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Intellectual Property & Technology

Global Trademark Strategies: The Madrid Protocol

by Kenneth D. Suzan

Trademark owners in the United States seeking to extend their brands outside U.S. borders now have a relatively new mechanism for protecting their valuable intellectual property. In the late fall of 2003, after extensive political debate and negotiation, the United States officially joined the Madrid Protocol, a centralized system for trademark filings and protection in over 60 countries worldwide. Under the Madrid Protocol, a single trademark application may be filed with the United States Patent and Trademark Office (USPTO) and, in coordination with the World Intellectual Property Office (WIPO), receive protection in any or all of the Madrid Protocol member countries. The Madrid Protocol member countries constitute a diverse array of overseas jurisdictions, ranging from the United Kingdom, Spain, and Japan to Cyprus, Swaziland, and Liechtenstein.

With the Madrid Protocol in place, U.S. trademark and service mark owners may consider filing one international application with the USPTO in U.S. currency using a single language such as English. The centralized trademark filing, if not met with objections from a foreign jurisdiction’s trademark-issuing authority or opposition from third parties, will result in a single international registration valid for 10 years and subject only to one renewal deadline. International registration owners may subsequently renew their trademarks for additional 10-year terms.

While the decision to register a company’s trademarks pursuant to the Madrid Protocol will vary depending upon the specific branding and business goals of a particular company, it is clear the cost savings carries a wide appeal. Without the Madrid Protocol, a U.S. company seeking protection abroad must pay individual national trademark filing fees, engage the services of foreign counsel, complete powers of attorney, and arrange for legalizations and translations. The costs can add up quickly if expanded to several countries. Under the streamlined Madrid Protocol system, only one application is needed, along with one set of fees, the amount depending upon the number of countries the brand owner requests. The cost savings can add up to 50 percent or more just for the application filing fees. In the event of a corporate change of name or assignment of the mark to a new entity, only one document and one set of fees are required to update the record title of the international registration. The same applies for the trademark renewal process. Over time, significant cost savings can be realized for the prosecution and management of a global trademark portfolio.

Apart from the cost savings, there are other significant advantages to electing trademark registration under the Madrid Protocol. First, the trademark examination process is speedier. Designated member countries must examine the trademark within a 12- to 18-month period. In some of the same countries, the examination process can often span several years. Second, the owner of an international registration may elect to designate protection to additional member countries of the Madrid Protocol following the issuance of the international registration. Therefore, as a company grows and expands its brand into new foreign markets, the international registration can equally accommodate the company and continue to provide expanded protection. Third, it is anticipated new countries will join the Madrid Protocol over the next decade. Owners of international registrations will be able to file requests for country extensions as new contracting parties join the Protocol. Fourth, registration under the Madrid Protocol enables companies to replace existing national trademark registrations and reduce subsequent renewal fees.

While the Madrid Protocol certainly has many appealing features, there are critical disadvantages that must be considered before opting to register trademarks under this system. First, the international registration and all subsequent extensions into designated member countries are subject to “central attack” if the U.S. company’s home country application or registration is refused, withdrawn, cancelled, or amended to the supplemental register during the first five years of registration. This means a brand owner’s global trademark portfolio, registered under the Madrid Protocol, could be attacked and cease to exist. However, the owner of the international registration will be afforded the opportunity to transform the failed international registration into national applications by paying additional filing fees and coordinating with foreign counsel. Cost savings realized at the inception of filing the international application could be easily consumed in the added costs of filing new trademark applications during the applicable three-month window afforded under the law. Nevertheless, the new national trademark applications will receive the original filing date of the international application, which could prove helpful in a subsequent trademark opposition or cancellation proceeding.

Other disadvantages of the Madrid Protocol include a prohibition of amending the mark over time, including at the time of renewal. Should a company’s logo undergo slight changes or if description of goods requires amendment based on an agreement with another trademark owner, the needed amendments to the registration may not be made. As a result, opting to register a company’s trademark under the Madrid Protocol may not be the right vehicle for foreign trademark registration.

In addition, the strict filing requirements that apply to prosecuting trademarks in the United States must be considered. For example, the United States is notorious for requiring trademark and service mark owners to narrowly tailor the applicable description of goods or services during the prosecution process. The international registration and subsequent extensions to member countries will be similarly limited to the descriptions formulated under U.S. law. As a result, the brand owner will not be able to benefit from the often broader descriptions of goods and services allowed under many foreign trademark laws. This narrower scope of coverage could play a major role in a company’s foreign trademark litigation matters.

U.S. trademark owners must also be mindful of the limitations placed on assignments of international registrations. An international registration procured under the Madrid Protocol is only assignable to businesses that are nationals of, domiciled in, or have an effective or commercial establishment in a member country of the Protocol. By way of example, an international registration could not be assigned to a Canadian corporation, as Canada has not acceded to the Madrid Protocol.

Trademark owners must coordinate with their trademark counsel before opting to register their trademarks under the Madrid Protocol. The advantages and disadvantages of seeking trademark protection pursuant to the Madrid Protocol must be carefully considered and analyzed. While cost savings may be a driving force, there are many competing factors relating to trademark strategy that must enter into the decision making process.