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March 18
As the EU Trademark Review enters its final stages, legislators misdirect focus from unresolved substantive issues to OHIM surplus and funding of non-trademark matters

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As you surely know, the European Union is currently overhauling its trademark system. It is the first such review since the system was created more than 20 years ago. The Office for Harmonization in the Internal Market (OHIM) has been tremendously successful (while operating alongside national offices of the Member States) over the past two decades and has accumulated—on top of its annual reserve of 190 million Euro—a sizeable and unwelcome budget surplus of more than 300 million Euro from trademark and design filings and renewals.

The European Commission proposed draft legislation in March 2013. The European Parliament and Council analysed the Commission’s texts and proposed amendments. The three EU institutions are currently engaged in “trilogue” negotiations in order to achieve a final compromise text.  INTA has been involved in this process from the very beginning.

While agreements on thorny issues such as tackling counterfeit goods in transit and small consignments have been announced, the issue of how to handle OHIM’s surplus is still outstanding. INTA has recently learned that concrete proposals have emerged to divert OHIM funds and surplus to activities unrelated to trademarks and designs. These include the transfer of the surplus and funds to the European Court of Justice, the EU budget and possibly to the national budgets of EU Member States, and to the European School of Alicante. 

INTA is strongly opposed to these proposals and, along with other user associations, sent a joint e-mail on March 10 to selected Members of the European Parliament’s Legal Affairs Committee, to protest against these moves. In short, we argue that:

  1. The surplus should be used to finance the implementation of the EU-wide trademark reform and continue improving OHIM’s services to its users; and
  2. Any future surplus should be avoided and the renewal fees should be reduced. Otherwise, the risk is high that users of the system will be charged not only to register and renew their trademarks and designs but also—indirectly—to finance the European Court systems, subsidise EU and national budgets and support European Schools.

INTA is also focusing its advocacy efforts on unresolved substantive issues, including:

  • A potentially problematic extension of trademark rights limitations to enable uses of the sign for the purpose of parody in the course of trade; and
  • The extension of absolute grounds for refusal to signs which consist exclusively of inter alia “the shape or another characteristic of goods which gives substantial value to the goods”.  INTA opposes such extensions, especially as the wording for absolute grounds is vague and may capture non-traditional trademarks.

The final trilogue negotiation meeting is currently scheduled for the end of April. By then, political issues such as the use of the surplus and trademark rights limitations might be resolved. Officials suggest that compromise proposals could be expected before the summer with a final vote by the European Parliament shortly after that.

INTA continues its advocacy work together with other OHIM user associations as the trilogue proceeds. Watch this space for updates and share your comments and thoughts below.

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