Halsbury's Law - June 2008
The Madrid System has been used by trademark owners in its member countries for many years. Initially implemented in 1891 with the Madrid Agreement and extended in 1989 to include the Madrid Protocol, the system provides an alternative to a bundle of national applications with all their individual registration requirements and separate fees. In February 2007, India's cabinet had ratified the accession to the Madrid Protocol, and implementation of the necessary law can be expected to be finalised by the end of this year. At that time, Indian trademark owners will be in the position to use this attractive system and extend the protection of their national applications and registrations to all member countries of the Madrid Protocol in a very quick, efficient and cost-effective way. There are currently 75 member countries (also called "Contracting Parties"), which can be covered through one single centralised application for an "International Registration" (also called "WIPO Registration"). Owners of Indian trademarks can then file their applications for International Registrations via the Indian Trademark Office and will be able to designate—among many others—countries economically as important as Australia, China, Japan, Singapore, the E.U. and the U.S. Furthermore, the Madrid Union is consistently growing from its initial, smaller circle of European member countries to a truly global network; Madagascar has just joined the list of the next candidate countries, which include South Africa, Indonesia and Israel.
Basic Principles of the International Registration
The Madrid System is only available to applicants in its member countries, and the geographic scope of trademark protection is also limited to the territories of these countries. Thus, Indian applicants will only be able to designate member countries of the Madrid Protocol but not those that exclusively joined the Madrid Agreement; this restriction is, however, of limited relevance as there are only 7 member countries that have not joined the Protocol, namely Algeria, Bosnia and Herzegovina, Egypt, Kazakhstan, Liberia, Sudan, and Tajikistan. An applicant under the Madrid Protocol must own a Trademark application or registration in its home country (in this case India) for the identical mark with the same or a wider specification of goods and services. An extension of the specification of goods and services via the Madrid Protocol is not possible. Applications are filed through the Trademark Office of the applicant's home application or registration ("office of origin") in one chosen language (English, French or Spanish), without the need to appoint or use an external representative. Refusals, if any, are issued individually by the Trademark Offices in each designated country. Additional countries can still be included via "subsequent designation" at a later time. Changes to the WIPO registration, such as limitations of goods and services, changes of ownership, recording of licenses or cancellations are recorded in one single operation. All official fees are payable in Swiss Francs.
The Basic Fee of an application is SFR 653.00 (ca. INR 24,000) and covers an application in up to 3 classes. Any additional class requires payment of a supplementary fee of SFR 73.00 per class (ca. INR 2,650). For every designated member country, the applicant has to pay a complimentary fee of again SFR 73.00. Apart from the original fee system, there is a number of member countries to the Madrid Protocol that have made use of the option to adopt the alternative system of so-called "individual fees". Designating these countries (i.a. Australia, China, the E.U., Japan, the UK, and the U.S.) will result in fees that are usually higher; sometimes considerably higher than the complementary and supplementary fees mentioned above. The individual fees vary depending on the specific countries from around SFR 200 to more than SFR 2,000, including in some countries one class, in others up to three classes. The highest individual fee of EUR 2,229 is due for designation of the E.U., a designation that covers the entire E.U. via Community Trademark (CTM) and includes up to three classes. Designating the E.U. via Madrid Protocol offers a comparably priced alternative to a direct filing of a CTM at the OHIM in Alicante with the advantage of conveniently combining it with other countries in one single application. While this system of individual fees seems to take away from the attractiveness of the Madrid system, a comparison with national filing fees and requirements in the respective countries will reveal that the Madrid system remains useful, time and cost-efficient. A summary of all fees can be found at: http://www.wipo.int/madrid/en/fees. The "fee calculator" found at the same location is a very helpful and easy-to-use tool that provides the exact amount of fees that an intended application will incur. Comparing the costs of the Madrid system with an alternative filing option is therefore a great help for the cost conscious applicant. Because the applicant can file the International Application directly at the Office of Origin and without the requirement of an outside counsel, the system offers an initial cost advantage.
The Chief applicant countries and main users of the Madrid System—based on the applicant's "home" country—are the initial member countries: Germany, France, the E.U., Italy, Switzerland, and the "Benelux" countries (Belgium, Netherlands and Luxemburg forming a single Madrid territory that can be designated as one "country"), as well as the U.S. as the third place applicant country in 2007, behind Germany and France. Most popular designations are China, Russia, Switzerland, the U.S., the E.U. and Japan.
