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Policy and Advocacy
Board Resolutions
Madrid System Safeguard Clause





November 9, 2005

Sponsoring Committee: Trademark Office Practices Committee


Resolution

WHEREAS, INTA supports the simplification and efficient operation of the Madrid System for International Registration of Marks;

WHEREAS, INTA strongly supported the negotiation of, and continues to support accession to, the Madrid Protocol, which streamlined and improved the procedures for the international registration of marks by alleviating the consequences of “central attack” and other difficulties identified under the Madrid Agreement;

WHEREAS, Article 9sexies of the Madrid Protocol (the Protocol) contains the “safeguard” clause that provides that where, with regard to a given international application or international registration, the country of origin is party to both the Madrid Protocol and the Madrid Agreement (the Agreement), it is the provisions of the Agreement that remain applicable in the relations between States bound by both treaties;

WHEREAS, the Madrid Union is considering whether to completely repeal the safeguard clause thus allowing the Protocol to govern relations between States bound by both treaties, or to restrict scope of the safeguard clause in such instances, with possible action by the Madrid Union in September 2006; and

WHEREAS, an Ad Hoc Working Group on the Legal Development of the Madrid System, which met in July 2005, could not reach consensus on total repeal of the safeguard clause due to arguments put forth by certain qualified States to restrict the scope of the safeguard clause so that trademark owners may reap the benefits of both the Protocol and the Agreement;

BE IT RESOLVED, that the International Trademark Association supports restricting the scope of the safeguard clause only to maintain the Agreement’s provisions regarding the refusal period for an application (12 months) and the fees charged (fixed).

BE IT FURTHER RESOLVED, that INTA urges the Madrid Union to allow for the future consideration of the total repeal of the safeguard clause if the offices of the relevant States provide users of the Madrid System with enhanced services such as reports on the status of their designations and statements of grant of protection.


Background

Article 9sexies of the Madrid Protocol requires that the Madrid Union consider the total repeal or partial restriction in scope of the so-called “safeguard” clause ten years after the Protocol has been in force (April 2006). The safeguard clause provides that where, with regard to a given international application or international registration, the country of origin is party to both the Madrid Protocol and the Madrid Agreement, it is the provisions of the Agreement that remain applicable in the relations between States bound by both treaties.

For example, if a trademark owner in France wishes to request an extension of protection of its French mark to Germany (France and Germany are parties to both the Protocol and Agreement), the request for extension would be governed by the Madrid Agreement only. The trademark owner cannot opt for the Madrid Protocol.

In anticipation of the deadline for review of the safeguard clause, the World Intellectual Property Organization (WIPO) formed an Ad Hoc Working Group on the Legal Development of the Madrid System for the Registration of Marks. During its meeting in July 2005, no consensus could be reached on total repeal among the 45 countries party to both treaties and therefore eligible to vote on this issue in the Madrid Union.

However, there appeared to be consensus among the Working Group on restricting the scope of the safeguard clause with regards to the perceived benefits of the Protocol so that certain provisions of the Agreement considered disadvantageous to trademark owners would no longer apply. The benefits identified by the Working Group are:

  • allowing transformation of an international registration if the basic application or registration fails, thereby ameliorating the impact of “central attack” that under the Agreement results is the loss of the original date of the international registration for all designated jurisdictions;
  • allowing the required basis for applying for an international registration to also be a basic application, rather than just the basic registration required under the Agreement;
  • eliminating the requirement of the so-called "cascade" rule under the Agreement, whereby the country of origin is determined according to a hierarchy of the applicant’s establishment, domicile and nationality, thus allowing the applicant the freedom of choice of country of origin under the Protocol, i.e., either by establishment, domicile or nationality; and
  • providing the option for the holder of an international registration to submit directly to the International Bureau subsequent designations and requests for the recording of cancellations and renunciations, rather than just through the intermediary of the Office of the Contracting as required by the Agreement.
  • The sticking points preventing consensus on total repeal of the safeguard clause were whether to maintain the scope of the Madrid Agreement with respect to the time of refusal of a request for an extension of protection (12 months under the Agreement and up to 18 months, or possibly longer in the case of an opposition, under the Protocol), which affects just 12 jurisdictions, and to the fee structure (the Agreement has a standard fee set by WIPO, while the Protocol allows for Offices to charge their individual fees, which are usually higher), which affects just 11 Offices.
During the Working Group meeting, a large number of States indicated their position on the issue. Out the 45 States qualified to vote on the issue:

  • 5 were in favor of maintaining the safeguard clause scope for the refusal period and the fees (France, Germany, Kyrgyzstan, Russia, Slovenia).
  • 6 were in favor of restricting the safeguard clause scope for the refusal period and the fees (Cuba, Iran, Kenya, Portugal, Spain, Switzerland).
  • 3 were split on whether to maintain or restrict the refusal period or fees (Bulgaria, China, Italy).
  • 2 took a position on just maintaining the scope for the fees (Latvia, Morocco).
  • 1 took a position on just restricting the safeguard clause scope on fees (Hungary)
  • 1 took a position on maintaining the scope for the refusal period (Austria)
  • 27 States qualified to vote did not indicate any position during the meeting (Albania, Armenia, Belarus, Belgium, Bhutan, Croatia, Cyprus, Czech Republic, North Korea, Lesotho, Liechtenstein, Luxembourg, Monaco, Mongolia, Mozambique, Namibia, Netherlands, Poland, Moldova, Romania, Serbia and Montenegro, Sierra Leone, Slovakia, Swaziland, Syria, The former Yugoslav republic of Macedonia, Ukraine).
Proponents favoring total repeal of the safeguard clause emphasize the considerable simplification of the international registration procedure (trademark owners in the 45 effected countries would not be faced with the complexity of fees and refusal periods if designating multiple countries that are either party to both treaties or just one treaty). Proponents also point to the benefits and flexibility of the Madrid Protocol that should be available to trademark owners in countries party to both treaties. Moreover, the safeguard clause was put in place for the transition between the Madrid Agreement and the eventual acceptance of the Protocol as the sole treaty governing the international registration system should be taken into consideration.

Proponents for maintaining the safeguard clause for the refusal period and fees argue that trademark owners in countries party to both treaties benefit from a shorter refusal period (12 months) and lower fees. They also argued that trademark owners should receive better service (e.g. regular status reports on their application and issuance of statements of grant of protection) in exchange for a longer refusal period and higher fees.

As a result of these issues, the Working Group could not make a recommendation to the Madrid Union during the Union’s meeting in September 2005. However, the Union authorized another meeting of the Working Group with the objective of making a recommendation on the future of the safeguard clause by September 2006.

In September 2005, INTA surveyed 67 company members with operations in countries party to both the Agreement and the Protocol. A total of 16 companies responded, of which 5 favor total repeal of the safeguard clause, 10 favor restricting its scope to the refusal period and fees, and 1 abstained.

Given the results of INTA’s internal survey, and considering the political situation within the Madrid Union, the Trademark Office Committee requests that the Board adopt resolutions: (1) in support of restricting the scope of the safeguard clause to only the refusal period and fees; and (2) urging the Madrid Union’s future consideration of the total repeal of the safeguard clause if those offices of the relevant States provide applicants using the Madrid System with enhanced services such as reports on the status of their designations, and statements of grant of protection.