Seanad Éireann debate -
Wednesday, 6 Mar 1996

Vol. 146 No. 12

Trade Marks Bill, 1995: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Enterprise and Employment (Mr. Rabbitte)

I am afraid that this Bill is very narrow and boring in comparison to the exciting menu I have just heard the House debate. However, I am assured that it is very necessary.

Our present law in this area in 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, which maintains the register. Changes in our legislation are necessary due to an EC directive on harmonisation of trade mark law throughout the Community and other international developments which I shall mention later.

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 register is a record of 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.

The primary purpose of this Bill is to give effect to EU Council Directive No. 89/104 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 how 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 that 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.

Moreover, the registration of a word or device as a trade mark does not give an absolute monopoly to all uses of that word or device; it is necessary in law to make clear what is 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 that 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.

The directive is concerned with substantial law, not procedures. While it sets out the ground for refusal or invalidation of registered trade marks, it states specifically 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, who register trade marks only after search and examination, can 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 so 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 this 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 a 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 14 of the Bill will not only extend these broader infringement rights to similar goods but, in the case of a mark that 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 well known mark.

The second main purpose of the Bill is 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 that 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. This Bill makes provision in connection with the operation of Council Regulation 40/94. Applications for a Community trade mark can 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 also to implement certain provisions of the Paris Convention for the Protection of Industrial Property. Explicit provision is now being made in Part III of the Bill to allow 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 office and undertaking substantial costs to pursue the various applications.

Trade mark owners in some 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 had functioned for more than 100 years, it had a membership of only 44 countries. This is partly because participating countries conduct little or no examination of applications and objections to a trade mark have to be pursued through litigation after the mark has been registered.

In contrast, our trade marks system is based on registration being granted only after the mark has been examined by the controller, 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 many countries, including the United States, 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.

The fourth aim of the Bill is to facilitate the registration of trade marks in respect of services. Up to now, service industries were unable to do so as section 11 of the Trade Marks Act, 1963, confined the definition of a trade mark to only goods. This 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.

Let me now turn to the detail of the Bill. I should highlight two new provisions which were introduced on Report Stage in the Dáil as sections 12 and 25.

Section 10 sets out the relative grounds for refusal of a trade mark application. Relative grounds have to do with conflict with an earlier trade mark or application as distinct from the absolute grounds for refusal in section 8, which relate to the nature of the mark itself. Section 12 provides, by way of exception to section 10, that the controller shall not refuse an application for registration despite the existence of relative grounds where an applicant demonstrates that there has been honest concurrent use of the applicant's mark with the earlier mark.

The controller will take account of honest concurrent use in considering any opposition to the application. This provision which was introduced at the request of the Association of Patent and Trade Mark Agents, replaces section 20(2) of the Trade Marks Act, 1963, which also dealt with honest concurrent use.

The second new provision is section 25 which deals with powers of seizure and search for infringing goods, material or articles as defined in section 21.

Following the Committee Stage debate in the Dáil on section 92, dealing with the fraudulent use of a trade mark, I was persuaded that more effective deterrents to counterfeiting were needed. Section 20 offers trade mark proprietors the option of applying to the High Court for an order for delivery up of infringing goods. This remedy may not be effective against professional counterfeiters who will likely fail to obey the order and simply move their counterfeit goods to another place. The powers of search and seizure will enable the Garda Síochána to take immediate action following application to the District Court. Seizures will involve a financial sanction in direct proportion to the scale of counterfeiting involved and should be a serious deterrent to those who might seek to infringe the rights of trade mark owners.

Part I of this Bill clarifies general matters and provides for repeal of the present law. Part II deals with the registration of trade marks generally. It reenacts much of what was contained in the Trade Marks Act, 1963, while taking account of various changes that have taken place since enactment, particularly those necessitated by Council Directive 89/104.

Section 47 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 is for seven years with renewals for successive periods of 14 years. This will bring our registration periods into line with international norms. Section 54 introduces a new category of trade mark whereby an association of members can register a collective mark in respect of goods or services.

Part II of the Bill covers the various provisions necessary to take account of the new Community Trade Mark Regulation 40/94, the Protocol to the Madrid Agreement and our obligations under the Paris Convention.

