Following the so-called 'Trilogue' discussions in April, on 10 June 2015, the Council's Permanent Representatives Committee (Coreper) approved proposals for the reform of the European trade mark system, and those proposals were then adopted by the Legal Affairs Committee on 16 June. The amendments are now likely to be put to a final vote in the Autumn and, if passed, will come into force shortly thereafter. This could be early 2016.
The proposals include a new regulation and directive, reforming both the Community-wide trade mark system and the harmonized national trade mark systems of individual member states. Rights holders should be encouraged by amendments which, if adopted, will give them enhanced options in the fight against counterfeiters.
Goods in Transit
The problem of counterfeit goods transiting through the EU has long caused a headache for brand owners. In 2011 in the joined cases of Nokia and Philips the Court of Justice of the European Union addressed the issue, concluding that goods in transit could be seized only where it was shown that they were intended to be put on sale in the EU. While it was widely acknowledged that this was an unsatisfactory state of affairs, it is hard to see how the CJEU could have decided differently given the constraints of the legal framework existing at the time. The good news is that the new proposals are designed to address this issue head on.
The following wording is due to be added to article 9 of the regulation (and equivalent wording to the directive):
…the proprietor of a European Union trade mark shall also be entitled to prevent all third parties from bringing goods, in the course of trade, into the Union without being released for free circulation there, where such goods, including packaging, come from third countries and bear without authorization a trade mark which is identical to the European Union trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark.
The entitlement of the proprietor of a European Union trade mark pursuant to the first subparagraph shall lapse if during the proceedings to determine whether the European Union trade mark has been infringed, initiated in accordance with the provisions of Regulation (EU) 608/2013 concerning customs enforcement of intellectual property rights, evidence is provided by the declarant or the holder of the goods that the proprietor of the European Union trade mark is not entitled to prohibit the placing of the goods on the market in the country of final destination.
This welcome addition to article 9 effectively creates a new category of trade mark infringement in the EU, allowing for the first time the seizure of goods in transit by Customs even where there is no suggestion that the goods might be marketed in the EU. If the declarant wishes to oppose the seizure, then the burden is on him to provide evidence that the trade mark owner would be unable to prevent those goods from being put on the market at their final destination.
The recitals to the proposed new regulation remind rights holders that the smooth transit of generic medicines should be protected, and also that rights holders can be liable to declarants for damages where goods are subsequently found not to infringe. Although these appear to be sensible precautions to prevent abuse of the new rules, it is noted that the Netherlands delegation has made a statement setting out its grave concerns with the proposals regarding goods in transit; it is particularly concerned about the possible impact on generic medicines and has said it will abstain from the vote as a result. However, putting concerns with generic goods to one side, the proposals are a positive step in assisting rights holders in removing potentially dangerous counterfeit goods from circulation.
A new article 9a is also due to be added to the regulation (with equivalent wording added to the directive) to provide that affixing a mark to packaging, labels, tags or security features is also prohibited where there is a risk that this is done with a view to infringement. This strengthens the position of rights holders in relation to so-called "preparatory acts", building on the amendments to the Customs regulation in 2013 which expanded the definition of "counterfeit goods" to include packaging and labels etc. even where they were presented separately from the goods to which they were intended to be fixed, thereby allowing Customs to seize labels that were transported separately from corresponding goods.
Countering counterfeits is just one aspect of the trade mark reform proposals, which extend far wider than just those aspects described above. The wider proposals include changes to the types of marks that can be protected, the date on which protection commences clarification of the types of acts that constitute infringement, and much more. A detailed report on the full proposals will follow shortly.