By Adam Smith
May 11 2010
European trademark owners are on the warpath. They are already unconvinced that the study into the EU trademark system is listening to their opinions, and now there is dismay that the European Council is trying to force the Office for Harmonization in the Internal Market (OHIM) to commence anti-counterfeiting work and the 50% split of CTM renewal fees with national offices. So they are going right to the top: user association MARQUES today meets with the European Commission to try and explain why now is not the time to start work on these areas.
CTM users were always uncomfortable with these controversial provisions but, in order to drive through the CTM fee reduction, they accepted them in what become known as the September 2008 'compromise solution' (September Agreement). One condition was that the Commission would run a thorough study into the functionality of the European trademark system. Although this study is only half complete, the European Council has recommended that the Commission now start work on revisions to the Community Trademark Directive which would, among other things, enjoin OHIM to distribute 50% of CTM renewal fees to national offices and commence anti-counterfeiting work in cooperation with the European Observatory on Counterfeiting and Piracy.
The problem with the latter provision is that it would signal a major shift in OHIM's mission. Critics argue that the hot topic of anti-counterfeiting is being used by the national offices as a political bargaining chip in order to drive through the renewal fee split, which many national offices are keen to grab. This creates an unfortunate atmosphere of conspiracy which is, so far, building rumour after rumour. While a number of member states are thought to back the recommendation, several agree with users that the study should be completed first (these member states include Austria, Denmark, The Netherlands and Sweden).
The motivating factor behind these ongoing squabbles in Europe is, of course, money. It seems that the current study is asking, in a rather oblique way, a fundamental question: once a mark owner has paid to register its CTM, to whom does that money belong? Since OHIM must not make a profit, many users assume the money still belongs to users and should be spent for the good of the system; on the other hand, those member states keen to receive 50% of the renewal fees seem to think it belongs to them. Exactly how this question will be answered remains unclear. But one thing is certain: jumping the gun with the September Agreement provisions before the study is complete will not wash with users.
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