Part IV contains administrative provisions many of which re-enact existing legislation. Matters covered here include the maintenance of the Register of Trade Marks, the powers and duties of the controller of patents, designs and trade marks and legal proceedings and appeals.

Part V deals with the trade mark agents and replaces section 69 of the 1963 Act. Section 84 provides for the controller to maintain a register of trade mark agents while section 86 outlines the eligibility requirements to be placed on the register of trade mark agents.

Section 90 provides for rules governing the register as well as the professional qualifications and conditions for registration of an agent. Section 91 is a new provision that confers privilege on communications between registered trade mark agents and their clients in the same way as between solicitors and their clients. The provisions outlined in this Part follow largely on the existing provisions in section 105 to 109 of the Patents Act, 1992, as they relate to patent agents.

Part VI is devoted to offences and introduces important new measures to deal with the growing problems of the fraudulent use of trade marks and counterfeiting. Section 92 gives much stronger protection to registered trade marks by broadening the scope of offences to include use of a mark which is identical to, or nearly resembles, a registered trade mark.

The unauthorised use of a registered trade mark devalues the reputation of that mark as the counterfeit goods are generally of inferior quality. Such use also harms traders in the genuine goods who lose business. This Bill will provide trade mark proprietors with wider rights against acts of infringement as defined in section 14.

Part VII of the Bill deals with miscellaneous and general matters. Section 96 breaks new ground by placing the onus of proving use of a trade mark on the owner where use of the mark is contested. In the case of a person seeking to have a mark cancelled on the grounds of non-use under the 1963 Act, the burden of proving non-use rests with that person. This is a difficult matter and it is reasonable and straightforward to call upon the owner of the mark to prove use and this is the approach taken here.

The First and Second Schedules of this Bill set out requirements and procedures for registration of collective and certification marks, respectively. The Third Schedule deals with transitional provisions. Existing registered marks kept under Parts A and B of the former register shall be deemed to be transferred on commencement of the new Act to the new register as set out in paragraph 2. The remaining transitional provisions relate to the status of applications for registration pending at the date of the coming into operation of the new legislation as well as other matters. Paragraph 15 deals with applications for trade marks in respect of services that were made between 1 January 1993 and commencement of the new Act.

I believe there will be a general welcome for this Bill. Its enactment will improve the environment for Irish businesses to register their trade marks and facilitate trademark owners in protecting against infringement.

I commend the Bill to the House.

Mr. Fahey

I welcome the introduction of this Bill which, as the Minister said, is fairly narrow in its mandate. The Bill will enact changes in our legislation which are necessary due to the EU directive on harmonisation of trade mark law throughout the European Union. It is valuable legislation in that it will make it easier for Irish exports to compete in other EU markets.

It is a rather technical Bill and, as the Minister has said, the directive itself deals with substantive laws. Articles 2 and 3 are of vital importance and deal with the grounds for refusal or invalidity relating to the registrability of the mark.

The essential requirement is for a legal mechanism whereby grounds for objection contained in articles 3 and 4 can be considered. In that regard, a new and wider definition of the directive in article 2 is reflected in section 6 of the Bill which permits registration of geographic names and the shape of goods or their packaging.

The fact that rights enjoyed by a registered mark will be broadened is a welcome development. It means that in future another person's use of a mark on similar goods or services will constitute infringement. It is important that under the Bill the owner of the mark will have recourse to trade mark legislation and will no longer have to rely on common law action to deal with infringements.

Section 14 of the Bill will not only extend these broader infringement rights in the case of a mark that has a reputation in the State but will also make it more difficult for non-similar goods to have an unfair advantage as the result of infringement. The Bill deals with the need to tighten up the whole area of trade mark legislation.

The Bill makes provision for the new Community trade mark under Council Directive 40/94 which established the office of harmonisation in the Internal Market for trade marks and designs. The Community trade marks system will operate in parallel with national systems.

Another aim of the Bill is to enable the ratification of the Protocol to the Madrid Agreement on the international registration of marks. Explicit provision is now being made so that we can meet our various obligations under both the Madrid Protocol and the Paris Convention.

One of the most important advantages of the legislation is that Irish trade mark owners will now have European trade marks instead of having to protect marks in overseas markets by applying separately and independently for registration in each country where such protection is desired. This is an important development towards ending the widespread bureaucracy encountered by Irish products in European markets.

