Speech by António Campinos, President of OHIM

Speech by António Campinos, President of OHIM Trademark protection in Europe Prague 9 September 2014 It is an honour to be asked to speak at this important conference on the Protection of Intellectual Property in Europe. The conference also coincides with the celebration of the 95 th anniversary of the Patent Office in Prague, which demonstrates the priority put on IP rights in the Czech Republic from a very early date 1. I would congratulate the Czech Office on its anniversary and also mention that this is the 20th anniversary year of the opening of the Office for Harmonization in the Internal Market, which of course, led to the Community Trade Mark, and the Registered Community Design. OHIM now also includes responsibility for the European Observatory on Infringements of Intellectual Property Rights, and you will hear more about its work from my colleague Paul Maier, shortly. 1 Czech Patent office opened in 1919. NB: Vienna Congress 1878; Paris Convention in 1884 (14 States). 1

International cooperation and enforcement The Czech Office, WIPO, the EPO, and OHIM are all close partners in the effort to deliver efficient and effective IP Rights to companies and other right holders, whether they are based in Prague or Paris, elsewhere within the EU, or indeed globally. The word efficient refers mainly to the quality of our registration services and it is essential that IP offices continue to strive to do better in this area. However, it is increasingly evident that for these rights to function as they should they must be accompanied by effective enforcement. Events like today s conference are vital since they help to focus attention on IP Rights, the international dimension of such rights, and the importance of enforcement. This is demonstrated by the comments of Francis Gurry and will, no doubt, also be emphasised later today by Benoît Batistelli and other speakers. 2

Upcoming changes in Commission/IP rights Dear colleagues, this conference is taking place during a period of important change. In the area of trade marks we await the outcome of the negotiations between the Commission, the Council and the Parliament on the Trade Mark Package. There is also a Commission proposal in the area of the protection of Trade Secrets, on which the Council agreed its approach in May this year. In July, the Commission launched a green paper on whether to extend Geographical Indications to nonagricultural products. This would be aimed at protecting traditional knowledge and production methods associated with products ranging from Bohemian crystal to Scottish tartans or Carrara marble. Some of you may know that the European Parliament has suggested that non-agricultural GIs could be an area in which OHIM could assist. 3

Meanwhile, amidst all this change, at the EU level we are waiting to hear what will happen to Intellectual Property Rights under the European Commission s new College of Commissioners. You may have seen speculation in the media that the Internal Market portfolio, which previously included IP, is to disappear and that there will be changes to the Digital Agenda portfolio and to the responsibilities for innovation and the Internet among other things. The President elect of the Commission, Jean-Claude Junker, has put forward some very interesting proposals on the digital arena in the ten-point plan which he presented to the European Parliament a short time ago. Digital policy is, of course, closely linked to innovation, and in one area, that of copyright, Mr Junker proposes modernising copyright rules in the light of the digital revolution. We do not yet have details on what that will entail. Some have speculated that this is the beginning of the path towards an EU copyright, just as we now have an EU trade mark, an EU design and progress towards a unitary patent. 4

As many of you will know the detail is important, but the political will to introduce such a change is a vital starting point. It will need to be focused, and sustained, perhaps over a significant period. And it will also need the support of a considerable cross-section of society. At this point I should mention that some steps, on a more modest scale, are already being taken in the area of copyright by my own Office. OHIM, through the Observatory, is working on the creation of an Orphan Works database which is expected to be fully operational within the next few months. This database sets out to help with the problem of the large number of books, films and other material that is still subject to copyright, but for which no owner can be traced. This causes big problems for both public and private sector digitisation projects, and is holding back wider access to a considerable part of our cultural heritage. To take just one example, the British Library estimates that 40% of the 150 million works that it holds are orphan works. 5

So, to summarise, change is afoot in the area of Intellectual Property and the decisions that we take in the EU area over the next period, on a whole range of issues, are likely to be critical. In this context I would like to mention two thoughts: Firstly, the coordination of the various strands of IP policy at the EU level will be very important and in this context it really matters what happens to Intellectual Property within the Junker Cabinet. Secondly, enforcing IP rights is essential, but it is not just a job that can be left to police officers or customs officials. IP rights are important to the economy and society as a whole and everyone has a stake in making sure that they work effectively. OHIM s role through the Observatory OHIM has a particular responsibility to explore and communicate these matters through the European Observatory on Infringements of Intellectual Property Rights, which has been part of our Office since June 2012. 6

The move to optimise legislation and to better defend IP was the driving force in the decision by our political masters to first create the Observatory and then unite it with OHIM to reinforce competences in IP at the EU level. Clearly, you cannot build on the positive values of IP unless you first understand its economic importance and the real attitudes of the public. For that reason we have been active in important studies to fill the knowledge gap. And since the right tools are needed for the effective enforcement of IP rights, OHIM has also created powerful IT tools to help with the fight against counterfeiting. Research Studies Given the theme of this conference, I would like to outline some of the results of the Observatory studies that are helping us to understand better how important IP is to the modern economy and what citizens really think about it. The first major study published was the IP economic contribution study presented last September, which was carried out jointly with the EPO. 7

