Source: EURLEX
Language: en
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# 52013SC0096

**COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE 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) /\* SWD/2013/096 final <EMPTY> \*/**

  

COMMISSION STAFF WORKING PAPER

EXECUTIVE SUMMARY OF THE 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.
context

In Europe, a trade mark can be registered
at national level at the industrial property (IP) offices of Member States, or
at EU level as a Community trade mark ('CTM') at the Office for Harmonization
in the Internal Market (Trade Marks and Designs) in Alicante ('OHIM').

Since the 90s, when the trade mark acquis
was created, neither the TM Directive nor the CTM Regulation have been subject
to any major modification. The business environment, however, has changed
significantly over the past two decades.

2.
Problem definition

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

First, the Directive does not cover
procedural aspects at all, the level of harmonisation as to substantive law (including
optional provisions) is insufficient, and there is only a vague legal basis for
cooperation between the OHIM and national IP offices in the CTM Regulation.

Second, in order to achieve and ensure complementarity
and interoperability between the CTM and national systems, OHIM and national IP
offices need to cooperate closely. However, besides missing a clear legal
basis, there are two other drivers hindering cooperation. These drivers are the
insufficient technical facilities (IT equipment) of national offices, and the
fact that they do not possess the necessary financial resources to develop,
launch and run, in the long term, common tools, e.g. joint trade mark databases
with online search facilities.

The above problems have a series of
significant adverse consequences for industry. These deficiencies not only limit
accessibility to the systems of trade mark protection, involve a great deal of
legal uncertainty, and put the complementary relationship between the CTM and
national systems at risk, but also distort the level playing field for companies,
with further negative consequences on the competitiveness of the EU.

Without appropriate changes, the current sub-optimal
conditions for European businesses and the under-developed complementarity
between the trade mark systems are likely to worsen.

There have been some promising attempts to
find practical solutions for facilitating cooperation between OHIM and national
IP offices, notably within the context of the OHIM Cooperation Fund. However,
this experience has revealed the clear shortcomings of the current framework
for cooperation, and demonstrated the limits of cooperation based on voluntary
arrangements.

Therefore, despite existing cooperation
initiatives, sustainable benefits are not secured, and the benefits of the
existing cooperation initiatives will represent a cost if the situation continues
as it is.

As a result, the further
IP offices fall behind in terms of efficiency, the less attractive they become vis-à-vis
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 national systems, contrary to the goal of preserving national
trade marks alongside CTMs in a system of harmonious and complementary coexistence.

3.
subsidiarity

Article 118(1) TFEU allows the establishment
of measures for the creation of unitary IP rights to provide protection
throughout the EU, including the setting up of centralised Union-wide
authorisation, coordination and supervision arrangements. The adoption of 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, is provided for by Article
114 TFEU.

The CTM is a self-standing EU intellectual
property title. Only the EU legislator is entitled to make necessary
modifications to the Regulation in order to improve and streamline the CTM
system. The same applies for necessary amendments of corresponding provisions which
are already part of the TM Directive.

Moreover, as the identified problems do not
allow a level playing field for EU companies (with further negative
consequences on their competitiveness), it is advisable to adopt measures that
can improve 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, particularly given the need to ensure coherence with the
CTM system.

Finally, as OHIM is a regulatory agency of
the EU, a solution for the unfavourable framework conditions impeding effective
cooperation with national offices can also only be found at EU level.

4.
Objectives

The general objective of the review is to
modernise the trade mark system in Europe, thereby enhancing EU companies'
competitiveness through improving accessibility of TM systems (decreased costs;
increased speed and predictability), providing legal certainty for all
businesses in the EU, and ensuring coexistence and complementarity between EU
and national systems.

The specific objectives are to increase convergence
of the TM Directive with the CTM Regulation, and to increase the level of
cooperation between OHIM and national IP offices.

Finally, the operational objectives are to
achieve greater approximation of trade mark procedures and substantive issues,
provide an adequate regulatory incentive for cooperation, build technical cooperation
capacity at national TM offices, and to secure long term financing for
cooperation activities.

5.
analysis and comparison of policy options and their
impacts

The policy options
were considered for each of the operational objectives and measured against the
criteria of effectiveness (achievement of objectives) and efficiency (time
needed, overall cost and proportionality).

5.1.
Approximation of trade mark laws and procedures

Option 1 (base
line): There would be no further harmonisation, despite the apparent need for
further alignment of the heterogeneous legal framework.

