- Using an Agent or Distributor
- Data Privacy
- Franchising
- Direct Marketing
- Joint Ventures/Licensing
- Selling to the Government
- Distribution and Sales Channels
- Selling Factors/Techniques
- Electronic Commerce
- Trade Promotion and Advertising
- Pricing
- Sales Service/Customer Support
- Protecting Your Intellectual Property
- Due Diligence
- Local Professional Services
- Marketing U.S. Agricultural Products
- Web Resources
Using an Agent or Distributor
Companies wishing to use distribution, franchising and agency
arrangements need to ensure that the agreements they put into
place are in accordance with European Union (EU) and Member State
national laws. Council Directive 86/653/EEC establishes
certain minimum standards of protection for self-employed
commercial agents who sell or purchase goods on behalf of their
principals. In essence, the Directive establishes the rights and
obligations of the principal and its agents; the agent’s
remuneration; and the conclusion and termination of an agency
contract, including the notice to be given and indemnity or
compensation to be paid to the agent. U.S. companies should be
particularly aware that the Directive states that parties may not
derogate certain requirements. Accordingly, the inclusion of a
clause specifying an alternate body of law to be applied in the
event of a dispute will likely be ruled invalid by European
courts.
Key Link:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31986L0653:EN:HTML
The European Commission’s Directorate General for Competition
enforces legislation concerned with the effects on competition in
the internal market of such "vertical agreements." Most U.S.
exporters are small- and medium-sized companies (SMEs) and are
therefore exempt from the Regulations because their agreements
likely would qualify as "agreements of minor importance," meaning
they are considered incapable of affecting competition at the EU
level but useful for cooperation between SMEs. Generally
speaking, companies with fewer than 250 employees and an annual
turnover of less than €50 million are considered small- and
medium-sized undertakings. The EU has additionally indicated that
agreements that affect less than 10 percent of a particular
market are generally exempted as well (Commission Notice 2001/C
368/07).
Key Link:
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2001/c_368/c_36820011222en00130015.pdf
The EU also looks to combat payment delays with Directive
2000/35/EC. This covers all commercial transactions within the
EU, whether in the public or private sector, primarily dealing
with the consequences of late payment. Transactions with
consumers, however, do not fall within the scope of this
Directive. In sum, the Directive entitles a seller who does not
receive payment for goods/services within 30-60 days of the
payment deadline to collect interest (at a rate of 7 percent
above the European Central Bank rate) as compensation. The seller
may also retain the title to goods until payment is completed and
may claim full compensation for all recovery costs.
Key Link: http://ec.europa.eu/enterprise/regulation/late_payments/index.htm
Companies’ agents and distributors can take advantage of the
European Ombudsman when victim of inefficient management by an EU
institution or body. Complaints can be made to the European
Ombudsman only by businesses and other bodies with registered
offices in the EU. The Ombudsman can act upon these
complaints by investigating cases in which EU institutions fail
to act in accordance with the law, fail to respect the principles
of good administration, or violate fundamental rights.
Key Link: http://www.ombudsman.europa.eu/home/en/default.htm
Data Privacy
The EU’s general data protection Directive (95/46/EC) spells out strict rules concerning the processing of personal data. Businesses must tell consumers that they are collecting data, what they intend to use it for, and to whom it will be disclosed. Data subjects must be given the opportunity to object to the processing of their personal details and to opt-out of having them used for direct marketing purposes. This opt-out should be available at the time of collection and at any point thereafter. This general legislation is supplemented by specific rules set out in the "Directive on the processing of personal data and the protection of privacy in the electronic communications sector" (2002/58/EC). This requires companies to secure the prior consent of consumers before sending them marketing emails. The only exception to this opt-in provision is if the marketer has already obtained the intended recipient’s contact details in the context of a previous sale and wishes to send them information on similar products and services.
Key Link: http://ec.europa.eu/justice_home/fsj/privacy/index_en.htm
Transferring Customer Data to Countries outside the EU
The EU's general data protection Directive provides for the free flow of personal data within the EU but also for its protection when it leaves the region’s borders. Personal data can only be transferred outside the EU if adequate protection is provided for it or if the unambiguous consent of the data subject is secured. The European Commission has decided that a handful of countries have regulatory frameworks in place that guarantee the adequate protection of data transferred to them – the United States is not one of these.