The study, which took into account patents, trade marks, designs, copyrights, and geographical indications found that of the 615 industries represented in the EU, 321 of them that s more than half are IPR-intensive. The key findings are that 39% of total economic activity in the EU, that is 4.7 trillion annually, and approximately 26% of all employment in the EU, amounting to 56 million jobs, is generated by these industries. Another 20 million jobs, 9% more, rely indirectly on IPRintensive industries. What s more, IPR-intensive industries pay around 40% more than others and account for 90% of external trade. Trade mark rights are the most significant economically, but most businesses rely on a bundle of IP rights. The report includes many other detailed results broken down both by IP right and by country. 8

I hasten to say, the study is not about how innovative different countries are, but about where the IP rights create jobs and generate GDP. We know that this is often in different countries given issues such output, wages and competitiveness. In the Czech Republic, the shares are 31% for employment and 36.2% for GDP, making it well above average for employment. 54 billion of Czech GDP and 1.6 million workers are attributed to IPR-intensive industries. When the source of the employment in IPR-intensive industries is examined, the success of the Czech Republic in attracting investment from other EU Member States and non-eu countries is clear since 36% of the 1.6 million jobs are in companies owned abroad. In fact the Czech Republic tops the EU league table in terms of employment attributed to foreign owned IPR intensive industries, ahead of Slovakia, Hungary and Romania. The percentages in Spain and Portugal are much lower, for example, at around 13%. 9

Both at the EU level and at the national level the importance of IPR-intensive industry to jobs and GDP is clear. But, it is also clear that not everyone is enthusiastic about the role of Intellectual Property. This brings me to the second study the perception of IP in EU society. It is the first European study of this kind on such a scale, including telephone interviews with a 26,500 citizens in all 28 Member States. Overall, 96% of citizens say they support innovation and creativity by rewarding inventors, creators and artists for their work and more than two-thirds agree that companies generating a lot of IP are important for jobs and growth. However, when they look at the issue from a personal perspective, a significant number of Europeans, particularly young people, believe that IP infringements can be justified, and don t believe that they really hurting anyone. 10

This last point clearly signals that we need to make EU citizens aware of IP in general and also that it is not only used by big multinationals but also by the SMEs. As a second stage of the economic contribution study we are currently looking at the importance of the contribution made by smaller companies, which are, of course, the lifeblood of any economy. A third study quantifying the economic damage caused by infringements, will be published next year. For the IPR infringement study OHIM will be cooperating with the Organization for Economic Cooperation and Development and we are also keeping in close contact with the European Patent Office and drawing on their expertise. 11

All these studies will play a key role in communicating the importance of IP to the general public, without whose support action to control IP infringement is going to be very difficult indeed. We will also be working closely with Member States on various national awareness-raising activities to be funded through the Office s bilateral cooperation framework. As mentioned earlier, as well as carrying out studies, OHIM has also being delivering enforcement tools. OHIM has developed an Enforcement database and an Anti-Counterfeiting Intelligence Support Tool, which the Observatory is introducing in cooperation with enforcement authorities. The Enforcement database allows the sharing of information on IP matters between businesses and enforcement authorities. It will help customs authorities distinguish fake goods from the genuine and ensure the right person is contacted should a suspicious case be detected. It also allows right holders to automatically generate an application for customs action which will allow suspect goods to be seized. 12

The other database, the Anti-Counterfeiting Intelligence Support Tool, allows data on seizures, provided by different enforcement authorities in the Member States, to be stored, analysed and reported in a common standard. In addition to data on customs seizures in each Member State, which will be provided on an annual basis by DG TAXUD, we have received data concerning seizures carried out by police and other competent authorities from eight Member States and plan to extend this to cover the entire EU. The tools that we have delivered share something important with the study series both are about having better information. With the two studies already published, I think we have made an important start in creating greater understanding of the challenges facing IP. The third study on the economic cost of infringements will make up a trilogy of studies that will serve as the basis for creating new narratives which will make citizens perceive IP rights as something more relevant and significant to their lives. 13

Ultimately, the challenge we face is to ensure that respect for Intellectual Property rights is both justified by its role as an enabler of the 21st century economy and shared by society as a whole. Dear colleagues, as I said at the very beginning, IP rights need to be efficient and to be effectively enforced. With regard to the first point, efficiency, as you know there is a two-tier system of trade mark and design rights in the EU. To date, since my Office was opened, a total of 1.3 million Community Trade Marks and 755 000 Registered Community Designs have been applied for by companies from all over the world. Czech companies are important users of Community trade marks and designs with historically around 6,000 of each applied for, which puts them in the top-20 in terms of use. To put it in context, we receive about 800 applications for CTMs annually from Czech companies, which is about 7% of their total trade mark applications the majority choose to register national trade marks. 14

