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Issue 4 - July 2015
Dear Colleagues,
It is with great pleasure that we are presenting the fourth issue of this Newsletter, the purpose
of which is to provide a platform for the exchange of experiences and ideas among staffers of
the European Parliament and the Congress in the area of legal affairs.
In addition to following up on the last newsletter from May 2015 by outlining recent
developments concerning the reform of copyright in the context of the Digital Single Market
Strategy and by presenting summary analyses of the Better Regulation package, the reform of
the EU trademark system and the recently adopted resolution on the TTIP negotiations, this
issue will also touch upon the Hague Conference on Private International Law and possible
consequences of austerity programs for civil justice in Europe. All of these subject areas have
featured prominently in the work of the Committee on Legal Affairs during the first half of
2015 and will remain high on the agenda for the coming year.
This issue will also include a recap of the preparations for the upcoming visit of a delegation of
Committee members to Washington, DC, on November 4-6, 2015.
"I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors."
Thomas Jefferson in 1816
"We must rigorously assess the impact of legislation in the making, including substantial amendments introduced during the legislative process, so that political decisions are well-informed and evidence-based. And while the natural tendency of politicians is to focus on new initiatives, we must devote at least as much attention to reviewing existing laws and identifying what can be improved or simplified. We must be honest about what works and what doesn't."
First VP of the European Commission, Frans Timmermans, in 2015
Antoine Ripoll
Head of the European Parliament's
Liaison Office with the US Congress
Robert Bray
Head of Unit
Committee on Legal Affairs, EP
Subscriptions: please email the JURI Secretariat : [email protected] Credits & Acknowledgments European Parliament - Committee on Legal Affairs Head of Secretariat: Robert BRAY - [email protected] Administrator responsible: Magnus NORDANSKOG - [email protected]
Editorial/Production Assistant: Marcia MAGUIRE - [email protected]
2
Copyright reform in Europe
When it comes to the question of access to cultural works in the digital age one can easily
identify two major differences between the United States and the European Union: the US
functions primarily with one single language, which of course is English (although Spanish is
gaining prominence), and it has a largely unified territory both geographically and legally,
whereas the EU functions with 24 official languages (and several other unofficial ones) and at
least 28 different territorial and legal jurisdictions in the Member States.
This cultural and territorial divide in the EU creates difficulties over and above the more
conventional "epic battle" faced in today's digital age between two seemingly incompatible
positions: consumers' sense of entitlement to easy, borderless and cost-efficient access to
linguistically and culturally diverse quality media content, on the one hand, and authors' and
creators' expectation to receive fair remuneration or compensation for their intellectual
contributions, on the other. Add to this equation all the intermediaries ― such as publishers,
music companies, movie studios or internet service providers, just to name a few, which hold
claims of vested interests in the dissemination of culture, take different positions on liability
questions, and are struggling to find new ways of making contributions in the value chain in
order to retain or enlarge their slice of the cake ― and policy makers find themselves faced
with a large number of options and a very difficult balancing exercise indeed.
The need to find an answer to these questions has accelerated in the last several years with
the advent and mass spread of tablets and smart phones, wireless broadband access and
innovative business models for media access.
This is where the European Commission finds itself today. Upon taking up his new office last
year, Jean-Claude Juncker, the President of the Commission, announced that reform of
copyright in the context of creating the Digital Single Market in Europe would be one of his top
ten priorities during the 2014-2019 legislature. Vice-President Andrus Ansip was given
responsibility in the Commission for the Digital Single Market whereas Günther Oettinger
became the Commissioner in charge of the Digital Economy and Society, which includes
copyright. When the Commission on May 6, 2015 presented its Digital Single Market strategy1
it included a roadmap for its completion, which among other things listed "legislative proposals
for a reform of the copyright regime" to be presented during 2015.
Of course, these developments, at least as far as copyright is concerned, did not however take
place in a vacuum, but were rather preceded by extensive analytical and legislative work over
a number of years in the EU institutions. The orphan works and collective rights management
directives, which were both negotiated and adopted in the last legislature (see the newsletter
of June 2014), constitute, as far as the European Parliament is concerned, but the end results
of long discussions and diverse activities conducted by the working groups on copyright set up
by the Committee on Legal Affairs during the two preceding legislatures, both of which focused
on the balancing exercise outlined above, and not least the different consequences of the
principle of territoriality.
In fact, the former Commission came very close to presenting a roadmap on how to revise
copyright rules in Europe by the end of the last legislature, but it was never formally adopted
or made publically available2 owing to unresolved conflicts between the different
Commissioners who were then responsible for the relevant policy areas: internal market and
1 Available here.
2 The so-called "Barnier white paper" was however leaked in draft form and can be accessed by a simple search on the
Internet.
3
services; digital agenda; research, innovation and science; and education, culture,
multilingualism and youth. Some of these tensions continue in the current Commission,
illustrated by the fact that Vice-President Ansip has come out publically against the practice of
geo-blocking whereby access to media content (and more generally, any product or service) is
restricted on the basis of the location of the consumer, and favors portability cross-border of
legally acquired media content, whereas Commissioner Oettinger has stated that "we should
not throw the baby out with the bath water" and has enumerated three sectors which could
warrant looking into, namely sports, state-funded television and European film. More meat on
the bones concerning these questions, and the general modalities of cooperation between
Ansip and Oettinger, are expected during the autumn in view of the upcoming legislative
proposals.
As outlined in the last two newsletters of November 2014 and May 2015, in anticipation of the
reform of copyright rules in Europe becoming a priority for the new Commission, the
Committee on Legal Affairs set up a new Working Group on Intellectual Property Rights and
Copyright Reform, with the purpose of hearing the different views of relevant stakeholders and
conducting its own analytical preparatory work in order to prepare its Members for the
upcoming legislative proposals and to enable them critically to assess the better regulation
activities conducted by the Commission in view of the proposals (see also the article on the
next page), not least the different policy options which are to be included in the impact
assessments which will accompany the proposals.