The Department of Commerce and the European Commission negotiated the Safe Harbor agreement to provide U.S. companies with a simple, streamlined means of complying with the adequacy requirement. It allows those U.S. companies that commit to a series of data protection principles (based on the Directive), and who publicly state that commitment by "self-certifying" on a dedicated website, to continue to receive personal data from the EU. Signing up is voluntary but the rules are binding on those who do. The ultimate means of enforcing Safe Harbor is that failure to fulfill the commitments will be actionable as an unfair and deceptive practice under Section 5 of the FTC Act or under a concurrent Department of Transportation statute for air carriers and ticket agents. While the United States as a whole does not enjoy an adequacy finding, transfers that are covered by the Safe Harbor scheme will. Companies whose activities are not regulated by the FTC or DoT (e.g. banks, credit unions, savings and loan institutions, securities dealers, insurance companies, not-for-profit organizations, meat packing facilities, or telecommunications carriers) are not eligible to sign up to the Safe Harbor.
EU based exporters or U.S. based importers of personal data can also satisfy the adequacy requirement by including data privacy clauses in the contracts they sign with each other. The Data Protection Authority in the EU country from where the data is being exported must approve these contracts. To fast track this procedure the European Commission has approved sets of model clauses for personal data transfers that can be inserted into contracts between data importers and exporters. The most recent were published at the beginning of 2005; work to update these and develop new ones in ongoing. Most transfers using contracts based on these model clauses do not require prior approval. Companies must bear in mind that the transfer of personal data to third countries is a processing operation that is subject to the general data protection Directive regardless of any Safe Harbor, contractual or consent arrangements.
EU countries’ Data Protection Authorities (DPAs) and large multinational companies are also developing a third major approach to compliance with EU rules on transfers of personal data to countries outside the EU. This is based on country-by-country approval of “binding corporate rules” (BCRs). Companies that set up BCRs that satisfy European DPAs will be able to use the presumption of conformity that these approvals provide to transfer personal data from the EU to any location in the world – not just the United States. BCRs can be a tool for compliance with privacy rules on a global scale. The process of negotiation and approval of the BCRs is currently lengthy and complex, and has not been attempted by small or medium-sized companies.
Key Links: http://www.export.gov/safeharbor/
http://ec.europa.eu/justice_home/fsj/privacy/modelcontracts/index_en.htm
http://ec.europa.eu/justice_home/fsj/privacy/workinggroup/wpdocs/2007_en.htm
Franchising
Germany is a mature franchise market in which local entrepreneurs
have developed sophisticated concepts. A high concentration of
franchising chains in Germany exists in the service sector (45%),
trade (37%), building and handicraft (8%), and gastronomy (10%).
Industry sources expect the best prospects to be in the areas of
training and educational services; express delivery services (all
types); theme bistros/restaurants; office management, accounting
and tax services; maintenance, cleaning and sanitation services;
advertising; telecommunication products and services; energy
saving products and services; retail stores (specialized); home
care services; and environmental services. U.S. franchisors must
be prepared to adapt to required market norms and standards,
invest in market research, test market receptivity through pilot
projects, and to adjust their concepts to German business
practices and consumer tastes.
Restrictions to competition in franchise agreements are generally
covered by the Block Exemption on Vertical Restraints of 1999
referred to in the preceding chapter "Distributors."
Direct Marketing
German consumers are accustomed to purchasing via catalog and have become more receptive to shopping on Internet platforms. More than 80% of German enterprises use direct marketing to sell their products and services. The most frequently used formats are email and Internet marketing (65%), telephone marketing (31%), direct mail (24%) and inserts in publications with a response element (18%). Trading companies, manufacturers, and service companies spend more than EUR 30 billion on direct marketing with mailing expenditures clearly in the lead, followed by inserts with response elements, and telephone marketing. Direct marketing agencies currently employ 48,000, a number which is expected to grow over the next years.
It is important to know the pitfalls of using direct marketing as a selling tool in Germany. Data protection and privacy laws are stringent, and consumer protection guidelines and competitive advertising are also highly regulated. Companies should consult with a lawyer before raising, storing or processing any sort of data in Germany. Other potential challenges regard the laws pertaining to unfair competition and rebates.
