Oregon State Bar Bulletin — OCTOBER 2003

Legal Practice Tips
Some caveats when protecting your client’s 'brand'
By Leonard D. DuBoff

The word branding has become a part of the business lexicon, and businesses with an active presence on the Web are frequently in the forefront of the development of this concept. An important aspect of branding, that is, the creation of an identity for a business, is the protection of trademarks. The lawyers representing these businesses must be aware of this dynamic and counsel clients accordingly. Until recently, the process of protecting a business’s name, symbol or logo (known as a trademark) was complex and expensive since it was necessary to initiate trademark protection in every country in which the mark is to be used.

The first breakthrough in establishing some efficient form of international trademark protection occurred as a result of the creation of the European Union. A program whereby a mark could be registered throughout the nations of the European Economic Community was consistent with the idea of unification, and it is now possible to obtain a single registration for this purpose.

Unfortunately, the United States is not part of the European Union, and as of this date, the North American Treaty Alliance has not adopted a similar program. As a result, American businesses have been restricted in their ability to obtain comprehensive international protection for a reasonable price, though it has been possible to take advantage of the European innovation for protection in the EU-member countries.

After years of lobbying and education of the administration by U.S. businesses on the importance of providing economical international protection for U.S. trademarks, the United States has finally responded.

In November 2002, President Bush signed the Madrid Protocol Implementation Act of 2002,1 allowing American trademark owners to register marks in all participating countries through the U.S. Patent and Trademark Office (PTO). As of this writing, more than 70 countries2 are parties to the Madrid Accord, and the number continues to increase. Regulations implementing this treaty have been developed, and the implementation legislation is effective on Nov.2, 2003.

Filing the Application
In order to file an 'International Registration' application pursuant to the Madrid Protocol, a trademark owner must have a registered trademark or a trademark application filed in the owner’s 'country of origin.' For American applicants, this is the United States. This registration or application is known as the basic or home registration/application. Then, an application for International Registration can be filed through the PTO designating other member countries in which the trademark owner desires registration.

The International Bureau of the World Intellectual Property Organization (WIPO), which oversees the protocol system, will review the application to ensure that it complies with the protocol’s rules. Once it does, WIPO will grant a registration date and will forward the application to every country designated in the international application.

Each designated country’s trademark office then examines the application using the same criteria as it would for a domestic registration within that country. The local trademark office will have 12 to 18 months (or longer, if necessary due to third-party opposition to the application) to refuse the registration. If no refusal is issued, the trademark will be deemed registered. If the application is refused, the trademark owner can respond just as it would with a non-protocol application in that country. Additional attorney’s fees and local agent fees will be incurred if an application results in an office action or if an opposition or cancellation proceeding is filed against the application by a third party.

Benefits of the Madrid Protocol
The Madrid Protocol will benefit U.S. trademark owners in a number of ways. To begin with, American trademark owners can work with their American trademark counsel, rather than retaining individual agents/attorneys in each country in which registration is desired. Also, the cost of registration for the basic application is typically much less than the cost of having to separately register the mark in each of the desired countries. As of this date, the filing fee is approximately US$450 for up to three classes (based on the international classifications system currently in effect throughout the world). There is a charge of approximately US$50 for each additional class and a charge of approximately US$50 per country for each country desired, unless the country designates a different amount.

The renewal process is simplified under the Madrid treaty, since one renewal date applies to all countries. Renewals are due every 10 years. The fee of approximately US$100 is to be paid to WIPO for renewing all of the marks covered by the registration. All PTO renewal and filing requirements, including the filing of a declaration of use after the initial five years of registration, must also be complied with.

A registrant may desire to extend registration into an additional country, even after the initial registration is effective, by paying an additional fee and providing appropriate notice. That registration will remain in effect only until 10 years after the initial registration.

Another significant advantage for American applicants is that the application does not have to be translated into the language of the country in which registration is desired. This will save American applicants the cost of having the application translated and avoid the necessity of translating complex terms into foreign languages.

Possible Disadvantages of the Madrid Protocol
While the Madrid Protocol will provide American trademark owners with a more cost-effective and efficient process for registering marks in some or all of the participating countries, there are some issues which should be considered.

First, since trademark searches should now be international and not merely within the United States and its territories, this will increase the cost of conducting an appropriate search.Second, the trademark in the home application/registration must be identical to the trademark in the international registration applications, and the description of goods and services in the international registrations cannot be broader than the description in the home application/registration. Most foreign jurisdictions grant trademark protection for broad categories of goods and services, whether or not the applicant uses the mark with all of the goods and services claimed. In the United States, however, protection is extended only to goods and services actually sold with the trademark. 15 USC 1051 et seq. Since the U.S. is more stringent, international registrations based on U.S. applications and registrations will frequently be much narrower than the scope of international registrations in other countries. It may, therefore, be beneficial in some situations to consider registering directly in a country with less-demanding registration requirements than the United States. This evaluation should be performed before the application is filed.

Another disadvantage of the international registration is that, if the home application is not registered, or if the registration is cancelled within five years, the entire international registration fails; that is, all extension applications/registrations fail. Thus, if a mark is vulnerable to cancellation in the United States, it may be advantageous to separately register the mark individually in other countries. The trademark owner is permitted to transform those failed applications/registrations into non-protocol applications which retain the filing and priority date of the invalidated home application, but the international registration fees will not be applied.

Now that the United States has joined the Madrid Protocol, foreign trademark registrations will be more easily and less-expensively available. This will likely benefit American trademark owners who participate in world commerce. Indeed, those who export, have products or services prepared in other countries under license, sell through the Web or who anticipate having their mark infringed abroad will likely benefit from the new international registration process. While there are numerous benefits that will be available under the new international registration procedure, there are some issues that should be considered before taking advantage of the international registration opportunity when it becomes available. Knowledgeable trademark attorneys will be able to advise clients on the pros and cons of registering through the international process for some or all of their marks.

The law does underscore the fact that business in today’s world is global, and global businesses need to consider global protection.

Endnotes

1. Pub. L. 107-273, 116 Stat. 1758, 1913-1921.

2. Albania, Algeria, Antigua and Barbuda, Armenia, Australia, Austria, Azerbaijan, Belarus, Belgium, Bhutan, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cuba, Cyprus, Czech Republic, Democratic People’s Republic of Korea, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Luxembourg, Monaco, Mongolia, Morocco, Mozambique, Netherlands, Norway, Poland, Portugal, Republic of Korea, Republic of Moldova, Romania, Russian Federation, San Marino, Serbia and Montenegro, Sierra Leone, Singapore, Slovakia, Slovenia, Spain, Sudan, Swaziland, Sweden, Switzerland, Tajikistan, The former Yugoslav Republic of Macedonia, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekistan, Viet Nam, Zambia.

ABOUT THE AUTHOR
Leonard DuBoff is the author of more than 20 books on business and intelletual property law. He was a law professor for more than 24 years, teaching copyright and related courses, and in 1994 founded in his own law firm.

© 2003 Leonard DuBoff


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