EC To Review European Trademark Fees Regularly

by Ulrika Lomas, for LawAndTax-News.com, Brussel

04 January 2007

The European Commission late last month set out, in the form of a Communication, its vision for the long-term financing of the EU agency responsible for granting EU-wide trademark and design rights, OHIM (the Office for Harmonization in the Internal Market, located in Spain).

The Commission has proposed the introduction of a regular and automatic review of trademark fees in order to ensure a reasonable balance in OHIM's budget. In the shorter term, this should mean lower trademark fees and a reduction in OHIM's surplus cash reserves.

Internal Market and Services Commissioner Charlie McCreevy announced that:

"OHIM is showing that it is keenly aware of the need to run its affairs efficiently and offer value for money. In a way, it has become a victim of its own success. I welcome a structural solution to avoid disproportionate cash reserves and other future imbalances in the OHIM budget. This approach is also great news for businesses, which will soon be able to get EU-wide trademark protection at even more attractive rates."

As a self-financing EU agency, OHIM has a budget that is independent from the Community budget and is subject to the requirement that the revenue and expenditure in the budget be balanced. The budget of OHIM is mainly funded by the fees that businesses have to pay for its services.

OHIM is generating substantial cash reserves arising from steadily rising numbers of trade mark and design applications, increased productivity and improved efficiency of the agency, as well as growth in e-business.

Despite recent fee reductions these cash reserves are expected to grow further in the coming years. By the end of 2005, cumulative cash reserves had reached more then EUR130 million, while cumulative reserves could easily reach EUR375 million by the end of 2010 and nearly EUR700 million by the end of 2016.

Explaining the reasoning behind its decision to conduct a regular fee review, the EC stated that:

"The Commission has a specific responsibility because it is in charge of setting the fee levels...A regular fees review should be applied both in circumstances of budget surpluses as well as in situations of budget shortages, making use of a standard approach in which the most important fees would move upwards or downwards as necessary. Following political agreement on this approach, such a formula could be automatically applied, for example, on an annual basis. In the short term this would lead to further fee reductions for business."

"The pre-determined formula should not put at risk OHIM's high level of performance, nor should it hinder enhanced cooperation between OHIM and the trade mark offices of the Member States."

"The Commission intends to present proposals for an amendment of the Commission's Trade Mark Fees Regulation in spring 2007."

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