Tag Archives: european union

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2016: New year, new trademark system

We are set to witness a substantial trademark legislation reform in 2016. The EU Commission, the Council and the European Parliament are at a very advanced stage with their preparatory work in this area. If adopted, it will be the most significant trademark reform since the complete harmonization of national trademark systems and the introduction of a community trademark in the 90s.

The draft reform includes a new Trademark Directive to be implemented by Member States in the medium term, as well as a new Community Trademark Regulation, which would become applicable in the short term once adopted.

Among the most relevant modifications envisaged by the new regulatory package, we highlight the following:

  • Symbolically, the Community Trademark will be redubbed “European Union Trademark”. The OHIM will be redubbed European Union Intellectual Property Office (EUIPO).
  • The legal requirement for trademarks to be graphically represented will disappear, opening the gates for new forms of non-traditional trademarks.
  • The harmonization of national trademark systems will be consolidated. Member States will need to incorporate administrative proceedings for trademark cancellation in their respective national Offices. In Spain, the competence for trademark cancellation is currently attributed to Courts and Tribunals. Thus, the reform will reduce the cost of litigation to cancel trademarks.
  • The fees relating to Community Trademarks will be modified. Currently, a basic fee includes up to 3 classes of products and services. This system is inefficient in most cases, where applicants are only interested in registering trademarks for one or two classes of products and services. With the reform, we expect that each class of product or service will be paid separately. This is already the case for internal Spanish trademarks.
  • Renewal fees are substantially reduced.
  • The system of product and service designation will be modified as a result of the IP Translator case and the consequent modification of the class heading system.

To sum up, the reform is significant but not groundbreaking. The new regulatory system will seek to adapt and improve certain aspects that have proven inefficient or improvable over many years. We hope the work of the EU institutions will proceed as expected and will keep you informed as soon as the reform is adopted.

Stay tuned!

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How Intellectual Property Impacts Your Business

The European Observatory on Infringements of Intellectual Property Rights and the European Patent Office have carried out studies on the contribution of the main intellectual property rights (IPR) to the economy in the European Union. The purpose of these studies is to provide evidence about the value of intellectual property (IP). The impact of the IP has been assessed in two different studies.

The first study, released on September 2013, analyzed the main IPR intensive industries and their contribution to the economic performance and employment in the European Union. The results indicated that about 35 % of jobs in the European Union rely on IPR intensive industries, approximately 26 % of all jobs in the EU are provided directly by these industries and 9 % of all employment in the EU comes directly from them. Furthermore, the study revealed that about 39 % of total economic activity in the EU is generated by IPR intensive industries.

The latest study, released on June 2015, deals with an economic analysis of the main IPR and the firm’s performance in Europe. The new study has found out that European companies owning IPR achieve better economic performance than their competitors not owning IPR. The report shows descriptive statistics which exhibit the differences between companies owning and not owning IPR. The results of the analysis clearly demonstrate that the ownership of, specifically, patents, trademarks and designs, is strongly associated with improved economic performance at the level of the individual company.

Among other interesting patterns, the results show that the revenue per employee for owners of IPR is 28.6 % higher than for firms not owning IPR. This revenue is largest for companies owning designs at 31.4 %, followed by trademark owners and patent owners. This relationship between IPR and revenue per employee is even stronger for small and medium-sized enterprises (SMEs). For instance, when taking into consideration all firms subject to the study, the revenue for employee for firms owning IPR is 28 %. However, with respect to SMEs, this positive relationship reaches 32 %. Nevertheless, the statistics show that SMEs do not seem to be aware of how beneficial it is to own IPR since only 9.1 % of SMEs own designs, trademarks or patents.

Besides, IPR owners employ almost 6 times as many employees as companies not owning IPR and the salaries on companies owning IPR are almost 20 % higher than by firms that do not own IPR. The highest salary corresponds to patent owners at 40.6 %, followed by designs at 23.0 % and trademarks at 18.8 %.

In conclusion, these studies clearly present the positive impact of IP in the economy of the European Union. Now, with the results of these studies, the European Observatory on Infringements of Intellectual Property Rights and the European Patent Office aim to raise awareness among European citizens about the value of intellectual property.

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Towards the Unified Patent Court

25 EU Member States have embarked on enhanced co-operation to implement unitary patent protection for their territories. The so-called “EU Patent Package” consists of two regulations: Regulation No 1257/2012 concerning the implementation of enhanced cooperation in the area of the creation of unitary patent protection and Regulation No 1260/2012 regarding the applicable translation arrangements. However, for the time being, Spain will not participate in this ambitious project.

Spain’s objections and the decision of the CJEU

Spain sought annulment of both regulations. Spain argued inter alia that the administrative procedure preceding the grant of the Patent defined by Regulation No 1257/2012, infringes the principle of effective judicial protection, since the procedure is not subject to a judicial review to ensure the correct and uniform application of EU law and the protection of fundamental rights. With regard to Regulation No 1260/2012, Spain claimed that it infringed the principle of non-discrimination on the ground of language since –according to Spain’s objections- the translation agreements discriminates individuals whose language is not one of the official languages of the European Patent Office (i.e. English, German and French).

Spain has not been alone in its battle against the Patent Package. Many opponents of the Unitary Patent Court have expressed their disapproval of the aforementioned regulations. Nevertheless, the Court of Justice of the European Union (CJEU) has recently rejected Spain’s objections to the Unitary Patent Package, effectively giving the green light to the project.

