 
services. The CBA was carried out for two groups of projects, both of which were launched in 
2011  (January  and  September).  These  projects  are  currently  in  the  implementation  phase. 
Only  two  projects  have  been  closed  out  to  date:  IT  architecture  and  seniority  projects.  The 
time span used for the first group CBA was 15 years. This was then revised to 10 years for the 
second  group,  which  was  considered  to  have  a  shorter  payback  period.  In  both  cases  the 
yearly  discount  rate  is  5%.  The  CBA  used  conservative  estimates  and  assumptions,  e.g.  on 
expected  process  improvements,  increases  in  business  volume  or  number  of  national  IP 
offices participating. 

The  CBA  concluded  that  all  projects  would  produce  a  net  benefit  to  society  and  would  be 
therefore worth going ahead with. It also suggested foreseeing "gates" within each project to 
refine  the  analysis  based  on  more  updated  information  and  fewer  assumptions.  These  gates 
would allow for a project to stop if it appears no longer feasible. 

Each CBA started by considering the benefits that would accrue to the businesses registering 
trademarks, to the IP offices, and to OHIM. For example, in the case of e-filing, the project is 
meant to achieve three major objectives:  

–  Improve the experience of businesses, with a reduction of time spent, a more predictable 

and transparent outcome, fewer errors and lower legal costs. 

–  Ensure  efficiency  savings  for  IP  offices.  The  interests  of  IP  offices  and  businesses  often 
coincide:  for  example,  faster  processing  time  are  an  efficiency  gain  for  IP  offices  and  a 
benefit for businesses which use their services. 

–  These  efficiency  gains  in  turn  could  translate  into  a  reduction  of  fees  or  improved 
services  for  businesses,  as  in  the  long  term  IP  offices  are  assumed  to  operate  on  a  non-
profit basis. 

9.8.1.  Packet 1 projects 

The table below provides an overview of the results of both CBA broken down by project. 

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Figure 23: Final overall CBA table for all Packet 1 projects 

Cost  

-1,118,000 
-722,000 
-485,000 
-2,257,000 
-823,000 
-1,522,000 

Benefit 
OHIM  
per year 
194,435 
58,324 
415,549 
265,000 
162,000 
295,000 

IP 

Benefit 
offices  
per year 
1,944,355 
1,173,539 
415,549 
500,000 
545,541 
1,745,000 

-874,000 

50,000 

150,000 

Benefit 
businesses 
per year 
3,889,908 
887,925 
1,952,956 
1,370,000 
1,327,205 
2,848,357 

Not 
calculated 

Total 
benefit  
per year 
6,028,698 
2,119,788 
2,784,054 
2,135,000 
1,872,746 
4,545,945 

Net  Present 
Value  
over 10 years 
23,642,448 
6,970,156 
9,375,875 
6,123,727 
5,353,448 
15,583,640 

200,000 

620,000 

-1,130,000 
-8,931,000 

36,000 
1,476,308 

105,853 
6,579,837 

243,696 
12,520,047 

385,549 
20,576,192 

5,751,173 
73,420,467 

Search Image  
Seniority 
Quality 
Designview 
Similarity 
CESTO 
Architecture 
and 
Standards 
E-learning 
TOTALS 

Source: OHIM 

The  figure  above  shows  that  this  package  of  options  would  produce  net  benefits  far  out-
weighting  the  costs.  In  the  first  case  a  cost  of  approximately  € 9  million  would  yield  a  net 
benefit above € 73 million over 10 years. This mean s that each Euro of cost would yield over 
€ 8 of net benefit. The ratio between cost and  net benefit of most individual projects over 10 
years is in line with the 6% average and ranges between 1% and 9%.  

Note:  Two  very  conservative  assumptions  have  been  made:  one,  that  10  offices  implement 
each  of  the  tools  (we  have  received  expressions  of  intent  to  implement  for  far  higher 
numbers);  and,  two,  that  tools  only  deliver  benefits  for  a  ten-year  period  including  the 
development  time.  This  excludes  the  long-term  benefits  of  harmonisation.  All  these  figures 
are work in progress and will be updated on a regular basis. 

The above table shows that most of the net benefit accrues to businesses.  

9.8.2.  Packet 2 projects 

The table below shows the costs and benefits for Packet 2 projects. The first column contains 
the costs of each project, while the subsequent four columns show the average annual benefits 
for  OHIM,  the  participating  IP  offices,  the  businesses,  and  the  total.  Finally,  the  last 
(highlighted)  column  shows  the  Net  Present  Value  of  the  net  benefits  of  each  project, 
discounted over 10 years using a discount rate of 5%. 

