On November 2, 2003, the United States became an active member of the Madrid Protocol system for international registration of trademarks. This is one of the most important changes to U.S. trademark law in recent years, providing a system for obtaining international trademark protection that is streamlined and potentially very cost efficient.
This article offers an overview of how the Madrid Protocol works, and some of the potential advantages and disadvantages it may present to trademark owners seeking international protection for their marks.
The Madrid Protocol - An Overview
In a number of countries, it has long been possible to protect trademarks on an international basis using a fairly simple procedure --The Madrid Agreement, an international convention first adopted in 1891.
Because the Madrid Agreement includes some perceived shortcomings that discouraged many countries from joining, a new convention for international trademark protection was born - - the Madrid Protocol, first operational in 1996. The Madrid Agreement and Protocol now coexist, with some countries joining one or the other, and some joining both.
One of the most recent countries to ratify the Protocol (but not the Agreement) is the United States, where it became effective November 2, 2003. Under the Protocol, U.S. companies are able to utilize their U.S. trademark applications or registrations to obtain trademark protection in any or all of the other member countries. Also, foreign companies in the other member countries are able to use the Protocol to obtain protection in the U.S.
How The Protocol Works - A Brief Summary
As detailed below, a Madrid Protocol applicant begins by either filing a conventional trademark application in its home country, or by relying on an existing registration there ("the home mark"). The applicant then files another separate application in its home country trademark office, based on the home mark, which is called an international application. In the international application, the applicant requests an international registration, and designates one or more other Protocol member countries where trademark protection is sought.
The home country trademark office (called the office of origin) forwards the international application to the World Intellectual Property Office (WIPO) in Geneva, Switzerland, which grants the international registration, if all formal requirements are met. WIPO then notifies the Protocol member countries where protection has been sought. These countries treat the request for protection as if it were a national trademark application directly filed by the applicant there. These offices conduct the examination required by their national law, and, if required, entertain opposition proceedings under national law.1
A list of the 61 active member countries is attached to this article. More countries are expected to join.
Current member countries include countries of the European Union, some countries in Eastern Europe and from the former Soviet Union, Australia, Japan, China, and a number of African countries. At present, the only member countries in either the North or South American region are the United States, Cuba and Antigua and Barbuda.
Also, notably missing from the list of members are most Spanish speaking countries. This is because the permissible languages for Protocol filings are limited to English and French. Spanish may be added in the future.
The Governing Laws
In the U.S., the Madrid Protocol Implementation Act of 2002 ("MPIA") (Public Law 107-273, 116 stat. 1758, 1913-1921) amends the Trademark Act of 1946 to implement the Madrid Protocol in the U.S. The MPIA became effective November 2, 2003. In parts 2 and 7 to volume 37 of the Code of Federal Regulations, the USPTO has added new regulations and amended existing ones to implement the MPIA. The MPIA and its implementing regulations are available at www.uspto.gov/main/trademarks.htm.
Who Can File An International Application Under The Madrid Protocol And Where Can The Application Be Filed
An international application under the Madrid Protocol may be filed by any entity or individual who is a domicile or national of a Madrid Protocol member country, or who has a "real and effective industrial or commercial establishment" there. Thus, in some cases, an applicant will have a choice of two or more "home countries". For example, once the Protocol is effective in the U.S., a U.S. corporation with an operating facility in the U.K. (also a Protocol country) may file in either the U.S. or the U.K.
The Precondition To Filing Under The Madrid Protocol
As mentioned above, to file under the Protocol, the applicant must begin with a home application or registration. This application or registration must be for the same mark and the same goods and services for which international protection is sought. If necessary to cover all the goods for which international protection is sought, the applicant may rely on more than one home application or registration.
Filing The International Application
Once the home application has been filed (or the home registration identified), the next step is to file an international application in the applicant's home trademark office, i.e., the national trademark office where the home application or registration is. This international application must contain a request for protection in at least one other Protocol member country and may contain up to 60 such requests. This request is referred to as a "request for extension of protection" (or an extension request). The abbreviation REP is sometimes used.
