Speech: The Madrid Protocol -- U.S. Perspectives

10.13.1995

Presented At
ITMA Autumn Conference
Stratford-on-Avon, England
October 13, 1995

 

Background and Mechanics of the Madrid Protocol
Limitations of the Protocol
Limitations Based on U.S. Practice
Limitations Based on Foreign Practice
Limitations Inherent in the Madrid Protocol System
Conclusion
Notes

The Madrid Protocol is about to become a reality. According to Article 14 of the Protocol, the Protocol will enter into force three months after it is ratified by four signatories -- one of which must be a member of the Madrid Agreement and one of which must not. On September 1, 1995, China (a member of the Madrid Agreement) ratified the Protocol. Since Spain, another member of the Madrid Agreement, and Sweden and Great Britain, both non-members, had earlier ratified the Protocol, the Protocol will enter into force on December 1, 1995.¹

At present, it does not appear that the United States will ratify the Madrid Protocol any time soon. A dispute has arisen between the European Union on the one side and the United States and several other non-European countries on the other side, regarding whether the European Union ought to have a vote in the Madrid Union separate and apart from the individual votes of its member states. The United States has taken the position that the extension of voting rights to the European Union would result in a double counting of the European vote, and set a dangerous precedent for other treaties. Accordingly, in May 1994, the U.S. State Department issued a statement that the United States would not join the Protocol until this dispute over separate voting rights for the European Union is settled.

Since the viability of the Madrid Protocol depends on bringing as many countries as possible under its umbrella -- particularly such important non-European, industrial states as the United States, Canada, and Japan -- it is widely assumed that a resolution of the European voting rights dispute will be found. Thus, it has become as important for U.S. practitioners as for their European counterparts to consider the practical advantages and disadvantages of the Madrid Protocol.

Unlike in Continental Europe, where the Madrid Agreement has been largely accepted and functioning satisfactorily for many years, outside Continental Europe, the Madrid System has been viewed with much concern, and its benefits have been hotly debated. This ought not to be too surprising since the trademark law and practice outside Continental Europe is often quite different from that on the Continent. This is perhaps nowhere more apparent than in common law countries -- such as the United States and the United Kingdom -- where it is sometimes feared that the engrafting of the Madrid principles onto a common law tradition may not "thoroughly take."

This paper will examine the advantages and limitations of the Madrid Protocol specifically from the U.S. perspective. Concededly, some U.S. concerns regarding the Protocol are unique to the United States. However since the United Kingdom, like the United States, is a common law jurisdiction, and since its trademark law and practice resemble those in the United States, at least in several key respects, this paper should (hopefully) have relevance for practitioners from the United Kingdom and other countries that follow a British law tradition.

To better understand the U.S. perspective on the Madrid Protocol, a brief background of the history and mechanics of the Protocol is now provided.

BACKGROUND AND MECHANICS OF THE MADRID PROTOCOL The Madrid Agreement has been in place for over one hundred years. It is an international trademark filing system that affords trademark owners from member countries the opportunity to file their trademarks simultaneously in all other member countries through a single filing with their home country trademark offices.

At last count, 44 countries had joined the Madrid Agreement (including most of Europe, China, and the Russian Federation). Yet many important countries have not joined -- the United States, Canada, the United Kingdom, and Japan, most notable among them.

The Madrid Protocol resulted from an effort on the part of WIPO to make it possible for the six members of the European Community that are not part of the Madrid Agreement -- Great Britain, Ireland, Denmark, Greece, Sweden, and Finland -- as well as other countries, to join the Madrid System.

The Madrid Protocol is a separate, but similar treaty to the Madrid Agreement. Under the Protocol, the owner of a home country trademark application or registration (known respectively, as the "basic application" or "basic registration") files an international application with its national trademark office. In its international application, the trademark owner designates those member countries of the Madrid Agreement and/or Protocol in which an extension of protection is sought. The national trademark office then forwards the international application to WIPO. WIPO, in turn, issues an international registration for the mark, publishes it in the international trademark gazette, and forwards it to the designated countries, where the registration is examined by the national trademark offices pursuant to their own national laws. Each national trademark office has up to 18 months to refuse protection -- and possibly more if its national practice provides for an opposition period. If the national trademark office does not refuse protection within that time frame, the mark is deemed protected.