The Registration Procedure Under the Madrid Protocol
The applicant under the Madrid Protocol must own an application or registration in its "home" country or where it has a commercial establishment (called "Basic Application" or "Basic Registration"), on which it can base the International Registration. After filing the International Application, the Office of Origin determines whether the application corresponds to the details of the Basic Application/Registration. The Office of Origin then forwards the application to the "International Bureau" in Geneva, Switzerland, which examines the formal requirements (classification of goods and services, payment of fees, entitlement of the applicant to file via the Madrid Protocol), records in the International Register, publishes the application in the International Gazette and notifies the designated countries. The Trademark Offices of the designated countries have generally 12 to 18 months to perform the substantive examination, which is done according to their national trademark laws and to issue refusals. If no refusal is issued within this period and if the designated country has not obtained an extension of the examination period, the application is considered as approved in this country.
As with national applications, some member countries have stricter registration requirements, resulting in higher numbers of refusals. Designations of the U.S. encounter the most refusals, but also South Korea, Japan, China and Russia prove to be challenging jurisdictions for trademark owners. It is advisable to prepare designations these countries with greater care and possibly include foreign counsel in the drafting of such applications. An important difference to the CTM system is that a national refusal under the Madrid system does not affect the protection in the other designated countries. Thus, the applicant can keep the WIPO registration in all member countries, where it is not refused and remains free to file an additional national application, where the designation of a specific country is refused.
Once registered in a designated country, the Madrid registration has the same effect as a national application or registration in that country. The date of the International Registration is either the date of filing with the Office of Origin (if the International Bureau receives the application within 2 months) or the date when the International Bureau actually receives the application from the Office of Origin (if received after these 2 months). The International Registration obtains the priority of the Basic Application if it is filed with the Office of Origin within 6 months of the application date of the Basic Application. It is important to note that the WIPO Registration remains dependent on the fate of the Basic application or Registration for a period of 5 years from the time of the WIPO registration. If, and to the extent that, the basic registration ceases to have effect, whether through cancellation following a decision of the Office of Origin or a court, through voluntary cancellation or through non-renewal, within this five-year period, the international registration will no longer be protected. The WIPO Registration will also be cancelled if the basic application is refused or withdrawn within the five-year period. In all these cases, the applicant can apply within three months of the date of cancellation of the WIPO Registration in the International Register, for registration of the same mark with the Offices of all those member countries whose designation are affected by the cancellation. The national or regional applications resulting from this so-called "transformation" are treated as filed on the date of the original international registration. After the five years, the WIPO Registration becomes independent and remains in force even if the basic registration or basic application is cancelled, withdrawn, or otherwise ineffective.
After registration, a "subsequent designation" allows to extend the geographic scope of protection by designating additional member countries. The subsequent designations will have their fling dates as separate priority dates as far as the respective extensions are concerned. This provides a convenient and relatively inexpensive way to extend the territory covered by the International Registration (Basic Fee SFR 300.00; complimentary fee SFR 73.00; individual fees apply for the respective countries according to the schedule mentioned above). It becomes relevant especially in cases where the applicant expands its commercial activities to new markets, where a national refusal is no longer valid, or where the now designated country has become party to the Protocol after the filing of the WIPO Application. However, if the trademark owner intends to protect the mark for additional goods or services, it needs to file an additional application, whether via WIPO or directly with the Trademark Office of the specific country.
Summary and Expectations
The Madrid Protocol offers trademark owners the opportunity to obtain international protection for their domestic trademarks with the filing of one single application. It can be done without consulting or instructing foreign counsels. This can prove dangerous when designating countries with strict registration requirements if the applicant has not sufficient knowledge about these. Filing a too broad specification of goods and services for the U.S., for example, can result in a cancellation of the entire registration or class due to "fraud", if the mark was never intended to be used for all of the designated goods. With the specific registration requirements in mind, however, the Madrid Protocol will offer many advantages to Indian trademark owners.
Indian practitioners will be able to use the Online Search tool offered by WIPO (the "Madrid Express") to review International Registrations when clearing new marks; they can advise on and file International Applications for their domestic clients, and represent foreign applicants when their applications are refused by the Indian Trademark Office. While the Madrid system will most likely result in a decrease of national Indian trademark applications, it can be expected that the designations of India via the Madrid Protocol will make up for this decrease. Because the Madrid system is so convenient and cost efficient for applicants, it is even likely that India will be more often designated by foreign applicants via the Madrid Protocol than it had been via national Indian applications. Most probably, the number of refusals by the Indian Trademark Office will also increase when foreign applicants designate India via the Madrid Protocol. The Indian IP community will be enhanced by the Madrid Protocol and Indian businesses will enjoy the opportunities it offers. There are therefore many reasons to look forward to its implementation in India.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