EU Regulations
There is a wide range of EU legislation that impacts the direct
marketing sector. Compliance requirements are stiffest for
marketing and sales to private consumers. Companies need to
focus, in particular, on the clarity and completeness of the
information they provide to consumers prior to purchase, and on
their approaches to collecting and using customer data. The
following gives a brief overview of the most important provisions
flowing from EU-wide rules on distance selling and on-line
commerce. It is worth noting that the EU is currently overhauling
its consumer protection legislation. Companies are advised to
consult the information available via the hyper-links, to check
the relevant sections of national Country Commercial Guides, and
to contact the Commercial Service at the U.S. Mission to the
European Union for more specific guidance.
Processing Customer Data
The EU has strict laws governing the protection of personal data,
including the use of such data in the context of direct marketing
activities. For more information on these rules, please see the
privacy section above.
Distance Selling Rules
Distance and Door-to-Door sales
The EU’s Directive on distance selling to consumers (97/7/EC)
sets out a number of obligations for companies doing business at
a distance with consumers. http://ec.europa.eu/consumers/cons_int/safe_shop/index_en.htm
Distance Selling of Financial Services
Financial services are the subject of a separate Directive that
came into force in June 2002 (2002/65/EC). This piece of
legislation amends three prior existing Directives and is
designed to ensure that consumers are appropriately protected in
respect to financial transactions taking place where the consumer
and the provider are not face-to-face. http://ec.europa.eu/consumers/cons_int/fina_serv/index_en.htm
Direct Marketing Over the Internet
The e-commerce Directive (2000/31/EC) imposes certain specific
requirements connected to the direct marketing business.
Promotional offers must not mislead customers and the terms that
must be met to qualify for them have to be easily accessible and
clear. The Directive stipulates that marketing e-mails must be
identified as such to the recipient and requires that companies
targeting customers on-line must regularly consult national
opt-out registers where they exist.
http://ec.europa.eu/internal_market/e-commerce/index_en.htm
Joint Ventures/Licensing
Joint Ventures
Dealing with joint ventures ranks among the most difficult jobs
under German competition law. In Germany, joint venture
legislation falls under the purview of the Federal Cartel Office
(Bundeskartellamt: http://www.bundeskartellamt.de). The law requires
that a joint venture must exercise “genuine entrepreneurial”
activities. Under German law, this means:
• Organizations which merely carry out auxiliary functions
such as purchasing or distribution on behalf of the parents are
not considered joint ventures; and
• JVs must have at their disposal sufficient assets and
personnel to carry out their activities.
The Bundeskartellamt is required to prohibit a merger if it is "expected to create or strengthen a dominant position.” Market dominance is defined as an undertaking, which either has no competitors or is not exposed to any substantial competition or has a paramount market position in relation to its competitors.
Licensing
German antitrust law does not, in the absence of a dominant
market position, restrict the owner’s freedom to use her/his
industrial property rights, including the exploitation of a
patented innovation.
Selling to the Government
Selling to German government entities is not an easy process. Although there has been a delay in implementing some facets of the EU Utility Directive, German government procurement is formally non-discriminatory and compliant with the GATT Agreement on Government Procurement and the European Community's procurement directives. That said, it is a major challenge to compete head-to-head with major German or other EU suppliers who have established long-term ties with purchasing entities.
EU Regulations
The EU public procurement market, including EU institutions and
Member States, totals around EUR 1,600 billion. This market is
regulated by two Directives:
• Directive 2004/18 on Coordination of procedures for the
award of public works, services and supplies contracts, and
• Directive 2004/17 on Coordination of procedures of
entities operating in the Utilities sector, which covers the
following sectors: water, energy, transport and postal
services.
Remedies directives cover legal means for companies who face
discriminatory public procurement practices. These directives are
implemented in the national procurement legislation of the 27 EU
Member States.
The US and the EU are signatories of the World Trade Organization’s (WTO) Government Procurement Agreement (GPA), which grants access to most public supplies and some services and works contracts published by national procuring authorities of the countries that are parties to the Agreement. In practice, this means that U.S.-based companies are eligible to bid on supplies contracts from European public contracting authorities above the agreed thresholds.