Significantly, the Madrid Protocol contains a number of innovations that address the primary concerns of the countries that have not joined the Madrid Agreement. The most notable from the U.S. perspective are the following: 

• Under the Protocol, unlike under the Agreement, a country of origin application may serve as the basis for an international registration.  
• Under the Protocol, the time limit for notifying refusals has been extended to 18 months, with a possible extension in the case of opposition practice. (Under the Agreement only 12 months is allowed.)  
• Under the Protocol, the harsh effects of the Madrid Agreement's "central attack" provision² have been somewhat ameliorated. While the Protocol retains the Agreement's "central attack" provision, it also contains a provision permitting the transformation of the international registration, under the appropriate circumstances and within the prescribed time limit, into a series of national applications that retain the priority date of the international registration.
• Under the Protocol, unlike under the Agreement, a national trademark office may elect to charge its own national fees for the examination of Madrid applications. From the U.S. perspective, this is an improvement over the Madrid Agreement's mandatory fee structure, which fails to adequately distinguish between the costs of operation in examination and non-examination countries.  

Accordingly, from the U.S. perspective, many of the shortcomings of the Madrid Agreement have been addressed in the Madrid Protocol. With these shortcomings addressed, many in the United States are likely (initially at least) to view the Madrid Protocol as a panacea. However, as is explained below, it is hardly that.  

LIMITATIONS OF THE PROTOCOL  

While U.S. companies will often benefit from securing international protection through filing under the Madrid Protocol, rather than through direct national filings, that will not always be the case. The hoped-for, large, "front end" savings on applications, thought to be obtainable by eliminating the local agent at the outset, is unlikely. In addition, in certain countries and under certain circumstances, direct national filings may be the better strategy.

This paper now considers the most significant limitations that U.S. companies will face when filing under the Madrid Protocol. Generally, these limitations fall into three categories: First, those that result from the restrictive nature of U.S. trademark practice, particularly as it would be carried forward into an international filing; second, those that result from the unique aspects of foreign trademark practice of which U.S. applicants might not be aware were they not to engage local agents; and third, those that result from the inherent limitations of the Madrid Protocol system itself.

I. LIMITATIONS BASED ON U.S. PRACTICE

Under Article 2 of the Madrid Protocol, an application for an international registration must be based on one or more home country applications and/or registrations. Once issued, the international registration will be territorially extended to the member nations of the Madrid Protocol designated by the owner of the international registration. The trademark offices of the designated countries may then either accept or refuse the requests for extension of protection.

U.S. trademark practice, however, has a number of restrictive aspects. In addition, there are several important discrepancies between U.S. practice and those in other countries expected to join the Protocol. The Madrid Protocol's requirement of a country of origin basis, as stated in Article 2, may pose serious disadvantages to those U.S. companies that seek to secure international trademark protection by proceeding under the Protocol as opposed to through direct national filings.

A. The Relative Difficulty of Obtaining a Home Registration in the United States

Unlike in some other countries where there is no substantive examination, 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 home registration in the United States than it is in many other countries that already are parties to the Madrid Agreement (e.g., Benelux³ and Italy) or that may become parties to the Madrid Protocol. This problem is exacerbated by the fact that the United States has the world's largest economy and that the Register in the United States is among the world's most crowded.

If the underlying home country application fails, the Madrid Protocol allows the owner of an international registration to convert the international registration into direct national applications in the countries to which the international registration was extended. However, in Benelux, for example, the trademark owner probably could obtain a viable registration faster if it filed directly for any mark for which it expected a serious challenge in the U.S. trademark examination process. In countries where trademark rights arise exclusively or substantially from registration and not use, direct national filing may be preferable.

B. The Inability to File Early Because of the U.S. Requirement To State Use or a Bona Fide Intent to Use

In the United States, in order to be valid, a trademark application must contain a statement either that the applicant has used, or that it has a bona fide intent to use, the mark in commerce. In the United States, an applicant can not get a filing date until it has either used or has the requisite level of intent to use the mark in commerce. By contrast, national applications in many other countries do not require a statement of the applicant's use or bona fide intent to use the mark. Consequently, nationals of other countries will sometimes 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 Madrid Protocol, rather than direct national filing.