Since the first meeting of the Working Group in December 2014, eight meetings have taken
place, focusing on hearing a broad range of stakeholders, including representatives of public
libraries, publishers, authors, newspapers, journalists, distributors, researchers, scientists,
internet service providers, consumers, activists, musicians, record companies, directors,
performers, the TV and movie industry, photographers and architects. This taking of evidence
will continue into autumn, and will lay the ground for a number of working documents on
pertinent questions to be chosen by Members based on the evidence presented3.
In parallel with the activities of the Working Group, the Committee also produced a so-called
implementation report on the Infosoc directive (see the last newsletter from May 2015) with a
focus on different limitations and exceptions to copyright in national legislation. This report has
attracted significant interest from stakeholders, the media and Members of Parliament. The
final resolution was adopted by Parliament on July 9, 20154. This report will be followed-up in
September by the presentation of an ex-post impact assessment of the Infosoc directive
commissioned by the Parliament's Research Service, which has been elaborated by external
experts during the spring and summer with input from Members and staff, and will include
different policy options.
One of the main underlying questions for discussion when it comes to policy options is the
choice of legal basis for legislative measures in the EU Treaties (see the newsletter of
November 2014). While the Commission has indicated that it will propose to continue to
harmonize national legislation on copyright with the use of directives, which are not
automatically directly binding but implemented through national legislation, Parliament is
inviting the Commission to study the impact of a directly applicable regulation establishing a
single European Copyright title based on the legal basis introduced for this purpose in the
Lisbon Treaty in 2009.
Some commentators have raised concerns that it could be too early to abolish national
copyright regimes without further harmonization as a first step, since a pan-European
3 More information about the Working Group and the meetings held can be found here.
4 Available here.
4
copyright title would replace such regimes overnight, but a possible policy option is to
introduce a voluntary single title initially, which would exist in parallel with national titles,
mirroring the systems in place for patents and trademarks (see the article on page 8 below).
This discussion is sure to be high on the agenda for the coming year.
In the press release following the first meeting5, it was underlined that the Working Group
would keep an eye on the American operators of the "GAFA" (Google, Apple, Facebook,
Amazon), a.k.a "Big Data". This goes hand in hand with the Commission's recent opening of
antitrust investigations concerning Google and an upcoming judgment from the Court of
Justice in a case concerning how data protection is ensured when it comes to Facebook's
servers which contain the information for consumers on the European market6. All of this
illustrates the impact on the Digital Single Market not only on copyright, but also on
competition and data protection rules. The linguistic issue raised in the first paragraph above is
furthermore illustrated in the Commission's recent announcement antitrust procedures against
UK pay-tv broadcaster Sky and six major US movie studios.
The legislative proposals from the Commission on reform of copyright in Europe are foreseen
for December 2015. We will update on developments and activities in the Committee on Legal
Affairs in upcoming issues of the newsletter.
_______________________________________________________________________________
The Better Regulation Package
On May 19, 2015, Frans Timmermans, the First Vice-President of the European Commission,
presented the eagerly awaited package of proposals and initiatives in the area of better
regulation, the subject-area which was the focus of the newsletter of November 2014. This is
particularly welcomed by the Committee on Legal Affairs since it is the committee in the
European Parliament responsible for this subject-matter and it has been calling for a long time
for negotiations to start between Parliament, the Council of the European Union and the
Commission on a new Interinstitutional Agreement on better regulation, not least since the
agreement currently in force dates back to 2003 and has been severely outdated, if not
obsolete, for many years now.
The package is a staggering 700 pages long, the majority of which however constitutes a
"toolbox" document aimed at Commission services intended to give them practical guidance in
the application of better regulation. The main document in the package, entitled "Better
Regulation for better results - An EU agenda", is however a more manageable 14 pages long
and gives a succinct summary of the main initiatives of the package.7
The main message is one of streamlining legislation, of making it leaner, of less legislation.
This follows the withdrawal from the Commission's work program for 2015 of 73 pending
legislative proposals. The Commission claims that any new initiatives must flow from genuine
political priorities and that it "cannot, and should not, be involved in every issue in the EU". At
the same time, it emphasizes that better regulation is a tool to provide a basis for timely and
sound policy decisions - "but it can never replace political decisions". However, applying the
principles of better regulation is intended to ensure that measures are evidence-based and well
designed and deliver tangible and sustainable benefits for citizens, business and society as a
whole, "making sure that we actually deliver on the ambitious policy goals we have set
ourselves".
5 Available here.
6 Case C-362/14, Maximilian Schrems v Data Protection Commissioner (pending).
7 The toolbox and other relevant documents in the Better Regulation package are available here.
5
Here, it could be noted that at his parliamentary confirmation hearing on October 7, 2014, Mr.
Timmermans said that "better regulation is not "deregulation", it is not ideologically driven. It
is about reducing unnecessary red tape [...] about removing administrative burdens,
duplication, unnecessary or outdated legislation [...] As I said, I am not ideological about this.
I am practical, and willing to be eclectic."
So, what does all of this mean? Well, the Commission is now quick to point out that this is not
all brand new. In reality it should be noted that this package represents yet another
opportunity for renewed emphasis on what was previously known as "smart regulation", and
before that "better law-making" (the previous Interinstitutional Agreement, from 2003, related
to law-making, not regulation), and all EU institutions and the Member States should apply the
principles and processes involved.