The home office will examine the international application only for limited purposes, primarily to certify that the mark is identical to the mark in the basic home application or registration, that the applicant is the same, and that the goods and services are covered by the home application or registration. The home office also certifies the filing date and then forwards the international application to WIPO.
It may be possible to claim priority under the Paris Convention when filing an international application under the Madrid Protocol. That is, priority of the applicant's first filed national application for the mark in issue usually can be successfully claimed, if the international application is filed within the six month Paris Convention window.
Role Of WIPO
WIPO also examines the international application, but only for formalities.
WIPO checks that all basic filing requirements have been met (e.g., there is a drawing of the mark), that the goods and services are correctly classified under the Nice Convention, and all fees have been paid.
If any issues are presented, WIPO will inform the home office and the applicant and those issues must be addressed within a three month deadline to avoid abandonment.
Once the application is formally correct, an international registration will issue and WIPO will notify the trademark offices of the countries for which there have been extension requests. Each of those national trademark offices will then conduct its own separate examination of the request for protection there.
Role Of The National Trademark Offices
Examinations in the designated countries where protection is sought is conducted just as it would be for any application filed directly in that country. The individual countries may refuse registration on any ground available for directly filed applications. Opposition proceedings are possible to the same extent as under national law.
Although substantive prosecution in the individual countries is done without WIPO's involvement, WIPO is informed of the outcome and publishes and records information about the proceedings.
Under the Madrid Protocol, the national trademark offices must issue a refusal within 12 months, with an option to extend this period to 18 months. The United States has opted for the longer time period. If no refusal is issued within the 12 or 18 month time period, the mark must be accepted for protection.
The individual countries are permitted to indicate that the refusal is based on an opposition, even if the opposition is not decided until after the twelve or eighteen month period, if WIPO is notified of the possibility of opposition within the required period.
If a national trademark office ultimately allows the extension request, that request will register and is often referred to as a registered extension of protection.
Where The Madrid Protocol Provides Protection
The Madrid Protocol will provide protection in any Madrid Protocol country that is designated in the original international application, or in a designation that can be made at a later time. A designation made later is referred to as a subsequent designation, and usually receives an effective filing date when it is submitted. If the subsequent designation is filed within 6 months of the Paris Convention priority date accorded to the international registration, that priority may also apply to the subsequent designation.
The basic filing fee for an international application under the Madrid Protocol for up to 3 international classes is 653 Swiss francs (currently about $US 497) (if the mark is in color, 903 Swiss francs, or about $US 688). Also, there are additional fees for each designated country. This fee will be 73 Swiss francs (about $US 55), unless the designated country establishes an individual fee, which may not be more than the fee for filing an application directly in that country. To date, twenty-three member countries have set individual fees. The U.S. has done so and the fee is the same as the current application fee charged by the U.S. Patent and Trademark Office.
In some cases, there will be a supplemental fee of 73 Swiss francs (about $55) for each class of goods and services over 3 classes. The home office may charge a processing and handling fee for certifying and forwarding the international application to WIPO.
The WIPO web page includes a fee calculator that allows the user to input all relevant information, including, of course, the countries where protection is sought, and to receive a total filing fee amount. The WIPO Schedule of Fees is found at www.wipo.int/madrid, and WIPO Fee Calculator at www.wipo.int/madrid/feecalc/FirstStep.
Dependency Of The International Registration On The Home Application Or Registration
For the first five years following the effective date of the international registration, its validity and scope will depend upon the fate of the basic home application or registration. For example, any limitation, final refusal or abandonment of a home application, or cancellation, limitation or invalidation of a home registration within that five year time period, has the same effect upon the international registration and all extensions of protection into Madrid Protocol countries. The same is true if the abandonment, cancellation or the like of the home application/ registration occurs after the end of the five year period due to an action initiated during that period.
This concept of five year dependency is often referred to as central attack (when the act of a third party is involved). After the five year period is complete, however, the international registration becomes independent from the basic home application or registration.