This can be particularly problematic in first-to-file countries, where trademark rights have no common law basis and the protection afforded foreign marks (even those that are well-known internationally) may be sorely lacking. For example, if the U.S. owner of a mark in the apparel field makes a conscious decision to hold off expanding into fragrances, luggage, or home furnishings for a number of years, it may not be able to file a U.S. intent-to-use application for those goods. Unless a program of direct national filings in countries of potential interest is undertaken in the short term, however, the U.S. company may be locked-out later, internationally. The problem will be especially egregious in severe piracy jurisdictions, such as Vietnam, where one should anticipate that pirates will file applications for logical extensions of the goods and services contained in U.S. applications. What's worse, such piratical applications could form the basis for international filings under the Madrid Protocol.

C. The Restricted Specification of Goods and Services Based on a U.S. Home Application or Registration

In the United States, the Patent & Trademark Office requires that a fairly detailed specification of goods or services be included in the application. A considerable amount of time is often spent, during the examination process, narrowing the specification further until the USPTO will accept it. And, as noted above, the goods or services that can be included are limited to those upon which the mark has either been used, or for which there is a bona fide intention to use.

Unlike in many other countries, it is not possible in the United States to obtain the registration of marks for classwide headings or extremely broad categories of goods (e.g., "women's apparel"). For this reason, a Madrid Protocol application based on a U.S. application or registration would tend to include a narrower specification of goods or services than might otherwise be included in a comparable application filed directly on the national level.

However, a U.S. company will not be seriously disadvantaged by extending its international registration under the Madrid Protocol to countries where local practice also mandates that an application contain a fairly detailed specification of goods or services. For example, in Canada, while the Trade Marks Office may permit a somewhat broader specification of goods and services than in the United States, it nonetheless requires a fairly detailed specification. Similarly, the Hong Kong Trade Marks Office requires a fairly narrow specification, particularly with respect to service marks and descriptive marks.

By contrast, a U.S. company may be seriously disadvantaged by proceeding under the Madrid Protocol in those countries that permit an applicant to file without stating a bona fide intent to use and/or for a broad range of goods and services, sometimes embracing one or more entire class headings. Benelux and Greece (both of which permit the registration of marks for class-wide headings) are prime examples.

Obtaining the broadest possible specification of goods may not always be necessary, however, or a reason to forego the benefits of the Madrid Protocol. In those countries where the scope of infringement protection extends beyond the goods and services that are actually contained in the registration, to similar goods and services, broad specifications of goods and services may not be necessary to protect the mark. Countries such as France, Italy, Germany, and Mexico (and, under its new Trade Marks Act, the United Kingdom) are in this category.

In addition, broad specifications of goods and services may only give an illusion of broader protection. If use of the mark by a U.S. company is only for a limited number of the goods or services covered by its foreign registration, that use will not support the entire registration in a cancellation action based on non-use. The broad infringement protection the U.S. company might obtain from a registration containing a wide specification may be relatively short term, and in the long run, costly. In France, a country that recognizes the principle of partial cancellation, for example, a registration may be cancelled in respect of any of the goods and/or services for which it has been registered and in relation to which it has not been used for a period of at least five years.

There are countries in which narrow specifications of goods and services may well create a problem, however. If infringement protection is limited only to the goods and services actually contained in the registration, direct national filing should be considered. This is the case under the current trademark laws of both India and Hong Kong,⁴ for example, where the registrant must resort to the common law remedy of passing-off if a third party uses the registrant's mark in connection with goods or services only similar to those actually contained in the registration.

D. Limited Ability to Specifically Tailor the Specification on a Country-by-Country Basis

Because the U.S. Register is the most crowded in the world, an applicant often has to restrict its specification of goods or services in the United States so as to avoid a conflict with another mark (whether real or imagined by the Trademark Examining Attorney). Under the Madrid Protocol, the limited U.S. specification will carry over into the international registration and the requests for extension of protection based on it. While it appears that it will be possible to restrict the specification of goods and services contained in a request for extension of protection under the Madrid Protocol (in order to avoid conflict with another mark in that country), it will not be possible to expand the specification beyond that contained in the basic application or registration.⁵ If the specification has had to be unusually narrowed to avoid a problem in the U.S. that does not exist abroad, it may be preferable for the U.S. company to seek international protection of its mark through direct national filings, as such applications will not be similarly restricted.

