During the 12th session of the WIPO Working Group on the Legal Development of the Madrid System for the International Registration of Marks, held in Geneva in October 2014, a proposal was discussed to suspend the operation of (or, to follow the letter of the proposal, “freeze”) the so-called “dependency clause” contained in Article 6 of the Madrid Agreement and of the Madrid Protocol.
Simply put, pursuant to the dependency clause, the protection resulting from an International Registration may no longer be invoked in respect of all or some of the goods and services claimed if, before the expiry of five years from the date of the International Registration, the basic domestic application or registration has ceased, for any reason, to have effect in respect of such goods and services.
Historically, the present five-year dependency period is a remnant of the original regime of the Madrid Agreement, according to which, until the Nice Act of the Agreement, dependency lasted throughout the duration of the International Registration. The five-year dependency period was maintained in the Protocol; however, it was mitigated by a new feature allowing the holder of an International Registration canceled as a result of the ceasing of effects of the basic mark to transform the holder’s International Registration into applications for registration in the Contracting Parties designated in the International Registration, retaining the date of the International Registration.
Dependency in Question
Dependency has been maintained to date as a mechanism to balance the interests of right holders and third parties. Since the Madrid System greatly facilitates the procurement of extended international protection by way of a single application, it was (and remains) considered appropriate to offer to holders of prior rights with which the International Registration may be conflicting in a number of jurisdictions the facility, over a limited period of time, to challenge the validity of the International Registration through a single procedure in the Contracting Party of origin (commonly known as the “central attack” strategy).
Over the years the dependency principle has drawn criticism from many trademark owners who see it as a long-lingering threat to the validity of their International Registrations, and hence a disincentive to using the Madrid System.
This is particularly the case in jurisdictions where examination standards regarding the specification of goods and services are rather strict, thus resulting in frequent amendments of the basic application leading to limitation of the International Registration.
Additionally, potential users in countries where the language uses scripts other than Latin script and who wish to register a mark in Latin characters for use exclusively in foreign markets are facing the risk of cancellation of their basic mark for lack of use in the country of origin, with the consequent loss of their International Registration. In several of the jurisdictions where this is relevant, the non-use grace period is three years, therefore shorter than the five-years dependency period. Possible solutions have been formulated, including reducing the dependency period to three years.
Whereas an amendment of the Madrid Agreement and the Madrid Protocol would require a revision conference and a ratification process that would take several years, the International Bureau of WIPO proposes that the dependency clause be merely suspended (or “frozen”), initially for a trial period, by a decision of the Assembly of the Madrid Union. However, the proposed procedure has raised some doubts and it could only be supported if it is clearly established that it offers total legal security to holders of International Registrations.
The Basic Mark in Question
The “freezing” proposal currently on the table is also perceived by many of its supporters as a first step towards a more radical reform of the Madrid System embodied in the so-called “Norway Proposal,” which was tabled by the Norwegian Office in 2006 at the second session of the Working Group.
Essentially, the Norway Proposal, which was last discussed in 2010 during the 8th session of the Working Group, is to do away altogether with the requirement of a basic mark. Under one possible scenario, applicants would even be entitled to “self-designate” their own country of origin in an International Registration.
The Norway Proposal, which would naturally entail a revision of the Agreement and the Protocol, was greeted by many as a welcome simplification of the Madrid System and the solution to perceived drawbacks, such as the need to conform the goods and services specifications in the international application to that appearing in the basic application or registration, the inequity of the central attack mechanism or the problem referred to above encountered by users applying for international registration of marks not used in the country of origin.
Others expressed concerns about the disappearance of the central attack mechanism, the potential multiplication of bad-faith applications, the consequent reduced role of offices of origin (seen as detrimental, in particular, to small- and medium-sized companies) and the increased role of WIPO. Also, practical and constitutional issues have been raised as regards the possibility of self-designation, in particular for U.S. applicants.
INTA has been following closely the legal development of the Madrid System, and is participating actively in the Working Group. However, the position of the Association on the substance of these proposals remains to be determined. The Madrid System Subcommittee of the Trademark Office Practices Committee of INTA is about to launch a consultation among INTA members, with a view to obtaining guidance on a position to be recommended to the Board of Directors in preparation for the next session of the Working Group, to be held in November 2015.
The Authors wish to thank Louise Gellman of Nabarro LLP, former Chair of the Trademark Office Practices—Madrid System Subcommittee, as well as the past and present members of the Subcommittee, for their contribution to this article.
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© 2015 International Trademark Association