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Thursday, 30 August 2007

Waste management trade mark licensor Grüne Punkt appeals

Via the IPKat's friend Kathrin Vowinckel comes a press note with the news that German company Duales System Deutschland GmbH (DSD) has appealed against the May 2007 decision of the Court of First Instance (CFI) in Case T-151/01 Der Grüne Punkt (noted here by the IPKat). The CFI confirmed the European Commission's decision that DSD had abused its dominant position in the market by requiring payment of a fee for the total quantity of packaging bearing its "Der Grüne Punkt" logo (right) and put into circulation in Germany, even though other exemption systems or a self-management solution were used.

In its appeal DSD intends to have the CFI decision set aside, thereby avoiding having to give "isolated trade mark use rights" to third parties. According to the press note, DSD in its submissions to the European Court of Justice argues that the CFI has got it wrong and that its Trade Mark Agreements do not offer "isolated trade mark use rights". The trade mark "Der Grüne Punkt" is not used irrespective of the exemption service relating to the take-back and recovery obligations as set out in the Ordinance on the avoidance of packaging waste (Verordnung über die Vermeidung von Verpackungsabfällen).

DSD complains that the CFI did not deal with the argument that the trade mark "Der Grüne Punkt" was exclusively used in respect of packaging for which manufacturers and distributors were using DSD's exemption services.

Left: how the Commission views Grüne Punkt

In keeping with the transparency rules laid down in the Ordinance, the trade mark is intended to clearly signal to the consumer that the packaging to which the trade mark is applied takes part in the DSD system and that a fee was paid for its waste collection in the immediate vicinity of the actual point of sale.

The IPKat looks forward to seeing how the ECJ will grapple with the various policy issues, as they relate to (i) the environmental imperative of ridding ourselves of packaging waste as efficiently as possible, (ii) the fundamental notion of a competition-driven internal market within the EU and (iii) respect for the integrity of intellectual property even (or particularly?) when its use is licensed to third parties. Yes, says Merpel - but I bet that, when weighed up against cuddly and fashionable environmental issues and the lethal cutting edge of competition, IP will be a distant third.

Waste management here
Waist management here

2 comments:

Roberto Iza said...
This comment has been removed by a blog administrator.
GreenDot Insider said...

The "Grüne Punkt" faces even more charges of abuse of its dominant position. From the outset, the German Cartel Office (Monopolies Commission) has kept an eye on Der Grüne Punkt, and rightly so. The system was never designed to have companies pay for the collection and recovery of their packaging waste (which was the lawmaker's) intention, but only for the use of the mark. Being the only scheme recognized as a fully compliant system and thus exempting companies from their individual statutory obligation to coillect their waste whereever it needed to be collected in Germany, companies had little choice but to sign up to Der Grüne Punkt. Any other scheme (e.g. Landbell) was fought by all legal means possible.

Dr Flanderka, then General Counsel of the company (and now CEO of a competing company), soon realized that, in order to ward off charges of abuse of its dominant position, and in order to be safe from any attempt to break up the company or modify its legal basis, it had to team up with other schemes throughout Europe that were also in charge of disposing of packaging waste in accordance with the European Packaging Directive and respective national laws. A first licence agreement covering the Green Dot was signed with the French scheme Eco-Emballages, and others soon followed suit. The English, though no single-scheme country, finally gave in, and Valpak, the biggest scheme, agreed to take a licence.

The consequence of this all was that, if you signed up to the Green Dot in any European member state (and thus applied the interlocking arrows brand on your packaging), you also had to pay licence fees for the use of that brand in other member states where you exported the packaging. In other words, if you were intending to export your goods to countries where you were member of a scheme, and to such countries where you were not, you had to print two types of packaging, unless you wanted to be sued by any European Packaging scheme holding a licence, whether that scheme provided services to you or not. Securing a steady flow of licence fees and making the Green Dot big enough so as not to be broken up (or having its revenue basis modified) by any national body was the main, if not the only intention behind the creation of the European umbrella organization “PRO EUROPE” (Packaging Recovery Organization Europe), acting as a licensing body throughout Europe and beyond (even a Canadian scheme received a licence). Thus well-entrenched in the European packaging waste market and even legislation (the Portuguese modelled their law on the operations of their “Sociedade Ponto Verde”), it was able to assure its income and keep its ineffective recovery system for nearly 18 years.

One of Dr Flanderka's quotes when he was selling the Green Dot to the director of another European packaging recovery scheme was "Ze Green Dot iss a licence to print money". It sure was. What a pity, then, that KKR recently invaded the mighty halls of "Der Grüne Punkt" (in a move designed to break the grip it had on the German economy through its shareholder structure, which read like a who's who of the German consumer goods, food and packaging industry) and took out all the money, more than EUR 2 bn in hidden reserves alone, for a purchase price of just 600 m.

The Green Dot was indeed a licence to print money. But it looks like s.o. else is now having the privilege of spending it...

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