The effects of dependency or central attack can be mitigated by another concept called transformation. This permits an international registration to be transformed into individual national applications in the designated extension countries, while retaining the date of the original international registration (or subsequent designation) and any priority claimed. The trademark owner must file a transformation application within three months of cancellation of the international registration.
The Replacement Effect
An international registration is deemed to replace a preexisting national registration for the same mark, for the same goods and services, and in the name of the same owner. If all three of these requirements are met, this replacement effect occurs automatically and the international registration is accorded the preexisting national registration's priority date. Thus, if a national registration is not renewed, the holder of the international registration extended into that country will retain its rights because of the replacement effect.
If the national registration is allowed to expire the owner can request that replacement be noted in the records of the national trademark office and at WIPO. In practice, very few international registration holders have allowed their national registrations to expire, and, as a result, very few requests have been made to note that replacement has occurred.
Recording Changes Affecting The International Registration
The Madrid Protocol allows recording of documents applicable to all extensions of protection, such as assignment of ownership, change of name or address, or limitations to the goods and services, simply by filing one document with WIPO. Assignments may be total or for only some designated countries, or for only some goods and services.
However, assignments may be made only to an individual or entity that is entitled to Madrid Protocol protection, that is, a national or domiciliary of a Madrid Protocol country, or an entity with a real and effective industrial or commercial establishment there. WIPO will not record the assignment if this is not the case.
The Madrid Protocol does not require assignment of goodwill along with the mark. However, national law will govern the assignment of a mark and its associated good will. Thus, in the U.S., assignment of the goodwill associated with a mark will still be required.
An international registration lasts for ten years and is renewable in ten year increments. The international registration may be renewed with WIPO with respect to all extension countries, or for only some of them. The Madrid Protocol does not require proof of use to renew. However, the member countries may require this in order to maintain a registered extension of protection. The U.S. does so.
Also, if the international registration expires or is cancelled, all corresponding extensions of protection likewise will expire. Thus, unintentional failure to renew an international registration may have extensive and dire consequences. WIPO will send a reminder to the owner six months before the renewal is due.
Some Potential Advantages And Disadvantages Of The Madrid Protocol
The Madrid Protocol offers many potential advantages over filing individual applications in the national trademark offices where protection is sought. The Protocol allows for filing a single application, with a single fee (in one currency), in one language (which includes English), which may result in protection in up to 60 different member countries. Thus, the initial filing process is quite streamlined compared to filing separately in multiple countries, and requires retaining legal counsel in only one country.
However, if a refusal is made by a national trademark office examining an extension request, or if an opposition is commenced, it will be necessary to retain local counsel in the country in issue. Thus, cost savings over filing directly in multiple countries may depend upon whether all goes well in the designated countries.
The Protocol also requires a defined period of no more than 18 months within which a potential refusal must be raised by the offices of the designated member countries. This often provides a shorter examination period than would occur for national applications.
Perhaps one of the greatest potential advantages of the Madrid Protocol is the ability to effect and record such important events as change in ownership with a single filing. However, an important potential pitfall is the prohibition on assignment of marks to entities that do not enjoy Madrid Protocol entitlement. This means, for example, that marks may not be assigned to Canadian purchasers, since Canada is not a member of a Protocol. Thus, a company that anticipates future assignment of its trademark portfolio, or that simply wants to have unlimited discretion to do so probably should not proceed under the Madrid Protocol.
Another potentially great advantage of the Protocol is that renewals are achieved with one filing and one fee every ten years (with some countries, including the United States, imposing separate use requirements to maintain registration there). Thus, for companies that anticipate using a mark long into the future, the renewal cost savings may be substantial. Similarly, if industry brands rarely last ten or more years, this will not be a significant benefit.
One possible pitfall of the Protocol results from the fact that U.S. law generally requires a narrower and more specific identification of goods and services than the law of many other countries. Thus, international applications based on U.S. basic applications and registrations, and subsequent protection in designated member countries likely will have narrowly defined goods and services. Extension requests into the United States also will have to abide by the U.S. rules during prosecution. For this reason, applicants that have a choice of home countries, based on a "real and effective industrial or commercial establishment" in more than one location, may choose a home country with less rigorous requirements than the U.S.
