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April 2003

The Madrid Protocol: A New Tool For International Trademark Protection

It is not a new Latin dance craze. But no later than November of this year, trademark lawyers in the United States and their business clients will be hearing more and more about the Madrid Protocol as an international tool for global trademark protection. It represents a significant change and advance in trademark practice. And, as with all changes, there are both opportunities and landmines awaiting the practitioner.

A Global Economy

It is the rare industry or business today that stops at the water's edge. The global economy and free flow of information are critical to business in the 21st century. Brands and trademarks in particular have always transcended national borders. Like the canary in the coal mine (or the buzzard circling the desert, depending on your taste in analogies), trademarks in particular have served as the harbinger and leading edge of economic cycles and globalization in particular.

Further, in today's information-based economy, a company's most valuable asset often is its intellectual property, whether patents, trademarks, copyrights, trade secrets, or the highly skilled minds which walk out the door each evening. The ability to protect intellectual property rights is often the key to maintaining competitive advantage in a changing marketplace.

Historically, intellectual property for the most part has been strictly territorial in nature to each national jurisdiction. Nevertheless, there have been significant movements towards greater international cooperation and reciprocal recognition of prior rights. In 1971 Belgium, the Netherlands and Luxembourg abolished their national trademark regimes and instituted a unified Benelux trademark. Pursuant to the Paris Convention, a foreign trademark registration or (if within the past 6 months) pending application can serve as the basis for a U.S. registration under, respectively, Sections 44(d) and (e) of the Lanham Act, the federal trademark law; foreign nations provide for similar treatment. The European Union, now grown to 25 members, offers the Community Trade Mark, or CTM, a trademark registration good across the EU.

Perhaps the "granddaddy" of international trademark agreements has been the Madrid Treaty, an 1891 agreement that provides for a unified filing through the World Intellectual Property Office (WIPO) in Geneva to serve as the vehicle for multiple national registrations. Reflecting the international and diplomatic mores of the 19th century, applications were required to be submitted in French. As a result, the Madrid Treaty never achieved any real traction in the English-speaking world.

The Madrid Protocol, dating from 1989 and first operational in 1996, was intended to overcome this impediment by allowing applications in English as well. Nevertheless as originally implemented, the Protocol did not initially attract significant participation because of fundamental differences from the more rigorous trademark examination systems of key industrial nations, such as Great Britain, Japan, and the United States. Fees were regarded as insufficient, and the specified examination period (12 months) as too short. An international registration could only be granted where the home national registration had already been issued.

These shortcomings have now been remedied to large degree, and the Protocol has attracted considerable participation, including the United States which will accede to membership by this November at the latest.

(For a current list of members, go to www.wipo.int/madrid/en/index/html).

The Madrid Protocol promises to revolutionize multinational trademark prosecution (i.e., applications to register). Hitherto, a trademark owner wishing to register its trademark in multiple national markets had laboriously to file separate applications in each country, in the process hiring (expensive) local counsel and incurring (sometimes expensive) local fees. Although not nearly as expensive as multinational patent protection, where you can drop a lot of money in a hurry notwithstanding the analogous Patent Cooperation Treaty (PCT), the various trademark searches, fees, and local counsel can add up quickly for the global business.

This will now change under the Madrid Protocol. Using as a basis a home or "basic" application in a national jurisdiction where the trademark owner resides, has citizenship, or has a real facility (establishment), the applicant will, either at the same time or within 6 months, file with its home trademark office a simplified International Registration (IR)—not unlike a menu or checklist-- specifying the other member countries of the Protocol where it wishes to register. A uniform fee of 73 Swiss Francs (about US$52) is charged per country (unless the member country, like the United States, opts to continue to charge its own national fee, in the case of the U.S. $330 per class) in addition to the basic WIPO fee of 653 Swiss Francs (US$470) for up to three classes.

The applicant's home trademark office – in most cases here, the United States Patent and Trademark Office, or PTO – will then forward a copy of the national application together with the IR to WIPO in Geneva. WIPO then issues an "International Registration" which actually is simply a receipt, and goes through a process of "nationalizing" the IR. Simply put, this means that WIPO undertakes to run interference and shepherd the application through the national trademark offices which the applicant has specified in the IR. Unless the applicant is given notice within the specified time limit of 18 months from application that any of the specified national offices has raised objection, the registration is then deemed valid in those countries. That is, no additional certificate is issued. This may take some getting used to for U.S. practitioners, who are accustomed to receiving a shiny parchment certificate of registration from the PTO before affixing an ® to the desired mark.

In effect a Madrid application is a bundle of national applications administered by WIPO. A refusal in one country will not affect treatment in others. Country-by-country use requirements must be met. Even if the home, or "basic" application fails, the IR can then be converted into national applications with the original priority date. This is also true for the first five years of registration if a so-called "central attack" on the home registration is successful; thereafter, each national registration stands on its own.

Of course each national office may then raise issues or objections (in the U.S., this is done through an Office Action), which the applicant may then have to hire local counsel to address. But assuming smooth sailing, the cost savings can be substantial, as much as half (although search costs may go up to include WIPO). Equally important, the tracking, administration, and management burden to the client's or law firm's trademark administrator is greatly simplified.

The Protocol is not a panacea. Significant issues have clearly been left open to some degree. For example, the United States historically has required a much greater degree of specification of the covered goods and services in a registration (e.g., "toys in Class 28, namely, battery-operated stuffed animals and dolls"), whereas other jurisdictions (notably European) content themselves with a general description by international classification (e.g., "toys in Class 28"). It is quite likely, therefore, that foreign mark owners seeking to extend registration to the United States will be forced to narrow their specification of goods and services. And U.S. owners might want to avail themselves of broader protection abroad by continuing to file national applications directly.

As always, a client's commercial needs should drive the decision to use Madrid or not. If the important or potentially important markets for a given trademark are clustered in one region, thought should be given to regional protection instead, such as a CTM in the European Union, or a priority mark in the Andean Pact or Mercosul countries in South America. If there is a bare handful of key markets, it may be just as well to continue to file individual national applications. But if a mark will be used on the same goods and services in a large number of countries, increasingly Madrid will be the way to go

Nothing in this article is intended to serve as legal advice upon which readers may rely. Appropriate legal advice in specific situations turns on the individual circumstances of each case. Consult your lawyer.

Intellectual Property

Richard P. Sybert


Intellectual Property
International