Cooperation and Convergence Because there is a two-tier system in the EU it is important that the different offices cooperate to offer a coherent system that is easy to understand and to use. However, historically, there have been many differences and this legacy is still being dealt with. OHIM, the national IP offices and user associations are working together under the European Trade Mark and Design Network, to build common computer tools such as TMview, Designview and common e-filing and back office file handling systems. The tools also include an important harmonised database of goods and services for trade marks. This work is complemented by a Convergence Programme, which is delivering a common approach to things like classification of trade marks, and on the graphical representation of a design application, just to take two examples. 15

The work by offices to build a common modern IT infrastructure and converge practices where possible is complemented and supported by the Commission s proposals for legislative reform, which I mentioned earlier. The Czech Republic IPO is a partner in the European Trade Mark and Design Network and has adopted 10 of the 19 common IT tools being created. The Czech office also takes part in all seven Convergence Programme projects. This partnership is strengthened by the presence of eight seconded national experts from the Czech Republic who are currently working at OHIM, and will eventually take back the expertise they have gained to their home office. New website OHIM for its part, has also been working on its internal IT systems and its website to modernise and to make them more user-friendly and powerful. The website is the public face of these efforts. It had a difficult start (for which we apologise) but the benefits are now evident. 16

These benefits can be seen in better security. We now have about 40,000 online accounts, which in turn makes a much greater use of e-communication possible. Better security is also the starting point in empowering users to access more relevant, personalised services and to control things like their Recordals and changes of names and addresses. The rise in e-communication, which now accounts for the majority of Office communications, and an increasing proportion of communications from users, is not just efficient, it is also environmentally friendly. In the first half of this year we have seen an important reduction in the amount of paper the Office receives - down by more than 15%. Less paper means fewer resources used on basic tasks such as digitisation, and because users can adjust the information themselves, it also improves quality. 17

This work is also boosting efficiency in various ways, taking advantage of the progress made in the harmonisation of classification. Almost 30% of users now take 100% of their terms from the Harmonised Database of goods and services. In addition, around three-quarters of terms used in all applications are now automatically matched. This produces significant efficiencies, since it means that in effect, the classification and translation for terms that can be automatically matched in the harmonised database has already been paid for. In this respect that Commission s proposal in the Trade Mark Package, to provide a reduced fee for users matching 100% of terms is both balanced and fair. Let s remember that the majority of such users are unrepresented and are therefore, most likely to be SMEs. OHIM s Quality agenda Users in general, but especially SMEs, need IP offices like OHIM to offer a service that is both accessible and high quality. 18

Quality is delivered in a number of ways, both through applications being dealt with in a reasonable timescale and through the delivery of consistent and predictable decisions that will allow users to plan their applications and avoid complications. The advanced IT tools created under the European Trade Mark and Design Network, and work on OHIM s Back Office systems and website, are being complemented by the extension of ex-post checks and complete revamping of OHIM s Service Charter, in order to deliver the high quality service that users need. For example, OHIM s new Service Charter introduced earlier this year sets out to give users greater certainty about the level of service to expect by giving target times in days, weeks or months for a certain step to be accomplished. These targets must be met for 99% of cases across the board and average times are also reported. 19

There are just three levels of performance: Firstly Excellence, which is what we are aiming for; Compliance, which represents satisfactory performance; and Action Needed. The new Service Charter leaves us very little room for manoeuvre and I can tell you we are taking the scores we achieve very seriously, especially if we fall into the area of Action Needed. Summary and Conclusion In conclusion, IP Offices in the EU need to be pro-active in producing efficient, high quality registrations using measures and tools such as those that I have just outlined. They also need to cooperate so that businesses can use the two-tier system of trade marks and design rights most efficiently and make their choices based only on their marketing strategy addressing national, EU or even global markets. Once businesses have made their registration choice it is essential that this is backed up by effective enforcement, and that will involve cooperation among all the stakeholders. 20

The economic importance of IP Rights is demonstrated by the studies that I outlined earlier, and since economic activity is now global, IP Rights with a global reach are also needed. For that it is vital that the pace of international cooperation of IP organisations and agencies is continued. In this respect the outcome of the Trade Mark Package negotiations, currently underway with the Commission, Council and Parliament is important in yet another way, since one of the issues will be how funding for cooperation both within the EU and globally, can be continued. This funding has proved its worth, both in terms of the very keen take-up of the common tools by IP offices, including the Czech office as already outlined, and in terms of the progress being made on converging practice. For this and all the other reasons outlined, I hope you will agree that it is important that the final version of the Trade Mark Package continues to support this investment and builds upon it for the future. 21

Funding for cooperation has proved its worth and is vital to ensure that progress continues toward the kind of joined-up IP rights that businesses in the Czech Republic and throughout the EU need for future success. Thank you Dur 26 mins 22