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Having waited in the wings for years, by Christmas New Zealanders should be able to use the Madrid system to seek international registration of trade marks.  This is a great step forward, making it much easier to protect New Zealand's intellectual property.

It will also be much easier for overseas applicants to extend their trade mark protection here, making the risk of infringement and potential loss of rights far more likely for those who are lax in looking after their intellectual property. 

It's time to check the health of your trade mark protection, both nationally and internationally. 

What is the Madrid system?

The Madrid system offers a simpler and more cost-effective means of securing worldwide protection for brands.

Organisations will now be able to file one trade mark application and pay one set of filing fees. 

Renewals, assignments, changes of address/names and other trade mark matters for International Registrations can all be dealt with easily under the Madrid system. 

The Madrid system does not, however, supplant local trade mark laws.  Nor will it circumvent local requirements, such as the need in the US to show use of a trade mark before registration will be granted. 

Like any system, there are traps for the unwary and it will not always be best suited for your individual requirements.

The New Zealand government adopted the Madrid Protocol in 2011, but the regulations needed to allow New Zealanders to use the system are not expected to be in place until September this year.  The Intellectual Property Office of New Zealand (IPONZ) should be ready to process international applications using the Madrid system by Christmas. 

How will it work?

An application for International Registration can be filed in the name of a legal entity or by a natural person.  However, the applicant must:

  • Be a New Zealand national, or otherwise be domiciled in New Zealand, or have what is referred to as 'a real and effective industrial or commercial establishment' in New Zealand
  • Have a New Zealand application or registration for its trade mark, covering the relevant goods and services.  This is commonly referred to as the 'Basic Application' or 'Basic Registration', and
  • Select one or more member countries in your application for International Registration (other than New Zealand).  The standard rules regarding trade mark priority apply, so where possible it's advisable to file an international application within six months of a Basic Application. 

The Madrid system will not automatically be a good fit for you, particularly if you work for an international organisation in which different companies within the group are to own the trade marks overseas.  Consult an IP law specialist to help you carefully assess the above requirements. 

Ensuring you end up with the protection you need also requires some expertise.  Your international application is still filed via IPONZ, which will certify it and forward it on to the World Intellectual Property Organization (WIPO) for examination.  WIPO then checks the application for compliance with formalities, fees, and classification of goods and services.  Any irregularities raised are most likely to relate to the goods and services covered by your application or their classification. 

The way in which you have described your goods and services may seem mundane, these goods' descriptions will determine the scope of protection for your trade mark.  Answering objections based on goods and services can be costly, so care must be taken to ensure:

  • The goods and services covered by your international application fall within the scope of your Basic Application or Basic Registration.  If not, you may need to file an additional application in New Zealand before filing your international application
  • The classification of your goods and services are checked using WIPO's online classification services, as well as those provided by the US Patents and Trade Marks Office, and the Office of Harmonisation for the Internal Market in Europe, and
  • Whether a more refined description of your goods and services is required for certain selected countries, such as the US and China who usually only accept narrow descriptions.

Once the formalities are done with, your application is published in an International Gazette and a 'Certificate of Registration' is issued.  This use of the term is unfortunate, as it contributes to the misconception that the Madrid system allows you to avoid the cost and delay of prosecuting your trade mark in each individual country; this is not the case.  An International Registration is neither governed by a single body of law, nor effective in any local jurisdiction. To have any teeth, your application must still pass national examination in each of your selected countries. 

National examination

Each country designated in your application will examine the application to ensure compliance with their trade mark law.  Each country can refuse to grant protection of your mark without impacting grants of protection by other selected countries.

Generally, the grounds of refusal are based on:

  • Objections your mark is not distinctive, is generic, laudatory or descriptive of your goods and services
  • The mark is misleading, contrary to public order or honest practices
  • The goods and services specified in your international application breach local requirements, and
  • Your mark is same or confusingly similar to an earlier mark.

You should have appropriate clearance searches carried out by an IP law specialist in each particular country before seeking to protect your trade mark overseas.  You should also budget for costs associated with the prosecution of your mark through to registration in each particular country. 

This stage of examination doesn't involve WIPO.  If a refusal is issued in respect of a particular country, local representation will need to be appointed to respond to the refusal.

Watch out

As with any system, the Madrid system has its downsides.  These include:

  • Central attack:  Your International Registration is dependent on your basic mark for a period of five years from the date of International Registration.  If your basic mark ceases to exist, either from being challenged by a third party or failing to proceed to registration, your International Registration will collapse. All is not lost, however, there's provision to transform all or part of your rights into a national application or registration, provided you do so within three months from the cancellation date of the International Registration
  • Ownership:  The dependency on the basic mark means your International Registration has a five-year period of vulnerability; this vulnerability is independent of any changes of ownership.  Given this, any assignments or sale agreements involving the basic mark within this five-year period must include appropriate warranties so that the action or inaction of the new owner doesn't jeopardise the International Registration
  • Non-use:  Once the five-year period of vulnerability has expired, you still need to ensure you make consistent and appropriate use of your mark in each designated country.  Otherwise, you could find your rights in a particular country challenged on the basis of non-use, and
  • Subsequent designation:  You can add other countries to your International Registration at a later date.  This is a great advantage if your markets of interest suddenly expand.  However, unless filed within six months of your Basic Application, any additions will be accorded a separate filing date.  The 10-year lifespan of your registration will also continue to run from the date you filed the original application. Once this 10 years is up, renewal fees will be payable for all countries - including those late additions.

The introduction of the Madrid system in New Zealand reflects the international nature of today's commercial environment.  It's not appropriate for all businesses, but its implications domestically and internationally need to be acknowledged. 

The Madrid system can open the door to worldwide protection, yet it is still not the 'golden ticket' some wish it was. 

Competition in New Zealand's brand space is likely to heat up as more overseas trade mark owners use the Madrid system choose to protect their marks in New Zealand.  Smart IP strategies will be crucial.

This article first appeared in the 2012 winter edition of  FinePrint

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