Considering that the regulations entered into force on 20 January 2013, supporters of the system consider Spain’s objections were the last stumbling block. However, the regulations will only apply from the date of entry into force of the Agreement on a Unified Patent Court. The Agreement will have to be ratified by at least 13 states, including France, Germany and the United Kingdom to enter into force; at the moment only 6 states –Austria, Belgium, Denmark, France, Malta and Sweden- have ratified the decision.

The unitary patent and Unified Patent Court

The application procedure, the examination of the procedure, and formalities of concession by European Patent Office will not change with the new regulation. The differences arise once a unitary patent is granted.

A unitary patent provides uniform protection with equal effect in all participating countries. Individuals requiring protection in a country that has not incorporated the unitary patent –for instance, Spain- will need to register the patent with their national authorities. In this case, to extend the effects of a unitary patent to Spain, the person seeking protection will need a license, a translation to Spanish and, in addition, will be subject to payment of a fee. Besides, Spanish courts will be the only competent judicial authorities.

The unitary patent offers protection through enforcement before a single court, as opposed to having to initiate proceedings in multiple national courts. The goal is to have a single trial rather than a wide range of resolutions by the courts of different countries. This will reduce both legal costs and the risk of diverging decisions, generally promoting legal certainty. The results are greater efficiency, swifter proceedings and a reduction in litigation expenses. Patents can nevertheless still be obtained from the national patent offices of each participating country; in such case the patent holder will be entitled to protection only at the national level.

The major goal of these regulations is to create an exclusive specialized jurisdiction for litigation relating to European patents. The Unitary Patent Court will be the single competent authority to hear disputes regarding the validity and infringement of the new unitary patent. An advantage of this will be the high level of specialization of the UPC, which will comprise a Court of First Instance (CFI), a Court of Appeal (CA, located in Luxembourg) and a Registry. The court shall base its decisions on EU law, the Agreement, the European Patent Convention (EPC), other international agreements applicable to patents which are binding on all the participating states (e.g. the TRIPs agreement and the PCT) and national law.

There will be a transitional period of at least seven years (which may be extended by another seven years), during which infringement and validity actions on European bundle patents may still be brought before national courts or other national competent authorities. Additionally, an owner of a European bundle patent will be able to opt out of the jurisdiction of the UPC on a patent by patent basis. In this case, the European bundle patent will remain in the jurisdiction of national courts. For example, if the owner of a European bundle patent valid in the UK chooses to opt out that patent, any litigation will be in the UK courts. Once a patent has been opted out of the UPC’s jurisdiction it can be opted back in at any time before the end of the transitional period, provided no action has already been brought before a national court.

The European Union has sought to achieve harmonization of patent law for almost 40 years. It is true that there are still some elements of uncertainty in the project and some aspects that need to be polished. In the meantime, however, the supporters of the new system are celebrating the CJEU’s decision.

 

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WOMEN IN POWER (II)

Red Eléctrica Española, Acciona, FCC, CaixaBank, Inditex or Viscofan are the listed Spanish companies with the most gender-balanced boards of directors based on the gender profile of their members

Spain: new measures, but are these enough?

As we already mentioned in our previous post, the measures contained in the Draft Law relating to corporate governance of corporate enterprises refer exclusively to commercial undertakings listed on the Spanish secondary stock market and provides that a commission set the goal of representation for the underrepresented sex,  in addition to facilitating the appointment of women in the  selection processes for directors.

In 2013, 79.5% of women directors of IBEX-35 companies were independent directors, another 16.4% were consejeras dominicales (directors representing shareholders with substantial shareholdings) and only 4.1% were executive directors, in companies such as Banco Santander, Telefónica, Arcelor and Bankinter. There were also two Chairwomen of the Board: in Dia and FCC.

We cannot deny that in Spain gender quotas on corporate boards are an example of the catalyst effect that the adoption of legislative measures can have. We have to recall that  Organic Law 3/2007 of 22 March 2007 for Effective Equality of Women and Men included a recommendation  that companies (and not just listed ones)  include in  their  boards of directors a number of women that would  permit balanced representation of gender,  leading to a sharp increase  in the presence of female directors in Spanish listed companies (from 3.30%  in 2005  to 17.23% in 2013).

On the other hand, the Unified Good Governance Code, published in 2006 by the National Securities Market Commission (in Spanish “CNMV”) contains other recommendations: in the event that there are no directors or that a limited number are appointed, the Board shall state the reasons for, as well as the initiatives adopted to correct this situation. In addition, the appointments committee must ensure that when filling new vacancies, selection policies involving positive discrimination in favor of women are adhered to.

But what lies behind these equality policies? Do they only seek social justice between genders? Many studies conclude that greater gender parity undoubtedly leads to improved performance by businesses: not only because more women in the corporate governance of companies implies the proper management of diversity, but also because of better quality in decision making, the existence of more innovation, a better knowledge of the market or identification with customers, as well as greater use of European talent (let us not forget that 60% of European students are women).

We therefore welcome the fact that with  the Draft Law this matter will be  incorporated directly into the Spanish Corporate Enterprises Act, and subsequently integrated into the Commercial Code, although it is likely that it  may remain a mere statement of good political intentions. This will certainly help, but it will be insufficient   if the threshold of 40% female presence on boards of directors by 2020 – the target earmarked by proposed European legislation – is to be reached.  Clearer mandatory rules, including deadlines and administrative or financial penalties, would have been preferable.  As things are, the fate of female board directors is sealed… though perhaps it can still be modified in the parliamentary debate.