Also, trademark owners should fully realize the risks presented by Madrid Protocol dependency or "central attack" requirements. If the basic application or registration falls in whole or part within the proscribed time period, the international registration and all extensions of protection will be similarly lost or limited, unless transformation is achieved, as described above. But transformation is likely to result in substantial additional costs since a transformation application must start anew with local counsel appointed, and another set of filing fees due.
Finally, it is expected that implementation of the Madrid Protocol will greatly complicate and increase the cost of trademark searching and clearance in the United States. In order to conduct a thorough search it will now be necessary to check records of international registrations for which coverage is or may be extended into the United States. For example, if an international registration is filed in Australia on November 1, 2003 and extended to the U.S., it should have priority over a U.S. national application that has been filed in this country after that date.
Madrid Protocol Member Countries
Antigua and Barbuda
Democratic People's Republic of Korea
Iran (effective December 25, 2003)
Republic of Korea
Republic of Moldova
Serbia and Montenegro
The Former Yugoslav Republic of Macedonia
What is the Madrid Protocol?
The Madrid Protocol provides a centralized filing system allowing a trademark application or registration in one country to be the basis for an international trademark registration. The Madrid Protocol presently has 88 members, including most major industrialized countries and regions such as the United States, the European Union, Australia, China, Japan, and South Korea. Canada is not presently a member of the Madrid Protocol. Other notable exceptions include Brazil and India.
Can Canadians file under the Madrid Protocol?
An entity based in a non-member country such as Canada may still file an international trademark application under the Madrid Protocol if it has a “real and effective industrial or commercial establishment” in a member country. That member country would then be the applicant’s “home country” for the purposes of the Madrid Protocol. The applicant’s establishment in the home country must be one at which some industrial or commercial activity takes place but it need not be the applicant’s principal place of business. For example, a mere warehouse in the U.S. will not suffice but a U.S. branch office staffed with several salespeople conducting actual sales transactions in the U.S. would likely suffice.
Advantages and disadvantages
Advantages of filing under the Madrid Protocol include the potential cost and time savings over filing individual national applications. Filing under the Madrid Protocol simply requires filing a single application in the home country through a local agent in that country, and designation of the foreign member countries in which protection is also sought. The application in the home country would be prosecuted to registration in the same manner as a regular national application for that country. For the designated foreign member countries, the respective national trademark offices have a specified period of time within which to raise any objections, in the absence of which the trademark will be afforded the same protection in that country as if it had been registered in the home country. Filing individual national application is typically more expensive and time-consuming than filing under the Madrid Protocol since each application must be filed by respective local agents, and each application may require administrative steps such as legalizations and translations.
Another advantage over individual national applications is that administrative matters subsequent to registration (e.g. name change, address change, owner change, renewals, etc.) can usually be processed in a single procedural step, with effect across all designated contracting states. This simplifies the management of trademark portfolios and can result in significant cost savings.
A disadvantage of the Madrid Protocol is that a trademark owner can lose its rights granted by an international registration if the home country application does not mature to registration or if the home country registration is canceled during its first five years. Such situations are uncommon, and the loss of rights can be avoided by timely converting the foreign member country designations into individual national applications. Such conversions would, however, negate any cost savings achieved by initially filing under the Madrid Protocol.
Another disadvantage is that the International Registration is based on the home country application. For example, the United States requires more narrow descriptions of goods/service in trademarks than some other countries. As such, you may be able to secure broader protection by filing directly in those countries.
A further disadvantage is that an international registration can only be assigned to an entity that is based in or has a real and effective industrial or commercial establishment in a member country. For example it would not be possible to assign the international registration to a Canadian company with operations only in Canada.
Of course, an international registration can only cover Madrid Protocol member countries. Separate national applications would still be required for non-member countries such as Canada.
The Madrid Protocol can be useful tool for trademark protection for qualifying Canadian entities seeking coverage in a significant number of foreign countries but a careful assessment should be made in each case.