I move: "That the Bill be now read a Second Time".
Our law in this area is contained in the Trade Marks Act, 1963, and the rules made thereunder. Registration of trade marks is administered by the Patents Office, under the direction of the Controller of Patents, Designs and Trade Marks. The Controller keeps the Register of Trade Marks and registration affords legal protection to a trade mark proprietor.
In essence a trade mark is a badge of goodwill and the primary purpose of registration is to legally protect the exclusive rights of the proprietor and thereby the goodwill subsisting in the trade mark. The function of the register is to record what are claimed as exclusive rights. There are over 65,000 entries on the register at present and every year approximately 6,000 new applications are made.
As with many other areas of enterprise in recent years, the pace of change in trade mark practice has been remarkable. The Bill is necessary to take account of such changes as have taken place, particularly those arising from amended and new international agreements and regulations. The basic international treaty relating to trade marks is the Paris Convention of 1883 which constituted a union for the protection of industrial property. This treaty allowed countries to conclude other agreements provided they did not contravene the Convention. One such agreement was the Madrid Agreement of 1891 concerning the international registration of marks.
In recent years the most important development has been European Council Directive No. 89/104 of 21 December 1988, which is an important single market measure to approximate the laws of member states on trade marks. The directive does not attempt a wholesale harmonisation of national trade mark laws. Rather, it concentrates on differences between member states which distort competition. In particular, it harmonises the conditions for validly registering a trade mark and the rights conferred by registration.
The second change of note also relates to our obligations within the European Community and concerns Council Regulation 40/94, dated 20 December 1993 which makes provision for a unitary Community trade mark. This new system will allow trade mark owners to register marks throughout the Community by means of a single application to the Office for Harmonisation in the Internal Market, dealing with trade marks and designs, in Alicante, Spain. This office is scheduled to commence processing of Community trade marks applications from April 1996.
Another important international development was the Madrid Protocol which was concluded in June 1989. The Madrid Agreement and the Protocol are now more compatible with our national trade mark system. The Protocol facilitates the international registration of trade marks by the World Intellectual Property Organisation in Geneva. Ireland signed this Protocol in December 1989. It could not enter into force until four instruments of accession had been deposited with the World Intellectual Property Organisation. To date, China, Cuba, Spain, Sweden, the United Kingdom, Denmark and Mongolia have deposited instruments of accession. The World Intellectual Property Organisation will now discuss with member countries of the Madrid Union for the International Registration of Marks, common regulations and fees which are expected to operate from April 1996. As I will explain later, this Protocol has benefits for this country which we wish to avail of by becoming party to it.
Apart from these recent international agreements, changes to the present legislation are required by developments and innovations in trade mark practices. Since the Trade Marks Act, 1963, was framed there has been an international trend to register marks in respect of services and not just goods. The closest example of this trend is the United Kingdom which introduced the registration of service marks through the Trade Marks (Amendment) Act, 1984. This is an important change in international practice which we must now accommodate in our law.
Preparation of this Bill allowed my Department an opportunity to undertake a fundamental overhaul of the present legislation and to incorporate the various changes outlined above. This brings me to the main objectives of the legislation now proposed which are outlined in the long title of the Bill.
The primary purpose of this Bill is to give effect to EU Council Directive No. 84/104 to approximate the laws of member states relating to trade marks. Implementation of the directive will reduce or eliminate differences in approach between EU member states in the area of trade marks, thereby reducing barriers to competition and assisting the completion of the Single Market.
At the heart of the law governing registered trade marks are the key questions of what marks should qualify for registration and what rights are conferred by registration. In order to be registered, a mark must be able to fulfil the essential function of a trade mark — that of distinguishing its proprietor's goods or services from those of his competitors; it may not, for example, be descriptive of the goods, or be a word which another trader might legitimately wish to use to describe his goods. Nor may a mark be validly registered if it conflicts with an earlier right, for example a similar trade mark already on the register. Moveover the registration of a word or device as a trade mark does not give a monopoly to all uses of that word or device; it is necessary in law to make clear the scope of the protection conferred and what acts constitute infringements of the trade mark right.
The Directive seeks to ensure that, as far as possible, these questions are answered in the same way throughout the Community. Article 3 is concerned with grounds for refusal or invalidity which relate to the registrability of the mark — sometimes referred to as "absolute grounds". Article 4 refers to grounds concerning conflicts with earlier rights — often referred to as "relative grounds"; while article 5 deals with the rights conferred by a registered trade mark.
Each of these articles contains mandatory provisions, specifying grounds or rights for which member states must provide and permissive provisions specifying grounds or rights for which a member state may provide. The law may not, however, provide for any grounds or rights which are additional to those mentioned in the Directive. Taken together, therefore, articles 3 to 5 provide an exhaustive list of the grounds for refusing or invalidating the registration of a trade mark and of the rights conferred by registration.
