On November 10, 2015, the Council of the European Union adopted a position on the reform of the European trademark system at first reading.

The reform of the current system will improve the conditions for businesses to innovate and to benefit from more effective trademark protection against counterfeits, including fake goods in transit through the EU’s territory.

The new legal framework is also aimed at making trademark registration systems throughout the European Union more accessible and efficient for businesses in terms of lower costs and complexity, increased speed, greater predictability and legal certainty.

The Dutch delegation abstained from voting and the UK delegation voted against the adoption of the draft regulation.

The European Parliament is expected to vote in second reading before the end of the year, approving the council’s position at first reading without amendments and ending the legislative process.

The European Commission, the executive of the European Union, decided to support the measure. “In balance, the overall agreement significantly improves the existing situation in particular in terms of substantive trademark law,” said a commission statement. The commission went on to express its concerns on certain budgetary aspects of the agreement.

The Netherlands abstained from the vote because of “grave concerns” on provisions relating to goods in transit. “These provisions will introduce the possibility to detain goods on account of possible infringement of a national or EU trademark, where those goods are merely in transit through EU territory,” said a statement from the Netherlands delegation. “The proposed measure will put a disproportionate and unnecessary burden on holders of goods and an impediment to legitimate international trade, including for legitimate generic medicines. Although the Netherlands supports the battle against counterfeiting as this undermines trade, the proposed measure for detaining goods in transit is unacceptable.”

The UK delegation said it could not support the regulation “since it includes a provision that enables the transfer of future surpluses accumulated from trademark and design fees to the general EU budget.” “Research has suggested that IP-rich industries contribute 39 percent of the EU’s GDP, with trademarks a significant part of this,” a UK statement said. “We should not divert money which came from

IP to other uses. It should stay in the system, supporting innovation or enforcement.”