Another important development with regard to this Bill is the extension of trade marks to cover services. Until now service industries were unable to have trade marks; the definition was confined to goods only. The fact that section 6 of the Bill will facilitate the registration of trade marks in respect of services by broadening the definition of trade marks is an important development for what is a major growth area in Irish industry. As the Minister has said, service industries will now be able to protect the goodwill associated with their marks and this should be of advantage in further developing the international service sector, which is becoming probably the most significant growth area in Irish industry.

Section 25 deals with powers of seizure and search with regard to infringing goods, materials or articles as defined in section 21. I welcome the fact that the Minister strengthened the Bill by introducing amendments to provide for more effective deterrents to counterfeiting. Section 20 is welcome in that it offers mark proprietors the option of applying to the High Court for an order for the delivery of infringing goods. It is significant that the Minister recognises this remedy may not be effective against professional counterfeiters who are likely to fail to obey the order and move their counterfeit goods to another place.

I would like the Minister to expand on the extent of the problem of offending counterfeiters. It seems to me that a significant amount of counterfeiting takes place and that we have major problems with regard to the copying of a range of products, including video and music tapes. It is important that the Garda Síochána has powers of search and seizure and that it takes immediate action following an application to the District Court. I welcome the Minister's attempts to deal effectively with counterfeiting and I would like him to spell out how the Garda can deal on a practical level with the problem.

My main concern about the Bill stems from the fact that we have an uncanny ability to introduce good legislation but a poor ability to implement it. The last regulatory Bill we passed provided for the control of banking institutions and the strengthening of the office of the Director of Consumer Affairs but we have done little since then to provide resources for the implementation of the Act.

I am concerned that it might be difficult to implement the provisions of Part VI of this Bill. I welcome the stringent measures with regard to imprisonment and fines to deal with people who infringe the legislation. As a result of the Bill, will more resources be provided and initiatives taken to stamp out counterfeiting? Can we realistically believe that people who will be in major breach of the legislation will find themselves in prison? It is vital that this good legislation be implemented in an effective and practical way and that before too long people who engage in counterfeiting are brought to justice and face the treatment provided for in the Bill. This is the only concern I have and I would like the Minister to assure the House that the provisions of the final two sections will be implemented.

I welcome the Bill, I believe it will be of major benefit to Irish industry. As I read the Bill and the Minister's speech I am reminded of the question of marketing and brand names. It is a pity many of our European competitors have major brand names which are found throughout Europe and Ireland. Unfortunately, many traditional industries in this country died and those which remain are in a shaky position. In the clothing industry there are big brand names, such as Benetton from Italy and Boss from Germany. A Scottish company which produces golfing gear and for which Mr. Nick Faldo is promoter has a major brand name but I cannot now remember what it is. There are several other brand names which one immediately associates with various European countries.

In Ireland we do not appear to have been able to develop the brand name concept. To a large degree our manufacturers, with the possible exception of Kerrygold, still operate within their own small brands and the marketing tools of brand names have not been developed to any great degree. These marketing tools could be most beneficially used for the more effective marketing and promotion of Irish products in European markets. This Bill should remind the Minister, officials in his Department and people in industry that we should develop a policy of having well known brand names which cover a range of Irish products, particularly in traditional industries which face major competition from imports.

There is an urgent need for such a development, if it is not too late at this stage. Kerrygold is a good example of a brand name in the food sector. I often wonder why we have not been able to develop a common brand name for Irish meat products which are on sale throughout Europe. This issue is not directly related to the Bill. However, the Bill may provide the opportunity for a short discussion on the marketing of traditional Irish products.

Mr. Farrelly

This Bill is welcome. It is right and proper that we are following up on a three year old EU directive — although one might not agree with all European directives — and passing legislation so that the one office in Europe will be able to deal with patents and trade marks. Two weeks ago I was asked at a meeting in New York about patenting products in Ireland and Europe. I told the questioner that, as far as I knew, it had to be carried out in each country. I was not aware that this Bill would be before the House so quickly. People who are interested in coming to this country with their products or who wish to produce goods here are anxious to ensure that not only can they get a brand to protect their product but a patent for a product that is secured in Ireland will be effective throughout Europe.

