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Yearbook 2012/2013 A global guide for practitioners

MARQUES WTR YB 2012_13_Text_WT Yearbook 28/08/2012 16:30 Page 13

Introduction

MARQUES – a trusted voice for brand

owners tackling the growing IP protection challenge in Europe

In partnership with Marques

Author system must be taken to allow Europe to MARQUES benefit from its potential and to meet the challenges of economic globalisation. The In the past year, the challenges facing rights has said that such a holders have increased dramatically. While system “should be high quality, featuring some of these challenges are familiar, others tough examination standards; affordable, are new, particularly in the digital environment. balancing costs with quality and legal All of them have intensified beyond any certainty; consistent, with a harmonised predictions, and fundamental legislative interpretation of laws and unified court change is now needed to address them. proceedings; and balanced, between rewarding Across Europe, a number of IP legislative valuable intellectual creation and ensuring free packages have been proposed and are already circulation of ideas and innovation”. (Among being scrutinised by legislators and policy other things, reference is made to the makers. These include both new measures and Communication from the Commission to the the review of existing laws for the protection , the of IP rights (particularly trademarks), in order and the European Economic and Social to build up more efficient and consistent Committee, “An Industrial Property Rights protection and enforcement systems for IP Strategy for Europe”, Brussels, July 16 2008.) rights across Europe. MARQUES believes that the revision of the Faithful to its mission, MARQUES – the EU Community Trademark Regulation European Association of Trademark Owners – (207/2009) and the EU Trademarks Directive has been actively involved in these (2008/95/EC) approximating national consultation processes. MARQUES speaks to trademark laws has the potential to implement the relevant policy makers and institutions as many of the improvements that trademark a voice for rights holders, notably brand holders need. owners, which are confronted on a daily basis Therefore, upon publication of the Study with challenges to their rights. MARQUES on the Overall Functioning of the European ensures prompt and effective representation Trademark System by the Max Planck Institute, regarding these proposed reforms. MARQUES noted that full coherence must be Steps towards a high-quality IP rights achieved between the substantive provisions

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Introduction MARQUES – a trusted voice for brand owners

of the directive and those in the regulation. advertisement does not infringe a trademark, One such measure is to make the optional but elements are present that make the provisions of the directive mandatory. advertisement unfair. By contrast, it remains Furthermore, coherence should be introduced to be seen how the courts will deal with between trademark law and the EU Protection trademark grabbing on social network websites of Geographical Indications and Designations – that is, individuals making use of well-known of Origin for Agricultural Productions and trademarks as their own user names and Foodstuffs Regulation (510/2006) and the EU posting comments as if they were made by the Spirit Drinks Regulation (110/2008). Likewise, trademark owners themselves. In such there must be greater consistency between situations, there is much to commend legal trademark law and the regulations affecting solutions similar to those adopted in legal fields that closely interact with it, such as cybersquatting cases. the regulation of marketing practices On the same topic, MARQUES has (particularly the EU Misleading and highlighted that among the unfair practices Comparative Advertising Directive frequently encountered by its members and (114/2006/EC) and the EU Unfair Commercial brand owners at large are ‘lookalikes’, ‘me-too’ Practices Directive (29/2005/EC). products or parasitic copies – that is, products MARQUES believes that all types of that imitate the look and feel (eg, general trademark use should be governed under the layout, colours and placement of labels) of a umbrella of trademark law. This would well-known or best-selling product, without enhance harmonisation and legal certainty. In infringing registered trademarks or other particular, it would aid the governance of rights, such as copyright. MARQUES is marketing practices that typically extend over concerned that there has been a significant rise national borders, such as trademark use on the in the market power of mass or bulk retailers, Internet. At present, these are provided for and that this market power is being abused by under varying national unfair competition parasitic copies. In its comments to the Max laws and regulations. Planck Institute study, MARQUES remarked Hence, at the end of 2011 MARQUES that this market reality of parasitic copying is welcomed the opportunity to contribute to the not taken sufficiently into consideration. European Commission consultation on the Brand owners are looking for ways to handle Misleading and Comparative Advertising lookalikes, which is a serious problem in many Directive and unfair commercial practices member states where no laws are in place to affecting businesses. The commission’s aim is deal with unfair practices appropriately. In to achieve an overview of how the directive is most cases, the only way to challenge parasitic implemented in member states – in particular, copies successfully is through unfair to identify possible problems connected with competition law. MARQUES recognises the its interpretation and application that prevent concerns raised in the Max Planck Institute stronger cooperation between member states study with respect to “undistorted in the enforcement of cross-border cases. competition” and supports free competition, MARQUES’s response commented on the but believes that for the reasons above, most significant unfair commercial practices parasitic copies hinder free competition, rather that have appeared in the online environment. than enhancing it. These are advertisements using keywords To assist its members, MARQUES has corresponding to third-party trademarks and studied the lookalikes issue and has produced trademark grabbing in the context of social a useful chart summarising the regulations network websites. Keyword cases regularly throughout Europe that might assist brand appear in the European and national courts, owners. MARQUES also recently raised the and therefore rules covering them are issue before the European Parliament and has emerging. However, MARQUES believes that welcomed the European Commission’s keyword use also involves an unfair commissioning of a comprehensive study competition dimension. This is particularly from Hogan Lovells on trade secrets and important in circumstances where the parasitic copying. The Hogan Lovells study,

