Brussels Brief - March 25, 2005
March 25, 2005
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KEY DEVELOPMENTS
IP: Use of trade mark permitted to indicate product compatibility
Nicola Chesaites
In a recent dispute the Gillette Company attempted to prevent LA Laboratories Ltd from marketing its razor handles and razor blades, indicating compatibility with Gillette razor blades by use of Gillette’s trade mark. There is a rule under the European Community Directive on trade marks (89/104/EEC) that prevents trade mark owners from prohibiting the use of their trade mark by a third party where such use is necessary to indicate the intended purpose of a product or service. In its judgment on 17 March 2005, the European Court of Justice (ECJ) held that this rule also applies in respect of indications of product compatibility. For the purpose of determining whether the condition of honest use is satisfied, the ECJ instructed national judges that it was not necessarily the case that a third party presents its product as being of the same quality as, or having equivalent properties to, the products of the trade mark holder simply by the fact of using the latter’s trade mark to indicate the intended use of a product. (Case C-228/03 The Gillette Company v LA-Laboratories Ltd Oy , on reference from the Finnish Supreme Court).
STATE AID: Inquiry into aid for Bavarian ethylene pipeline
Sylwena Lattie
The European Commission has opened an in-depth investigation to establish whether the EUR 70 million that the German region of Bavaria intends to contribute towards the construction of an ethylene pipeline is compatible with EU state aid rules. The Commission considers that there is a risk that the grant may distort competition within the chemical industry and that this may outweigh any strategic regional importance that the pipeline could have. Interested parties have one month in which to submit their comments.
MERGERS: Commission approves Lukoil expansion to Finland
Yannis Virvilis
The European Commission has cleared the acquisition of Teboil and Suomen Petrooli, two Finnish operators of petrol service stations, by the Russian oil giant Lukoil. Lukoil is mainly active in non-EU countries in oil exploration and the production of refining and selling of petroleum products. Teboil and Suomen Petrooli are two sister companies that run retail petrol service stations and sell lubricants and other refined oil products. The Commission found that the operation would not significantly impede effective competition, as the horizontal overlaps are marginal. The reason is that the parties are active at different levels of trade. The vertical relationships were also found to be limited.
AIR TRANSPORT: Commission continues procedures against Member States for illegal Open Sky agreements
Yannis Virvilis
The European Commission has taken action against eleven Member States who have bilateral “Open Sky” agreements with the United States bringing the totality of such actions to 20. These agreements contain “nationality clauses”, whereby only national companies from the signatory countries can benefit from the agreement. The Court of Justice has condemned such practices by individual Member States, as being contrary to the provisions of the Treaty on the freedom of establishment. The Commission is at the same time preparing to continue the negotiations with the US authorities in order to conclude an overall agreement for creating a common air space.
Trade: Simplified rules of origin for preferential trade
Philip Bentley
The European Commission has announced its proposed strategy to simplify the rules of origin applicable to trade under preferential agreements. In the case of goods not wholly obtained in the country or regional group concerned, origin would be determined by reference to a single value-added criterion, applicable across the board. The current system of proving origin by means of a certificate completed by the exporter and stamped by the exporting country’s authorities would be replaced by a statement of origin signed by the exporter. The exporter would, however, have to register with, and be subject to controls by, these authorities. A system of periodic monitoring of compliance by these authorities with their obligations would also be put in place.
DEFENSE: EU To Postpone Decision To Lift Chinese Arms Ban
Philip Torbøl
In the run-up to the European Council meeting on 22-23 March 2005, the debate on lifting the 15-year old arms embargo against China suddenly took a new turn. While just a week ago the EU Member States seemed decided to go through with lifting the ban, a number of them now appear to have second thoughts. The UK would prefer postponing the decision until the end of its EU Presidency on 31 December 2005. This is supported by a number of other EU Member States, mainly in Scandinavia and Eastern Europe. As lifting the ban requires unanimity in the Council, France and Germany will probably have difficulty in reaching their June 2005 objective.
COMPETITION: Aviation insurance sector commits to change practices
Sylwena Lattie
Aviation insurers have undertaken to reform their practices to promote more competition and greater transparency. These undertakings were given following the European Commission’s investigation into certain industry practices adopted post 11 September 2001. The Commission found that these practices led to excessive co-ordination among insurers and so violated Article 81 of the EC Treaty. The undertakings will allow customers to have a say in the development of published standard clauses. In light of this and other commitments, the Commission decided to close the investigation. However, the Commission will continue to monitor the aviation insurance market closely.
Energy: Failure of ten Member States to transpose the new EU rules
Patrice Corbiau
The European Commission has sent reasoned opinions to ten Member States which, despite previous letters of formal notice, have not yet completely transposed the Directives on the liberalisation of the electricity and gas internal markets. As from 1 July 2004, these Directives should give industrial customers freedom to choose their suppliers and provide domestic customers with the same possibility as from 1 July 2007. The Commission is closely monitoring the implementation of the electricity and gas internal market and publishes a benchmarking report every year. Its last report of January 2005 stated that many aspects of implementation remained disappointing. With regard to the objective of competition in particular, the Commission observed that after five years of competition for electricity and over three years for gas, fewer than 50% of larger users have switched supplier in most Member States. (PC)
NEXT WEEK’S EVENTS
Monday 28 March – Friday 1 April 2005
COUNCIL MEETINGS
No meetings scheduled for next week
COURT OF JUSTICE
No cases next week
Judicial vacation of the Court of Justice from 21 March to 3 April 2005 inclusive
COURT OF FIRST INSTANCE
No cases next week
Judicial vacation of the Court of First Instance from 21 March to 1 April 2005 inclusive
