A Short Primer on the Madrid Protocol for U.S. Trademark Owners and Counsel

What does U.S. adherence to the Madrid Protocol mean for trademark owners, domestic or foreign? What change in analysis or approach should be adopted for building a sound international trademark portfolio? This brief overview presents some of the factors for consideration.

Upon implementation of the Madrid Protocol by the United States, a new central filing system will be available to U.S. trademark owners interested in protecting their marks abroad. Also, foreign trademark owners will be able to add the U.S. as a designated country in their Madrid Protocol applications or in connection with existing Madrid Protocol registrations.

While U.S. trademark owners have readily adopted the Community Trademark (CTM) and its single unified register, with protection enforceable in all European Union member countries, this new option will have to be viewed differently. The international registration obtained through the International Bureau of WIPO is not a single unified right or any right at all in and of itself. It facilitates filing in member countries on the basis of a single application, in a single language, filed by a person or company that is a national of a Contracting Party, or a legal entity that is domiciled or has a real and effective industrial or commercial establishment in the originating country.

There are additional advantages as well, such as a single fee paid in a single currency. Because of the simplicity of the filing procedure, there is no need to instruct foreign representatives in each country that one designates for protection. Only in the case of an official action in a designated country must one obtain legal representation to prosecute the application. Further, the process results in one registration with one number and one renewal date. Renewals, changes in ownership or address, or limitations to the goods or services are likewise effected by one filing and one fee administered by the International Bureau.

Since designations of protection to additional member countries may be made after registration, the system facilitates the expansion of trademark rights as the trademark owner expands into new markets. The latter factor certainly distinguishes the Madrid system from the CTM. If a party is not only interested in Western Europe or hopes to expand beyond Europe in the future, establishing an international registration affords foreseeable benefits of ease, flexibility and cost savings.2

It is anticipated that the European Community will eventually become a Contracting Organization, as may the Organisation Africaine de Propriete Industrielle (OAPI). Once that occurs, it will be possible to designate these jurisdictions for extension of protection. A CTM application could also be used as the basic application for extension under Madrid, provided one qualifies for filing by means of the "cascade" of nationality, domicile or real and effective industrial or commercial establishment.

Under the Protocol, the cost savings upfront, other than with respect to representatives' fees, will not be as large if the countries designated have opted to set their own individual fees. For example, the U. S. Patent and Trademark Office (USPTO) likely will charge the same fees based on the number of classes of goods or services in applications received through the International Bureau as it does for applications filed directly. It cannot fix a higher amount. More Protocol countries, (35 out of 55 as of February 1, 2002) however, have opted for the standard fee structure that includes the following: a "basic" fee of the International Bureau ($653 Swiss Francs or about $430); a "complementary" fee for each country designated (73 Swiss Francs or about $48); and a "supplementary" fee for each class of goods or services beyond three (73 Swiss Francs or about $48). The member country under the standard fee structure obtains a proportion of the complementary and supplementary fees according to the number of designations received, and applicants interested in these countries can designate them by paying only 73 Swiss Francs.

The greater cost savings no doubt is in the post registration activities mentioned above. Renewal of the ten year term, and other changes to the registration, are accomplished in a single step with a single fee. This is a tremendous savings on the time and effort spent on maintenance and the recordation of transfers.

With respect to transfers of ownership, one must keep in mind that while the basic home registration, the entire Madrid registration, or any of the country designations are freely assignable to a third party or parties, the assignee(s) must qualify according to the cascade of having an establishment in, domicile in, or the nationality of a country in the Madrid system. This can limit a holder's ability to transfer rights in a mark.

During its first five years, the international registration is dependent on the basic home or original application or registration. If the basic application or registration is amended in any way, so is the international registration and all of the extensions to designated countries. If the basic application or registration fails, is withdrawn or cancelled, so is the international registration and all of its extensions. However, there is a three month window in which the trademark owner has the right to transform the failed international registration into national applications or registrations in the designated countries, all of which will retain the original filing date and any priority claimed. The resulting national applications are subject to a further examination under the national laws or rules pertaining to the country concerned, and the payment of a further national fee. However, after the expiry of the five year term after application, the international registration becomes independent of the basic application or registration.

Because of this dependency, a U.S. trademark owner must consider the required level of specificity of the USPTO in describing the goods and services. If the identification in the basic application is amended to a narrower, more definite statement, the identifications in all of the designated countries will also be so amended. Thus, broader protection may be available by filing national applications.

If an international registration is not refused by the national office of a designated country, the protection of the mark is the same as if the mark had been registered directly with the national office as of the date of the international registration. The International Bureau of WIPO does not examine the application on absolute or relative grounds, for substantive matters such as distinctiveness or prior rights. It requires compliance with only minimum formalities before notifying the international registration to each national office designated by the applicant. If the applicant files within six months of the basic application, a timely request for Paris Convention priority may be made. No further certification is necessary to establish a priority filing date in designated countries.

The date of the international registration will be the date of filing the basic application at the national office of origin, provided that the application is received, without a deficiency, by the International Bureau within 2 months of the filing date.
Otherwise, the date will be the date when the last of any missing elements reach the International Bureau. The applicant thus must rely on the efficiency of the national office of origin to timely forward the application, or risk loss of time or even loss of convention priority. This is why the USPTO likely will mandate electronic filing of Madrid applications. It facilitates transfer of the application and fees to WIPO.

Note that it will become prudent for those conducting clearance searches in the U.S. to include the trademark records on the WIPO database. This may alert the potential applicant to possible conflicting marks bearing earlier filing dates, or priority filing dates, that have not yet been notified to the USPTO and entered into the USPTO database.

Another time limit the USPTO will have to meet is the 18 months from the date on which a notification of a request for extension is sent by WIPO to examine the application and notify WIPO of a refusal of protection, whether based on examination or the filing of an opposition. Indeed, the USPTO must notify WIPO of the possibility of an opposition within the 18 month term and must provide a statement of all of the grounds within 7 months of the beginning of the opposition period, or within one month of the end of the opposition period, whichever is earlier. (This indicates a change in the current extension practice before the Trademark Trial and Appeal Board.) No additional grounds of refusal may be notified to WIPO after the expiration of the noted time periods. In other words, if no notifications are made within the time periods, the USPTO loses the right to reject the application.

One final consideration, there is no provision allowing for the change of the form of the mark in a Madrid application or registration. Both during prosecution and at the time of renewal, the mark is to remain the same as in the basic application. Thus, if one is in an industry where it is expected that the mark will change over time, taking advantage of the Madrid process may not be appropriate.

The Madrid Protocol provides an effective and well-established means of obtaining multiple foreign trademark registrations at less cost. Understanding the system and its limitations, however, is crucial to developing the best strategy for the international registration of important marks.

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1. A Partner in the firm of Oblon, Spivak, McClelland, Maier & Neustadt, P.C., Arlington, Virginia.

2. A list of the Contracting Parties to the Madrid Agreement and the Madrid Protocol as of July 15, 2002 may be viewed at www.wipo.org/treaties/documents/english/word/g-mdrd-m.doc.