Here, it could be pointed out that the European Parliament, and in particular the Committee on
Legal Affairs, over the last 5-6 years have had a strong focus on smart and better law-making
and regulation, and have introduced a multitude of internal services and procedures in the
areas of impact assessments, European added-value and ex-post evaluations, as well as other
forms of evidence-based policy-making tools ― not least illustrated by the setting up of the
European Parliamentary Research Service during the last legislature ― and that the current
better regulation package is to a considerable extent the result of calls from Parliament for
further action made in its resolutions on the subject during the last five years or so as well as
the specific questions and demands directed at First Vice-President Timmermans by the
Committee in the context of his confirmation hearing8.
What does the package include then, more concretely? According to the Commission, it is a
series of actions demonstrating better regulation in its everyday work with the aim to function
more transparently and inclusively to produce higher quality proposals, and ensure that
existing rules deliver important societal goal more effectively.
In addition to the main document and the lengthy toolbox mentioned above, the package
includes a Better Regulation Guidelines document which outlines in further detail the policy
suggestions on such questions as legislative planning, impact assessments, proposals,
implementation, transposition, monitoring, evaluation and fitness checks and stakeholder
consultations, without however going into such practical detail as in the toolbox document.
It furthermore includes a document on the state of play and outlook on the Regulatory Fitness
and Performance Program (REFIT), a program which was set up recently at the end of the
mandate of the former Commission to evaluate the existing stock of legislation, and a decision
establishing a REFIT Platform, chaired by Mr. Timmermans which brings together Member
State experts and representatives from business, social partners and civil society, as well as
existing consultative EU committees. In addition to liaising with existing sectoral Commission
expert groups the panel would invite and analyze suggestions on regulatory and administrative
burden reduction and would bring suggestions for burden reduction to the Commission and
Member States, and the Commission may consult the Platform on any matter relating to its
better regulation work and the REFIT program.
The package also includes a decision establishing an independent Regulatory Scrutiny Board,
which replaces the previous Impact Assessment Board. While the main purpose of the latter
board, which was situated squarely inside the Commission, was to evaluate the impact
assessments undertaken by the Commission in order to ensure their quality and consistency,
the new board is intended to give advice to the political level of the Commission by assessing
8 The details of the hearing, including the written questions from the committee and the full video of the over two
hour long hearing are available here.
6
the quality of impact assessments, fitness check reports and evaluation reports and to
recommend improvements thereof. Some further guidance as to the scope of activities of the
Board may be found in Article 3 of the Decision, on its composition, according to which the
task of the Chair of the Board is to "manage the entire regulatory scrutiny process".
Whereas the title of the Decision talks of an "independent" Regulatory Scrutiny Board,
nowhere in the decision is it explained in relation to what or to whom it is intended to be
independent, it merely states that the Board members and its staff shall act independently and
shall not seek or take instructions. However, according to the wording of the decision itself, not
only is the Chair of the Panel to be appointed by the Commission President and two Vice-
Presidents and to be ranked as a Commission Director-General, the Board is administratively
part of the Commission Secretariat-General. Furthermore, an accompanying document which
elaborates on its mission, tasks and staff states that the Board members "shall not seek or
take instructions from any other institution, body, office or agency" (emphasis added). Three
of the six Board members will be officials selected from within the Commission services and
will after a period of three years return to their Directorate-General of origin. In this
connection, it could also be noted that at his confirmation hearing, Mr. Timmermans stated
that "it is important that the Commission's Impact Assessment Board is composed of people
who can act independently of vested interests and bring in outside expertise".
Finally, the package includes a proposal for an Interinstitutional Agreement on Better
Regulation, which arguably constitutes the most important part of the package. The
Commission is presenting a draft text which it suggests should form the basis for upcoming
negotiations between the three institutions, with a view to reaching an agreement before the
end of 2015 on practical provisions concerning initiatives and procedures relating to the
so-called Community method, transparency of the legislative process, democratic legitimacy,
subsidiarity, proportionality, legal certainty and simplicity, clarity and consistency in the
drafting of legislation.
The suggested draft text of the agreement is seven pages long with 8 preambular statements
and 37 paragraphs which cover the following questions: legislative programming and planning,
impact assessments, stakeholder consultation, ex-post evaluation of existing legislation,
explanatory memoranda, delegated and implementing acts, coordination of the legislative
process, implementation and application of legislation and simplification. There is also a
proposal for an annex which would include an updated Common Understanding on Delegated
Acts, the most important parts of which would set out criteria for the selection between
delegated and implementing acts, procedures for consultations in the preparation and drawing-
up of delegated acts, and standard clauses to be used in legislation (on delegated and
implementing acts, see also the next article for a practical example).
From the perspective of Parliament, the suggested text might be considered rather weak,
merely constituting paying lip-service primarily to the positions of the governments of the
Member States, whereas hardly anything in it panders to the Parliament. This is likely a result
of criticisms voiced within the Council (which gathers government representatives and
represents the joint position of Member States in the EU) over the last years of the rising
power and influence of the Parliament as a result of the entry into force of the Lisbon Treaty in
2009, and those sentiments have arguably become even louder following last year's European
elections in which each political group put forward a candidate for President of the European
Commission (widely referred to by the use of the German word "Spitzenkandidat", which
means top candidate), representing a further move towards the Commission constituting an
EU "government" led by an EU "prime minister" which would have to be supported by the
Parliament, something which would mirror the form of parliamentary democracy found in the
vast majority of the Member States.
