Community trade mark fees: a taxing problem, or is it merely legitimised theft?

In "CTM fees to be reduced – but no regular review", Managing Intellectual Property's James Nurton and Emma Barraclough report that the EU Competitiveness Council agreed in principle yesterday to ask the Commission to "immediately propose" a reduction of the fees charged by the Office for Harmonisation in the Internal Market (OHIM) - the second reduction in two years, though it probably takes around half a year to bring them down. The authors observe:

"Fees were last reduced in 2005, but since then OHIM has continued to operate with a surplus. Its cumulative cash reserves have now reached more than €200 million, a figure that Joao Miranda de Sousa [OHIM director of general affairs and external relations] described as "absolutely not logical". The size of the surplus means that there is scope for the fees to be cut by up to 40%.

"Each time a company pays fees for a Community trade mark, they know that a substantial part simply goes into a bank account. We are a not-for-profit organization – we aren't here to collect money", Miranda de Sousa said".

The Commission's proposals for a regular revision of the fees have provoked strong criticism from some national offices, concerned about its impact on their work and on trade mark applicants and owners. The article continues:

"... representatives of member states agreed that the OHIM has been "a great success" and its work "has been very well received by all stake holders".

But member states also underlined that "the high quality of OHIM's work ... requires further efforts to preserve and even improve OHIM's performance" and noted the need for a Community-wide trade mark and designs database. (Denmark objected to the inclusion of the word "high" in this statement).

The member states agreed that fees paid by users should not disproportionately exceed the overall costs of the CTM system. Four delegations (Hungary, Denmark, Lithuania and Portugal) asked that the new criteria used to set fees should also take into account "the effects of any reduction of fees on users of the national trade mark systems".

Five member states (Austria, Belgium, Hungary, Lithuania and Portugal) also urged that the fees should be fixed taking into account the balanced budget of OHIM and "the economic value" of the CTM. The Netherlands, Finland, Sweden and the UK opposed this suggestion".

Right: collecting the 200 million euro was the easy part - the difficult thing is how to spend it without anyone noticing ...

The IPKat frankly doesn't see what the performance of national offices or the value of the CTM to an applicant has to do with the OHIM fee structure. The function of OHIM is to grant registered rights and to discharge its duties for the benefit of trade mark owners and consumers alike, thus helping create a vibrant and competitive choice-based economic environment. The OHIM fee structure is not supposed to be means of milking users of the CTM system in order to cushion national trade mark registries or to build up a fund for anything else. Merpel agrees. If a member state (let's say Denmark, by way of example) wants to protect its national registry against the fact that fewer people use its national system, let it be honest and ask its citizens to subsidise it themselves by paying more tax.

The IPKat wouldn't be so perturbed if he thought that the money raised through CTM fees was ploughed back into improving the system for the benefit of those who are paying for it. He wonders, however, whether his readers regard the current overcharging of CTM fees which are not being re-invested in the system itself as being little short of theft, carried out with the encouragement and support of some national registries. He looks forward to receiving responses here - particular from the official representatives of those member states that are so intent upon charging Community Trade Mark Tax.

Financial Perspectives of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) and the further development of the Community trade mark system - Adoption of Council Conclusions here
MARQUES' position here