Intellectual Property Issues | European Union Trade Marks

If a brand goes unprotected, not only is the integrity of the brand at risk, but the brand owner's reputation is as well. And you can count on it having a significant impact on the balance sheet. The effect of counterfeiting can be seen in a recent statistic from The International Chamber of Commerce: Counterfeiting accounts for between 5 and 8 percent of the world's commerce and in the European Union alone, customs' seizures of counterfeit goods have increased from 11 million articles in 1998 to 94.4 million in 2001.

For brand owners, an effective brand protection strategy is the first step in deterring potential counterfeiters. In the European Union, an important element of this strategy is opting for registered protection for a trademark with a European Community Trademark (CTM).

A CTM registration provides trademark protection in the United Kingdom, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden. The application is made to the Office for Harmonisation in the Internal Market (OHIM) in Alicante, Spain.

The CTM is popular with businesses because:

A uniform law applies to trademarks, providing protection throughout the European Union.
The CTM gives brand owners exclusive rights enabling them to prohibit anyone from using an identical or confusingly similar sign.
It is considerably cheaper than applying for a trademark in each of the 15 national registries.
Although trademarks have to be used to stay on the register, a CTM does not have to be used in each Member State; use in one country is sufficient.
Infringement proceedings may be brought before community trademark courts, which are national courts designated to have jurisdiction in respect of CTMs. The decisions from these courts apply throughout the European Union.

Another factor prompting businesses to register their brands as CTMs is that in 2004 it is anticipated that Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia will join the European Union increasing the European Union from 15 Member States to 25. In 2007, that number may be upped to 27 if Bulgaria and Romania join, and in due course, 28, as it is likely that Turkey will also be admitted.

Subject to a few rules, all CTM applications and registrations will be automatically extended to any new European Union Member State without the need for any administrative intervention, any new applications or any additional fees. The lack of red tape makes the CTM registration a highly attractive and sought-after business asset.

To further persuade businesses to trade in the European Union, the European Commission recently presented a proposal to sync up each Member State's national intellectual property laws and to establish a framework for the exchange of information between national bodies. This would give brand owners a level playing field in the European Union, reinforce measures against offenders, and deter counterfeiters.

Commenting on the proposal, European Union Internal Market Commissioner Frits Bolkestein says, "Pirates and counterfeiters are in effect stealing from right holders the fair payment they deserve for their work. If we don't stamp that out, the incentives for industrial innovation and cultural creativity will be weakened. That would threaten Europe's competitiveness and its cultural diversity and dynamism. So we have to get tough with the pirates and counterfeiters and make sure they find no safe havens in the European Union."

The proposed directive is based on the best practice already found in the legislation of some Member States. Among other things, every Member State would be required to provide for injunctions to halt the sale of counterfeit goods; allow precautionary seizures of suspected offenders' bank accounts; authorize evidence-gathering powers for judicial authorities; and force offenders to pay damages to right holders to compensate for lost income.

Member States would also be required to show that all serious infringement of intellectual property rights (i.e., both intentional and for commercial purposes) as well as attempts at, participation in, and instigation of such infringements, were treated as a criminal offense to which criminal sanctions, including imprisonment, may be applied.

The proposal will go forward to the European Parliament and the European Union's Council of Ministers for adoption. Once adopted, Member States will have 18 months to implement it into their national legal system.

To secure business confidence as well as promote innovation and entrepreneurship, it is vital that countries and bodies such as the European Union have methods for protecting intellectual property rights, such as the CTM. The business community should be encouraged by the fact that the European Union has accepted that there are inconsistencies in brand protection among its Member States and that it is taking steps to address such inconsistencies at a time when, with enlargement imminent, borders are about to be expanded considerably.

[10-Mar-2003]

Ed Meikle, intellectual property lawyer at UK law firm Dickinson Dees, specialises in contentious and non-contentious intellectual property law, relating principally to trade marks, copyright, designs and patents. He advises extensively on the commercialisation, protection and enforcement of all such rights.


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