Back when products and services were sold via brick and mortar stores, only large corporations or conglomerates seriously considered seeking global protection for valued brand names. Now, however, in the age of the Internet and Cloud, goods and services can be delivered virtually anywhere. Seeking trademark protection on a global basis is often a logical option for even a small company. Yet the question inevitably arises: “How do I accomplish this in an efficient, cost-effective manner?”
In general, for countries never part of the British Commonwealth, trademark rights are attained only by holding a trademark registration, a process that can be time consuming and expensive. Unless the mark has become famous, or one can demonstrate extensive use, failing to hold a trademark registration can open a mark to being challenged or held hostage by another party. It is not unheard of for foreign partners to seek registration of one’s mark to “protect” it from potential infringers. But having one’s mark owned by another party is never a good idea: subsequent to termination, former partners have successfully sued the real trademark owner for infringement. All companies, especially those conducting business in Asia, Latin America and Europe, would be wise to carefully balance the risks of failing to protect marks via registration versus the costs of doing so.
Pursuing trademark registrations in numerous jurisdictions
Changes in the international landscape over the past 15 years help to craft a filing strategy. The 1993 formation of the European Union – a single market for the free movement of people, goods, services and capital – was the first step in creating a more accommodating structure for international filings. The EU’s Community Trademark (CTM) system allows unified trademark registration covering all EU members. A single CTM application can result in issuance of a registration that is fully enforceable not only in each of the 27 current EU member states, but also in its future members.
Before the CTM was created, a company would have to file in each individual country to obtain the same level of protection throughout Europe. Because Switzerland, Norway and Iceland are not EU members, individual country applications must still be filed in those jurisdictions.
The most significant development in international filing was the November 2003 accession of the US to the Madrid Protocol, a treaty whereby trademark registration in member countries is initiated by filing through the World Intellectual Property Organization (WIPO). The process is simple: an applicant submits its application to WIPO, which reviews it for filing requirement compliance, then forwards the application to those trademark offices the applicant designates. Currently, the Madrid Protocol covers 83 jurisdictions, with others joining all the time. The most recent member is Israel. Using the Madrid Protocol reduces the cost of filing, renewals and assignments because WIPO removes the need to hire local counsel in each country; instead, upon direction, WIPO notifies each affected national office. Local counsel is necessary only when an application is rejected by a trademark office or when a third party challenges a mark’s registration.
While there are clear savings in using the Madrid Protocol system, there are also constraints. First, there must be a valid home application or registration forming the basis of the WIPO filing; second, that home registration must remain valid and outstanding for five years. If it is abandoned or cancelled before the five years elapse, the entire filing program can be compromised, requiring either abandonment or
transformation of the mark into individual national applications.
Where should a global company file?
Clearly it makes sense to use the Community Trademark and Madrid Protocol systems in any filing program. A good rule of thumb is to follow the money. Jurisdictions should be categorized into Priority One, Two and Three filings. Priority One should encompass those jurisdictions where the company currently receives revenue and/or where it has offices and active business partners or distributors. Priority Two should include those countries into which the company intends to expand or where it may face serious piracy. Priority Three should include remaining countries where the company may do future business. Once priority lists are created, the company should determine how to phase filings, spreading out costs.
Another treaty, the Paris Convention, makes it possible to schedule Priority One filings over a six-month period dated from the home filing date, yet have all of these filings treated as having been filed on the same date as the home application. Because many countries base trademark rights on filing dates, maximizing the use of the Paris Convention can result in according marks early rights dates without incurring the full cost of filing all at once. Rights to marks have been won or lost by as little as one day, so this approach can be quite valuable.
Any company operating on the Internet should seriously consider whether its brand names are being sufficiently protected. A strategy using the Community Trademark, Madrid Protocol system and Paris Convention should help ensure that filing programs are efficient and cost effective.