E. Limitations Based on the Form of the Mark as Applied for in the U.S.

Under United States practice, a block letter registration of a mark provides coverage for all forms of display of the mark. Thus, in the United States, a block letter registration is often the preferred form of registration, as it allows for changes over time in the presentation of the mark, provides broad infringement protection, and helps to keep the Register clear of other similar marks that might otherwise be found to be distinguishable and, therefore, registrable. In addition, in the United States, use of a mark in a special form of display will support a block letter registration, avoiding the registration's vulnerability to cancellation for non-use.

In those countries where practice in this regard is similar to that of the United States (e.g., Canada, Benelux, France, Korea, Italy, and Mexico), the U.S. company that seeks to extend its block-letter-form international registration based on a U.S. application or registration, will not be disadvantaged. However, not all countries share the U.S. practice regarding the form of a mark.

Until recently, for example, in both Germany⁶ and Turkey⁷ a mark had to be used in the exact form in which it was registered in order for use of the mark to be deemed proper; otherwise, the registration would be vulnerable to cancellation for non-use. If the mark were never used in block letters, the registration would be vulnerable.

Additionally, in some countries, it may be more important, from an infringement standpoint, to protect the distinctive form in which a mark is displayed than to protect the word or words that make it up. For example, throughout Asia, a common form of infringement involves getting "the look" of the mark the same, although the word or words may be different. This is often a viable option for counterfeiters in Asia because Asians generally do not read English and may not recognize the English word or words included in the mark. What they are perceiving is the shape of the mark as a whole.

Lastly, in some countries, certain block letter marks may not be as easily registrable as in the United States. For example, in the United Kingdom and those countries whose trademark laws are based on that of the United Kingdom (e.g., Hong Kong and Singapore), it is often more difficult to register a common name (such as ANNE KLEIN) in block form because, in the absence of evidence of long-standing use of the mark in that country, the Registrar may take the position that the mark is non-distinctive. Accordingly, in order to achieve registration in such a country, it is sometimes necessary to file the mark in a special form of display, such as a signature or script. This can be particularly problematic if, under the law or practice of a given country, it is not possible to amend the form of the mark after application.⁸ In such a case, it might be preferable, and may even be necessary, for the U.S. company to file directly in the country rather than by way of requests for extension of protection under the Madrid Protocol.

F. Limitations Based on the Language of the Mark as Applied for in the U.S.

Generally speaking, a U.S. company will obtain registration of a word mark in English, and its international registration, based on the home country application or registration, would likewise be in English. If the U.S. company translates the mark into the local language when marketing its goods or services in a particular country, the extension of the international registration may not provide the necessary protection for the mark.

For example, a television producer might distribute its programs outside the United States using titles in the local languages of the countries in which the programs are broadcast. The mark covered by the international registration would be in English, as opposed to with direct national filings, where the mark can be applied for in each country of interest in the appropriate local language. Use of a mark solely in the local language will not support a registration of the mark in English in most countries. In time, the registration may become vulnerable to cancellation for non-use. This is particularly troublesome in those countries, such as France and Korea, where trademark rights derive from registration, rather than from use. That is because, in such countries, it will not be possible to rely on common law remedies for infringement.

Another, equally serious problem is that a registration for an English language mark may not be considered infringed by a third party's use of the same mark in a translated or transliterated form. This is most likely to be true in a country, such as Italy, where considerable segments of the local population are not familiar with English. Protection may depend on how closely the translated or transliterated form used by the infringer approximates English. Where the form is quite different, as it well might be in Korean or Chinese, the U.S. company might not obtain any useful trademark protection by proceeding under the Madrid Protocol.