Many companies find their successful products being copied and marketed by others. This legislation will protect people who probably have spent substantial amounts of money in bringing forward a product and who wish to secure a mark for it to protect it. This is an important Bill and the Minister, following discussions in the other House, strengthened the penalties to ensure that the protection offered by the Bill was effective. The establishment of the international trading centre in this country demonstrates to the the outside world that we are anxious and interested in doing business with people from other countries and that we can carry out that business effectively and efficiently.

The EU office to deal with patents and trade marks is due to open in April. We are, as usual, just on time passing the legislation and following up on a three year old directive. The cost involved in going to each country and seeking to protect the trade mark of one's product must be huge and must take a substantial amount of time. I am sure many companies found, by the time they had gone through this procedure, that somebody else had got in before them in some countries. It is difficult to protect products and good ideas from theft; somebody takes the idea, changes it somewhat and claims ownership. This has happened in the past. There are always people who are prepared to pick up on ideas and run with them, thereby taking from the success of the people who had the original idea and who actually spent the money developing the project.

We have spoken about successful brand names on numerous occasions in the House. The "Kerrygold" brand name has been particularly successful. However, huge amounts of money are required to imprint a brand name in people's minds. About two years ago it was reported that Baileys had spent £150 million in a ten year period advertising their brand name. That shows what it costs worldwide to get into a market and make a lasting impression.

Recently I watched a quiz programme on television. As politicians we do our best both locally and nationally to represent people while we are often featured on the radio and television. We are inclined to think that everybody recognises individual politicians and knows what their positions are. On that programme six second level students, aged between 14 and 16, were asked the number of elected Deputies in two counties and none of them got the right answer. We think we are well known and that everybody knows everything about the political system, which has a brand name in its own right in Ireland. One would be inclined to believe that second level students — there are probably only ten or 12 schools in each county — would know the number of public representatives in Dáil Éireann. It occurred to me watching the quiz that, although we spend a substantial amount of time in the Oireachtas and produce a huge amount of information and news for the print media, the cost to establish a brand name and sell something to the masses would cost millions of pounds.

This Bill is an important and positive step in the provision of a simplified system for people who wish to patent a product. It is amazing that it has taken so long because it is about 22 years since we became involved in Europe. The protection being given to patents in this Bill is worthwhile and welcome. I am delighted that we are prepared to give people protection for their products. Every day people come up with excellent ideas but often they do not get the benefit or reward they should. Can the Minister tell us the number of cases that have been taken for fraud against people using the trade marks of others? Has it been widespread? How many people, if any, have been prosecuted in Ireland for that offence in recent years?

I welcome the legislation. It is right and proper that we should give people in different businesses the right to apply to one place and secure a patent that is valid not only in Ireland but throughout Europe. This Bill should be passed without animosity.

Ms O'Sullivan

I welcome the Minister of State and this Bill. We will not have reason to delay it. It is not legislation that will set the world alight and I doubt that it will be discussed in public houses by people drinking Irish brands of drink which are probably as well known as the "Kerrygold" brand name. Beverages are good examples of Irish brand names that are well known throughout the world.

This is important legislation for people trying to develop businesses in this country and abroad. Legislation which helps to reduce costs for people trying to develop products is to be welcomed. This Bill will help to reduce marketing costs in a practical way because if one is selling in a number of countries one will now have the opportunity to register centrally with the World Intellectual Property Organisation in Geneva or with the Office for the Harmony of the Internal Market in Alicante. This Bill will prove a cost saving measure for businesses. It will offer clarity about how trade marks are registered and will give businesses greater protection, particularly with the amendment agreed in the Dáil for stronger search and seizure powers.

The idea of having a one stop shop in accordance with the EC Directive 89/104 makes sense in view of the forthcoming currency convergence and, in general, in trying to harmonise affairs in Europe. It makes sense to harmonise trade marks. The change in the registration system whereby one registers for ten years and has a renewal period of ten years is logical. This further clarifies the system.

The Minister of State referred also to a "use it or lose it" clause. In other words, if one can be shown not to have used a brand name for a period of five years one can lose it. There is no point having someone hold onto what might be a good marketable brand name without using it and, therefore, denying others the opportunity to use it effectively. I welcome the inclusion of services in brand naming. Service industries have been the most beneficial for job creation and it is only logical they should be covered by the legislation.