Figure 24: Final overall CBA table for all Packet 2 projects 

Cost  

-4,399,150 

Benefit 
OHIM  
per year 
45,000 

Benefit 
offices  
per year 
949,689 

IP 

Benefit 
businesses 
per year 
8,876,329 

Total 
benefit  
per year 
9,871,018 

Net  Present 
Value  
over 10 years 
45,337,752 

-1,798,940 

900,000 

470,800 

132,307,704 

133,678,504 

666,556,678 

Future  Software 
Package:  E-filing 
for Trademarks 
Database 
supporting 
of 
Enforcement 
IP  Rights  and 
Counterfeiting 

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Intelligence 
Support Tool 
Harmonised  User 
Satisfaction 
Survey 
Common 
Gateway 
Applications 
Common 
Centre Tool 
TOTAL:  

Call 

for 

-645,754 

120,000 

2,675,062 

0 

2,795,062 

15,793,074 

-790,691 

675,000 

15,650,800 

238,750 

16,564,550 

96,376,700 

-1,388,508 

990,000 

3,942,070 

3,637,500 

8,569,570 

27,229,170 

-9,023,043 

2,730,000 

23,688,421 

145,060,283 

171,478,704 

851,293,374 

Source: OHIM 

Packet 2 would cost approximately € 9 million  and produce a net benefit to society worth a 
staggering € 171 million yearly with a present  value of € 851 million over 10 years. The CBA 
revealed  that  the  most  efficient  project  would  be  a  database  supporting  enforcement  of  IP 
rights and counterfeiting intelligence support tool: it would cost approximately € 1,8 million 
and produce alone almost 80% of the total net benefits. This means that one Euro of cost on 
this  project  would  produce  € 371  of  net  be nefit  over  10  years.  Other  projects  are 
comparatively  less  efficient,  but  still  definitely  worth  going  ahead  with,  as  on  average  one 
euro of cost compares with approximately € 26 of net benefit. 

In  relation  to  the  TMview  and  Euroclass  projects,  launched  before  the  kick-off  of  the 
Cooperation  Fund,  an  ex-post  simplified  CBA  analysis  has  been  conducted  which  provides 
the following estimates: 

Figure 25: Overview for TMView and Euroclass  

Cost  

Benefit 
offices  
per year 

IP 

Benefit 
businesses  per 
year 

Total 
per year 

benefit  

Present 

Net 
Value  
over 10 years 

2,330,798 
5,880,692 
8,211,490 

1,909,600 
694,444 
2,604,044 

1,672,925 
923,710 
2,596,635 

3,582,525 
1,618,154 
5,200,679 

5,108,184
5,353,198
10,461,382

TMView 
Euroclass 
TOTAL:  

Source: OHIM 

Note: The above simplified CBAs for TMview and Euroclass is based on tools with 25 offices 
participating in. It is based on the following assumptions: 

TMview:  end  users  benefit  from  reduced  commercial  search  service  costs228  (since  use  of 
TMview  is  free  of  charge)  and  reduced  national  search  reports  fee  payments  when  filing 
CTMs, plus reduced labour costs related to the time needed for conducting searches (TMview 
being  a  single  search  tool  with  results  in  seconds);  offices  benefit  from  OHIM’s  subsidy  of 
their running costs derived from servicing TMView 

228 

For  purposes  of  this  CBA,  the  rates  for  SAEGIS’  online  searching  have  been  considered  (Source: 
http://trademarks.thomsonreuters.com/price-list,  being  the  price  2.65  US  Dollars  per  search.).  The 
national  search  fee  cost  for  CTM  applicants  is  120  euros  per  CTM  application  for  which  applicant 
requests a national search. 

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Euroclass: end users benefit from a decrease of refusal decisions, thanks to the pre-filing use 
of Euroclass search results, while offices benefit from reduction in time of examination due to 
use  of  pre-accepted  terms  shown  in  Euroclass  for  classification  purposes,  thus  gaining 
efficiency. 