For more information, please visit the U.S. Commercial Service at
the U.S. Mission to the European Union website dedicated to EU
public procurement. This site also has a database of all European
public procurement tenders that are open to U.S.-based firms by
virtue of the Government Procurement Agreement. Access is free of
charge.
http://www.buyusa.gov/europeanunion/eu_tenders.html
Distribution and Sales Channels
Distribution channels are varied and similar to the United States. There are certain restrictions, however, concerning multi-level networking systems, i.e., so-called snowball or pyramid distribution systems. More information: http://www.wettbewerbszentrale.de/
Selling Factors/Techniques
Success in the German market, as elsewhere around the world, requires long-term commitment to market development and sales backup, especially if U.S. companies are to overcome the geographic handicap with respect to European competitors. Germans at times perceive U.S. suppliers as tending to process a U.S. domestic order before taking care of an export sale, or being quick to bypass a local distributor to deal directly with its customer. Some German entrepreneurs with selective experience with U.S. companies are skeptical about their long-term commitment and after-sales support. U.S. firms entering Germany today are generally aware of the factors that make for a successful export relationship and are ready to establish a credible support network. However, U.S. firms should be ready to address any lingering doubts from prospective German clients/partners.
Electronic Commerce
Germany is the European leader in e-commerce and is among the world’s most sophisticated markets: Germany, the world’s number one exporter, is the largest economy in the European Union and the third largest in the world. As Europe’s most populous nation, Germany also has the largest number of Internet users, 41 million people (65 percent of the population) in 2008. 62 percent of German Internet users have used online shops in 2008. More products are sold online than through traditional mail order. The most popular product categories are music, video, travel, tickets, books and consumer electronics. Price, trust and product diversity play a major role in determining where products are purchased. The most popular online shops are ebay.de, amazon.de, tchibo.de and otto.de. A majority of online retailers is also relying on the traditional offline retail channel and 67 percent expect growing e-commerce revenues in 2009 despite the financial crisis
Trade Promotion and Advertising
Trade Fairs
Few countries in the world can match Germany when it comes to
leading international trade fairs. Such a reputation should be no
surprise given that the trade fair concept was born in Germany
during the Middle Ages. Today, Germany hosts a major world-class
trade event in virtually every industry sector, attracting buyers
from around the world. Trade fairs thrive in Germany because they
are true business events where contracts are negotiated and deals
are consummated. The U.S. exhibitors at German fairs should be
prepared to take full advantage of the business opportunities
presented at these events. While U.S. exhibitors and visitors can
conclude transactions, all attendees can use major German trade
fairs to conduct market research, see what their worldwide
competition is doing, and test pricing strategies. Finally,
German fairs attract buyers from throughout the world, allowing
U.S. exhibitors to conduct business here with buyers from across
Europe, Asia, Africa, Latin America, the Middle East, as well as
with other U.S. companies.
German trade fairs, in general, attract impressive numbers of
visitors and exhibitors. This reality confirms the conviction
that there is no other venue where an American company can get so
much product exposure for its marketing dollar. Trade fairs also
provide a U.S. company interested in entering Germany with the
opportunity to research its market and the potential of its
product properly before making a business decision.
Website: http://www.buyusa.gov/germany/en/events.html
Showcase Europe
Responding to the international nature of German trade shows, the
U.S. Commercial Service has a broad-ranging program entitled
“Showcase Europe” designed to support U.S. business interests in
the expanded European Union. Focused on high priority sectors
such as aerospace; energy; medical equipment, including drugs and
pharmaceuticals; telecommunications and information technologies;
environmental technologies and equipment; and travel and tourism,
“Showcase Europe” provides contacts, market information, and
commercial guidance for the entire European market region. What
makes these programs effective and unique is that they are
conducted by trade specialists who regularly work at U.S.
embassies and consulates around Europe, but come together at
selected trade fairs for the sole purpose of supporting U.S.
firms. "Showcase Europe" programs also address trade policy and
other business concerns, such as the protection of intellectual
property rights and other market impediments to U.S. companies,
which are common across Europe. Website: http://www.buyusa.gov/europe/
Showcase Global
Only recently, U.S. Commercial Service Germany has started to
expand “Showcase Europe” into a true “Showcase Global” program,
which is designed to promote the presence of U.S. companies at
selected trade fairs in Germany globally, through the Commercial
Service’s worldwide network. Please visit our website at http://www.buyusa.gov/germany/en
for more information on Commercial Service Germany's activities
at trade fairs.
Advertising
In addition to exhibiting at major German trade fairs,
advertising plays a central role in most companies’ broad-based
marketing programs. Regulation of advertising in Germany is a mix
between basic rules and voluntary guidelines developed by the
major industry associations. The “Law Against Unfair Competition”
established legal rules at the beginning of the 20th Century.
Although it has been modified over time, this law continues to be
valid today. The law allows suits to be brought if advertising
"violates accepted mores."