I welcome the provisions in section 25 which increase the powers of the Garda with regard to counterfeiting. The most obvious examples of counterfeiting are watches and perfumes. One can buy perfume in some countries which the vendor may describe as being the same as a known brand of perfume but which has a different brand name. I do not know if that is technically counterfeiting; the Minister might clarify that point. One can often buy tee shirts with recognised brand names from street vendors for a lower price than one might pay otherwise and I assume that would be covered by the counterfeiting provisions.

About seven or eight years ago I holidayed in a well known Mediterranean resort. Senator Farrelly referred to the success of Bailey's and the cost of its marketing and there was a drink for sale in the local supermarket called "Wailey's" which had a label very similar to the Bailey's label. There was another drink for sale called "Cordon's", a gin which had a label similar to a well known brand of gin. There were many such examples of drinks with bottle shapes and labels similar to well known brands but they had a slight variation in the name. I presume such trading would be covered under this legislation. I do not know if it was an infringement of the law in the particular country I visited, but it is clearly a misuse of trade marks. The beverages were cheaper than the well known brands and it seemed an unfair method of trading. It probably cost the producers of Bailey's Irish Cream a lot of money.

A wide variety of goods is available to the public and brand recognition is crucial to success in marketing goods. It is difficult to broaden the market for a product without spending a lot of money on marketing. The public increasingly tends to buy on the basis of advertising — a new brand of chocolate has to be made more exciting than an existing brand, although they probably taste the same. Branding is crucial to the success of businesses and, in a small way, this Bill will make it easier for Irish companies trying to make it into new markets. The WIPO is in its infancy but it has a lot of potential for developing an international register of brand names. This will help the many Irish companies trying to expand their markets to eastern Europe, Australia and the Far East.

When the Bill was being discussed in the Dáil Deputy McDowell made the point that we tend to be reactive rather than proactive in relation to EU directives. Sometimes we implement EU directives later than they are meant to be implemented and we often implement them just on time. However, we seldom discuss them in any great detail when they are in draft form, as is the case apparently in other European countries. We should have more say in EU directives while we still have an opportunity to influence them and before we have to implement them. One hears complaints about the implications of EU law for baking brown bread in the kitchen or the shape of cucumbers. We should have more of an influence on EU directives at the draft stage when it might be more effective. I welcome the Bill and commend it.

Miss Ormonde

I welcome this Bill which updates the 1963 legislation and brings the law into line with EU directives on regularising and registering trade marks. This must be done in such a way that there are criteria for highlighting the qualities of a particular article so that others cannot produce another article with the same brand qualities.

Trade marks have been subject to abuse — Senator O'Sullivan mentioned perfumes as a prime example of such abuse. One may find imitations of the well known international brands of perfume on sale in local supermarkets or from street vendors. It is time we regularised the law in this area, particularly for those goods which have the characteristics of a well established name so that it is not infringed by competitors. I am not sure from the Minister's speech what is meant by "infringements", particularly if someone makes a similar product. The public should be aware of what is meant by this EU directive in relation to updating the Trade Marks Act, 1963.

The Minister is protecting the exclusive rights of the proprietor and, thereby, the goodwill of the trade mark. Goodwill means different things to different people. Suppliers and those trading under this Bill must help us, as legislators, by ensuring that they clarify how the trade mark was established and how it could be abused. We are not as familiar with this issue as those in business and we may not get the opportunity for consultation. We should have such information before we come into the House to discuss this Bill.

I welcome the Bill but I would like the Minister to clarify "infringements".

Mr. Howard

I support the Bill because it gives effect to an EU directive and brings our domestic legislation into line with a number of international conventions and agreements. It also gives effect to the EU's decision to have a common European trade mark.

Many arguments were advanced in the other House and it is to the Minister's credit that he took a number of them on board. This meant the Bill progressed quickly to Committee Stage which was unusual when one considers its size — seven Parts, 102 sections and three Schedules. It affects 12 Acts which date back to 1851. It is a tribute to the Minister and his officials that this Bill could be presented in such a way that it encountered little or no opposition in the other House.

The Minister said:

At the heart of the law governing registered trade marks are the key questions of how 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; [that must be the purpose of the legislation, but I am worried that what follows is a qualification of what went before]. It may not, for example, be descriptive of the goods or be a word that another trader might legitimately wish to use to describe his goods. . . .