7
Many in Parliament would have liked to see concrete proposals in the draft agreement on the
practical modalities for the procedure to be followed for the negotiation and conclusion of
international agreements, not least considering the recent judgment from the Court of Justice
in the so-called Mauritius case9, in which the Court clarified the obligation for the Commission
and the Council to keep the Parliament immediately and fully informed at all stages of such
procedures (see also the article on the TTIP negotiations on page 10 below). The proposal
seems furthermore rather weak on the role of national parliaments in the EU legislative
procedures and the way in which they can make their views heard. Moreover, the Commission
is proposing to retain a number of secondary interinstitutional agreements and joint
declarations on practical better regulation questions, relating to simplification procedures
(codification and recast), the quality of drafting legislation, explanatory documents and
practical arrangements for the ordinary legislative procedure. In the latter case, it must be
underlined that those arrangements date back to 2007, i.e. before the Lisbon Treaty, and the
main reason for Parliament's calls over the last 6 years for the renegotiation of the
Interinstitutional Agreement has been to update it to the new legislative environment thus
created.
The one thing, however, that is almost entirely missing from the text are provisions on so-
called informal trilogue negotiations, that is to say negotiations in view of reaching
compromises between the three institutions in legislative procedures during either the first or
the second reading. This is something that the Commission and Mr. Timmermans have talked a
lot about since taking office last year, in particular in relation to transparency and openness
and the need to make it easier for citizens and stakeholders to know and understand what is
happening and be able to influence the procedure. The only explicit references to this in the
draft agreement is that the "three institutions will ensure an appropriate degree of
transparency in the legislative process, including of trilateral negotiations".
As mentioned above, the Committee on Legal Affairs is the committee responsible in
Parliament for better law-making. The Committee on Constitutional Affairs is however
responsible for interinstitutional relations. Both committees have therefore agreed to cooperate
in working together with the Conference of Presidents ― the political body in Parliament which
represents it in relation to other EU institutions, and consists of Martin Schulz, the President of
Parliament, and the Presidents of the eight political groups ― in formulating a negotiating
mandate for Parliament and conducting the negotiations with the Commission and the Council.
While President Schulz will retain overall responsibility for the negotiations as far as Parliament
is concerned, Guy Verhofstadt, a former Belgian prime minister and leader of the liberal
political group ALDE in Parliament, has been named lead negotiator for Parliament. Exploratory
discussions at technical level have taken place between the institutions in the last month
before the summer vacations and the substantive political negotiations are expected to start in
September. We will follow up with developments in the upcoming issues of the newsletter.
Whereas the Committee had hoped that the package would include at least some discussion on
a possible future EU Administrative Procedure Law (see the last newsletter of May 2015), not
least since Mr. Timmermans had made statements in exchanges with the Committee to the
effect that they would seriously consider this option, nothing in the 700 pages relates to this
important field of law. The prevailing view seems instead to be that the Commission is using
better regulation and REFIT to give more powers to itself and Member State governments. Civil
society has on the other hand largely welcomed the enhanced possibilities for input from
stakeholders, but is very critical of the vague proposals on delegated and implementing acts.
We will follow up on developments in upcoming newsletter during the autumn.
9 Judgment of the Court of Justice of 24 June 2014 in Case C-658/11, Parliament v Council [ECLI:EU:C:2014:2025].
8
EU Trademarks Package
As outlined in the June 2014 newsletter, the EU legal framework on trademarks is based on
the coexistence between a European trademark title and national trademark titles, with
respective registration and governance taking place at a European office and national offices,
and consists of a directive which aims at harmonizing national laws, and the Trademark
Regulation which establishes a stand-alone system for the registration of unitary rights having
equal effect throughout the EU.
The Office for Harmonization in the Internal Market (OHIM) in Alicante, Spain, was set up to
manage the registration and administration of the Community trademark. This rather peculiar
name was a consequence of a lack of an explicit legal basis at the time of the creation of the
Community trademark in the mid-1990s.
Coming up on 20 years of existence, on March 27, 2013 the Commission therefore presented a
package of legislative initiatives which aimed at improving and modernizing this system and to
codify the practices and precedents which had been introduced since its creation. For this
reason it consisted of a suggested revision of the Regulation and an overhaul of the Directive,
including an overhaul of the levels of fees payable to OHIM, which had built up a considerable
financial surplus since its creation.
According to the Commission, the overall objective of the package was to implement a well-
targeted modernization of registration systems all over the EU in order to make trademark
protection cheaper, quicker, more reliable and predictable. To achieve this, the Commission’s
suggestions included updates to the governance and financing of OHIM, enhanced cooperation
between OHIM and national trademark offices, and further harmonization of national
procedures. This overhaul of OHIM followed in the wake of a general modernization of
decentralized EU agencies which had been set in motion a couple of years earlier10.
The work on the files in the Committee on Legal Affairs was rather swift, and its reports on the
two pieces of legislation, together with a negotiating mandate, were adopted in Committee in
December 2013, with the hope that negotiations with the Council and the Commission would
start in early 2014 (see the previous article on informal trilogue negotiations).
However, since the Council had major difficulties in finding a common position and agree on a
negotiating mandate it soon became clear that it would not become possible to start
negotiations before the European elections in May 2014. The Parliament therefore adopted its
position in first reading at the end of February 2014, and effectively put the file on hold until
the new Parliament had been formed following the elections.
The Council finally agreed on a common position in July 2014 and following trilogue
negotiations during the autumn 2014 and spring 2015 a so-called early second reading
agreement on the final wording of the two texts was reached in April 2015.
The main feature of the agreement is arguably the change of OHIM's name to the European
Union Intellectual Property Office (EUIPO) and the change from "Community trade mark" to
"European Union trade mark". At the time when the first directive on harmonizing national
trademark legislation was adopted in the late 1980s, the legal basis in the EU Treaties for this
measure was the provision providing for harmonization of national legislation in order to create
the Internal Market, which became a reality in 1992. However, in order to provide the legal
conditions necessary to enable undertakings to adapt their activities to the scale of the
10
For further details, see the Common Approach on Agencies, available here.