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MARQUES – a trusted voice for brand owners Introduction

published on January 19 2012, provides a of businesses, especially small and medium- comparative analysis of the current legal sized enterprises, to allocate sufficient budget regimes available to tackle parasitic copying, to defend themselves from counterfeiting and whether there is currently sufficient while investing in innovation and human protection available to rights holders to resources. It is in the interests of trademark prevent it across the . owners, consumers and the economy to fight MARQUES recognises the study’s finding that counterfeit products. MARQUES strongly despite the implementation of the Trademarks supports the strengthening of available Directive, different member states have kept measures to protect trademarks, and all IP many of their existing laws governing the rights, against infringements. Hence, the protection of unregistered trademarks, such as European Commission’s review of the EU IP unfair competition laws, passing off and, in Enforcement Directive (2004/48/EC) and the some cases, design laws. This has left differing proposal for a regulation on customs and inconsistent approaches to protecting enforcement of IP rights are welcome. against parasitic copies in the various member MARQUES made a submission to the states. Even where there is a European law commission on the proposal, in which it framework, inconsistencies arise due to supported, among other things, the inclusion implementation and enforcement through of parallel trade in the scope of the draft member states’ national laws. regulation and the mandatory use of the Upon publication of the Hogan Lovells simplified procedures for destroying study, the European Commission abandoned infringing goods under customs acknowledged that products developed and control. MARQUES also raised strong concerns marketed under a parasitic copying strategy about the facts that the definition of lead consumers to make associations or ‘counterfeit goods’ (Article 2(5) of the proposal) become confused between competing no longer covers packaging, labels and products. This practice distorts competition brochures, and that the proposal would bring because the imitating products take unfair new challenges and difficulties. For example, it advantage of the reputation of the copied would not add a clear definition of ‘IP rights products and divert sales. MARQUES agrees infringement’. MARQUES believes that the with the European Commission that scope of the customs enforcement regulation companies which suffer from parasitic copying should be wide enough to permit the should be given proper and effective legal detention of goods which are not just means to tackle such unfair practices. counterfeit or pirated. At minimum, however, MARQUES therefore urges that it is time to the objective of a well-planned mechanism to enact a coherent and effective framework of protect consumers, trademark owners and the legal protection against parasitic copies across economy against counterfeits and pirated all member states, not only to give the victims goods is imperative. of lookalike products the legal means to tackle MARQUES also urged the closure of the such products in court, but also to enhance significant gap in enforcement resulting from their negotiating position with respect to the existing approach to goods in transit. It is copiers. Such legislation should have clear aims well known that many goods are diverted, and objectives, and only specialist courts including for sale within the European Union, should be competent to hear such claims in rather than continuing on their journey to the order to ensure that the remedies available in nominal destination country. On this issue, actions against parasitic copying and the ways MARQUES also made comments on the Max in which they are applied are consistent in all Planck Institute study, stating that it does not member states. support the suggestion that goods in transit Counterfeiting and piracy are among the should infringe in both the country of transit most significant challenges facing brand and the country of destination in order to be owners today. The trade in counterfeit seized. If this were the case, infringers would products is a global problem and has a clear designate as the country of destination a effect on the economy – notably, on the ability country without trademark protection or

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Introduction MARQUES – a trusted voice for brand owners

