EU Council approves TM reform, despite UK and Dutch reservations

The European Council has approved a widespread reform to the EU trademark system, despite reservations from the UK and the Netherlands concerning the use of a potential budget surplus and measures enabling trademark owners to halt counterfeit goods in transit.

Earlier this year, the council, parliament and commission concluded a political agreement to update the EU’s trademark system following two years of discussions.

Among the key measures are a reduction of Community trademark renewal fees, improved rights for trademark owners to stop infringing goods in transit and a scrapping of the requirement that marks need to be represented graphically.

In a statement published on Tuesday, November 10, the council said that “the overall agreement significantly improves the existing situation in particular in terms of substantive trademark law”.

The UK, however, opted not to support the package.

Its chief concern, outlined in a statement by its delegation, was that that a potential future budget surplus generated at the Office for Harmonization in the Internal Market may be diverted to the general EU budget and used for non intellectual property-related purposes.

“We cannot support the regulation since it includes a provision that enables the transfer of future surpluses accumulated from trademark and design fees to the general EU budget. Research has suggested that IP-rich industries contribute 39% of the EU’s GDP, with trademarks a significant part of this.

“We must nurture and protect this contribution to retain our competitiveness: therefore we should not divert money which came from IP to other uses,” the UK said.

The Netherlands abstained from supporting the regulation on the grounds that the provision tackling counterfeit goods in transit would burden the country where the products are merely in transit.

“The proposed measure will put a disproportionate and unnecessary burden on holders of goods and an impediment to legitimate international trade, including for legitimate generic medicines.

“Although the Netherlands supports the battle against counterfeiting as this undermines trade, IP rights, etc, the proposed measure for detaining goods in transit is unacceptable,” the country added.

The European Parliament is expected to vote on the proposals in a second reading before the end of the year.