9
Community, and thus allowing them uniform trademark protection by means of one procedural
system, it became necessary to provide for a Community trade mark.
Since at the time there was no explicit legal basis in the EU Treaties providing for the creation
of unitary pan-European intellectual property titles, in order to achieve this, the so-called
flexibility clause was used. This clause provides for the adoption of measures where the
treaties have not provided the necessary powers but action is necessary within the framework
of the policies defined in the treaties to attain one of the objectives set out therein.
Since it was considered necessary to create a trade mark title valid for the whole internal
market, the flexibility clause was used with reference to the policy of harmonization in order to
fulfil the objective of creating a functioning internal market. This explains why the agency set
up in 1994 got the name "Office for the Harmonization in the Internal Market".
With the Lisbon Treaty in 2009, a new legal basis was introduced which allowed for the
creation of European intellectual property rights to provide uniform protection throughout the
Union and for the setting up of centralized Union-wide authorization, coordination and
supervision arrangements. When the Commission presented the proposal for a modernized
Trademark Regulation in 2013, it therefore proposed to use this new legal basis for the
proposal.
The Commission however proposed to change the name of OHIM to the "European Union Trade
Marks and Designs Agency". The Council, for its part, considered that the original name was
well-known and established and that a change would be too costly and that it therefore should
be retained unchanged. The Parliament took the position that because of the change of legal
basis and the fact that since its creation OHIM had been given tasks in the field of intellectual
property unrelated to trademarks (for instance the counterfeiting observatory and the orphan
works register, see the newsletter of June 2014, and possibly registration of geographical
indicators in the future), the name should reflect this rather than harmonization in the internal
market, which does not make any sense for the ordinary citizen. The agreed compromise name
therefore retained "office" and substituted intellectual property for harmonization in the
internal market.
Since the Office over the years had created a financial surplus of over 500 million euros, it was
agreed to lower registration and renewal fees, albeit while keeping them above the average
fee for nation registration, to spend part of the revenue on capacity-building cooperation
projects between the Office and national trademark offices and to allow for surplus to be used
to offset costs incurred by national offices in implementing the EU trademark system. In case
of continuing financial surplus, the possibility of transferring any surplus to the general EU
budget was also introduced. Furthermore, in order to improve the democratic scrutiny of the
Office, the Parliament will appoint a representative in its Management Board.
At national level, a major improvement compared to the old system is that Member States will
now be required to offer administrative procedures before the national trademark offices for
revocation and cancellation procedures of existing trademarks. Also, in order to provide clarity
as to which classes of goods and services a trademark would cover, since different offices use
different guidelines, and to harmonize the case law of the Court of Justice, the agreement
provides for provisions clarifying which classes are covered by an application for a trademark.
In order to provide safeguards for freedom of speech and artistic freedom, provisions were
included to prevent unreasonable lawsuits against artistic expression which are in accordance
with honest practices in industrial and commercial matters, also preventing abuse by
counterfeiters or less serious business interests.
10
The agreement furthermore includes provision on goods in transit, i.e. goods being transported
between two points outside of the European Union but which are reloaded in a port or airport
in the Union, allowing for the prevention of introduction into the internal market of such goods
which infringe EU trademarks, while at the same time ensuring the smooth transit of generic
medicines. The Court of Justice ruled in early 2014 that goods sold to a private individual in
the EU through online sale from a website in a country outside the EU which infringe an EU
trademark can be prevented, even if the goods had not been targeted to consumers in the
EU11. A provision concerning such small consignments which was originally intended to be
included in the Regulation was therefore dropped in the final agreement.
A major political issue which took up considerable time in the negotiations, but which did not
directly pertain to substantive or procedural trademark law was the question of the choice to
be made when it comes to secondary legislation, the regulation of non-essential elements and
uniform conditions for implementation, which do not have to be included in the provisions in
the legislative acts themselves but could rather be handed over to the Commission. The
Parliament favors so-called delegated acts since it gives it more influence in their elaboration,
whereas the Council favors so-called implementing acts since it gives more influence to experts
from the Member States in their elaboration. This is a question which has been causing heated
debate between Parliament and the Council since the Lisbon Treaty entered into force ― the
Court of Justice has tried a number of cases on this question recently but has ruled that this is
essentially a question of choice to be made by the legislator itself and it would only take a
position on "manifest errors of assessment". A compromise was finally struck on the trademark
texts, whereby close to half of the contested provisions will provide for delegated acts, but this
question will for sure continue to be discussed in the context of the Interinstitutional
Agreement on better regulation during the autumn (see the previous article).
The two legislative texts will be revised by lawyer-linguists starting in September in order to
ensure that all of the 24 different official language versions are legally and linguistically equal,
and the Parliament and the Council will then adopt them formally in second reading, before
they can be signed and enter into force.
_______________________________________________________________________________
Developments in the TTIP negotiations
As outlined in the newsletter of May 2015, in the wake of the European elections and midterm
elections in the US in 2014 and the discussions relating to the US President procuring a Trade
Promotion Authority from Congress12, the European Parliament has drawn up a resolution with
recommendations to the European Commission in the on-going negotiations for a Transatlantic
Trade and Investment Partnership (TTIP), which engaged a huge numbers of Members of
Parliament and which included a record-breaking 14 opinions from parliamentary committees,
including the Committee on Legal Affairs13. The final resolution was adopted by Parliament on
July 8, 201514.
In the conclusions from the European Council meeting of heads of state and government of the
Member States of March 20, 2015, it stated that the EU and the US should make every effort
to conclude negotiations on an ambitious, comprehensive and mutually beneficial agreement
by the end of this year, and to enhance dialogue with civil society.