II. LIMITATIONS BASED ON FOREIGN PRACTICE

The biggest lure of the Madrid Protocol to U.S. companies is hoped-for savings in the filing and application process. Securing international protection will be able to be accomplished with a single filing with the USPTO, which is thereafter forwarded to WIPO, requesting extension of an international registration based on a U.S. application or registration to the desired member countries. In securing international protection for their marks under the Madrid Protocol, U.S. companies may be tempted, as a cost-saving measure, to forgo the input of local agents at each step in the registration process, preferring instead to limit the role of such agents to mere problem-solving. When dealing either with marks or countries of secondary importance, cost saving may be the most important consideration. However, for a company's primary marks, or in its primary markets, it can be extremely dangerous to forego the input of local agents, given the idiosyncracies of foreign law and practice.

A. Reasons Why Limiting the Involvement of Local Agents May Be Disadvantageous

There are many reasons why it may be important for a U.S. company to keep its local agents fully involved in all phases of its international registration program, especially for its major marks in its primary markets (or the primary counterfeiting countries). A good local agent can (and, in the case of a direct national filing, is more likely to) provide the U.S. company with significant advice. 

• The local agent can offer advise as to the suitability of a proposed mark prior to filing.  
• The local agent can conduct a search and offer an opinion as to the availability of a proposed mark prior to filing.
• The local agent can monitor identical and similar marks filed by third parties.

•  The local agent can offer timely recommendations for complying with use and registered user requirements. 

• The local agent can examine packaging, labelling, etc. for compliance with local laws.

Discussed below are some of the other factors relating to international trademark law and practice of which a U.S. company must be fully apprised before deciding how broad a role local agents should play in its international registration program.

B. Filing and Other Application Requirements

The draft Regulations under the Madrid Protocol currently provide that a country may notify WIPO of its requirement for a signed declaration establishing the applicant's bona fide intention to use the mark. This provision was included in the draft Regulations in order to permit the United States to adhere to the Protocol. Other than this provision, there is no other provision currently in the draft Regulations permitting notification of any other special filing requirements for any designated member country.

However, one must distinguish between special filing requirements (of which none other than the signed declaration establishing the applicant's bona fide intention to use the mark is permitted under the draft Regulations or provided for in the draft application forms under the Madrid Protocol) and additional application requirements that may be imposed once the request for extension of protection is received in the trademark office of a given designated member country of the Madrid Protocol.

Since there is nothing in the Madrid Protocol or in the current draft Regulations that strictly prohibits them from doing so, it is theoretically possible for other countries to impose such requirements. Thus, for example, Japan or Korea could require the submission of a Corporation Nationality Certificate and Brazil or Turkey could require the submission of a Line of Business Affidavit.

Most of these additional application requirements would be barred under the Trademark Law Treaty concluded in October 1994 by WIPO. The objective of this treaty is to harmonize the procedural and administrative aspects of trademark law among the member countries. As such, the treaty is intended to complement the Madrid Protocol. The Trademark Law Treaty imposes a list of maximum requirements that a member country may demand be complied with in respect of a trademark application, both initially and throughout the application's pendency. If universally adopted, this treaty could make practice under the Madrid Protocol simpler and more certain. Unfortunately, it is an open question when or if this treaty will ever become effective,⁹ let alone whether it will be adopted in all countries that become members of the Madrid Protocol.¹⁰

It is a simple matter to request an extension of protection based on an international registration. U.S. companies have hoped that this simplicity would result in substantial front-end savings on international registration programs by eliminating the need to retain local agents in each country. In some countries, however, local agents might still be needed as a matter of course. A U.S. company that requests its international registration be extended to the territory of such country might be refused until proper documentation is supplied or some other application requirement is fulfilled. While hardly fatal to the application, these technicalities, which will probably necessitate the engaging of a local agent to respond to a refusal, will deprive the company of some, if not all, of the envisioned cost-benefit of filing under the Madrid Protocol.

C. Maintenance Requirements

Under the Madrid Protocol, countries can still impose their own special requirements with respect to the maintenance of trademark registrations. Moreover, it is unlikely that these differing maintenance requirements will be eliminated in the near future.¹¹

United States practice provides the perfect example of the type of maintenance requirements that, if not met, can result in the cancellation of a registration. In the U.S., a registrant must file a § 8 Affidavit, between the fifth and sixth years after the date of the registration, setting forth those goods or services from the registration for which the mark is in use in commerce. The affidavit must include a specimen or facsimile showing current use of the mark.

