INTA questions the consistency of Article 5s with the national treatment and most-favored-nation obligations

On June 24, 2024, the European Union adopted a new package of sanctions against Russia in response to its destabilizing actions in Ukraine.

This 14th package, detailed in Council Regulation (EU) 2024/1745, amending Regulation (EU) No. 833/2014, intensifies the existing sanctions by targeting high-value sectors of the Russian economy, such as energy, finance, and trade, making it increasingly challenging for Russia to circumvent EU restrictions.

A particularly contentious element of this package, Article 5s, has raised alarms among heads of intellectual property offices (IPOs) and INTA members. The article mandates the following:

Intellectual property offices and other competent institutions constituted under the law of a Member State or the EU shall not accept:

(a) new applications for registration of trademarks, patents, industrial designs, utility models, protected designations of origin, and geographical indications filed by Russian nationals or natural persons residing in Russia, or by legal persons, entities or bodies established in Russia, including if jointly filed by a Russian national or natural persons residing in Russia, legal persons, entities or bodies established in Russia with one or more non-Russian natural or legal person resident or established outside of Russia;

(b) any requests or submission filed by Russian nationals or natural persons residing in Russia, or by legal persons, entities or bodies established in Russia during the registration procedures before such intellectual property offices related to any of the intellectual property rights referred to in point (a).

While INTA acknowledges that sanctions against Russia have been and continue to be an important element of the global response to their aggression, the Association is concerned about the consequences the sanction would create in intellectual property (IP) systems.

Article 5s appears to conflict with several international IP treaties, threatening their multilateral objectives.

These treaties, such as the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), the Patent Cooperation Treaty, the Trademark Law Treaty, and various free trade agreements, aim to promote stability and economic development through common rules, standards, and norms that facilitate international trade, investment, and cooperation, while reducing technical barriers and increasing predictability. Inclusivity, consultation, and cooperation are essential to achieving these goals.

INTA questions the consistency of Article 5s with the national treatment and most-favored-nation obligations outlined in these treaties.

Additionally, the consequences of Article 5s could impose significant burdens on legitimate IP rights holders in Europe. For instance, the provision does not seem to take into consideration the Madrid Protocol. As per Article 5 thereof, a Designated Office must notify the refusal of the application to the International Office within 12 or 18 months, as of the date of designation notification. Such a refusal can only be based on the grounds set forth by the Paris Convention for the Protection of Industrial Property. If these terms lapse without a refusal notification, the trademark registration will be deemed granted in such a territory. Accordingly, not only would the measure put IPOs in an untenable position in which they cannot comply with the Madrid Protocol, but it could prompt bad-faith applications, cluttering registers and creating additional enforcement burdens for IP rights owners, as well as legal uncertainty for users. Thus, it threatens to erode IP protections for the very EU businesses the sanctions seek to protect.

Given these potential repercussions, INTA expresses deep concern over the lack of consultation during the drafting process and urges the Council to establish a transition period for implementing Article 5s.

On July 17, 2024, INTA submitted its suggestions to the Directorate-General for Internal Market, Industry, Entrepreneurship, and SMEs, as well as sent relevant letters to the heads of EU IPOs and the permanent representatives of member states to the EU.

The transition period INTA advocates would allow the European Commission, IPOs, and the private sector to explore ways to improve the regulation and mitigate challenges, such as the impact on Madrid Protocol practice and the potential increase of bad-faith filings.

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