11
Judgment of the Court of Justice of 6 February 2014 in Case C-98/13, Blomqvist v Rolex [ECLI:EU:C:2014:55]. 12
See the article by US Trade Representative Michael Froman published in the November/December 2014 issue of Foreign Affairs, available here. 13
Available here. 14
Available here.
11
Since the start of the negotiations in 2013, the Committee on Legal Affairs has focused on
three issues: regulatory questions, Intellectual Property Rights and Investor-to-State Dispute
Settlement (ISDS).
Taking into account the bad experiences from the negotiations for the Anti-Counterfeiting
Trade Agreement (ACTA) a number of years ago, where the Parliament finally voted down the
conclusion of the agreement as far the EU was concerned, in part because of it not being fully
and immediately informed about the negotiations in accordance with the EU Treaties and the
Court's case law (see also the article on better regulation above), the Commission is now very
adamant about coming to the Parliament to explain its positions in view of negotiating rounds,
to report back after negotiating rounds have taken place, and to take into account the views of
Members of Parliament.
The resolution adopted earlier this month therefore in part consolidates the discussions
between Parliament and the Commission at different levels which have taken place over the
last couple of years.
On general regulatory questions, the Parliament recommends to the Commission to identify
and to be very clear about which technical procedures and standards are fundamental and
cannot be compromised, which ones can be the subject of a common approach, which are the
areas where mutual recognition based on a common high standard and a strong system of
market surveillance is desirable and which are those where simply an improved exchange of
information is possible. This should however not affect standards that have yet to be set in
areas where the legislation or the standards are very different in the US as compared with the
EU, such as the implementation of existing legislation, or the adoption of new laws, or future
definitions affecting the level of protection.
Parliament furthermore stressed the importance of fostering bilateral regulatory cooperation in
order to enhance information exchange and to improve the adoption and implementation of
international instruments, whilst respecting the subsidiarity principle, not least by means of a
structured dialogue and cooperation between regulators. In this connection, it called for
clarifications on the role, composition and legal status of the proposed Regulatory Cooperation
Body, which it considers must fully respect the law-making procedures, established regulatory
systems and the legitimate policy objectives on both sides of the Atlantic, as well as
Parliament’s role within the EU’s decision-making process in the Treaties and its democratic
scrutiny of EU regulatory processes.
The resolution highlights that the recognition of equivalence of the greatest possible number of
vehicle safety regulations based on a verified equivalent level of protection would be one of the
most important achievements of the agreement. At the same time, it is underlined that any
provisions on regulatory cooperation in TTIP must not set a procedural requirement for the
adoption of Union acts concerned by it or give rise to enforceable rights in that regard and
must fully preserve the capacity of national, regional and local authorities to legislate their own
policies, in particular in the field of social and environmental protection.
While the resolution falls short of discussing administrative procedure (see the newsletter of
May 2015 and the article on better regulation above), it does highlight the importance of prior
impact assessments for regulatory acts, in particular in order to measure their impact on
consumers and the environment alongside its impact on trade and investment. Likewise,
transparency of procedures and stakeholder consultations in view of the development of any
regulatory proposal are singled out as essential in this area.
12
When it comes to Intellectual Property Rights (IPR), the Parliament calls on the Commission to
ensure that TTIP includes an ambitious, balanced and modern chapter on precisely defined
areas of IPR, including recognition and enhanced protection of geographical indications, and
that it reflects a fair and efficient level of protection, without impeding the EU’s need to reform
its copyright system and while ensuring a fair balance of IPRs and the public interest, in
particular the need to preserve access to affordable medicines and to ensure that the chapter
does not include provisions on the liability of internet intermediaries or on criminal sanctions as
a tool for enforcement, as having been previously rejected by Parliament including the
proposed ACTA treaty.
On patents, Parliament considers it to be of great importance that the EU and the US remain
committed and engaged in global multilateral patent harmonization discussions through
existing international bodies and thus cautions against attempting to introduce provisions on
substantive patent law in the agreement, in particular with regard to issues relating to
patentability and grace periods.
Since the EU negotiating mandate does not include audiovisual policy, the resolution does not
mention this question in relation to IPR. It is however mentioned under the heading "market
access", where it is underlined that nothing in the agreement should affect the ability of the EU
or its Member States to subsidize and provide financial support to cultural industries and
cultural, educational, audiovisual and press services. The fact that audiovisual policy does not
form part of the negotiations further explains the Commission's recently introduced antitrust
proceedings against UK pay-tv broadcaster Sky and several US movie studios.
Finally, on IPR, the resolution stresses the importance to secure full recognition and strong
legal protection of EU geographical indications (GIs) and measures to deal with improper use
and misleading information and practices and reiterates that guaranteeing the labelling,
traceability and genuine origin of these products for consumers and the protection of the
know-how of producers should be considered as an essential part of a balanced agreement.
The fact that Paul Ryan (R-WI), the chair of the Ways and Means committee, at a hearing
recently said that "for generations, we've been making gouda cheese in Wisconsin, and for
generations to come, we're going to keep making gouda in Wisconsin, and feta, and cheddar
and everything else" might stir up some feelings among Dutch and Greek cheese makers. To
be continued...
When Jean-Claude Juncker, the President of the European Commission, presented his political
guidelines before taking office last year, he stated that he will not accept that the jurisdiction
of courts in the Member States is limited by special regimes for investment disputes in the
TTIP agreement. This question of Investment-to-State Dispute Settlement has for the last year
come to overshadow almost all other questions being discussed in the negotiations, at least in
Europe, and it appeared prominently in the debate in Parliament in view of the adoption of the
resolution, not least since its second biggest political group, the center-left Socialists and
Democrats (S&D) is split on the issue. A former senior Commission figure has claimed that this
is a repetition of the strategy used by the movement which opposed the ACTA treaty: to focus
a lot of attention on one single issue and to raise major opposition to it among citizens by the
use of social media, forcing their elected representatives to represent their views, thereby
putting the whole underlying agreement at risk.
