Last year, this author explored the factors that influence the decision whether an applicant domiciled outside the United States should file a national U.S. trademark application or a Madrid Protocol application with the U.S. Patent and Trademark Office (USPTO). (Choosing Between Madrid Protocol and National Trademark Filings in the United States
, INTA Bulletin
, August 1, 2014, Vol. 69, No. 14.) In this companion article, the considerations as to whether a U.S. trademark applicant should file outside the United States via a national filing or a Madrid Protocol application are reviewed.
For companies and individuals that sell goods and services outside the United States, international trademark filing is a necessary and important business consideration. Unlike the United States, which recognizes unregistered trademark rights, many countries are “registration rights” countries, which means the first party to register a trademark is the party that owns exclusive rights to use and license others to use the trademark in that country.
In the past, U.S. trademark owners were limited to foreign filing of trademarks via direct filings with each individual national trademark office. However, since 2003, U.S. trademark owners have been able to avail themselves of the International Registration (IR) filing and registration process offered through the World Intellectual Property Organization (WIPO).
When the United States first joined the Madrid Protocol in 2003, WIPO reported only 208 annual IR filings by U.S. applicants. Ten years later, in 2013, WIPO reported over 6,000 annual IR filings by U.S. applicants. In fact, in 2014, the country with the highest number of IR applications was the United States, with 6,595 applications. (WIPO Statistics Database, updated Dec. 2014.) Clearly, over the past 11 and a half years, numerous U.S. trademark owners have discovered that an IR filing is the ideal way to file trademarks in foreign jurisdictions in a more cost effective manner than direct filing with each foreign trademark office. For others, however, the recommended filing strategy may still be via a direct filing with each national trademark office.
IR Filing Requirements and Costs
A “qualified owner” of an active U.S. trademark application or registration is eligible to file an application for an IR, for the same mark as covered in the U.S. filing, and for the same, or narrower, goods and services as listed in the U.S. filing. Under 15 U.S.C. §1141a and Madrid Protocol Article 2(1), the “qualified owner” must:
- Be a national of the United States;
- Be domiciled in the United States; or
- Have a real and effective industrial or commercial establishment in the United States.
The IR filing is made through the USPTO, is based upon the U.S. application or registration and the cost of the filing depends upon the countries that are designated in the IR application. With regard to government filing fees, an owner of an IR filing has to pay: (1) the basic fee of 653 Swiss Francs for the IR, which is approximately USD 650 as of the date of writing of this article; (2) the USPTO Certification fee of USD 100 per class; and (3) fees associated with each designated country or jurisdiction. Using the Community trade mark (CTM), as an example, the fees associated with designating the CTM through an IR are 1,111 Swiss Francs, which is approximately USD 1,120 as of the time of this writing. The government filing fee for filing a CTM application directly with the Office for Harmonization in the Internal Market (OHIM) is EUR 900, which is approximately USD 1,020, and thus is comparable to the OHIM-specific IR filing fee. While a national filing with OHIM would not require the payment of the IR basic fee or the USPTO Certification fee, there would be additional costs incurred with hiring local counsel for the filing, discussed in further detail below. Not all countries in the world are members of the Madrid Protocol. However, many countries of interest to U.S. trademark owners are members, such as numerous countries in Asia and Europe. A list of countries and jurisdictions that may be designated, which is currently numbered at almost 90 countries, may be found on WIPO’s Web site at www.wipo.int
After the IR filing is made with the USPTO, the IR filing is certified by the USPTO and sent to WIPO for review. (See USPTO Trademark Manual of Examining Procedure (TMEP) § 1902.06 and Madrid Protocol Article 3(4).) If an IR application is unacceptable, WIPO will notify both the applicant and the USPTO of the unacceptability in the form of a “Notice of Irregularity,” with a three-month deadline to remedy the deficiency in the IR application. (TMEP § 1902.07 and 37 C.F.R. § 7.14.)