Option 2 (partial
approximation): The approximation of national laws and their coherence with the
CTM system would be expanded to encompass (i) the alignment of the principal
procedural rules with the CTM Regulation, (ii) the alignment of further
substantive law aspects addressed in the CTM Regulation, and (iii) the
reduction of optional provisions in the TM Directive, in line with the CTM
Regulation. It is considered that this limited alignment exercise would be
feasible for Member States and could be done within a reasonable period of
time. Since the achievement of the identified
objectives would be highly uncertain, if the approximation was carried out on a
voluntary basis (sub-option 2a), it appears appropriate to pursue the
harmonisation by a legally binding instrument (sub-option 2b).

Option 3 (full
approximation): The approximation would be based on option 2 but includes
all remaining aspects of substantive trade mark law and procedures. The
approximation would be either voluntary (3a) or mandatory (3b). However, the
analysis of existing problems has not demonstrated an apparent need for a full
scale approximation of all trade mark provisions. Moreover, Member States do
not seem to be ready for such an extensive move. As a result, option 3 would be
disproportionate to the actual needs and its political feasibility highly
uncertain.

Option 4 (single
rule book): National trade mark laws would be entirely replaced by a single
rule book setting uniform rules across the EU. As a result, all national
offices would apply identical provisions. However, even more than option 3, this
option would be clearly disproportionate and is to be discarded upfront.

Objective 1 – approximation of trade mark laws[1]

||

|| Effectiveness || Efficiency || Overall

Greater approximation of TM laws and procedures || Time needed || Overall cost || Proportio nality

1. Baseline || 0 || 0 || 0 || 0 || 0

2. Partial approximation || || || || ||

2a. Voluntary || ? || -- || - || + || -

2b. Mandatory || ++ || + || - || + || ++

3. Full approximation || || || || ||

3a. Voluntary || ? || -- || -- || - || -

3b. Mandatory || ++ || -- || -- || -- || +/-

4. Single rulebook || ++ || -- || -- || -- || +/-

The selected option 2b is expected to have an
overwhelmingly positive effect on all users of the trade mark system,
especially SMEs. In the long term, it would contribute
to improving the efficiency and effectiveness of procedures at national IP
offices and eventually lead to significant cost savings. Finally, it would
be clearly beneficial to OHIM, considering the idea of taking the CTM
system as a benchmark, and the Office's task of supporting and coordinating efforts
in converging practices and tools with national offices. Moreover, one of the
priority harmonisation measures, the introduction of the
"one-class-per-fee" system, will be accompanied by an appropriate
adjustement of CTM application, renewal and class fees, which will additionally
benefit users.

5.2.
Missing clear legal basis for cooperation

Option 1 (base
line): No specific legal basis for cooperation would be provided.

Option 2:
A clear legal basis would be established allowing OHIM and national offices
to cooperate (optional cooperation) with the aim of harmonising practices and developing
common tools and databases. Given its non-binding nature, it cannot be expected
that all offices would take part.

Option 3: National
offices and OHIM would be obliged to cooperate (obligatory cooperation). The cooperation objectives would be clearly specified in
order to allow monitoring of their achievement. As a result, participation of
all offices would be ensured and it would become easier for them to justify, to
their budgetary authorities, the allocation of resources for common projects
with other IP offices, and easier for OHIM to internally validate its
expenditure on cooperation activities.

Objective 2 - providing adequate legal basis for cooperation

||

|| Effectiveness || Efficiency || Overall

Greater incentive for cooperation || Time needed || Overall cost || Proportio nality

1. Baseline || 0 || 0 || 0 || 0 || 0

2. Legal basis for optional cooperation || ? || + || + || ? || ?

3. Legal basis for obligatory cooperation || ++ || + || + || + || +

The selected option 3 would ensure full participation
in the process of converging practices and developing common tools, and would
thus meet the expectations of users. For national offices, the
selected option would lead to significant gains in efficiency and cost in the medium to long term. National
offices would be able to build on the experience gained in the context of the
OHIM Cooperation Fund, and further develop the existing framework which would facilitate
a smooth transition. OHIM clearly demonstrated its capacity to deal
effectively and within a short timeframe with such large scale cooperation projects
and will also be able to draw benefits from the common projects.

5.3.
Cooperation capacity building regarding
technical facilities

Option 1: Would
leave it for each IP office to procure and develop the required facilities.

Option 2: Would
make it possible that the required facilities and tools are accessible to IP
Offices within a framework of voluntary cooperation.

Option 3: Would
ensure that the required facilities are accessible through an obligatory
cooperation framework. Only this option would guarantee that all offices
benefit and commit to the development of common tools and databases.