The resolution is therefore very balanced in its wording on ISDS. After having referred to
President Juncker's position above, it outlines in its preamble that since the results of a public
consultation on the question are now available, a reflection process is currently being
undertaken within and between the three EU institutions, while exchanging with civil society
and the business sector, on the best way to achieve investment protection and equal
treatment of investors while ensuring states’ right to regulate.
13
The operative part of the resolution then goes on to state that it must be ensured that foreign
investors are treated in a non-discriminatory fashion, while benefiting from no greater rights
than domestic investors, and that the ISDS system should be replaced by a new system for
resolving disputes between investors and states which is subject to democratic principles and
scrutiny, where potential cases are treated in a transparent manner by publicly appointed,
independent professional judges in public hearings and which includes an appellate
mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the
EU and of the Member States is respected, and where private interests cannot undermine
public policy objectives.
In essence, this mirrors what the Commission stated in its reflection paper on ISDS presented
earlier this spring (see the newsletter of May 2015).
The resolution ends with a call to the Commission to build on the close engagement with
Parliament upheld thus far and with a commitment to seek an even closer, structured dialogue,
underlying that the Parliament will continue to closely monitor the negotiating process and to
engage on its part with the Commission, the Member States, and the US Congress and
Administration, as well as with stakeholders on both sides of the Atlantic, in order to ensure an
outcome which will benefit citizens in the EU, the US and beyond.
The rate of progress in the negotiatons is expected to be considerable during the autumn given
the goal to conclude them before the end of the year. We will therefore closely mionitor
developments on the Parliament's side and follow up on these questions in upcoming issues.
_______________________________________________________________________________
Hague Conference
CROSS-BORDER CIRCULATION OF JUDGMENTS AND THE HAGUE CONFERENCE ON PRIVATE
INTERNATIONAL LAW: DEVELOPMENTS AND POSSIBILITIES
On 11 June 2015 the European Union submitted its instrument of approval of the Hague
Convention of 30 June 2005 on Choice of Court Agreements (hereafter, the 2005 Choice of
Court Convention).
As analyzed in an earlier newsletter in November 2014, the rationale behind the 2005 Choice
of Court Convention lies in the facilitation of transnational disputes in civil and commercial
matters through an international convention on jurisdiction of courts and the recognition and
enforcement of their judgments abroad - the so-called 'Judgments Project'.15 Due to the
complexity and highly technical nature of this endeavor, the efforts of the Hague Conference
on Private International Law were scaled down to the conclusion of a convention on choice of
court agreements, which following EU ratification, will enter into force on 1 October 2015.
All EU Member States (with the exception of Denmark) and Mexico (which acceded in 2007)
will be bound by the Convention. Based on Article 21 of the 2005 Choice of Court Convention,
the EU made a declaration for the exclusion of certain insurance contracts from the scope of
application of the said convention, 'to protect certain policy holders, insured parties and
beneficiaries who, according to internal EU law, receive special protection'.16
15
For more details and background information, visit this site. 16
Ministry of Foreign Affairs of the Kingdom of the Netherlands, the Hague, 'Convention on Choice of Court Agreements (The Hague, 30 June 2005), Notification pursuant to Article 34 of the Convention'.
14
The ratification of the Convention and its imminent entry into force will result in practical
terms, in increased legal certainty and respect of party autonomy for EU companies engaging
in commercial activities with firms outside the EU. The choice of a forum to resolve a trade
dispute in international contracts will thus be respected by the courts of the states that are
bound by the 2005 Choice of Court Convention, and the judgments given by the designated
courts will also be recognized and enforced in these states.
At European Union level, the successful recast of Brussels I Regulation on jurisdiction and
recognition and enforcement of judgments in civil and commercial matters has tackled issues
of recognition and enforcement, in a given Member State, of judgments given in another
Member State. However, in view of the constantly increasing volume of international trade
globally, individuals and companies increasingly need to enforce their judgments outside the
EU. This situation is particularly problematic as successful litigants before EU courts may be
deprived of an effective remedy where, for instance, the counterparty's assets are located
outside the EU and in a State where judgments coming from EU courts are not easily
recognized and enforced.
Although the 2005 Choice of Court Convention contains a number of provisions concerning the
enforcement and recognition of foreign judgments (Articles 1-2 and 8-9), its scope of
application is limited only to judgments following an exclusive choice-of-court agreement and
relating to specific types of civil and commercial matters, excluding for that matter disputes
involving consumer, personal injury, employment and certain tort claims. Despite the partial
shelving of the 'Judgments Project', work on the development of a Convention on the
Recognition and Enforcement of Foreign Judgments has resumed since 2012. According to a
preliminary draft, judgments issued by the courts of the Contracting States will be recognized
and executed in all other Contracting States, without reviewing the merits, and refusal to
recognize and enforce these judgments can only be based on grounds specifically provided in
the Convention.
Against this background, the ratification of the 2005 Choice of Court Convention by the United
States (signed on 19 January 2009) becomes the more important. Considering that the US
remains EU's top trading partner and in view of the ongoing negotiations on the Transatlantic
Trade and Investment Partnership (TTIP) between the EU and the US, such a ratification would
enable the application of the Convention's legal framework to transnational trade disputes
arising out of international contracts between EU and US firms, where a competent court to
resolve these disputes has been designated.
More importantly, the coordination of the EU and US efforts in this field with the international
community and the 'Judgments Project' appears to be the right way forward in terms of legal
certainty and efficiency in transnational commercial transactions between the two regions.