Once the IR filing is found acceptable, either as filed or as corrected, it is registered with WIPO as an international trademark registration, it is given an IR registration number and a Certificate of Registration is issued. (See TMEP § 1902.06 and Madrid Protocol Article 3(4).) The term “registered” is a bit misleading, however, as each country or jurisdiction that is designated in the IR filing must also review and accept the application before protection is extended to each designated country. (Madrid Protocol Article 4.) Once reviewed and accepted by the designated countries, an IR is effective in all the designated countries to which protection has been extended for an initial 10-year registration period, and is renewable for additional 10-year periods. (Madrid Protocol Articles 6 and 7.)
Consideration for Filing an IR Based Upon a U.S. Trademark Application or Registration
For some U.S. trademark owners, foreign filing with an IR designating countries of interest is ideal. In view of the fact that IR filings typically only require hiring local counsel in a designated country when a refusal is received or an objection is filed in that country, those that file IRs typically spend much less money on international filing of their trademarks than those that file directly with each individual national trademark office, which requires hiring local counsel at the time of filing. This is especially true in the case of IR filings that designate numerous countries in an IR application. Further cost savings may also be realized at renewal, because renewals need not be handled by hiring local counsel at the time of renewal; only the IR needs to be renewed in order to effectuate renewal of the IR and protection in all of its designated countries. However, the cost savings of an IR filing versus national filings is only realized under these ideal conditions.
In view of the fact that the IR is dependent on the base U.S. application or registration for five years, the ideal candidate for an IR is an individual who or business that owns a U.S. trademark registration, as a U.S. registration has already successfully passed examination by the USPTO and has successfully passed the publication period. (Madrid Protocol Article 6(3) and TMEP § 1902.09.)
An ideal candidate not only owns a U.S. trademark registration, but owns a registration that has been registered for at least five years. This is because a U.S. registration that has been registered for over five years cannot be canceled on the following grounds: there is likelihood of confusion, the mark is merely descriptive or deceptively misdescriptive, the mark is geographically descriptive or geographically deceptively misdescriptive, the mark is primarily merely a surname, the registrant is not the owner of the registered mark and there was no bona fide use of the mark in commerce to support the original registration. (USPTO Trademark Trial and Appeal Board Manual of Procedure (TBMP) § 307.02(a).)
An even better candidate is an owner of an incontestable U.S. trademark registration. Incontestable status of a U.S. trademark registration can be achieved if the owner of the registration files an affidavit or declaration stating that the mark has been in continuous use in commerce for a period of five years after the date of registration, which is a made through the Declaration of Incontestability of a Mark under Section 15, 15 U.S.C. § 1065. Under Section 33(b) of the Trademark Act, 15 U.S.C. § 1115(b), if the right to use the mark has become incontestable under Section 15, then the registration is conclusive evidence of the validity of the registered mark and its registration, of the registrant’s ownership of the mark and of the owner’s exclusive right to use the registered mark in commerce, subject to certain defenses and exceptions. (TMEP §1605.)
The ideal candidate’s U.S. trademark registration also covers a good or service that is simply described, such as “beer” or “guitars.” This will help ensure that WIPO does not issue a Notice of Irregularity with regard to the goods and services in the IR filing.
When a U.S. Trademark Owner Should Consider a National Filing Rather Than an IR
Not every trademark is an ideal candidate for an IR filing. In view of the fact that the IR is dependent on the U.S. filing for five years, basing an IR on a pending U.S. trademark application can be risky. If the U.S. trademark application is refused registration based upon a likelihood of confusion with an earlier-filed mark, and the trademark owner will not be able to overcome the refusal, an IR filing should not be made based upon that U.S. trademark application. Similarly, if a U.S. trademark owner is concerned that its U.S. trademark application may be successfully opposed by a third party, an IR filing should not be based upon that U.S. trademark application. If a U.S. trademark application that is the basis of an IR is abandoned, either in the examination stage or the opposition period, the corresponding IR would be canceled and the IR would have to be transformed to national trademark filings within three months from the IR cancellation. (Madrid Protocol Article 9quinquies and TMEP § 1902.10.) The transformation process may be a lengthy and expensive process, which could have been avoided if national filings were made rather than a risky IR filing.
