The city of Alicante in Spain is the gateway to a number of desirable resorts on the Costa Blanca, making it popular with visitors from all over Europe and beyond. It has also of course been home to the Community trade mark (CTM) officeOHIM or OAMI in its Spanish formsince the CTM system was founded in 1996. The CTM, and its more recent sister the registered Community design, have proven very successful with applicants, and most trademark practitioners have welcomed their development. However, the very success has recently raised unexpected debates about questions such as price, the CTMs relationship with national rights and the interaction between OHIM and national offices. Antonio Campinos, new chair of OHIMs Administrative Council, will now be regularly joining the tourist hordes flying to the city as he takes on the mission of addressing the perceived tensions in Europes trademark system.
Two sources of tension
Campinos took over the chairmanship of the Offices Administrative Councilthe body representing all EU member states that meets several times a year to decide on strategic issues at OHIMearlier this year. Campinos, who has been head of Portugals IP office since 2006 and has also chaired WIPOs Working Group on the Legal Development of the Madrid System, is under no illusions about the challenges he faces in his new role. In Portuguese we have a saying: we should call a cow by its own name. There is some tension going on. It is clear for everybody to see.
The tension he refers to has heightened over the past five yearsa period which has seen the growth of the EU to 27 member states and continued increases in demand for CTMs. Two issues in particular have led people to question the nature of the relationship between OHIM and in EU member states. The first is the level of OHIM fees. Thanks to the unexpected demand for Community rights and the efficient running of the Office, within 10 years of opening it had a surplus of some 100 million euro, and the European Commission proposed cutting the fees. Reductions of up to 25% were introduced in 2005, alongside programs to support national offices. But the surplus has continued to build up, and in May last year EU member states agreed to review fees again. The Commission argues they should be reduced further, but some national offices fear that cheaper CTMs will encourage applicants to seek EU rather than national protection, thereby overcrowding the CTM register at the expense of national rights.
The second issue concerns national searches. When the CTM was set up in the 1990s, it included a provision requiring applicants to pay for a national search in each member state (except for those, such as France and Germany, that opted out). But national searches were never popular with applicants and, following a review, it was decided to make them optional (a compromise solution). That change came into effect in March this year, but not without controversy: OHIMs Budget Committee and an EU committee in Brussels, which both consist of member states, decided that OHIM would pay the 4 euro difference between what applicants are charged for each national search (12 euro) and what the national offices receive (16 euro). Critics called this a cross-subsidisation from OHIM to national offices, which set a dangerous and inequitable precedent.
These two issues both arise from the dual registration system of CTMs and national rights that exists in Europeindeed, the system could now be described as three-way with the option of international registrations through the Madrid Protocol available in all EU member states. The system is complicated because though the CTM exists outside of national rights, major decisions have to be agreed by representatives of EU member statesand specifically the Administrative Council. Campinos says many of the tensions in recent years have arisen from misunderstandings: I feel that stress has been lost inside the Council on the relationship between member states and the Commission and OHIMthere is a lot of work to do there. He adds: In my view, the communication has not been as good as it could be.
That is something he will be aiming to improve, he says. You have to explain and explain again and again and again to ensure that what youve said has been correctly understood. He also stresses the importance of timing, and allowing time for decisions to be made: You can then disagree but you have time to explain and understand. Its a democratic process.
On the question of pricing, for example, he says that the most important point is to note the success of OHIM, especially under the presidency of Wubbo de Boer since 2000. If you see what OHIM management has been doing, they are pushing this organization to the 21st century. He points to the work done to reduce pendency times and the effort now underway to improve quality and says: OHIM is doing fantastic work. It is the efficiencies created by the management that have led to the surplus, which in turn enables the Office to cut fees, he points out: If there is a surplus then it is logical to reduce the fees. The reality is it is due to sound management.
Another area where he sees miscommunication is in the support given by OHIM to national offices. This was enhanced following the fee reduction in 2005, and is designed to help national offices in the EU develop. Figures released earlier this year showed that national offices received a total of 1.8 million euro from OHIM last year. Some see this diversion of funds as the (popular) CTM helping out (less popular) national rights. But Campinos stresses that it is not about handouts: The debate is going in the wrong direction, about giving money to member states. But a Community agency has a role to play in harmonization: I believe in helping SMEs and in the European network.