9.8.3.  Assumptions underlying benefit calculations 

The  key  assumptions  used  to  calculate  the  benefits  for  each  project  are  outlined  below.  In 
general,  the  benefits  to  OHIM  and  the  IP  Offices  consist  of  efficiency  gains  due  to  the 
reduction in the number of calls and e-mails and other streamlining of processes, and in most 
cases a modest increase in the number of trademark applications filed as a result of improved 
user experience or increased perceived value of a trademark once stronger enforcement tools 
are  deployed.  For  businesses,  the  main  sources  of  benefits  are  a  reduction  of  harm  from 
counterfeiting and piracy, as a result of more efficient enforcement tools, a reduction in legal 
expenses  to  conduct  various  proceedings  before  OHIM  and  the  other  IP  offices,  and  a 
reduction in inter-partes cases, such as oppositions resulting from more effective search and 
information tools provided at the time or before filing of the application. 

Figure 26: Main assumptions behind benefit calculations 

OHIM 

IP Offices 

Business 

Future 
Software 
Package:  E-filing  for 
Trademarks 

–  10% 

reduction 

in 
number  of  calls,  e-
mails and complaints. 

Reduction  of  the  number 
of  examiners  (1.3  FTE  per 
office); 

50% reduction in refusals 
on  Absolute  Grounds  and 
formalities; 

1% increase in number of 

TM applications; 

15% reduction in number 
and 

e-mails 

calls, 
of 
complaints. 

10%  reduction 
in 
number of oppositions; 
in 
number of cancellations 

reduction 

5% 

the 

the 

in 

Increase  of  3  percentage 
the  number  of 
filed  without 

points 
applications 
using intermediary; 
the 
reduction 
number of calls, e-mails and 
complaints 
IP 
offices. 

filed  with 

5% 

in 

supporting 
IP 
and 

Database 
Enforcement  of 
Rights 
Counterfeiting 
Intelligence  Support 
Tool 
Harmonised 
Satisfaction Survey 

User 

1% 

increase 

in 

1% increase in number of 

number of CTM filings. 

TM filings. 

1%  reduction  of  revenue 
to  piracy  and 

lost  due 
counterfeiting; 

10%  reduction 
in 
number of legal actions. 

the 

Savings  in  consultant 
costs to carry out survey. 

Avoided  cost  to  develop 

No direct benefits. 

and run own survey; 

Savings 

in  consultant 

costs to carry out survey; 

1% increase in number of 
TM  filings  due  to  higher 
customer satisfaction. 

Common Gateway for 
Applications 

1%  increase  in  the 

1% increase in number of 

number of CTM filings; 

TM filings; 

20% 
reduction 
in 
examiner 
training  cost 
to  on-going  best 
due 
practice  exchange  and 

Avoided  cost  of  “look 
feel”  adaptations  of 

and 
individual applications; 

Avoided  cost  of  “label 

10%  reduction 

the 
number of calls, e-mails and 
complaint filings. 

in 

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knowledge transfer. 

Common  Call  Centre 
Tool 

20%  reduction  in  the 
number  of  calls,  e-mails 
and 
complaints 
forwarded  from  other  IP 
offices; 

1%  increase  in  the 

number of CTM filings. 

reduction 

translations”  for  individual 
applications; 
20% 

in 
examiner training cost due to 
on-going 
practice 
best 
exchange  and  knowledge 
transfer. 

costs 

Avoided 

of 
developing  own  call  centre 
solution; 

1% increase in number of 

TM filings. 

Efficiency  gains  due  to 
reduction  in  time  spent  (by 
intermediaries)  on  obtaining 
information from OHIM and 
other IP offices. 

Common 
assumptions;  

Time horizon is 10 years; 
Discount rate used to calculate NPV is 5%; 
On average, 10 IP offices participate in each project. 

Source: OHIM 

9.8.4.  Comments on broader social impacts 

–  As  far  as  legal  costs  for  enterprises  are  concerned,  taking  into  account  that  99.8%  of 
companies in EU27 are SMEs, and that overall they don't have big market power, it can be 
assumed  that  a  significant  part  of  their  savings  would  be  transferred  to  consumers  via 
lower prices. This conclusion, however, depends on the specific market conditions in each 
sector. 

–  Conversely, the legal profession is among the "losers" of some of these projects, as legal 
costs savings would mean the reduction in the use of this intermediary. Such intermediaries 
would need to transition towards provision of higher value-added services to their clients 
to make up for the lost revenue. 

–  Employment effect: the CBA carried out by OHIM calculated that some of the efficiency 
gains would materialise through a potential re-deployment of staff, particularly information 
centre employees dealing  with customer inquiries and even examiners. This would allow 
offices  to  focus  their  resources  on  improving  service  provided  to  business.  In  terms  of 
quality of work, the image boost for IP offices would translate into higher commitment and 
motivation of employees. 

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