A kick in the gulyás? Hungary, Benelux stewed by Europe's finest

In the stew: Hungary and Benelux --
but has there been "genuine use" of the law?

Is the use of a Community trade mark -- which covers all 27 Member States of the European Union -- to be regarded as a "genuine use" if it takes place in just one of those countries? This question has raised a good deal of controversy in recent months (see earlier IPKat posts here and here, for example). Not everyone has heard, however, that this topic was discussed last week by the European Parliament. According to a little bird that roosts in the rafters of that organisation, the Benelux and Hungarian IP offices came under a bit of heat.

Michel Barnier (Commissioner for the Internal Market and Services) expressed the view that any new restriction the Community trade mark [ie restricting the concept of genuine use to use that transcended national borders] could have serious consequences for the fight against counterfeiting; it would damage SMEs and business start-ups in particular. For that reason he would like to confirm and reassure the Parliament that his services were following very closely the developments in the Member States involved.

"At this stage we are confident that the national jurisdictions will not confirm these decisions, which do not seem to us to conform with the unitary character of the Community trade mark and with the principles of the single market ... The Commission will not allow one of the important elements of the internal market to be unpicked. If we let this happen due to the somewhat protectionist temptations in this or that country, it will be the SMEs who will be the first victims. We are therefore determined to say ‘stop’ to these temptations".

In the event that the decisions are not overturned at a national level (which Michel was confident they would be), the Commission would consider starting infringement proceedings.

Malcolm Harbour (Chairman of the Committee on the Internal Market and Consumer Protection) described the actions of the Benelux and Hungarian offices as “naked self-interest”:

“I want to thank the Commissioner very much indeed [Hmm, says Merpel, I thought being Commissioner was a thankless task ...] for making it absolutely clear that the behaviour of the two trade mark offices concerned – in Benelux and in Hungary – is absolutely unacceptable".

I emphasise that very strongly, because this is clearly an attack on the fundamental principles of the internal market. The first thing my committee intends to do – and I will make sure it happens – is that, when the Minister for the Internal Market (and indeed the Hungarian Minister, from January onwards) comes to my committee, we will make sure that we ask this question and ask them to go directly to their trademark offices and say this is not acceptable.

Why is it not acceptable? Because it is a fundamental attack on the basic principle of the internal market that there should be no discrimination of any kind on companies, wherever they operate in a single uniform unitary market. In this case it is even worse, because this proposal – or proposed actions, if they were to be upheld – actually discriminates against small enterprises as opposed to larger enterprises.

I cannot understand why it is that, after all the time that we have had the Office for Harmonisation in the Internal Market (the trade mark office) in operation, we suddenly find these two trade mark offices doing this [Shall we tell him?]. Perhaps it is because the cost of registering a European trade mark has come down, because they are operating it so efficiently.

Of course, these two trade mark offices, in trying to sustain these objections to allowing people to register trade marks, will be requiring the companies concerned to register in their own jurisdictions. This is naked self-interest on behalf of these organisations. It cannot be allowed to stand. It is fundamentally against the principles of the European Union and, by the way, it also undermines – as the Commissioner rightly says – a major priority for this Commission, which is innovation, getting new products into the market and making the internal market work better.”

The IPKat is most impressed at these expressions of principle since it was ever his feeling that, whatever the merits of the Benelux/Hungarians' legal arguments -- and their arguments are not entirely devoid of merit -- the principle involved was too big for anyone to let the actual law stand in its way. In any event, it's good to see European Parliamentarians discussing anything to do with intellectual property, since it shows that (i) the subject really is on the agenda and (ii) they know it's there.  Merpel adds, some folk might unkindly comment that, while the European Parliament doesn't yet know much about IP, its expertise in "naked self-interest" is unrivalled ...

Hungarian goulash here and here