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Brussels, 26th April 2001
Seminar of Internal Market and Consumer Affairs Ministers, Lund 27-28 April parallel imports and prices
One of the issues due to be considered at the informal seminar of Internal Market and Consumer Affairs Ministers organised by the Swedish Presidency in Lund, Sweden on 27-28 April concerns parallel imports and prices.
The Swedish Presidency is due to present a new study on price comparisons between the United States, the United Kingdom and Sweden, in the context of a debate on whether the existing trade mark exhaustion regime should be revised. Unfortunately, this study was only made available late on 26th April.
Internal Market Commissioner Frits Bolkestein will indicate to Ministers that:
Background on exhaustion of trade mark rights
The EU trade mark regime, established by a Council Directive 89/104/EEC is based on the system of Community exhaustion, whereby a trademarked good may be sold in any Member State once it has been put on the market elsewhere within the Internal Market, as opposed to international exhaustion, whereby a trademarked good could be marketed in any Member State once it has been put on the market anywhere else in the world. Some trademark holders are using Community exhaustion to prevent "parallel" imports of their branded goods into the EU (i.e. outside official distribution channels). For some time the Commission discussed with interested parties in 1999 and 2000 whether to change the current Community-wide exhaustion regime or not.
The Commission concluded in May 2000 that a change from Community exhaustion of trade mark rights to international exhaustion will not, at least in the short term, lead to a significant fall in consumer prices. A summary of the Commission position is available on the Europa Website:
Trade mark policy has only a marginal effect on parallel trade. Other elements like distribution arrangements, transport costs, health and safety legislation, technical standards and labelling differences may have a greater and more direct impact. The Commission considers that changing the exhaustion regime for trade marks would have little effect on the market place given that the large majority of products are covered by a plurality of intellectual property rights.
Moreover, a change of regime may over time inhibit investment in new brands or even make trademark holders withdraw products from the market. Trademark holders who continue to provide branded goods may choose to reduce the quality of goods or the provision of associated services.
An EU-exhaustion policy has been developed to foster integration of the internal market. If the EU were to introduce an international exhaustion policy, and its trading partners did not do likewise (as seems likely), EU companies would face a competitive disadvantage.