If the law for the registration of a trade mark is that it is capable of "distinguishing its proprietor's goods or services from those of his competitors", then the fact that it may not apply, for example, to another trader who might legitimately wish to use it to describe his goods seems to qualify what was previously stated.

The Minister also said: "Moreover, the registration of a word or device as a trade mark does not give an absolute monopoly to all uses of that word or device." I do not know if there is a difference between a monopoly and an absolute monopoly. I assume that if a trade mark must be able to fulfil the essential function of distinguishing a proprietor's goods or services, then that proprietor has a monopoly. Perhaps the Minister could clarify this issue.

EC Directive 40/94 of 20 December 1993, to which this Bill is giving effect, will establish a Community trade mark office which will register trade marks that affect all Community members. We will also continue the service provided by the Patents Office of registering trade marks in the domestic area. How will these two offices work together? Will a trade mark registered by the controller of patents here automatically be registered with the Community trade marks office, or will there be two categories of trade marks — those recognised by the European office and those recognised by the Patents Office?

I recognise that, as the Minister said, we and the UK have a unique system of registration. We both operate the same practice whereby an application for the registration of a trade mark receives a detailed examination and, when the officials are satisfied, registration is granted. As he also said, other countries register first and allow conflicts of interest to be solved by litigation. Am I correct to interpret the directive as permitting the continuation of that practice? If I am, does the directive allow for an inconsistency within member states in the methods used for registration?

Earlier, I complimented the Minister on his approach to this complex legislation. Sections 12 and 25 were added as a result of the discussion in the other House and I applaud him for this attitude — if a weakness is identified, it is good that a Minister is prepared to recognise it and respond. He did not treat the pointing out of a deficiency in legislation as a reflection on his ability to pilot legislation through the House, as so many other Ministers have. Section 12 deals with the honest concurrent use of a trade mark and section 25 deals with the power to seize counterfeit goods. I welcome the provisions and rather than seek clarification now I will leave discussion of them until Committee Stage.

I also welcome the provision in section 47 that the registration period will run for ten years with renewal periods of ten years to follow and the new measures in section 92 to provide stronger protection against the fraudulent use of trade marks and the counterfeiting of goods.

Having read the Official Report of the debate in the other House, I ask the Minister to indicate if he has a timescale he is anxious to meet. The Opposition in the Dáil suggested this Bill should be implemented by 1 April. I have no desire to cut across that but as I wish to raise points on Committee Stage I would like to know the Minister's intentions.

Mr. Farrell

The Bill is welcome, timely and necessary but I am sorry other matters were not included. Inventors who have spoken to me feel they should be safeguarded during the period after they come up with the idea. Before they can apply for a patent, they must produce a prototype — which can cost a certain amount — but in that time their idea may be hijacked by someone else. One entrepreneur said there should be a period of eight months to a year in which they could develop their products, have the prototype made and gear the product for the market and during that period there should be no danger that anyone else could hijack their idea. There is a great future for innovators and developers of products. We should pursue this sector but we are not doing so strongly enough.

The discussion of trade marks should be broadened to include ships which fly flags of convenience for a country other than the country of origin. Ships from Belgium, for instance, may fly the Irish or British flag. This Bill should prohibit this practice; people should not be allowed to fly a flag to enable them come here to poach fish, etc. It should also prohibit the use of a phrase such as "An tSeapáin tír a dhéanta" on an article; it gives the impression that the item was Irish made when the Irish language is used on it. That jargon should not be allowed as it is a way to get goods into a market. All goods should clearly indicate where they are made. It would help to promote Irish goods if one could clearly read on them that they were made here.

Apart from those few points I agree with most of the Bill. Heretofore, one had to apply to each country individually for a patent and I hope this legislation will mean that if one gets a patent for Ireland, automatically one will be covered in all EU countries. I know it is not possible to legislate so that this procedure will apply worldwide but it should be. It is now easy to make almost identical copies of articles, and there are many on the market. The first to arrive were cameras; Kodak spent a lot of money developing cameras, then the Japanese introduced imitations which were equally good but with one little difference.

We need to tighten up the law in this regard. There is also a need to see where and how near imitations can resemble the real thing. Those spending a lot of money and engaging in extensive research would want to know that they will get some return on their investment before their idea can be hijacked.