There is a close relationship between articles 4 and 5, because both are concerned with conflicts between trade marks. Article 4 deals with the extent to which a trade mark constitutes a barrier to the valid registration of a later mark and article 5 with the extent to which the earlier trade mark can be used to prohibit use of the later mark.
The directive is concerned with substantive law, not procedures. While it sets out the grounds for refusal or invalidation of registered trade marks, it specifically says that member states remain free to fix the procedures whereby these grounds are applied. This is why articles 3 and 4, which deal with the grounds for refusal or invalidation, include the words "shall not be registered or if registered shall be liable to be declared invalid". Countries like the UK and Ireland, which register trade marks only after search and examination continue to do so, while countries that do not search or examine but leave the validity of a registration to be settled by litigation are free to retain their systems if they wish. The essential requirement is that there must be some legal mechanism whereby the grounds of objection contained in articles 3 and 4 can be considered. The changes to our legislation needed to give effect to these articles are twofold.
First, the test for registering a trade mark will be whether the mark is capable of distinguishing its owner's goods or services from those of another. The new and wider definition contained in article 2 of the Directive is reflected in section 6 of the Bill which permits registration of geographic names and the shape of goods or of their packaging.
Second, the rights enjoyed by a registered mark will be broadened so that in future another person's use of the registered mark on similar goods or services will constitute infringement. Article 5 of the Directive gives a much wider protection than was available under the Trade Marks Act, 1963. Under that Act, infringement proceedings could only be taken if another person used the mark on the precise goods for which it was registered. If that other person used the mark on similar goods or used it to sell services related to the goods for which the mark was registered, then the owner did not have recourse to trade mark legislation and had to rely instead on a common law action for passing off. Section 13 of the Bill will not only extend these broader infringement rights to similar goods but, in the case of a trade mark which has a reputation in the State, extend infringement rights to non-similar goods where the infringing use takes unfair advantage of, or is detrimental to, the distinctive character or repute of the registered mark.
The Directive should have been implemented in this country by January 1993. Implementation by way of statutory instrument was considered unsatisfactory on legal grounds as substantial changes were required to comply with its terms. Deputy Michael McDowell introduced a Private Member's Bill in March 1993 and I compliment him on his initiative in that regard. At that time my predecessor decided to proceed with the preparation of an official Bill while retaining the overall scope and structure of Deputy McDowell's Bill.
The purpose of the Bill is also to make provision for the new Community trade mark. Council Regulation 40/94 of 20 December 1993 established the Office for Harmonisation in the Internal Market for trade marks and designs. This office will register Community trade marks which will have effect in all member states. The Community trade marks system will operate in parallel with national systems and offer trade mark owners the opportunity to register their mark throughout the Community by means of a single registration. The Bill makes provision in connection with the operation of Council Regulation 40/94. Section 55 provides, inter alia, for filing applications for a Community trade mark to be made through the Patents Office in Dublin.
A third aim of the Bill is to enable ratification of the Protocol to the Madrid Agreement concerning the International Registration of Marks and to implement certain provisions of the Paris Convention for the Protection of Industrial Property. Part III allows us to meet our various obligations under both the Madrid Protocol and the Paris Convention. At present, an Irish trade mark owner who wishes to protect his mark in overseas markets must apply separately for registration in each of the countries in which protection is desired. This entails going through whatever procedures are required in each country, paying fees to each national trade marks office and undertaking substantial costs to pursue the various applications.
Trade mark owners in many other European countries are able to register their mark by means of a single application under an international arrangement known as the Madrid Agreement. Although this agreement has functioned for more than 100 years it has a membership of only 44 countries. This arose because most participating countries conducted little or no examination of applications and fundamental objections to a trade mark only came to light when there was litigation.
In contrast, our trade marks system is based on registration being granted only after full examination of the mark including a search of the register for possible conflicting marks. Given the lack of compatibility between the Madrid system and many national systems it was not surprising that countries including the USA, Canada, Japan, the UK and Ireland remained outside the Madrid Agreement. A Protocol to the agreement was concluded on 27 June 1989 which overcame the difficulties we had with the original agreement.
Ireland signed the Protocol in December 1989 and section 57 allows provision to be made to give effect to it. This will make it easier for Irish industrial and commercial enterprises to obtain wider protection for their trade marks by means of a single application with the World Intellectual Property Organisation, WIPO, designating the member countries of the agreement where protection is required. Equally, trade mark proprietors in countries outside Ireland which are a party to the Protocol will find it easier to register their marks here by designating Ireland in their applications for registration of trade marks with the World Intellectual Property Organisation.
Section 58 enables us to make any amendments necessitated by any revisions or amendments of the Paris Convention. Sections 59 to 63 give explicit effect in Irish law to our obligations under the convention to protect well-known trade marks and emblems of other convention countries as well as intergovernmental organisations. Hitherto, the Controller of Patents, Designs and Trade Marks exercised his discretion to take account of our obligations under this convention. The incorporation of such obligations into the body of the Bill is a more satisfactory approach as it puts such obligations on a sound legal footing. A new services programme is also being prepared by ABT to exploit the export potential of the services sector.
