The Madrid Protocol is one of two international treaties comprising the Madrid System for registration of trademarks. Under the Protocol an international application may be based on an application or registration within a member country. The applicant or registrant will be able to file an "international application" with the U.S. Patent and Trademark Office (PTO) designating the additional countries in which protection is desired. The primary benefits to trademark owners are economic. Companies will likely reduce their administrative costs and paperwork by only having to file one application in one place. But opponents claim that there are problems.
The United States and The European Union Finally Reach an Agreement on Voting Arrangements In his efforts to find issues with bi-partisan support, President George W. Bush might look to the Madrid Protocol Implementation Act, a bill addressing international trademark rights, currently pending in both the House and Senate. The Senate bill has been placed on the Senate Legislative Calendar under General Orders (Calendar No.433). Passage appears likely.
That was not the case earlier last year. However, after a six-year impasse, the United States and the European Union finally reached agreement on voting arrangements within the Assembly of the Madrid Union.1 The United States had objected to the original arrangement under which the European Community itself would have had a vote in addition to the individual votes of each of its member States. This, it was felt, gave the EC member states a decided advantage. But in early February of last year, the Assembly of the Madrid Protocol expressed its intent to use their voting rights in such a way as to ensure that the number of votes cast by the European Community and its member States do not exceed the number of the European Community's Member States.
The voting arrangement was the last hurdle in the path of the United States joining the Madrid Protocol. With the voting rights issue resolved, on September 5, 2000, President Clinton transmitted Treaty Document 106-41, the Protocol Relating to the Madrid Agreement, to the Senate for ratification.
Proponents of the Protocol
Proponents of the Protocol have long argued that United States membership would greatly enhance the ability of all U.S. businesses to protect their trademarks in other countries more quickly, cheaply and easily. That, in turn, should make it easier for these businesses to enter those markets. The Protocol is one of two treaties comprising the Madrid System for international registration of trademarks. The first, the Madrid Agreement, concluded in 1891, provides for registration of trademarks in several countries through the filing of one international trademark registration with the World Intellectual Property Organization (WIPO) in Geneva. The second treaty is the Madrid Protocol, which came into force on December 1, 1995 and began operation on April 1, 1996. The number of countries ratifying the Protocol has increased dramatically.2
The Protocol also addresses a major problem which occurred under the Madrid Agreement. Under that Agreement, a system of 'central attack' permitted an international registration to be canceled within the first five years if the national registration upon which it was based was canceled or lost for any reason. The new system gives relief to the owner of such a lost or canceled registration. Any registration which has been canceled as the result of the loss of protection of the national trademark registration upon which it is based may be transformed into a series of national applications. This series of applications will have the priority date of the original international registration in each country to which the international registration was originally extended.
Under the implementing U.S. legislation, when an application for U.S. registration of a mark is filed, the applicant may simultaneously file an "international application" with the U.S. Patent and Trademark Office (PTO) designating the additional countries in which protection is desired. If the U.S. trademark is already registered, the owner will file an international application based on that registration. The U.S. application or registration is referred to as the "basic application" or "basic registration." The primary benefits to trademark owners are economic. Companies will greatly reduce their administrative costs and paperwork by only having to file one application in one place. Proponents estimate that the resulting savings in fees alone may be as much as 70%. Additionally, applications under the Madrid Protocol must be examined and acted upon within 18 months. In some countries, a registration through the national office can take up to 4 years. Critics of the Protocol
However, there are critics of the Protocol. Some have questioned the effect of adoption of the Protocol on trademark practice generally as the need for experienced local practitioners is diminished by the centralized system. Others have argued that Latin American countries may be at a serious disadvantage in a system which permits only English or French language applications.
For those familiar with the U.S. application process there are greater concerns.
In the United States, trademark applications are subject to rigorous examination, including the citation of prior identical and confusingly similar marks appearing on the Register. For this reason, it is more difficult to obtain a registration in the United States than it is in many of the countries that already are, or may become, parties to the Madrid Protocol. As a result, applications that are likely to encounter difficulty in registration in the United States may benefit from filing in countries where trademark rights arise exclusively or substantially from registration and not use.
In addition, because of the rigorous examination procedure in the United States, applicants are often required to severely limit the description of goods or services to which the mark is attached. Under the Protocol, the limited U.S. specification will carry over into the international registration and any requests for extension of protection. This can be of serious consequence if the business plan calls for gradual expansion of the goods or services to be marketed under the trademark. For example, a mark initially used to sell apparel may eventually be expanded to market perfume or cosmetics. Likewise, companies in other industries may seek full class coverage to account for licensing opportunities to cover a variety of products. Owners of such marks are unlikely to file under the Protocol, despite possible savings.
Another concern is that the United States system makes use, or intent to use, a fundamental requirement for registration. Consequently, nationals of other countries may have the advantage of being able to file valid applications for the same mark in their home countries earlier than their U.S. counterparts who rely on the Protocol.
Conclusion
Despite these concerns, passage of the Act appears likely. Now is an excellent time to review the status of your trademark estate and the likely benefits that international registrations may afford you in your business plans.
Footnotes
1. The Assembly consists of the contracting states to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.
2. Antigua & Barbuda, Armenia, Austria, Benelux (consisting of Belgium, Netherlands, Luxembourg, are designated as one "member country"), Bhutan, China (excluding Hong Kong), Cuba, Czech Republic, Denmark (excluding the Faroe Islands and Greenland), Estonia, Finland, France (including all Overseas Departments and Territories), Georgia, Germany, Greece, Hungary, Iceland, Italy, Japan, Kenya, Latvia, Lesotho, Liechtenstein, Lithuania, Moldova, Monaco, Morocco, Mozambique, North Korea, Norway, Poland, Portugal, Romania, Russian Federation, Sierra Leone, Singapore, Slovakia, Slovenia, Spain, Swaziland, Sweden, Switzerland, Turkey, Turkmenistan, Ukraine, United Kingdom and Yugoslavia.