Brexit And Trademarks: Protecting IP During Political Upheaval

By Emily Scheible and Laura Echols

Emily Scheible

Given the recent changes in the makeup of the European Union, many companies are considering the various ways the U.K. exit will impact their business. Trademark owners, in particular, should determine whether their brands are sufficiently protected in important markets with consideration paid to proposed expansion plans and political developments. Registration of trademarks is just one way to protect your brands around the globe and use of the International Registration system (IR) may make sense for your business. However, there are many considerations involved in deciding whether to use the system and a quick highlight of advantages and disadvantages is presented below.

The IR is based upon an international agreement known as the Madrid Protocol. The U.S. began its participation in November 2004. Since then, it has been gaining popularity with U.S. brand owners due to its efficiency and cost effectiveness when expanding and protecting a brand globally.


Pros

Before joining the IR, a U.S. trademark owner seeking to register its mark in foreign

Laura Echols

countries was required to engage attorneys in each country or jurisdiction of interest and to comply with that country’s specific requirements, such as filing Powers of Attorney, certifications, legalizations and apostilles. Now, for countries/jurisdictions participating in the IR (a list of such is found here), this local compliance is no longer necessary. By opting to file under the IR, applicants who own an application or registration in their home country file one IR application designating their jurisdictions (called “contracting parties”) of interest. Once filed, the application is briefly reviewed for non-substantive issues and is then distributed to each contracting party for prosecution. This one application process eliminates the need to engage counsel in every jurisdiction of interest. Additionally, applicants are not required to submit powers of attorney, translations or certified copies of priority documents. By eliminating each of these steps and by streamlining the application process, the filing process is often faster, simpler and overall costs may be significantly reduced. Local counsel need only be hired if a provisional refusal is issued or an opposition or other dispute matter commences.

The efficiency and cost savings enjoyed during the application process continues even after registration. For example, only a single filing is required when recording a change of ownership, address or license, appointing a new agent, renewing the registration or requesting a limitation to goods and services. Additionally, under the IR, brand owners are able to expand their brands further by later adding jurisdictions to their existing international registrations by filing a subsequent designation. The subsequent designation can be filed at any time and eliminates the need to file either fresh national applications or a fresh IR application. Due to the streamlined nature of these filings, there is no need to hire local counsel in individual countries – again, the simpler process allows for savings in time and expense.

The Madrid Protocol offers brand owners a gateway to the world with simultaneous trademark protection in a large number of countries via an efficient, cost effective, one-stop-shop filing and maintenance process.

Cons

While there are many advantages to the Madrid Protocol, a brand owner should be aware of several disadvantages before choosing to file under the IR. The most prominent disadvantage is the concept of “central attack.” The original home country application or registration (“Basic Mark”) acts as the foundation for the IR filing for the first 5 years of registration. During this time, the IR filing remains dependent on the Basic Mark. In practice, this means that if the Basic Mark fails or is cancelled for any reason the corresponding IR filing does not survive.  Accordingly, applicants who consider their Basic Mark to be vulnerable should be particularly mindful when considering whether to base their foreign filing program on a weak foundation.

The next two disadvantages to the IR relate to the limitations of U.S. trademark law. The U.S. operates a register for descriptive marks, known as the Supplemental Register separate from distinctive marks which are registered on the Principal Register. The level of protection afforded by the Supplemental Register is not as high as the Principal Register. However, a filing under the IR requesting registration in the U.S. is not permitted on the Supplemental Register. Therefore, if your mark is deemed merely descriptive, you do not have the option of moving your application to the Supplemental Register. Instead, you would have to file a brand new national U.S. application on the Supplemental Register for protection only in the U.S., losing the original filing date and incurring additional costs. As a result, brand owners should be cognizant of the nature of their marks before filing a Madrid application. Further, a registration issued by the U.S. on the Supplemental Register may not serve as the Basic Application upon which an IR filing may be made.

The next limitation lies with the identification of goods and services of the mark. The U.S. has one of the most restrictive policies with regard to the identification of goods and services. The Basic Mark determines the scope of the goods and services for the IR filing and each contracting party designated within the Madrid application. Accordingly, because the U.S. Trademark Office often requires a narrower description of goods and services than most other countries, a U.S. applicant may be able to secure broader protection abroad by filing directly in the foreign countries, rather than filing under the IR.

Another disadvantage relates to the mark itself. Once a mark has been submitted for a Madrid application, the mark cannot be changed. In a traditional application, the US Trademark Office allows applicants to make “non-material” changes to a mark, both during prosecution and after issuance of the registration. An example of a “non-material” change may be the addition or subtraction of a space or hyphen in between words. The mark subject to an IR filing may not be amended, even if the proposed change is quite minor. In that way, the IR system may be considered less flexible.

Lastly, the owner of a registration under the IR is not able to transfer ownership of any dependent marks to another party who is not a resident of a member country. Therefore, if an owner of an IR registration wanted to sell or assign the registration over to a resident of Thailand, for example, it cannot do so without significant additional hurdles.

Whether to use the IR depends upon many factors – including the strength of the mark, the likelihood of objection or rejection, the likelihood that the mark would be amended or changed over time and the scope of products and services identified by the mark. Generally, a U.S. trademark owner with a strong mark having a broad, approved description of goods and services would be in position to benefit the most from the Madrid Protocol.

Our Trademark Team recently presented a round table seminar on the topic and is available to assist in developing registration strategies to best protect your brands as your products and services travel the globe.

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