Many advertising practices that are common in the United States,
such as offering premiums, are not allowed in Germany. Any
planned advertising campaigns should be discussed with a
potential business partner or an advertising agency in Germany.
Following is the address of the German association of advertising
agencies:
Gesamtverband Kommunikationsagenturen e.V.
(German Association of Advertising Agencies)
Friedensstr. 11
60311 Frankfurt a.M.
Telephone: [49][69] 2560080
Telefax: [49][69] 236883
http://www.gwa.de/
There are numerous technical or specialized periodicals that deal with all aspects of technology and doing business in Germany. In addition, Germany has a well-developed array of newspapers and magazines which offer the opportunity to gather information and advertise products and services.
EU Regulations
Laws against misleading advertisements differ widely from Member
State to Member State within the EU. To respond to this
imperfection in the Internal Market, the Commission adopted a
Directive, in force since October 1986, to establish minimum and
objective criteria regarding truth in advertising. The Directive
was amended in October 1997 to include comparative advertising.
Under the Directive, misleading advertising is defined as any
"advertising which in any way, including its presentation,
deceives or is likely to deceive the persons to whom it is
addressed or whom it reaches and which, by reason of its
deceptive nature, is likely to affect their economic behavior or
which for those reasons, injures or is likely to injure a
competitor." Member States can authorize even more extensive
protection under their national laws.
Comparative advertising, subject to certain conditions, is defined as "advertising which explicitly or by implication identifies a competitor or goods or services by a competitor." Member States can, and in some cases have, restricted misleading or comparative advertising.
The EU’s Audiovisual Media Services Directive lays down legislation on broadcasting activities allowed within the EU. From 2009 the rules will allow for US-style product placement on television and the three-hour/day maximum of advertising will be lifted. However, a 12-minute/hour maximum will remain. Child programming will be subject to a code of conduct that will include a limit of junk food advertising to children.
Following the adoption of the 1999 Council Directive on the Sale of Consumer Goods and Associated Guarantees, product specifications, as laid down in advertising, are now considered as legally binding on the seller. (For additional information on Council Directive 1999/44/EC on the Sale of Consumer Goods and Associated Guarantees, see the legal warranties and after-sales service section below.)
The EU adopted Directive 2005/29/EC concerning fair business
practices in a further attempt to tighten up consumer protection
rules. These new rules will outlaw several aggressive or
deceptive marketing practices such as pyramid schemes,
"liquidation sales" when a shop is not closing down, and
artificially high prices as the basis for discounts in addition
to other potentially misleading advertising practices. Certain
rules on advertising to children are also set out.
http://ec.europa.eu/comm/consumers/cons_int/safe_shop/fair_bus_pract/index_en.htm
Medicine
The advertising of medicinal products for human use is regulated
by Council Directive
2001/83/EC. Generally speaking, the advertising of medicinal
products is forbidden if market authorization has not yet been
granted or if the product in question is a prescription
drug. The Commission plans to present a new framework
for information to patients on medicines in 2008. The framework
would allow industry to produce non-promotional information about
their medicines while complying with strictly defined rules and
would be subject to an effective system of control and quality
assurance.
http://ec.europa.eu/eur-lex/pri/en/oj/dat/2001/l_311/l_31120011128en00670128.pdf
Food
On July 1, 2007, a new regulation on nutrition and health claims
entered into force. Regulation 1924/2006 sets EU-wide
conditions for the use of nutrition claims such as “low fat” or
“high in vitamin C” and health claims such as “helps lower
cholesterol”. The regulation applies to any food or drink
product produced for human consumption that is marketed on the EU
market. Only foods that fit a certain nutrient profile
(below certain salt, sugar and/or fat levels) will be allowed to
carry claims. Nutrition and health claims will only be
allowed on food labels if they are included in one of the EU
positive lists. Food products carrying claims must comply
with the provisions of nutritional labeling directive
90/496/EC.
Nutrient profiles will be developed by January 2009, based on
scientific evaluations by the European Food Safety Authority
(EFSA). Once they have been set, there will be another
two-year period before the nutrient profiles begin to apply to
allow food operators time to comply with the new rules.
Nutrition claims can fail one criterion, i.e. if only one
nutrient (salt, sugar or fat) exceeds the limit of the profile, a
claim can still be made provided the high level of that
particular nutrient is clearly marked on the label. For
example, a yogurt can make a low-fat claim even if it has high
sugar content but only if the label clearly states “high sugar
content”. Health claims cannot fail any
criteria.
