European trade mark law, Quo Vadis?

While the issue which it leads has not yet been published, Willem Leppink's guest editorial, "European trade mark law, Quo Vadis?", is now available online. Willem, a leading member of European trade mark organisation MARQUES and a partner in the firm of Ploum Lodder Princen, Rotterdam, is a man whose opinions, based on years of experience and dedication in the field of European trade mark law, has this to say:

"On 23 January 2013 the UK Prime Minister David Cameron delivered a speech about the future of Europe and Britain's place in that future. Cameron mentioned that the first purpose of the European Union – to secure peace on the European continent – has been achieved, but that the main, overriding purpose of the EU is not to win peace but to secure prosperity.

In addition to his concerns about the Euro, Cameron said that there is a crisis in European competitiveness and a gap between the EU and its citizens that is only growing. He advocated that the single market in the EU is crucial, but that we cannot harmonize everything. In Cameron's view the EU has gone too far and some powers should flow back to the individual member states. Cameron used the example that there is no need for the working hours of British doctors to be set in Brussels. Cameron called for a flexible, adaptable and open European Union and his speech has sparked a fierce debate in the various countries of the EU. Former Belgian Prime Minister, Guy Verhofstadt, has for example warned against trying to “hold the EU to ransom”.

The debate is interesting because there is probably no right or wrong. Having grown up on the German-Dutch border and having seen the Customs checkpoints and in their slipstream the actual borders disappear, I am perhaps prejudiced about the advantages of the EU. In that border area many national differences have really vanished, of course also helped by the globalization of our society. Clear differences in food, electronics, fashion and even hairstyle on both sides of the national boundaries are simply gone.

A single market without borders requires honest competition and thus a level playing field. It will be unacceptable for a company in one EU country who has to adhere to strict environmental standards, if it has to accept the import of products that have been produced by a competitor in another EU country that is not so strict in applying its environmental standards. However, the question remains, to what extent and in how much detail should the EU harmonize the legislation of the EU member states?

Except for maybe competition and customs law, intellectual property law, and in particular trade mark law, is one of the most Europeanized areas of law. Especially after the coming into force of the European Trade Mark Harmonization Directive, the Anti-Piracy Regulation, allowing pan-European Customs border detention orders, and the Community Trade Mark Regulation (CTMR), creating the single European trade mark, most practitioners can now advise on most trade mark issues everywhere in Europe. Thus a single market for trade mark practitioners has been created.

The Europeanization of trade mark law has not led to much concern amongst European citizens about giving up national sovereignty, except maybe for the discussion around the official languages of OHIM. Most trade mark owners would even prefer further harmonization. Different opposition periods in the EU are not symbols of national culture and it is not to be expected that further harmonization there would lead to much resistance.

In my view there are two areas in trade marks where the EU and its institutions should be concerned about what Cameron calls “a lack of democratic accountability and consent”: (1) The growing role of the Court of Justice of the EU (CJEU) in the creation of trade mark law; and (2) the inability of the EU to distinguish in its legislation between counterfeits and other infringements.

Of all the EU institutions, the CJEU is the one with the most influence in European trade mark law. The CJEU goes beyond the point of giving interpretations of the legislation passed by the European legislator. The CJEU is not the only institution to be held responsible for that, as the European legislator often fails – probably as a result of too many compromises – to deliver clear and understandable legislation. The CJEU is then forced to take the decision that the legislator has failed to take, which is not an easy task for a court that mainly consists of well-respected experts on European and competition law and not with a traditional background in trade mark law.

The outcome of, for example, the Opel/Autec case, allowing a third party to put the OPEL logo on its miniature cars may seem to be reasonable, but there is hardly any trade mark lawyer who can explain the reasoning of this decision to a layperson. The judgment in ONEL, in which the CJEU had to answer the question whether use in one EU member state was sufficient to constitute genuine use of a Community Trade Mark (CTM), has created more confusion in the market than this test case sought to answer. According to the CJEU, the territorial borders of the Member States should be disregarded in the assessment of whether a trade mark has been put to genuine use in the EU. In my view this is a correct answer. From an EU point of view it is also a politically correct answer as the CTM was meant as a trade mark for a Europe without borders. However, in its considerations, the CJEU has said that it is reasonable to expect that a CTM should be used in a larger area than a national mark. In other words: the existence of national borders has not lost its relevance and it could perhaps make a difference whether a trade mark is used in two Dutch provinces, or in one Dutch and one Belgian province. This must confuse the average trade mark owner who is reasonably well-informed and reasonably observant and circumspect. The implementation of the Trade Mark Study by the Max Planck Institute into the European Trade Mark Harmonization Directive and the CTMR is a good start to move the emphasis again on the legislator rather than on the court.

The EU should also put more effort into distinguishing between counterfeits and other types of infringement. Many legislative initiatives, such as the Anti-Piracy Regulation and the Enforcement Directive have all originated from the war against counterfeits. The statistics on the trade in counterfeits justified creating rights for IP owners to request invasive and far-reaching legal measures against counterfeits. This made sense as the trade mark owner in the war on counterfeits had to take over the role of crime fighter as many governments and law enforcement agencies did not have the resources to fulfil this role properly.

However, during the legislative process and also later on, the far-reaching measures also became applicable to other forms of infringement, such as products with trade marks that just crossed the line in being confusingly similar. The Anti-Piracy Regulation was extended to any type of patent infringement and became a tool in high-tech wars between competitors trying to force each other into concluding licence agreements and thus absorbing many of the resources of the European Customs authorities. Now the Anti-Piracy Regulation will be expanded to parallel trade. Many IP owners have been satisfied about this extension to other forms of infringement beyond counterfeits.

I honestly doubt whether IP owners should be satisfied with this development. Most of the general public will understand that the fight against counterfeits requires far-reaching measures against criminals to prevent low quality and often life-threatening products from reaching consumers. There will, however, not be much support in society or the courts, including the CJEU, for far-reaching measures that can be invoked against bona fide companies and citizens, in cases that are in essence comparable to any normal civil case in which another party can be held accountable for having done something wrong.

The lack of support for far-reaching measures in non-counterfeit cases may shift to a call to limit or abolish such far-reaching measures, regardless of whether this relates to counterfeits or other infringements. Therefore the war on counterfeits can be seriously jeopardized.

If there had been a clear distinction between counterfeits and other infringements, the CJEU's judgments in Montex, Nokia and Philips, which have limited the rights of the trade mark owner to act, would not have been so disastrous for trade mark owners in their fight against counterfeits. The judgments all make sense insofar as they relate to normal infringements, but not in relation to counterfeits.

In that sense I agree with Cameron's call for a flexible and adaptable European Union …".