I welcome the Bill. Perhaps the Minister will try to incorporate the points I have raised to strengthen and reinforce it to ensure that products made in Ireland are safeguarded and secured so that we get the maximum from what our young people and entrepreneurs create and put on the market.

Minister of State at the Department of Enterprise and Employment (Mr. Rabbitte)

I thank those Senators who contributed to the debate and for the positive tone of their contributions. The Bill represents important legislation in the area of intellectual property. It does not extend to covering patents, but it is comprehensive with regard to our trade marks law, which must be brought up to date. Perhaps I inadvertently used the wrong word earlier when I said it was "narrow". I only meant it was narrow in the context of the rich agenda Senator Farrell had before I entered the House.

I accept that trade marks do not receive as much attention as patents or copyright, but they are increasingly important business assets in the context of the Single Market. For example, consumers who are faced with a multitude of products on supermarket shelves are most likely to opt for a brand which has an established reputation in the marketplace. This aspect intruded into the debate, but it is more a marketing question than one of protection of intellectual property. Nevertheless, I accept it is important. In a global market, one's ability to market one's product so that it is recognisable and strikes a chord with the consumer is especially important.

However, as Senator Farrelly remarked, it costs a vast amount of money to launch products of this kind on the international marketplace. Senator Fahey referred to Kerrygold and Senator O'Sullivan referred to Baileys. It is interesting to note that, in the case of Baileys, there was a linkup with an international giant before it was feasible to do so. Waterford Glass is the closest we have to an indigenous product that has some recognition on the world market, certainly in the USA. However, it is an extremely expensive business and costly for an indigenous Irish company to undertake alone.

Companies which have invested in marketing and advertising their brands are entitled to protect their registered marks against infringement. Section 14 defines those acts which constitute infringement, while sections 18 to 25 deal with infringement proceedings. Apart from the common law action for passing off, proprietors can take a civil action for delivery up of infringing goods, while section 25, to which Senator O'Sullivan referred, offers further remedy against infringement, whereby infringing goods, material or articles may be seized and brought before the District Court to be dealt with as the court sees fit.

Senator Fahey referred to the current extent of counterfeiting. The information we have is that offences prosecuted to date have been of a relatively minor scale. This is not to seek to give the impression that it is only ongoing on such a scale. For example, a number of seizures, mainly of articles of clothing, were effected in the centre of Dublin in the run-up to Christmas. Senator O'Sullivan described the kind of activity that can take place. The business of teeshirts and jeans is a favourite where it is a relatively simple matter to stitch on the trade mark badge of a well known international manufacturer.

However, in discussions with the anti-counterfeiting group which I have had during the preparation of the Bill — it represents approximately 60 large companies with an international presence — I was persuaded that the danger of offences can arise in any area. For example, in the UK the imitation of goods in the pharmaceutical sector underlines the indiscriminate pursuit of profit by counterfeiters.

There is a need to protect consumers and the Bill tightens our legislation on infringement. It should be remembered, however, that the trade mark owner has the primary responsibility to protect his mark. He now has the choice of taking a common law action for passing off, a civil action for infringement or seeking to have infringing goods seized following the application to the District Court. In this respect, and with regard to the point made on the protection of Irish food labels, such as Kerrygold, I would draw attention to section 98 which facilitates my colleague, the Minister for Enterprise and Employment, in preventing the registration abroad of marks which are misleading as to the Irish origin of the goods or services involved.

I do not have details on prosecutions of patent or trade mark infringements, as queried by Senator Farrelly, but I refer to section 25, which I had inserted in the Bill by way of amendment during its progress through the other House. To reassure those Senators who raised this matter, let met say that section 25 contains a far reaching set of measures. In addition to the powers already provided, it gives the power of warrant and seizure to the Garda Síochána.

The purpose of the section is not just to address the fact that some of these products, to which reference has been made, are being sold in Henry Street or wherever, but to enable the Garda to take effective action at the source of production, which is the real problem. If there are back street operations where teeshirts, jeans or whatever are being fabricated and being represented as something they are not, the gardaí now have effective powers and measures they can take to deal with the problem.