New products on the EU market must respect the conditions for
using nutrition claims set out in detail in the Annex of
Regulation 1924/2006. Products already labeled or on the
market before January 2007 may remain on the market with the old
labels until January 2010. From 2010, only nutrition claims
included in the Annex will be allowed.
A list of well-established health function claims such as
“calcium is good for your bones” will be established by January
2010, based on Member States’ lists of health claims already
approved at national level. Disease risk reduction claims
and claims referring to the health and development of children
will require an authorization on a case-by-case basis, following
the submission of a scientific dossier to EFSA. A
simplified authorization procedure has been established for
health claims based on new scientific data. GAIN Report
E48055 describes how application dossiers for authorization of
health claims should be prepared and presented. A guidance
document on how companies can apply for health claim
authorizations can be downloaded from EFSA’s website at http://www.efsa.europa.eu/EFSA/efsa_locale-1178620753812_1178623592471.htm.
http://ec.europa.eu/food/food/labellingnutrition/claims/index_en.htm
Food Supplements
Regulation 1925/2006, applicable as of July 1, 2007, harmonizes
rules on the addition of vitamins and minerals to foods. The
regulation lists the vitamins and minerals that may be added to
foods and sets criteria for establishing minimum and maximum
levels.
Key Link: http://useu.usmission.gov/agri/foodsupplements.html
Tobacco
The EU Tobacco Advertising Directive bans tobacco advertising in
printed media, radio, and internet as well as the sponsorship of
cross-border events or activities. Advertising in cinemas and on
billboards or merchandising is allowed though these are banned in
many Member States. Tobacco advertising on television has been
banned in the EU since the early 1990s and is governed by the TV
Without Frontiers Directive.
http://ec.europa.eu/health/ph_determinants/life_style/Tobacco/tobacco_en.htm
Pricing
Germany has become more price-conscious, especially in consumer goods areas. Consequently, price is increasing in importance as a competitive factor, but quality, timely delivery and service remain equally important, especially in the B2B relations.
Sales Service/Customer Support
The German commercial customer expects to be able to pick up the telephone, talk to his or her dealer and have replacement parts or service work immediately available. American exporters should avoid appointing distributors with impossibly large geographic areas, without firm commitments regarding parts inventories or service capabilities, and without agreements on dealer mark-ups
EU Regulations
Conscious of the discrepancies among Member States in product
labeling, language use, legal guarantee, and liability, the
redress of which inevitably frustrates consumers in cross-border
shopping, the EU institutions have launched a number of
initiatives aimed at harmonizing national legislation. Suppliers
within and outside the EU should be aware of existing and
upcoming legislation affecting sales, service, and customer
support.
Product Liability
Under the 1985 Directive on liability of defective products,
amended in 1999, the producer is liable for damage caused by a
defect in his product. The victim must prove the existence of the
defect and a causal link between defect and injury (bodily as
well as material). A reduction of liability of the manufacturer
is granted in cases of negligence on the part of the
victim.
http://ec.europa.eu/enterprise/regulation/goods/liability_en.htm
Product Safety
The 1992 General Product Safety Directive introduces a general
safety requirement at the EU level to ensure that manufacturers
only place safe products on the market. It was revised in 2001 to
include an obligation on the producer and distributor to notify
the Commission in case of a problem with a given product,
provisions for its recall, the creation of a European Product
Safety Network, and a ban on exports of products to third
countries that are not deemed safe in the EU.
http://ec.europa.eu/consumers/safety/prod_legis/index_en.htm
Legal Warranties and After-sales Service
Under the 1999 Directive on the Sale of Consumer Goods and
Associated Guarantees, professional sellers are required to
provide a minimum two-year warranty on all consumer goods sold to
consumers (natural persons acting for purposes outside their
trade, businesses or professions), as defined by the Directive.
The remedies available to consumers in case of non-compliance
are:
• repair of the good(s);
• replacement of the good(s);
• a price reduction; or
• rescission of the sales contract.
http://ec.europa.eu/comm/consumers/cons_int/safe_shop/guarantees/index_en.htm
Protecting Your Intellectual Property
Several general principles are important for effective management of intellectual property rights in the EU and Germany. First, it is important to have an overall strategy to protect IPR. Second, IPR is protected differently in Germany than in the U.S. Third, rights must be registered and enforced in Germany under EU laws. Companies may wish to seek advice from local attorneys or IP consultants. The U.S. Commercial Service can often provide a list of local lawyers upon request.
