For U.S. trademark owners wanting to protect their trademarks beyond the U.S. border, the newly adopted Madrid Protocol treaty appears, at first glance, to provide an incredibly easy and affordable procedure. As of November 2, 2003, a single application filed electronically with the United States Patent and Trademark Office (USPTO), and administered by the World Intellectual Property Organization (WIPO), could potentially result in trademark protection in any or all of the 58 Madrid Protocol member countries, from Europe, China, and Japan to the Republic of Moldova and Lesotho. One must proceed with caution, however, as looks may be deceiving.
There do seem to be many advantages of using the Madrid Protocol for international registration of a trademark: applications may be filed and prosecuted in a single language (either English or French), there is a ten-year lifespan with a single renewal date, one notification will record name or address changes and assignments, and more countries may be added after the initial filing date. The initial cost of filing through the Madrid Protocol is also less than filing separate national applications directly in each country.
While this one-stop shopping to register and maintain international trademarks is seductively alluring, traps for the unwary are strewn throughout the deceptively simple application. As with most offers that sound too good to be true, there is no substitute for a thoughtful, case-by-case strategic analysis based on a thorough understanding of the intricacies and limitations of proceeding with a Madrid Protocol registration for each particular country.
Most importantly, it is critical to recognize that the registration with WIPO is not really a "registration" at all. Rather, the WIPO registration is really a centralized bundle of individual national applications which, after they are examined by national trademark authorities, may mature into national registrations.
Each national application is examined and reviewed under local laws and standards on a country-by-country basis, and is processed usually within 12 to 18 months. Applications will still be published for opposition within each country. In the event that an application is refused or opposed in any designated country, timely action will be needed. Therefore, filing in certain countries under the Protocol could have significant consequences, such as the need to conduct simultaneous foreign inter partes proceedings across the globe. The resultant costs may greatly outweigh the initial reduced registration fee.
There may also be unanticipated problems. While a U.S. trademark owner may file the initial application electronically through the USPTO, the global filing system is far from being electronic. Deadlines for responding to office actions in individual member countries are sometimes quite short. As a practical matter, it may be very difficult and perhaps impossible to file a timely response in certain jurisdictions because of the time it takes for communication to be mailed from the designated country to WIPO in Switzerland, which must in turn mail it to counsel of record for the trademark owner in the United States. U.S. counsel must then analyze the office action, retain local counsel in the applicable jurisdiction and send instructions for filing a response within the designated deadline. In any event, the process of moving an application through the examination and issuance phases of a national trademark authority (called "prosecution" of the application) will prove to involve expenses which could make the initial cost savings on filing of the applications illusory.
Another very important consideration is the fact that international registration under the Madrid Protocol is dependent upon the home country application (also called the "basic" application). U.S. entities must apply through the USPTO, one of the world's most crowded registers, where applications typically undergo stricter examination and encounter more difficulties in obtaining a trademark registration than in most other countries.
U.S. trademark owners may also be sacrificing much broader international protection by proceeding with registration under the Madrid Protocol. The U.S. Patent and Trademark Office tends to require trademark applicants to define goods and services very narrowly and specifically, so the trademark protection granted in foreign countries would be limited to the coverage specified in the basic application. For example, many countries would otherwise allow for a broad description of goods such as "clothing" or "computer programs", but under the treaty, international registration would be limited to the more narrow, U.S. mandated specification of "shirts and ties" or "computer programs for spreadsheets in the field of accounting."
The Madrid Protocol also requires the trademark to always remain exactly the same as in the original application. This could be problematic if the applicant is in an industry in which the appearance of a stylized mark could change or evolve over time.
Additionally, in the event that there is a "central attack" which results in the home country registration being refused or otherwise cancelled within five years, the entire international registration would also be cancelled. Fortunately, there is a mitigating provision which provides for a short, three-month grace period to transform the Madrid Protocol registration into separate, national applications which would retain the filing date of the original application. However, to transform the Madrid Protocol registration to national filings will be quite costly.
Another important consideration in electing to proceed with international registration under the Madrid Protocol relates to the limitation of assignment of trademarks only to people or companies within the Madrid Protocol jurisdiction. For example, Canada and several Latin American countries are not signatories to the treaty, so international registration under the Protocol could interfere with a sale of assets to non-member countries.
Consequently, the Madrid Protocol should be viewed as one option for proceeding with international registration of a trademark, but not the only option. For example, U.S. entities that need trademark protection in Europe should still consider utilizing the European Community Trademark (CTM).
Like the Madrid Protocol, the CTM uses one application and filing fee that covers the member countries (presently 15 countries and will be enlarged to 25 countries as of May 1, 2004). However, the CTM differs significantly in that it is a single unified right that is not dependent on home-country registration. An applicant is not limited to the more narrow U.S. definitions, and international protection remains regardless of the efficacy of the U.S. trademark application or registration. Also, since the application is only examined at one central location, there is no danger of a multiplicity of inter partes opposition proceedings across a number of European countries. In addition, while a national registration obtained under the auspices of the Madrid Protocol is vulnerable to cancellation for non-use of the registered trademark in a particular country , the CTM registration is not be so vulnerable as long as the mark is being used in any member country.
The Madrid Protocol provides U.S. trademark owners with a new and potentially helpful alternative for registering marks in other countries. When carefully implemented as part of a comprehensive strategic initiative, U.S. entities will now be able to enjoy the simplicity, flexibility and initial affordability provided by this streamlined procedure. However, the Protocol is not a panacea. Use of it may not be beneficial and could ultimately prove to be an expensive burden in certain situations. As with most legal issues, therefore, there is no substitute for careful and thoughtful analysis where the advantages and disadvantages are vetted so that a client may be properly advised. Sometimes, what seems simple on the surface actually creates greater complexities underneath.