This Bill aims to facilitate the registration of trade marks in respect of services. Up to now, service industries were unable to register such trade marks as section 11 of the Trade Marks Act, 1963, confined the definition of a trade mark to goods only. The Bill will facilitate the registration of trade marks in respect of services by broadening the definitions of a trade mark as contained in section 6 to cover services. This will benefit service industries who will now be able to protect the goodwill associated with their marks and should assist in attracting service industries to Ireland.
Part I of the Bill clarifies matters common to most Bills and provides for repeal of the present law while Part II deal with the registration of trade marks generally. It re-enacts much of what was contained in the Trade Marks Act, 1963, while taking account of various changes which have taken place since enactment, particularly those necessitated by Council Directive 89/104. The Bill will deregulate the procedures involved in both the assignments and licensing of trade marks.
Under current legislation the controller is required to examine in detail assignments and licences. This is a costly exercise which has been justified on the basis that consumers needed to be protected. It was felt that unrestricted licensing could lead to deception of the public. It is considered this is an unlikely danger as the person who stands to suffer most from the devaluation of a trade mark is the proprietor of the mark. The best interests of the proprietor lie in ensuring that assignments and licences do not undermine the value of the trade mark. Section 26 requires that assignments must be in writing while section 27 provides for the recording of transactions affecting registered trade marks in the register. Sections 30 to 34 deal with licensing arrangements.
Under the 1963 Act a system of registering users of a trade mark was introduced. It was felt at that time a trade mark's capacity to distinguish could be undermined by unrestricted licensing and that a tightly controlled system of registered users would prevent deception of the public. The reality in today's market place is that the trade mark proprietor has most to lose from a trade mark losing its reputation. He will, therefore, ensure that the income he may derive from royalties does not suffer from the actions of licencees. Accordingly, it is not considered necessary to intervene in what is a commercial arrangement between a trade mark proprietor and a licensee. Modern consumers are conscious of trade marks and exercise choice in selecting from the vast range of goods available in an increasingly globalised marketplace. It is not considered necessary that the Patents Office should act in a consumer protection role through the compulsory recording and vetting of licences.
The Bill will not require licensees to register their use of a trade mark with the Patents Office as was the case under section 36 of the 1963 Act but section 30 will specify that a licence will not be effective unless it is in writing.
The present law also provides that where the proprietor of a registered trade mark applies to register the same or a similar mark for similar goods or services the two marks may be associated. The proprietor may only assign or transmit associated marks as a whole. The purpose of requiring marks to be associated was to protect the public from being misled into thinking that different goods bearing identical or similar marks originated from the same source when they did not. The Government feels that such protection is no longer necessary since it is the trade mark proprietor and the assignee who will stand to lose most should the trade mark be devalued through confusion on the part of consumers.
Section 35 provides that applications can be in respect of services as well as goods. Section 37 allows for goods to be classified by 34 different classes and services by eight classes in accordance with the Nice Agreement of 15 June 1957 for the international classification of goods and services. It is proposed to extend this system to service marks in line with general international practice.
Section 45 now provides for a trade mark to be registered for ten years and renewed for further periods of ten years. Under existing legislation the first registration period was seven years with renewals for successive periods of 14 years. This will bring our registration periods into line with those for the Community trade mark.
Section 52 introduces a new category of trade mark whereby an association of members can register a collective mark in respect of goods or services, while section 53 deals with certification marks. Whereas an "ordinary" trade mark serves to distinguish one trader's goods from another, the function of a certification trade mark is to indicate that goods comply with certain objective standards in respect of, for example, origin, material, method of manufacture or quality. These standards are set out in the regulations which must accompany a certification mark. When an application is made to register a certification mark, the registrability of the mark itself is considered by the controller in the usual way. The application is then referred to the Minister.
The regulations are examined to see that the mark does guarantee genuine qualities or characteristics and that anyone whose goods meet these standards is allowed to use the mark. The Minister must be satisfied that the applicant is competent to certify that the goods or services comply with these standards.
The proposed Community trade marks system does not provide for certification marks. It does, however, like most continental European systems provide for collective marks. These have a certain resemblance to certification marks in that they are accompanied by regulations concerning the use of the mark. The essential function of the regulations of a collective mark however is to indicate who is entitled to use the mark, for example, any member of the association owning the mark, rather than to set out standards with which the goods or services must comply. The proprietor may, if he wishes, include such standards and in some cases a collective mark may provide as effective an indication of quality or origin as a certification mark. In general, however, compliance with these standards does not itself confer the right to use the mark. The primary function of a collective mark is to indicate a trade connection with the proprietor organisation; such a mark is therefore more akin to an "ordinary" trade mark than is a certification mark.
I have not said "Marx" as frequently since I was in The Workers' Party — I am worn out repeating it but we will plough on. Our trade mark system does not at present provide for the registration of collective marks.