The EU’s legislative framework for copyright protection consists
of a series of Directives covering areas such as the legal
protection of computer programs, the duration of protection of
authors’ rights and neighboring rights, and the legal protection
of databases. Almost all Member States have fully implemented the
rules into national law; and the Commission is now focusing on
ensuring that the framework is enforced accurately and
consistently across the EU.
http://ec.europa.eu/internal_market/copyright/documents/documents_en.htm
The on-line copyright Directive (2001/29/EC) addresses the
problem of protecting rights holders in the online environment
while protecting the interests of users, ISPs and hardware
manufacturers. It guarantees authors’ exclusive reproduction
rights with a single mandatory exception for technical copies (to
allow caching), and an exhaustive list of other exceptions that
individual Member States can select and include in national
legislation. This list is meant to reflect different cultural and
legal traditions, and includes private copying "on condition
right holders receive fair compensation."
http://eur-lex.europa.eu/pri/en/oj/dat/2001/l_167/l_16720010622en00100019.pdf
Patents
EU countries have a "first to file" approach to patent
applications, as compared to the "first to invent" system
currently followed in the United States. This makes early filing
a top priority for innovative companies. Unfortunately, it is not
yet possible to file for a single EU-wide patent that would be
administered and enforced like the Community Trademark (see
below). For the moment, the most effective way for a company to
secure a patent across a range of EU national markets is to use
the services of the European Patent Office (EPO) in Munich. It
offers a one-stop-shop that enables rights holders to get a
bundle of national patents using a single application. However,
these national patents have to be validated, maintained and
litigated separately in each Member State.
http://ec.europa.eu/internal_market/indprop/index_en.htm
http://www.european-patent-office.org
Trademarks
The EU-wide Community Trademark (CTM) can be obtained via a
single language application to the Office of Harmonization in the
Internal Market (OHIM) in Alicante, Spain. It lasts ten years and
is renewable indefinitely. For companies looking to protect
trademarks in three or more EU countries the CTM is a more cost
effective option than registering separate national trademarks.
On October 1, 2004, the European Commission (EC) acceded to the
World Intellectual Property Organization (WIPO) Madrid Protocol.
The accession of the EC to the Madrid Protocol establishes a link
between the Madrid Protocol system, administered by WIPO, and the
Community Trademark system, administered by OHIM. As of October
1, 2004, Community Trademark applicants and holders are allowed
to apply for international protection of their trademarks through
the filing of an international application under the Madrid
Protocol. Conversely, holders of international registrations
under the Madrid Protocol will be entitled to apply for
protection of their trademarks under the Community Trademark
system.
http://oami.europa.eu/
http://www.wipo.int/madrid/en
Designs
The EU adopted a Regulation introducing a single Community system
for the protection of designs in December 2001. The Regulation
provides for two types of design protection, directly applicable
in each EU Member State: the registered Community design and the
unregistered Community design. Under the registered Community
design system, holders of eligible designs can use an inexpensive
procedure to register them with the EU’s Office for Harmonization
in the Internal Market (OHIM), based in Alicante, Spain. They
will then be granted exclusive rights to use the designs anywhere
in the EU for up to twenty-five years. Unregistered Community
designs that meet the Regulation’s requirements are automatically
protected for three years from the date of disclosure of the
design to the public.
http://oami.europa.eu/
Trademark Exhaustion
Within the EU, the rights conferred on trademark holders are
subject to the principle of "exhaustion." Exhaustion means that
once trademark holders have placed their product on the market in
one Member State, they lose the right to prevent the resale of
that product in another EU country. This has led to an increase
in the practice of so called "parallel importing" whereby goods
bought in one Member State are sold in another by third parties
unaffiliated to the manufacturer. Parallel trade is particularly
problematic for the research-based pharmaceutical industry where
drug prices vary from country to country due to national price
Regulation.
Community wide exhaustion is spelled out in the Directive on
harmonizing trademark laws. In a paper published in 2003, the
Commission indicated that it had no plans to propose changes to
existing legal provisions.
http://ec.europa.eu/internal_market/indprop/tm/index_en.htm
IPR Resources
A wealth of information on protecting IPR is freely available to
U.S. rights holders. Some excellent resources for companies
regarding intellectual property include the following:
- For information about patent, trademark, or copyright
issues -- including enforcement issues in the US and other
countries -- call the STOP! Hotline: 1-866-999-HALT or
register at www.StopFakes.gov.