Even if a U.S. trademark filing is not expected to encounter registrability problems, there are other reasons why an IR filing may not be the best choice for a U.S. trademark owner. Owners of IR filings which only designate one or two countries may not realize significant cost savings because of the additional basic fee and USPTO Certification fee that must be paid with the IR filing, which would not be incurred in national filings in just one or two countries.
If U.S. trademark owners want their international portfolio filings to have broader goods and services coverage than their U.S. filing, including filing for class headings in jurisdictions where such filings are allowed, an IR filing is not recommended. (TMEP § 1402.07(a).) Furthermore, in jurisdictions that recognize subclasses of goods and services, such as Japan and China, IR filings cannot designate specific subclasses in these jurisdictions, as IR filings follow the Nice Classification. (Madrid Protocol Article 3.) If a U.S. trademark owner wishes to have its trademark filing cover certain subclasses, a national filing must be made with the local trademark office.
Another consideration is the length of time it may take for an IR to be effective in the designated countries compared to the length of time it takes for a national trademark filing to register. An IR filing must first be examined and certified by the USPTO, then reviewed and registered by WIPO, then examined and granted by the trademark office of the country designated in the IR filing. WIPO requires that the trademark offices of the designated countries notify the IR owner of any refusals or potential objections within 12 or 18 months of notification by WIPO to the designated country’s trademark office (the 12 or 18 months depends upon the designated country and its Madrid treaty terms). The fact that three trademark offices must review an IR filing may result in a delay in the grant of the IR in a specific country or jurisdiction. On the other hand, a direct filing with a national trademark office only requires review by a single trademark office and may result in a more timely registration.
Still other considerations are country specific. Some countries provide only a short period of time from notification to file a response to a refusal to register. This is the case with China, which provides only 15 days to respond. (China – As Office of a Designated Contracting Party, discussed at www.wipo.int
.) The challenges in finding a local agent in China to file a response within 15 days may not be as convenient as having the refusal issued in a national filing, in which the local agent would be notified of the refusal directly by the Chinese Trademark Office. Other countries only provide notification of an opposition after the opposition has been considered by the local trademark office and not when the opposition is filed. This is the case with Turkey, which only notifies the holder of an IR of an opposition filing after the opposition has been considered and accepted by the Turkish Patent Institute (TPI). Only after the opposition has been considered and accepted does the TPI then issue a notification of provisional refusal based upon opposition. (WIPO Information Notice No. 19/2014 entitled “The opposition system in Turkey–monitoring the designation of Turkey, at www.wipo.int
.) As an applicant will not receive a notification of filing of an opposition by the TPI or WIPO at the time of filing, and will only receive notification after the opposition filing is accepted and the IR is refused registration based upon the opposition, the holder of an IR designating Turkey must monitor its own filing, or hire a local trademark attorney to monitor its own filing, on the TPI Web site. On the other hand, if the applicant filed a national filing with a local agent in Turkey, the applicant would not be responsible for monitoring its own filing for oppositions.
Finally, a Madrid Protocol filing may be assigned only to a person who is a national of, is domiciled in, or has a bona fide and effective industrial or commercial establishment in, a country that is either: (1) party to the Madrid Protocol; or (2) a member of an intergovernmental organization that is a party to the Madrid Protocol. (TMEP § 1904.16.) There is no such limitation with regard to whom a national trademark filing may be transferred or assigned.
In sum, the IR is a cost-effective method for foreign filing of trademarks, but it is not suitable for all U.S. trademark owners. For some trademark owners, such as those that require registrations in only one or two countries, or may wish to be free to assign the IR to any successor-in-interest, international trademark coverage is more appropriately obtained the old-fashioned way, by filing national trademark applications directly with each country’s trademark office.
For more on the Madrid Protocol, visit INTA’s Madrid Agreement and Protocol: A Practitioner’s Guide.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.
© 2015 International Trademark Association