A Brand New World: International Trademark Registration and the Madrid Protocol

• Publication year: 2003
• Pages: 89
• Citation: Vol. 32 No. 10 Pg. 89

32 Colo.Law. 89 Colorado Lawyer 2003.

2003, October, Pg. 89. A Brand New World: International Trademark Registration And the Madrid Protocol

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89

Vol. 32, No. 10, Pg. 89

The Colorado Lawyer
October 2003
Vol. 32, No. 10 [Page 89]

Specialty Law Columns
Intellectual Property and Technology Law
A Brand New World: International Trademark Registration And the Madrid Protocol
by Natalie Hanlon-Leh, Kathleen S. Herbert, Adam Lindquist Scoville

This column is prepared by the CBA Technology Law and Policy Forum Committee

Column Editors

Nathaniel T. Trelease, WebCredenza, Inc., Denver - (720) 937-9930,
ntrelease@webcredenza.com; Jim Brogan, Cooley Godward, LLP Broomfield - (720) 566-4190,
jbrogan@cooley.com

About The Authors:

This month's article was written by Natalie Hanlon-Leh, nhanlon-leh@faegre.com; Kathleen S. Herbert, kherbert@faegre.com; and Adam Lindquist Scoville, ascoville@faegre.com. They practice in the intellectual property group of Faegre & Benson LLP - (303) 607-3500 (Denver) and (303) 546-1300 (Boulder). The authors thank Benjamin Fernandez, a third-year law student at the University of Colorado, for his assistance.

Natalie Hanlon-Leh Kathleen S. Herbert Adam Lindquist Scoville

The United States will soon join the Madrid System for the International Registration of Marks. Trademark practitioners will have a new world of options for global protection, but with it come complicated procedures and important strategic considerations.

On November 2, 2003, the United States officially will become a party to the Madrid Protocol for the International Registration of Marks ("Madrid Protocol" or "Protocol").1 The Madrid Protocol provides a simple and economical means of obtaining and maintaining trademark protection in its member countries. It allows an owner of a U.S. trademark, service mark, or certification mark (generally referred to as "trademarks" or "marks") to file an international application valid in several countries.

Under the Madrid Protocol, such international trademark registration may be made through the U.S. Patent and Trademark Office ("USPTO"). Currently, sixty countries are members of or, like the United States, have formally announced their accession to the Protocol.2 The United States is the only country in the Americas, except Cuba, that has ratified the treaty.

In some countries, it currently takes several years before a trademark application is examined. The Madrid Protocol can result in applications being examined and proceeding to registration sooner. In addition, the need for a trademark owner to file separate applications in multiple countries may be eliminated, thereby reducing the costs of prosecuting a foreign trademark registration. Moreover, an international registration through the Madrid Protocol can be like a gift that keeps giving, in the form of a single renewal date and reduced renewal fees.

Small and mid-sized U.S. companies that do business abroad soon may find that the Madrid Protocol will result in foreign trademark protection becoming feasible, where it once was prohibitively complicated and expensive. Likewise, larger U.S. businesses will reap substantial cost savings in managing their foreign portfolios of marks. Nevertheless, with the advent of the Protocol, small and mid-sized U.S. businesses also will need to watch out for foreign companies with similar marks. This is because it will be easier for those companies to obtain a U.S. registration that could affect U.S. companies' rights at home.

This article discusses the need for international trademark registration in an increasingly global economy, as well as the history of what is referred to as the Madrid System for the International Registration of Marks ("Madrid System"), into which the Madrid Protocol brings the United States. Turning to practical considerations, the article discusses the procedures for filing an application for an international registration in the United States. With a basic understanding of the Madrid System, the article then discusses the strategic concerns that might dictate using the Madrid Protocol in seeking international protection or relying on traditional registration procedures. Finally, the article discusses the changes in purely domestic trademark practice necessitated by accession to the Madrid Protocol.

The Importance of
International Trademark Protection

The Madrid Protocol is significant because it provides an easy way for companies to obtain international trademark protection. This is an important consideration in a global economy, where companies increasingly offer their branded products and services overseas. With the growth of electronic commerce, even small companies that do business over the Internet may have global reach and need international protection. For many companies, their business value is in their brand. Thus, the ability to prevent others from using confusingly similar marks is critical.

Companies that plan to market globally must be prepared to register their new brands quickly in all countries in which they may seek to do business. Otherwise, they could face a costly and protracted effort to dislodge someone who is blocking their international business plans. It is not uncommon for a company to find that someone in another country has effectively taken its brand "hostage" by registering it with the sole purpose of selling the brand back when the company decides to enter that country's market. Sometimes, brand thieves also come disguised as friends. For example, a distributor or licensee may obtain a registration in its own name, ostensibly to protect the licensor's interests. In fact, that distributor or licensee could acquire significant leverage and power because it, rather than the licensor, becomes the owner of the registration.

There are a number of incentives for a broad-scale trademark registration program. In some countries, if a company wants to obtain a license to import products into a country, it first must register a trademark there. Unlike the United States and other common law countries, where rights arise out of the use of marks, many civil law countries have "first to file" systems, where rights to prevent infringement or counterfeiting arise only by obtaining a registration.3 If a company has a manufacturing facility abroad, but no plans to distribute products in the country where the facility is located, it still should consider registering its marks there in order to protect against infringement, counterfeiting, or even unauthorized sales from the plant.

History and Background
Of the Madrid System

The Madrid System was established in 1891 with the signing of the Madrid Agreement Concerning the International Registration of Marks ("Madrid Agreement" or "Agreement").4 Under the Madrid Agreement, the Madrid System is administered by the International Bureau of the World Intellectual Property Organization ("WIPO"), an office set up specifically for this purpose.

Over the past century, the Madrid System became established in many countries in Europe and other regions. However, most common law jurisdictions, the industrialized countries of the Far East (with the exception of China), and the Scandinavian countries did not join because of incompatibilities between the Agreement and their laws.

The Madrid Protocol,5 a separate treaty signed in 1989, was designed to allow these other countries to participate in the Madrid System without having to enact radical alterations to their trademark laws. Most of the countries that are parties to the Madrid Agreement also have ratified the Madrid Protocol. (See "Madrid Protocol Member Countries," below, for a map of countries that are parties to the Protocol.)

The Madrid Agreement and the Madrid Protocol share a number of common features that define the workings of the Madrid System. Under both treaties, nationals of member states may use the Madrid System to apply for an "international registration" with the International Bureau through the trademark office of their home countries.6 Likewise, under both treaties, an international registration gives no rights by itself. Thus, the applicant obtains rights equal to, but no greater than, the sum of individual national registrations in the same countries.7

For many trademark owners, the Madrid System will offer distinct benefits, even though it offers no additional rights. It allows the owner of a mark to file one application and have it treated as if the owner had applied simultaneously in multiple countries,8 bundling the registrations together to achieve administrative simplicity and cost savings. Under both treaties, each country to which the applicant wishes to extend protection has a limited time in which to examine the application and reject it if necessary.9

However, there are a number of differences between the Madrid Agreement and the Madrid Protocol that enabled many hold-out countries to adopt the Protocol but not the Agreement. The Madrid Agreement allows an international application to be based only on a previously registered trademark.10 Further, the Madrid Agreement provides that the international registration is completely eliminated (with no opportunity to preserve the foreign rights) if the original, domestic application is later limited, rejected, or canceled.11

Arguably, this would disadvantage U.S. applicants because U.S. applications tend to take longer to mature into registrations and are more vulnerable to attack, especially in the first five years.12 Thus, the Protocol's provisions allowing an international registration to be based on a pending application,13 and allowing the applicant to convert an...