- For more information about registering trademarks and
patents (both in the U.S. as well as in foreign countries),
contact the US Patent and Trademark Office (USPTO) at:
1-800-786-9199.
- For more information about registering for copyright
protection in the US, contact the US Copyright Office at:
1-202-707-5959.
- For information on obtaining and enforcing intellectual
property rights and market-specific IP Toolkits visit:
www.StopFakes.gov This site is linked to the
USPTO website for registering trademarks and patents (both in the
U.S. as well as in foreign countries), the U.S. Customs &
Border Protection website to record registered trademarks and
copyrighted works (to assist customs in blocking imports of
IPR-infringing products) and allows you to register for Webinars
on protecting IPR.
Due Diligence
Companies interested in taking over German firms should always conduct their own due diligence before entering into business ventures. One of the Commercial Service Programs, the International Company Profile, has been designed to support due diligence processes. All major consulting companies offer due diligence services, and most large U.S. accounting or consulting firms have subsidiaries in Germany.
Local Professional Services
The professional services sector is comparable to that in the United States. For all segments of business, there are professional service providers. U.S. Commercial Service Germany has started to build its own network of such companies. The Business Service Provider Directory lists experienced firms which offer services to U.S. exporters and investors interested in Germany: http://www.buyusa.gov/germany/en/business_service_provider.html
Local service providers focusing on EU law, consulting, and business development can be viewed on the website maintained by the Commercial Service at the U.S. Mission to the European Union at: www.buyusa.gov/europeanunion/services.html
For information on professional services located within each of the EU member states, please see EU Member State Country Commercial Guides which can be found at the following website: http://www.export.gov/mrktresearch/index.asp under the Market Research Library.
Marketing U.S. Agricultural Products
The Foreign Agricultural Service (FAS), of the U.S. Department of Agriculture (USDA) maintains an Agricultural Affairs Office in the U.S. Embassy in Berlin. A primary objective of the Agricultural Affairs Office is to facilitate trade in U.S. agricultural products. To meet this goal, they provide the following support and services:
• Custom Matchmaking Service (CMS): Designed to bring
German importers and U.S. exporters of food and agricultural
products together.
• Lists of German importers, by product sector, for use by
U.S. exporters.
• Attaché Reports: Current Market trends on select
commodities, such as fish, wine, and forestry products; basic
information on exporting food and agricultural products to
Germany; and reports on the retail and food-processing sectors in
Germany.
• USA Promotions: Decoration and other promotional materials
for use in special USA promotions.
• Trade Shows: Information on key trade shows being held in
Germany. Also, coordinate special USA pavilions at certain
food shows in Germany, and organize and recruit German buyers for
U.S. food and agricultural trade shows.
• American Food Directory: Extensive listings of U.S. food
and beverage products imported and available for sale in Germany.
The Agricultural Affairs Office also works closely with numerous
U.S. agricultural trade associations and U.S. firms in programs
to boost foreign demand for U.S. agricultural products. The
Agricultural Affairs Office is also responsible for agricultural
trade issues, such as reform of farm support, food aid, and
biotechnology.
Agricultural Affairs Office
American Embassy/Berlin
Clayallee 170,
14195 Berlin, Germany
Tel: [49][30] 8305-1150
Fax: [49][30] 8431-1935
Email: Agberlin@ usda.gov
http://www.usembassy.de/germany/fas/index.html
Web Resources
German Patent and Trademark Office (Deutsches Patent-und Markenamt): www.dpma.de
European Patent Office
http://www.european-patent-office.org/
EC Directive on Commercial Agents
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31986L0653:EN:HTML
EC Directive on Data Protection
http://ec.europa.eu/justice_home/fsj/privacy/law/index_en.htm
Electronic Commerce
http://ec.europa.eu/internal_market/e-commerce/index_en.htm
Industrial Property
http://ec.europa.eu/internal_market/indprop/index_en.htm
Office for Harmonization in the Internal Market (OHIM)
http://oami.europa.eu/en/default.htm
WIPO Madrid System
http://www.wipo.int/madrid/en
OHIM Community Design
http://oami.europa.eu/en/design/default.htm
Exhaustion of trademark rights
http://ec.europa.eu/internal_market/indprop/tm/index_en.htm