Objective 3 - Technical capacity building at national IP offices

||

|| Effectiveness || Efficiency || Overall

Greater security for obtaining facilities || Time needed || Overall cost || Proportio nality

1. Baseline || 0 || 0 || 0 || 0 || 0

2. Optional access to tools || ? || ? || + || + || ?

3. Mandatory access to tools || ++ || + || + || + || +

Under the retained option 3, users
can be expected to face convergent and technologically updated IT solutions. This
will result in increased accessibility, enhanced efficiency and reduced costs. IP
Offices can benefit from enhanced cooperation thanks to improved access to
IT development. The selected option would also benefit OHIM.

5.4.
Cooperation capacity building regarding funding
5.4.1.
Financing in general

Option 1: Each
IP office and OHIM would bear the entire cost of their cooperation activities. This
would prevent Member States from taking part in cooperation schemes, and,
therefore, this option would fail to achieve the identified objective.

Option 2: Cooperation
activities would be financed from the EU budget. However, it would be highly
unlikely that a substantial contribution from the EU budget could be made
available considering the current budgetary restrictions.

Option 3: Financing
would be from the OHIM budget, using part of OHIM's annual revenue. An appropriate
funding mechanism would be identified, including control mechanisms to guarantee
that funds are only used for specific earmarked purposes, and subject to
compliance criteria. OHIM has accumulated a substantial surplus which is already
partly used for Cooperation Fund projects. Moreover, OHIM's annual budgetary
results constantly exceed the operational expenditure of the Office. Hence, the
new cooperation activities could either be financed from annual income and/or
from the existing surplus, thus ensuring the availability of sufficient finances.
The cost of cooperation activities between OHIM and national offices would
amount to € 17 – 20 million a year which corresponds to about 10% of OHIM
operational income. The budgetary forecasts show that option 3 would not cause an imbalance in the OHIM budget.

Objective 4 ––
Secure long term financing

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 || 0 || 0 || 0 || 0

2. Financing from EU budget || ? || ? || 0 || -

3. Financing from OHIM budget || ++ || ++ || 0 || ++

5.4.2.
Financing from the
OHIM budget – funding mechanism

The report analyses two possible funding
models: funding via lump sums on the basis of agreed distribution criteria (3.1a)
and project-driven funding based on grants (3.2a). Based on that assessment, the
report finds the latter option to be fitter to achieve the identified
objectives.

Use of OHIM
budget – funding mechanism

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 || ++ || ++ || + || ++

5.4.3.
Financing from OHIM
budget – source of funding

Upon analysis of options, notably funding
from OHIM operational budget (3.1b), from a specific OHIM income (3.2b) and by
further using the accumulated financial reserve (3.3b), , it appears most
appropriate to finance cooperation actictives from OHIM annual income as a
whole.

Use of OHIM budget – source of funding

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 || ++ || + || 0 || +/- || +

2b. Funding from specific income (renewal fees) || ++ || - || - || 0 || 0

3b. Use of surplus (increase in allocation to the Cooperation Fund) || -- || + || 0 || 0 || -

5.4.4.
Impacts of the
selected option

Users would
clearly benefit from results of the new cooperation scheme. Moreover, there
would be no impact on them due to the use of OHIM budget to fund common
projects with 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. The financing of the cooperation activities by OHIM
would have a significant impact on its budget. It can be concluded that the
OHIM budget would be able to take the additional expenditure related to funding
of cooperation projects with national offices from its annual operational
results, while taking into account the impact of the adjustment of OHIM fees due
to the introduction of the"one-class-per-fee system". Accordingly, the
selected option would not cause an imbalance in the OHIM budget.

6.
Monitoring and Evaluation

Three years after the expiry of the
transposition deadline, Member States could submit to the Commission a report
on the implementation of the new provisions of the Directive. Based on these
inputs, the Commission could draw up a report, including an assessment of the
effectiveness of the measures taken. Furthermore, the cooperation activities
financed from the OHIM budget would be checked and monitored in accordance with
financial rules applicable to the Office, notably as regards grant procedures.
The progress in terms of convergence of practices and tools could be measured
annually, on the basis of OHIM summary reports. Five years after the entry into
force of the amendments to the CTM Regulation (and, if applicable, also the TM
Directive), the Commission could review the new legal framework for cooperation,
with particular attention to the funding mechanism for cooperation. The review should
be based on annual summary reports prepared by OHIM.

[1]               Score system: positive effect: from slightly positive
(+) to strongly positive (++); negative effect: from slightly negative (-) to
strongly negative (--); uncertain result: (?); no impact: 0.

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