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 : juri-secretariat@europarl.europa.eu Credits & Acknowledgments European Parliament - Committee on Legal Affairs Head of Secretariat: Robert BRAY - robert.bray@europarl.europa.eu Administrator responsible: Magnus NORDANSKOG - magnus.nordanskog@europarl.europa.eu

Editorial/Production Assistant: Marcia MAGUIRE - marcia.maguire@europarl.europa.eu

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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.