Additionally, under certain circumstances, beginning five years after the date of the registration, the registrant can also submit a § 15 Affidavit if the mark has been in continuous use in commerce for five consecutive years. If accepted, this affidavit will render the mark incontestable. Non-U.S. companies, unless they are aware of and calendar these dates, may find their registrations cancelled for failure to file a § 8 Affidavit, or never obtain the benefits of incontestability.

The U.S. is not alone in having such maintenance requirements, many of which may continue to exist after the coming into force of the Madrid Protocol. Examples include affidavits of use or nonuse (e.g., Philippines) and affidavits of continuing intent to use (e.g., Portugal).

Additionally, many countries impose the requirement that, if use of a mark is made entirely through a licensee, the license must be recorded in order for such use to inure to the benefit of the trademark owner. This is true not only in the so-called "registered user" countries (such as Hong Kong and Malaysia), but also in a number of key piracy jurisdictions, such as Korea and Venezuela, where it is a common tactic among pirates to attempt to cancel the pirated registration for non-use.

Unless a U.S. company that has secured international trademark protection under the Madrid Protocol is aware of and monitors these maintenance requirements carefully -- and further, unless the U.S. company keeps itself fully informed as to any changes in local law that may take place -- the company may unwittingly lose valuable rights, or the registration itself.

D. Renewal Requirements

Like the United States, many other countries currently require proof of use in order to renew a registration. For example, both Japan and Taiwan currently require proof of use, while Mexico currently requires the submission of an affidavit attesting to use. Generally, the rationale behind these renewal requirements has been to remove deadwood from the Register.

Under Article 7(1) of the Madrid Protocol, an international registration, and any national extensions of protection in member countries of the Madrid Protocol, may be renewed for a period of ten years by the "mere payment" of the appropriate fee. This provision means that proof of use may not be required by a member country of the Madrid Protocol as a condition for renewal of an extension of protection to its territory.

That is not to say, however, that a member country of the Madrid Protocol can not impose the requirement that -- at some point in time after the protection of an international registration is extended to its territory -- the registrant submit proof of use of its mark in that territory.

An interesting, and as yet unanswered question under the Madrid Protocol, therefore, is whether countries such as Japan, Taiwan, Mexico and the United States will simply "repackage" their special renewal requirements as new "use" requirements. Again, without the input of a local agent, a U.S. company might come up short.

The Trademark Law Treaty, should it become effective, would eliminate many of these special renewal requirements. However, even under this treaty, proof of use may still be required at regular intervals outside the renewal process in order to maintain a registration. This means that the registrant would have to monitor at least two key dates: (1) the renewal date and (2) the date by which use must be made in order to maintain the registration.

III. LIMITATIONS INHERENT IN THE MADRID PROTOCOL SYSTEM

There are also limitations inherent in the Madrid Protocol System itself. There are two such limitations that might make the Protocol less attractive to a U.S. company than it might otherwise at first seem.

A. Central Attack

Perhaps one of the most significant drawbacks that a U.S company contemplating filing under the Madrid Protocol must face is what has come to be known as "central attack." Under Article 6 of the Madrid Protocol, an international registration is dependent for five years from its date on the validity of the home country application or registration upon which it is based. If, for any reason, the basic application or registration is invalidated, whether completely or partially, the home country trademark office must notify WIPO. WIPO, in turn, is obligated to cancel the international registration to the extent applicable and to notify the offices of those countries in which the international registration was extended. Each office will then cancel the extension of protection to the same extent.

While it is possible under the Madrid Protocol for the trademark owner to transform the cancelled international registration into new national applications that enjoy the same priority as the international registration, it is expensive and time-consuming to do so.

Central attack is particularly problematic in a common law country such as the United States. Unlike in some other countries where the first to register a mark has the exclusive right to use it, in the United States, a common law user may have superior rights, even to that of a registrant. Therefore, the specter of a successful central attack of an international registration based on a U.S. application or registration is greatly increased.