He stresses the need to work to modernize the national offices and the responsibility to help member states who have been a democracy for 10 years now to modernize themselves, in terms of IT and management. He adds: We dont give them money, we give them resources. The most advanced European countries should help the less advanced countries.
As for the debate over the 4 euro subsidy, Campinos sees this as a non-argument, as few applicants will opt for national searches anyway. Its 4 euro multiplied by zero because no one will request a search report. They do their own before. Campinos was speaking to the INTA Daily News before March 10, when the national searches became optional but the early evidence supports his view: so far, only about 4% of applicants are requesting national searches.
Campinos, who started out as a banking lawyer before joining INPI as trademark director (a post he held for seven years before being appointed to the top job), is no stranger to change. Within Portugal, he has redirected the Office to promote IP in the economy (see box). At WIPO, he chaired the forum that led to the introduction of the trilingual regime for the Madrid system and the repeal of the so-called safeguard clausewhich he describes as a major move forward. But he emphasizes that there is more work to be done to develop the Madrid Protocol: Now we have to concentrate on the Protocol and bring it to the 21st century. There are proposals before WIPO from Norway and Australia to remove the requirement for a basic mark, revise time limits and make information more accessible. The most efficient would be for the company to choose their gateway without having to file a national trademark without worrying, says Campinos. We want to have a more modern treaty if we can.
Having proved his ability to get things done at WIPO, Campinos now has the opportunity to address the problems and miscommunications in Europe. He hopes that, in his role on the Administrative Council, he will be able to enhance both OHIM and the national offices in member states, resulting ultimately in better services and lower costs for users. And he is clear that the priority is to solve the surplus question: If we dont use the surplus, others will use it on agriculture or fisheries or whatever. The money will disappear to things that have nothing to do with the IP system.
How Portugal is building an IP economy
Campinos describes Portugals IP office as more small than medium. Its 166 staff handle about 400 patent applications each year and about 20,000 trademark applications (roughly two per 1,000 inhabitants). While he says that Portuguese businesses are among the leaders in trademark filing, he adds that we are well, well below where we should be in terms of patents. He says that this is partly due to lack of investment in R&D (which accounts for less than 1% of GDP) and partly to the lack of an IP culture.
Since being appointed as head of the IP Office, Campinos has been trying to remedy that deficit, by setting up links with small businesses and universities to promote patenting. The 20th century focused on protection and registration. Since 2000 we have concentrated on promotion, he explains, adding: IP is not needed inside my office but outside my office.
The Offices strategy aims to double public investment and treble private investment in R&D, and also treble the number of filed patents. The strategy is in two phases. The first, running from 2000 to 2007, involved the modernization of INPI (and particularly the development of online services) and the promotion of the IP system in Portugal. As part of this, the Office is financing 44 small units of IP promotion in universities and technology centers. The staff for these units come from the institutions themselves, but are financed by the IP Office. If theyre convinced that IP makes sense, they will convince people much easier than we will, says Campinos. The aim is to encourage both universities and industry in Portugal to protect more patents and bring more of their ideas to commercialization. So far, the strategy has financially supported 250 projects to promote the IP system while the network of offices has answered 10,000 information requests, supported more than 2,600 applications, and organized 300 seminars for more than 13,000 participants.
The results are already evident, in a 115% increase in inventions protected by Portuguese residents and a 91% increase in trademark applications. On the regional and international level the figures are even more striking: there has been a 361% increase in CTM applications and 359% increase in European patent applications.
The second phase of the modernization strategy starts this year and lasts until 2010. It aims to create a real IP culture in Portugal and comprises six goals, which include developing a new marketing strategy and further internationalization.
The Office has also been active in making trademark information available. On April 11 this year it launched an online service providing a free search for Community trade marks and international marksthe only EU member state to do so. The search complements the free searches for national marks, which have been available since April 2006. Around 88% of trademark applications in Portugal are filed online.