MEPs go soft on exhaustion of trademark rights

The European Parliament asked the Commission to prepare a study on the implications of a change in the exhaustion of the trademark rights regime. A change from the current regime of EU-wide exhaustion of trademark rights to a system of international exhaustion of such rights would open the possibility of “parallel imports” from third countries.

The change from an EU-wide exhaustion regime to an international one raises several issues:

  • the effects on consumer prices for these products if parallel imports would become possible;
  • effects on product quality, product availability, after-sales services and employment;
  • effects of new Internet trading and e-commerce on the regime.

The Commission concluded in May 2000, after an extensive external study of the issue, that a change from the current regime to international exhaustion would not lead to a significant fall in consumer prices. It therefore did not want to propose a change to the regime.

The Swedish Presidency (in favour of international exhaustion) put the issue back on the agenda during the informal seminar of Internal Market and Consumer Affairs Ministers in Lund, Sweden on 27-28 April 2001.

The European Parliament debated the issue in its plenary session of 3 October. Following the recommmendation of its rapporteur Hans-Peter Mayer, MEPs asked the Commission:

  • to produce a detailed study on implications of a possible transition to the principle of international exhaustion for European manufacturers and consumers as well as for jobs;
  • to produce a report on cases of abuse of trademark rights;
  • to examine in detail other legal aspects of the current exhaustion regime (concerning issues relating to WTO or the use of Internet).

 

TheEuropean Brands Association AIMwelcomed the Parliament's vote. According to AIM press spokesperson Philip Sheppard MEPs recognised that the issue of exhaustion of trade mark rights is a highly complex debate. "Parallel trade is only good for parallel traders, not for consumers", he said.

In a first reaction, consumer organisationBEUCexpressed its disappointment about the Parliament's position. It called the vote "the mountain which gave birth to a mouse" and said "that the Parliament's initial proposal, as ambitious and promising as it seemed, has ultimately developed into a teethless exercise without added value."

 

The current EU legislation on intellectual property rights is based on the principle of Community exhaustion. This regime gives trademark holders the possibility of preventing importation into the EU of goods which have been put for the first time on the market outside the Community. Several Member States want to change to an international exhaustion regime, because they claim that trademark holders are misusing the current system to maintain higher prices on the EU market.

 

The Parliament asked the Commission to present a report with detailed proposals by 31 December 2002.

 

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