B. The Fee Regime, and The Possible Illusion of Cost Savings, Under the Madrid Protocol

The great cost savings that some U.S. companies may envision through utilization of the Madrid Protocol is probably illusory. That is because Article 8 of the Madrid Protocol gives each national office the opportunity to "opt out" of the present system of supplementary and complimentary fees that exist under the Madrid Agreement, and instead charge an applicant for an international registration extended to its territory the same fee that it would have charged a national applicant that had filed directly in its territory, less the savings resulting from the international procedure.

While there may be savings where requests for extension of protection under the Madrid Protocol do not encounter objections on the national level, where they do, the assistance of local agents will still be necessary. In such cases, the cost-benefit of proceeding under the Protocol may be lost.

Additionally, where an international registration is cancelled, the transformation of the international registration into direct national applications may be more costly and time-consuming than filing separate national applications in each country would have been in the first place. Thus, where a U.S. company knows or has good reason to suspect that its basic U.S. application or registration is vulnerable to a successful central attack, it should probably avoid filing under the Madrid Protocol.

CONCLUSION  

Securing international trademark protection under the Madrid Protocol has many advantages, but it is not a panacea. A U.S. company is well advised to weigh the pros and cons of filing under the Madrid Protocol in each circumstance and country, before proceeding. Most importantly, where the U.S. company decides to proceed under the Protocol, consideration should still be given to obtaining the guidance of a local trademark agent, so that unexpected pitfalls can be avoided.

NOTES  

¹For the Protocol to enter into operation, it is necessary that the Assembly of the Madrid Union, once the Protocol is in force, to adopt new Regulations and fix the date of entry into force of those Regulations. According to WIPO, the tentative target date for this to occur is April 1, 1996.

² Under the Madrid Agreement, if the home registration fails in the first five years of the life of an international registration, the international registration and all of the extensions of protection fail along with it. This is known as "central attack."

³ In 1996, examination on absolute grounds will be introduced in Benelux.

⁴ It is anticipated that Hong Kong may change its Trade Marks Ordinance to comply with the recent changes in the U.K. Trade Marks Act, thus negating this problem.

⁵ The author understands, from conversations with the USPTO and WIPO, that it will be possible for a U.S. applicant to submit, along with its request for extension of protection, specifications that have been tailored for each country designated in the request -- provided, however, that the goods and services covered by such specifications are all included within the scope of the specification contained in the basic application or registration. Assuming this to be the case, it may be possible for the U.S. applicant that is forewarned of a conflict in a particular country of interest, to tailor the specification for that country so as to minimize or avoid the conflict.

⁶ The new German Trademark Act that came into force on January 1, 1995 maintains the principle that a mark must be used in the exact form in which it is registered, but it also provides that use of a mark in a form that does not change the mark's essential characteristics will support the registration. It remains to be seen, however, whether every special-form use will support a block letter registration.
⁷ Turkey's restrictive practice in this regard was changed in June 1995 when the new Decree Act for the protection of trademarks abolished the former Trademark Act No. 551.

⁸ This is the case under the new U.K. Trade Marks Act.

⁹ The Trademark Law Treaty will become effective three months after a minimum of five countries ratify it. Although 46 countries have signed the Trademark Law Treaty, to date, none has ratified it. Thus, it can be assumed that it will be several years at least before the Trademark Law Treaty enters into force. Moreover, it should be noted that the Trademark Law Treaty permits "developing" countries to defer implementation of some of its provisions for 8 years and other countries to defer implementation for 6 years, with all such reservations to expire no later than 2004. Thus, although the Trademark Law Treaty may ultimately achieve its goal of simplifying international trademark practice, it does not appear that this will occur any time soon, let alone before the Madrid Protocol comes into force.

¹⁰ For example, some Latin American and Middle Eastern countries would need to amend their national laws, particularly regarding notarization and legalization, in order to comply with the Trademark Law Treaty's near-total ban on such requirements. Since legalizations provide an important source of revenue for some of these countries, they might refuse to join the Trademark Law Treaty.

¹¹ The Trademark Law Treaty prohibits maintenance fees, but does not eliminate other maintenance requirements.

©Cowan, Liebowitz & Latman, P.C. 1995