On 10 December 2012 New Zealand implemented the long awaited International Trade Mark (ITM) registration system, also known as the Madrid Protocol, heralding the most significant development on the trade mark scene for years. New Zealand finally joins 86 other member countries in the ITM system, including most major trading partners, and no doubt membership will continue to grow.
The ITM system will provide export focused businesses with an alternative route for securing trade mark protection in overseas markets in a cost effective and efficient manner. It will also enable owners of ITM’s to maintain and manage their trade mark portfolio with greater ease and at lower cost.
The ITM system allows for a single trade mark application to be filed through the World Intellectual Property Organisation (WIPO) based in Geneva, rather than filing separate applications in each jurisdiction where protection is sought. The ITM application designates individual jurisdictions where protection is required, and once WIPO has accepted the application it passes details of the application to the designated national trade mark offices without the need for foreign trade mark attorney involvement and associated cost.
Each designated national trade mark office then examines the application against their national requirements for grant of registered trade mark protection, and if it complies, WIPO is notified and protection is granted in that jurisdiction to the same extent as if the trade mark had been registered nationally. It is also possible to designate new jurisdictions where registration under an ITM is required – an important feature as membership of the ITM system grows.
However, the potential benefits of the ITM system will not necessarily apply to all New Zealand businesses looking to take advantage of it. For example, significant cost savings are only likely where a business is looking to protect its trade mark in a number of jurisdictions, and if trade mark protection is required in only a handful of jurisdictions, it may be more cost effective to seek national protection in each jurisdiction of interest. Obtaining good strategic advice from trade mark professionals will be crucial.
The ITM system is also not without its “fish hooks”. If the application encounters problems during the national examination phase in the designated jurisdiction, it will be necessary to appoint a local trade mark attorney to deal with those issues and therefore earlier cost savings may quickly be lost. Pre-filing trade mark availability searches will continue to play a vital role in selection of a new trade mark, and assessing whether the ITM or national route is the best way of securing protection.
Furthermore, each ITM registration must be based on a New Zealand home trade mark application or registration. Critically the ITM registration and each national designation will be dependent on the home registration for a period of 5 years. This means that any changes affecting the home registration over this period will automatically be reflected in the ITM and national designations. This vulnerability is tempered to some extent by being able to convert ITM designations into national registrations, but again earlier cost savings may quickly disappear if conversion is necessary to avoid losing protection.
Smaller New Zealand businesses focused on the domestic market may also be impacted by the ITM system. It is expected that the number of requests for registered trade mark protection in New Zealand will increase markedly following implementation of the ITM system in New Zealand, as was the case in Australia where almost 5500 applications were received in the first year (2001-02) peaking at more than 22000 in 2007-08. If steps have not been taken by smaller businesses to secure their trade marks through registration in New Zealand, this will leave the door open for foreign businesses to acquire potentially conflicting rights.
The full impact that the ITM registration system will have in New Zealand remains to be seen. However, it is certainly a positive step towards further integration of the New Zealand economy in the global market for goods and services, a step New Zealand exporting businesses should welcome.
This article was originally published in the Chartered Accountants Journal.