This year, the United States will mark the fifteenth "anniversary" of its accession to the Madrid Protocol governing the International Protection of Trademarks; in other words – the International Registration path in lieu of national filing of applications.
Undoubtedly, it was widely expected back in 2003 and was met with great enthusiasm among trademark owners and their counsel. Today, a significant share of filings are made with the USPTO not as national applications but through the Protocol path. Equally, many U.S. trademark owners opt for this mechanism for their international coverage optimization and cost control when seeking protection of their U.S. brands abroad.
However, the intrinsic disadvantages of the Protocol as well as peculiarities of practice before the USPTO pose a number of questions which the rights holders and their counsel should address before choosing the route for trademark protection.
The two primary limitations of the Protocol that apply universally and not just in the United States were known even before the U.S. accession to the Madrid system.
The first is the "central attack", or dependency of International Registration ("IR") on the basic mark, on which the IR tree is built. If during the period of five years after the IR issuance the basic application is withdrawn or abandoned, or if the basic mark registration is invalidated or lapses, the IR and all national designations stemming from it would equally be cancelled. While it would be possible for the mark's owner to convert the Protocol-based IR to national applications, the related costs, both in government charges and foreign counsel fees in such designated jurisdictions would clearly undermine the initial efficiency of the IR path.
The other, less catastrophic but equally limiting peculiarity of the Madrid Protocol approach, is that ownership of the IR and its national designations (also called "extensions of protection") cannot be transferred to a legal person (entity or individual) not domiciled in a country which is either a contracting party to the Protocol or a member of an intergovernmental organization that is a contracting party to the Protocol. In effect, this a limitation of the pool of parties that may own and exchange rights in an International Registration.
Now, as U.S. practitioners, we will turn to disadvantages unique to the U.S. extensions of International Registrations.
1. Weakness of Protocol-based Registrations in a Conflict
The United States follow the civil law "first to use" system and recognize rights in a trademark based on its use in commerce. Madrid Protocol-based, as well as national foreign registration-based, marks are eligible for registration without establishing their use in the United States in commerce as a precondition. While it is an advantage in registration, in case of a trademark dispute such registration may be more susceptible to invalidation attack by the counterpart. This would effectively shift the burden and related costs onto the Protocol mark's holder. To the contrary, a national U.S. registration based on mark's use establishes prima facie evidence of such use, and in a contentious proceeding the burden would be on the counterpart to prove registrant's failure to use the mark during the relevant period or prove fraudulent allegation of use.
2. Supplemental Register is Not Available to IR Extensions
Historically, the USPTO maintains two Registers for trademark protection – Principal and Supplemental. Most marks are registered on the Principal Register, which affords most advantages of registered protection to rights holders. On the other hand, certain marks found ineligible for the Principal Register protection, such as merely descriptive, primarily merely surnames, or primarily geographically descriptive marks, may be registered on the Supplemental Register. While the latter would not enjoy the same scope of protection afforded to trademarks on the Principal Register (such as prima facie evidence of the registrant's exclusive right to use the mark or the option to record the mark with the U.S. Customs and effectively block importation of counterfeits), a Supplemental Register mark would still block junior applications for confusingly similar marks and permit the registrant to use the registered trademark ® symbol.
The disadvantage of the Protocol is that marks filed under its provisions are ineligible for transfer from the Principal to the Supplemental Register if found unregisterable on the former. The only approach would be to abandon the Protocol-based application and to file a new national application, incurring additional costs and also losing time as well as the effective early filing date of the earlier filed Protocol application.
3. Classification Cannot be Changed
The USPTO is renowned for its strict requirements concerning the specification of goods and services, and the Office Action dealing with the language of goods and services is one of the more common types during examination of applications.
In a national application, whether based on use, intent to use, or foreign registration, the USPTO would permit change of Class in case of its erroneous or incorrect designation. However, in an application based on the Madrid Protocol IR, the USPTO may not permit change of Class number from that stated in the IR, and the applicant must either delete the Class or file a new application just for that Class. And in case of a single-Class application, the entire application would need to be abandoned and refiled.
4. Goods and Services Cannot Be Moved
Just as in the previous point, in national applications (on any basis), goods and services can be moved from Class to Class in case of incorrect classification at the time of filing, as long as the original scope of coverage by application is not expanded. However, for a Madrid Protocol application, even if the application covers both relevant Classes, applicant may not move its improperly placed goods and services from one Class to another. It would be limited to Classes designated in the IR, and the USPTO may not permit any movement between Classes. The solution, again, is to delete the incorrectly placed items and refile the application.
5. Classes Cannot be Added
The third disadvantage belonging to the same family of issues – specification of goods and services – if certain items belong to Class other than that designated by original application, in national applications the applicant may pay the extra Class fee, add a new Class, and move the improperly classified items to the new Class. In a Protocol-based application such addition of Class is impermissible and deletion and refiling is, again, the only remedy.
6. Application or Registration Bases Cannot be Changed or Added
In a national application for the mark, applicant may change its basis from the use basis under Section 1(a) [of the U.S. Lanham Act] to the intent-to-use one under Section 1(b), change it from Section 1(b) to Section 1(a) by filing an Amendment to Allege Use, or add or delete the foreign application priority basis under Section 44(d) and foreign registration basis under Section 44(e). Both or either of the Sections 1(a) and 44(e) can serve as bases for mark's registration. These bases may be interchanged or in certain situations combined. However, a mark in the Madrid Protocol application under Section 66(a) can be filed and registered solely on this basis, which cannot be changed, nor can it be substituted with any other basis. This disadvantage also underscores the rationale for the central attack situation – if the Protocol basis for any reasons is extinguished within the relevant period, so would the resulting U.S. extension of protection, whether pending or registered. The only solution in such situation would be refiling of national application or (in case of central attack) conversion.
7. The Mark Cannot be Amended
A mark in the national U.S. application or resulting registration based on Section 1(b) intent to use or Section 1(a) use can be amended as long as such change is "immaterial". However, a mark based on a foreign registration or a Madrid protocol IR cannot be changed as it is "tied" to the exact form and shape of the underlying foreign registration / basic mark.
8. Risk of Missing Deadlines
An International Registration is valid for 10 years and can be conveniently and cost-effectively renewed by filing a request with WIPO and covering countries designated by the IR. However, this does not absolve the mark's owner from the duty to meet certain conditions for mark's continued protection in the countries designated by the IR.
In the United States, a Declaration of Use for a registered mark must be filed between the fifth and sixth year from date of registration in the United States for a national mark or from the date of issuance of Certificate of Extension of Protection for an IR. While different Sections of the Lanham Act govern the respective Declaration of Use – Section 8 for national registrations and Section 71 for the IR, the effective form and requirements for such Declaration of Use and the duty to file it are the same for all trademark owners in the United States. Further, the declaration of Use must be filed before the tenth year from the date of U.S. registration/extension of protection and every ten years thereafter.
The risk of missing either date (resulting in cancellation of registration with the USPTO) is greater for the Protocol-based marks, where the registrant or its foreign counsel would tend to keep on the docket the renewal due dates but may miss national designations' maintenance requirements. This risk is further amplified if the IR designation in the U.S. was secured without involvement of a U.S. attorney, e.g. if no Office Actions were raised during mark's prosecution.
In conclusion, while effectiveness of the IR mechanism for obtaining a geographically broad scope of coverage as well as the related cost benefits are undoubted, trademark owners and their foreign counsel should carefully weigh all pros and cons in deciding on the paths to secure protection of a trademark, in particular when extension to the United States is considered, and, in certain situations, a national application could be the recommended approach over the Madrid Protocol one.