The protection of trademarks, like other elements of industrial property, is territorial. This has traditionally meant that if one wished to get protection in different countries, one had to go to the industrial office of each country and register. That is obviously costly and time consuming.
The EU trademark system came into operation in 1996. Applications are dealt with by the Office for Harmonisation in the Internal Market (Trade Marks and Designs), more commonly referred to as the OHIM. This established a unitary system of trademark registration in all member states so there would be one trademark for all states, not just for individual countries. This was a major achievement and an integral part of completing the Internal Market. It is important to recognise, however, that some trademark users will only operate in a local market and may not require a trademark that covers the entire Union. Last weekend the Welsh rugby team had a Rockport logo on its jersey, a footwear brand that is well known in Britain but not here. It is, therefore, important that the national offices continue to give trademarks for their own countries.
The EU trademark system has been in operation for some years and earlier this year the Commission tabled a proposal to amend the existing regulation. It is based on the experience of the operation of the Community trademark (CTM) and seeks to increase the effectiveness of the system without substantively changing it.
There are a number of technical amendments. The most significant and contentious is a proposal to remove the current searching requirement from the system. In line with the CTM regulation, a mark shall not be registered if it conflicts, inter alia, with an earlier national trademark. When a CTM application is received, the OHIM conducts a substantive examination of the application to ensure it meets essential requirements. If it is satisfied on this, it forwards batch applications to the national patent offices or industrial property offices which have opted into the Community search system - those in all member states except Germany, France and Italy. These offices then search their registers. The information is then given to the applicant who decides if it will attract opposition on the basis of earlier national trademarks. Only 4% of applications are withdrawn before publication, suggesting that people do not decide to change their position on receipt of this information.
The Commission reviewed this and came up with a number of reasons to abolish the search system. It was costly in terms of money and time for the OHIM and it adds four to five months to the CTM process because member states have three months to file their returns. The CTM application is not published until one month after the office transmits the search report to the applicant. The Commission says the quality of search reports varies significantly from member state to member state and because the search process occurs after the CTM application has been filed, and excludes Germany, France and Italy, it compounds the argument that the process holds little value.
It also points to the accession next year of ten new member states which will enter the search system. This will be more unwieldy and increase the costs that are already significant. Last year we got €1.1 million from the OHIM. If that is multiplied by the number of member states participating in the scheme, it is a significant sum.
We must ensure the CTM remains a competitive Internal Market measure and reduces needless bureaucracy and additional costs on industry. We have consulted a number of bodies on this subject, including industry, the Patents Office and representative organisations. It is important to remember that CTM activity in Ireland is modest - it averaged about 400 applications per annum. Many companies use the services of trade mark agents so it can be difficult to find the true industry view on the system.
We found differing views, with some industries in favour of retaining the system but prepared to drop it if it would make it cheaper and easier for companies to handle the process themselves. Other associations felt that it is of little value in its present guise and it would be better to drop it and encourage members to use commercial search companies that provide a global search facility although the rates are seen as reasonable. We need to tease that out because the rates they were suggesting would only be registration fees while the search would cost significantly more. The Patents Office pointed to the loss of revenue if the CTM search facility is abolished. The associations representing attorneys and the Licensing Executives Society argue in favour of retaining the search facility. They say it is useful and that it represents good value for money, even if it resulted in the fee being increased to absorb the new member states.
The discussions on the proposal commenced in Brussels recently. The majority of member states are opposed to abolishing the search facility in its entirety. They accept there may be inadequacies but feel it would be preferable to consider refinements and improvements. We support this approach but we are concerned that the system should operate in a cost-effective way. We will continue to consult the relevant parties, especially in regard to areas where we see a conflict between their views, to establish the real value of the search facility and alternatives that might be available.
The Commission also proposed discontinuing the CTM search carried out by the OHIM but the consideration of the issue has concentrated on the national searches to date. It also proposed a number of technical amendments to the regulation that we are now considering. We have listed the principal amendments in the annexe to the document.
The Commission has examined the search system and expressed the view that it is not working properly but, instead of seeking ways to improve it, it has jumped to get rid of it entirely. We feel that it is preferable to improve it, but not at any cost.