Although the finalization and adoption of a Convention on Recognition and Enforcement of
Foreign Judgments will most likely take several years, its importance and added value cannot
be disregarded. It could provide uniform and clear rules for the recognition and enforcement of
judgments abroad that would simplify and facilitate cross-border circulation of judgments.
Such a development could reduce the legal problems individuals and firms face when engaging
in cross-border transactions, either in the form of limited international business volume -
owing to the complexities and uncertainties regarding the recovery of damages in an efficient
fashion - or in the form of increased international transaction costs - owing to the fear of
litigation.
15
Austerity and civil justice reform
THE THIRD GREEK BAILOUT AND THE REFORM OF THE CIVIL PROCEDURE CODE
According to the Euro Summit Statement of 12 July 201517 and in view of the need to rebuild
trust with the Greek authorities as a prerequisite for a possible future agreement on a new
ESM program, the Greek state pledged to adopt a new Code of Civil Procedure by 22 July
2015. In the same document, it is stated that this development amounts to 'a major overhaul
of procedure and arrangements for the civil justice system that can significantly accelerate the
judicial process and reduce costs'.18 At the time of writing, the Greek Parliament is about to
vote the bill on "Urgent measures for the implementation of law no. 4334/2015", containing
the above reform.
To begin with, procedural law has a supportive and auxiliary function to substantive law, as the
main objective of a civil trial is the protection of substantive rights, via their recognition,
potential shaping, or materialization. This requires the issuance of a correct and fair judgment,
rendering justice in due time. What is more, it is becoming increasingly apparent that there is
a link between a robust national economy and an effective and efficient civil justice system.
The quality of civil justice can impact on economic operator's trust in a state and the likelihood
to respect agreements and enforce one's rights before the courts, if something goes wrong.
The currently undertaken reform of the Civil Procedure Code in Greece is aimed at striking a
right balance between the fairness and swiftness. The main changes refer to the ordinary
procedure before the first instance courts, as well as the enforcement and execution of court
rulings, where the majority of delays are to be seen. Important changes to special procedures
are also introduced.
ORIDINARY COURT PROCEDURE
In an attempt to speed up the hearing of civil justice cases, a novel procedural system of trial
has been proposed according to which the cases should be adjudicated within 160 days from
the filing of the suit. What is more, priority is given to written procedures rather than oral
ones, without marginalizing witness evidence, which should have the same evidentiary value
as the other means of proof and should be available only when the court considers it
necessary.
New Articles 237 and 238 provide for a primarily written ordinary procedure, based on written
proposals and submissions by the parties, whereas discussion in the audience becomes a
formality, during which neither the litigants nor their representatives are obliged to be present.
In the same direction, a new fundamental principle of increased responsibility of the litigants is
introduced, whereby all parties involved in judicial proceedings are obliged to contribute to the
swift resolution of disputes, undertaking any procedural actions, including evidence
submission, within the specified deadlines. What is more, the Court is obliged to encourage
alternative methods of dispute resolution, pre-trial conciliation and mediation and where the
proceedings are not promoted for some time, the application shall be considered withdrawn.
SPECIAL COURT PROCEEDINGS
Special proceedings are maintained and reorganized in the revised Code of Civil Procedure for
the following main reasons: a) these are considered to have been used successfully in the
past; b) judicial expertise has been built up regarding the adjudication of these disputes; c)
the adjudication pace is satisfactory; and d) for the majority of the special proceedings, there
17
SN 4070/15. 18
Ibid, p. 4.
16
is an exceptional material jurisdiction of the one-member courts of first instance, regardless of
the value of the dispute.
Accordingly, the first category of special procedures in the revised Code of Civil Procedure
covers personal claims from family disputes. These refer mainly to marital and parental
disputes as well as those arising from unregistered cohabitation and from registered civil
partnerships.
Disputes regarding rights in property constitute the second and broader category of special
proceedings, and based on the revised Code of Civil Procedure, res judicata will be extended to
all pre-trial issues in lease agreements, whereas there will be no possibility to lodge a counter-
suit in disputes arising from credit titles. Additionally, the bill proposes a series of amendments
to the regime for issuance of orders for payment, in an attempt to remove any remaining
barriers contrary to the European order for payment (Regulation No 1896/2006).
Finally, the new bill makes changes in enforcement proceedings. Enforcement proceedings are
aimed at materializing the content of enforceable titles following the recognition and
establishment of the substantive claim of the creditor. However, although there is no pending
trial, long delays are to be seen in the development and completion of the proceedings,
compromising the satisfaction of creditors' claims despite the acquisition of an enforceable
title. The proposed changes in enforcement proceedings are aimed at simplifying and
expediting the system in two main ways: on the one hand, via the limitation of the number of
judicial remedies, which may be exercised during the various enforcement stages; and on the
other hand, via the limitation of the time needed for the practical implementation of
enforcement orders.
It is very early for any criticisms or indeed praise. That being said, the currently undertaken
reform of the European Civil Procedure Code is massive and all-encompassing following for
that matter earlier, unsuccessful attempts by the previous Greek government to pass a similar
bill in November 2014. It is not surprising that the Greek state is, being asked again to enact
these reforms, especially considering that similar overhauls of the civil justice systems of
Portugal and Italy have already been undertaken as a prerequisite for financial help from the
International Monetary Fund.
_______________________________________________________________________________
Upcoming visit to Washington, DC, in November
The Committees on Legal Affairs and Constitutional Affairs will make a visit by a delegation of
their Members to Washington, DC, on November 3-6, 2015, at the same time as the next
Transatlantic Legislative Dialogue interparliamentary meeting takes place.
The preparation of this visit, including possible means of follow-up to the visit to Silicon Valley
recently made by Members, will be followed up in next issue in early October.