I invite Senators to read the section. Its terms are draconian but I am persuaded as to its necessity. It deals with the point made by Senator O'Sullivan. The Senator also mentioned the phenomenon of passing off, which is a separate offence and provided for in the Bill. It is more appropriate to her description of perfumes that are being represented as something they are not, and so on.

Reference was made to the cornerstone of the Bill, Council Directive 89/104/EEC, which has substantially reduced the differences in trade marks legislation between member states. I can confirm to Senator Howard that I would like to see the Bill enacted and the necessary rules put in place as close as possible to 1 April, the common deadline. However, some work needs to be done on it after it completes its progress through both Houses. While this Bill took longer than anticipated to publish, I hope Senators find that it deals comprehensively with the changes which have taken place since the Trade Marks Act, 1963.

I do not dispute the wisdom of Senator O'Sullivan's comments, which reflect comments made in the other House in relation to how we transpose Council Directives into domestic law. I am persuaded that there ought to be discussion of the directives as they progress, either by one of the Houses of the Oireachtas or by a joint committee of both Houses. It would be helpful to the Minister who is representing Ireland in Brussels on whatever issue if there was a sounding board here where the issue could be teased out while the directive is in progress at European level. It takes a directive long enough, generally speaking, to be progressed for us to be able to catch up with domestic legislation and to have some meaningful discussion here. I do not know whether the new Oireachtas Joint Committee on Foreign Affairs can facilitate that or whether another joint committee of the House would do so.

Council Regulation 40/94 dealt with the creation of the Office for Harmonisation in the Internal Market for trade marks and designs, which is located in Alicante in Spain. This office will process community trade mark applications from April 1996 and applicants can obtain the protection of their marks through the Community by means of a single registration with this office. In answer to Senator Howard's query, both systems will continue to obtain and both are quite separate. Equally, ratification of the Madrid Protocol will enable proprietors to obtain wider protection of their marks in countries which are party to the Protocol. Significant savings should accrue from making a single application to the World Intellectual Property Organisation in Geneva rather than applying to each national trade mark office where registration is described. The new facility in this Bill to register service marks has also been warmly welcomed and over 3,000 applications have been received by the Patents Office to date.

Senator O'Sullivan referred to drinks which have similar names and packaging to established brands. In relation to counterfeiting, the Bill combats infringement by protecting the registered trade mark from use by unauthorised persons. Where the mark itself is not infringed the trade mark owner must rely on an action for passing off, the particular offence to which the Senator referred.

Senator Howard raised a query on my comments on how marks are registered and what rights are conferred by registration. These issues are set down in the directive; national legislation must adopt a common approach to them. There are also some discretionary elements in the directive but we must have uniformity on the key questions which are addressed in articles 2 and 3 of the directive.

Our national system and the Community trade marks system are separate. The Community trade mark office will only register marks which are not in conflict with any marks on national registers. It will be, therefore, harder to register a Community trade mark than a national one. A national mark is registered if there is no objection, but if an application is received to register a Community mark, a search of national registers will be made.

On the question of the "absolute monopoly", my view is that a person might be allowed to use, for example, the word "Euro" in a trade mark. This will not prevent other owners from obtaining registration of other marks containing the same word. It cannot be an absolute monopoly; if this were the case a creative property owner could register a particular mark which, because it contained a generic word, prevented another person registering a perfectly legitimate product name containing the same generic word. Section 17 provides for disclaimers. The controller might require a disclaimer in respect of a particular element of a trade mark such as the word "Euro" which I used as an example in the case given.

This legislation does not cover flags of convenience and goods which are presented to the consumer as being of Irish origin. It does, however, include a provision in section 98 which allows opposition to be mounted in other countries against registration of marks which are misleading as to Irish origin.

I welcome the general support for the legislation. It is desirable, as has been hinted at by most speakers, that we conclude it as speedily as possible. No substantive point of opposition has been raised. It is predominantly a technical Bill and in many ways quite a complex one, but it seeks to achieve the three simple goals that I set out. The main thrust of objections in the other House related to the question of counterfeiting and different aspects of fraud relating to that. The measures introduced in the Bill greatly strengthen it and the representatives of some lobby groups have expressed their satisfaction arising from that.

Mr. Fahey

Is it possible to raise a point of information on what the Minister has just said?

An Leas-Chathaoirleach

No, you may do so on Committee Stage.

Question put and agreed to.

Agreed to take remaining Stages today.