Apple, Inc. recently learned the Brazilian Trademark Office or the Instituto Nacional Da Propriedade Industrial, ruled in favor of a local company, Gradiente Electronica, when it said that the Brazilian company, not Apple, Inc., owns the “iphone” trademark in Brazil. The term was registered by Gradiente Electronica with the Brazilian Trademark Office in 2000, seven years prior to the iPhone’s release, and the trademark office ruled on the matter February 13, 2013.

In advising their clients, attorneys who represent or advise corporations that have or wish to secure global IP rights would be well-served to become acquainted with the various options for protecting trademarks on a global scale. While it may be likely that there was little Apple could do to prevent this particular unfavorable decision, it is worthwhile to explore the advantages of protecting trademarks internationally at the earliest possible chance.

First, there is no single “international” trademark registration available that would permit a company to secure its brand with the filing of just one trademark application. Trademark rights are national and one must register marks separately in each country in which protection is desired (there are some exceptions to this rule, such as a Community Trade Mark application, which allows an applicant to register a trademark in all European Community countries with the filing of just one application). Though, there are various strategies to leverage existing trademark rights and extend them to foreign countries.

For background purposes, one of the most commonly misunderstood concepts in U.S. trademark law is when rights in a mark first begin. In the United States, rights in trademarks begin as soon as one starts using the mark as a trademark in the United States. The Federal Lanham Act as well as the courts of the individual States recognize these unregistered rights, also known as common law trademark rights. These are separate and slightly different than the rights that are acquired after registering a trademark with the federal U.S. Patent and Trademark Office.

However, many other countries around the world—and Brazil is one of them—adhere to the principle that rights in a mark only accrue once it is registered. Whether one actually “used” the mark in commerce in the foreign country is of little or no legal consequence. Though many of the “first-to-file” countries have exceptions to this rule, it is nonetheless the general rule.

Some of the first-to-file countries, such as Brazil, have an exception for marks that are “famous” or “well-known.” In Brazil, Article 126 of the Trademark Law expressly recognizes well-known marks, even if they have not been previously filed or registered in Brazil. Apparently in this case involving the Brazilian “iphone” mark, it seems that Article 126 did not apply. With the full disclosure that Brazilian Trademark law is out of the scope of expertise of the author of this article, it is possible in the instant case that the prior-existing “iphone” registration that is owned by Gradiente Electronica effectively blocked the famous, but nonetheless non-registered rights of Apple. If that is so, it underscores just how powerful registered trademark rights are in non-common law or “first-to-file” jurisdictions.

Obviously, these results are frustrating to companies that have invested large sums of money, time, and resources into building a brand, especially one that is famous. Here are a few steps companies can take to secure their trademark rights outside of the United States:

1) File foreign “national” applications early in the countries where your company expects to sell products or services with its trademarks.

A typical way U.S. companies protect their trademark abroad is to file foreign “national” applications—that is, the filing of an application directly with the foreign countries. Pursuant to the Paris Convention for the Protection of Industrial Property (of which the United States is a signatory), when an applicant files for a trademark in a foreign country that is a party to the Convention, the applicant is due the same treatment as if the application was filed by a national of that foreign country. Furthermore, the Convention permits an applicant to use its filing date from its home application as the effective filing date in the foreign application, up to six months of the filing of the home application. In other words, if a U.S. applicant applies to register his or her trademark on January 1, 2013, and then up to six months later opts to file a trademark application in Germany for the same mark (Germany is also a signatory to the Paris Convention), the effective date of filing of the German application would still be January 1, 2013 (provided that the application is filed properly and the application indicates the proper basis for registration). In countries that have a “first-to-file” trademark scheme, the benefits of filing under the Convention are obvious—one can reach back in time six months.

Of course here, it doesn’t appear that the six-month priority period would have helped Apple.

2) Consider taking advantage of international treaties such as the Madrid Agreement, which under its Protocol allows for filing of an “international” application based on a filed U.S. trademark application or registration.

The Madrid Protocol is a component of another international treaty that permits trademark owners to file just one application in their home country to register the mark in one or more of 86 countries that have signed onto the Madrid Protocol. Interestingly, Brazil is not a member of the Madrid Protocol. The filing of international applications via the Protocol has several benefits but also a few drawbacks.

One benefit is that the applicant need only file one application in the home country instead of applying individually in several countries. The practical benefit is that there is no need to hire a foreign trademark attorney to file a Madrid Protocol application (as one must do if one seeks to file directly with foreign trademark offices). However, a foreign attorney becomes necessary if the foreign trademark offices that were designated on the application issue an office action, which must be answered for the application to be successfully registered.

A drawback to building a trademark portfolio filed via the Madrid Protocol is the vulnerability to a centralized attack. During the first five years of the international registration, all of the designated country registrations in a Madrid Protocol registration are entirely dependent on what happens to the mark in the home jurisdiction. Accordingly, if a trademark registration is successfully challenged in the home country (successfully opposed or canceled), the applicant would lose all of the rights in the designated jurisdictions too. This problem is not inherent in the strategy mentioned in point number one above (filing on the basis of the Paris Convention), which is decentralized and not dependent on a home jurisdiction application (except for priority date purposes).

3) Consider setting up trademark watching services with your counsel to keep on top of potential infringers or squatters before unauthorized trademark use becomes problematic.

Some companies use trademark watching services, of which there are many. The complete nature and quality of all of these services are outside the scope of this article, but there are tools available to trademark attorneys, as well as in-house counsel, that can be used to raise awareness of IP threats around the world. It is believed that these watching services can assist a brand owner in learning about potential infringing activities before problems become intractable.

However, it is not clear whether even a watching service would have prevented the Brazilian “iphone” case. The Brazilian “iphone” mark was registered in 2000, which was seven years prior to the release of the Apple iPhone. It is likely that the device was not even on the Apple drawing board at the time.

Conclusion

Apple’s iPhone woes in Brazil are an unfortunate casualty of the nature of trademark rights. While various international treaties attempt to harmonize the overlapping rights among foreign countries, the current state of trademark law at an international level can be inhospitable to even the most famous brands. Companies and their in-house counsel who are seeking to maintain or gain their competitive international advantages are best advised to consider these complexities and options when planning to protect or enforce their trademarks.