where the trademark for the goods being Based on the outcome of the review transited is not registered. The suggestion of process of the Internal Market and Consumer the Max Planck Institute study would place an Protection Committee’s report and the unnecessarily high burden on customs officials approach taken in the European Council’s draft and trademark owners to prove infringement compromise text of April 25 2012, particularly not only under harmonised EU law, but also in in relation to the issue of goods in transit, a third country. ahead of the council vote on May 29 2012 On December 1 2011 the Court of Justice of MARQUES and other IP industry organisations the European Union (ECJ) ruled on the joined signed an industry joint letter. The letter was cases of Nokia and Philips . The ECJ raised sent to the members of the Council Customs serious concerns and disappointment among Working Group to urge the council to consider the IP rights community by deciding that the amendments adopted by the Internal goods travelling through EU customs by the Market and Consumer Protection Committee external transit procedure cannot regarding goods in transit, as these automatically be considered counterfeit, and amendments would enable customs thus seized by Customs, without sufficient authorities to deal more effectively with the grounds to suspect that the goods are intended issue of suspected counterfeit goods in transit to be marketed within the European Union. under the proposed Customs Regulation. This requirement places an unwelcome Furthermore, in view of the plenary session evidentiary burden on brand owners and vote of July 3 2012, MARQUES also addressed implies that the uninterrupted transit of key members of the European Parliament to counterfeit goods through Europe will be the stress its members’ concerns regarding the default position. proposed regulation and to emphasise that the The ECJ’s negative answer to the question goods in transit should be included in the referred to it seems to undermine further the regulation. In the vote the parliament clarified fight against the global trade in counterfeits. the rules on how customs officials confiscate, The perception could be that the European store and destroy imports of counterfeit or Union is irresponsibly exposing non-EU pirated goods that infringe IP rights and consumers to the dangers of counterfeit goods adopted a resolution (with 397 votes in favour, in a way that is unconscionable for its own 259 against and 26 abstentions). The outcome citizens. Where this affects consumers in poorer of the plenary vote will serve as the European countries, whose customs institutions have Parliament's position in negotiations with the fewer resources to police their borders, this council for a possible second reading creates an additional moral dilemma. The agreement. ruling confirms MARQUES’s view that The outcome of the parliamentary vote legislative changes are required. Hence, appears to reward the IP business community’s MARQUES has strongly supported the efforts. Brand owners should enjoy a much compromise amendments concerning goods in more effective IP rights customs enforcement transit agreed by the rapporteurs of the system as the new regulation will expand the Internal Market and Consumer Protection, Legal scope of the existing regulation and provide Affairs and International Trade Committees of much stronger and more consistent legislation. the European Parliament, as these would bring In respect of goods in transit, according to the clearer guidance and a much fairer solution to text adopted at first reading during the rights holders and consumers. These plenary vote, the regulation shall apply to amendments include reversing the burden of goods in transit through the customs territory proving the final destination of the goods to of the European Union which are suspected of the declarant or holder of the goods. It is also a infringing an IP right (Amendment 27 – positive development that the compromise Proposal for a regulation, Article 1(4a) (new)) drafting of the transit provision foresees the and the burden to prove the final destination application of the IP laws of the member state of the goods should be borne by the declarant, in which the goods are found or where an holder or goods owner. The commission application is made. should adopt guidelines to provide criteria for

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MARQUES – a trusted voice for brand owners Introduction

customs authorities to assess effectively their risk of deviation onto the EU market, taking into account the relevant ECJ case law. (Amendment 11 – Recital 10a (new)).

About MARQUES MARQUES is a European association of pan- industry brand owners worldwide. Established in 1986 and later incorporated in the United Kingdom as a not-for-profit company limited by guarantee, MARQUES unites European and international brand owners across all product sectors to address issues associated with the use, protection and value of IP rights, as these are vital to innovation, growth and job creation, which ultimately enhance internal markets. Its membership includes brand owners and IP professionals in more than 80 countries. MARQUES is an accredited organisation before the Office for Harmonisation in the Internal Market (OHIM), appointed observer at the OHIM Administrative Board and Budget Committee, an official non-governmental observer at the World Organisation and a registered interest representative organisation (ID 97131823590- 44) in the Transparency Register set up by the European Parliament and the European Commission, which extends and replaces the former Register of Interest Representatives, opened by the commission in 2008. More information about MARQUES and its initiatives is available at www.marques.org.

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Contributor profiles MARQUES Ltd

MARQUES Ltd Unit Q, Troon Way Business Centre, Humberstone Lane Thurmaston, Leicester, LE4 9HA, United Kingdom Tel +44 116 274 7355 Fax +44 116 274 7365 Web www.marques.org

Nunzia Varricchio Alessandra Romeo Chair, MARQUES External relations officer, Senior trademark counsel, DSM MARQUES [email protected] Counsel, Buzzi, Notaro & Antonielli d’Oulx [email protected]

Nunzia Varricchio is chair of Alessandra Romeo is admitted MARQUES. She is also senior to practise as a trademark trademark counsel for DSM, a attorney before the Italian global science company which Patent and Trademark Office, is active in the health, nutrition the Office for Harmonisation and materials sectors. Ms in the Internal Market and the Varricchio has more than 20 World Intellectual Property years of in-house IP experience Organisation, and counsels on in Europe and abroad. She all trademark matters. specialises in the strategic Since February 2010 Ms management of acquired Romeo has been the external portfolios and the development relations officer of MARQUES. of internal IP resources. She is in charge of maintaining relationships and communications with official bodies, IP offices and other organisations. She is also responsible for proposing and implementing appropriate actions to achieve the MARQUES mission and objectives, and she manages internal and external communications vital to MARQUES.

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