After many years of consideration, New Zealand has adopted the Madrid Protocol, simplifying the process of protecting trade marks internationally.

On 8 September 2011, Parliament passed the Trade Marks Amendment Act, adopting the Madrid Protocol (as well as changing the criminal enforcement provisions of the Trade Marks Act 2002 and Copyright Act 1994, discussed in our accompanying article, and making other changes to trade mark law summarised in our earlier article of February 2009). The Intellectual Property Office is currently drafting regulations to implement the Protocol, a process that is expected to take several months to complete. As trade mark owners wait for IPONZ to issue the necessary regulations, it may be worthwhile to briefly review some of the issues to consider when deciding whether or not to use the Madrid Protocol.

New Zealand's long-awaited implementation of the Madrid Protocol is intended to significantly simplify the process of protecting trade marks internationally. It offers New Zealand companies the potential to cost-effectively register their marks overseas as they expand into international markets, and makes it easier for foreign companies to register their marks in New Zealand.

Using the Madrid process is not mandatory. Trade mark owners must evaluate its advantages and potential disadvantages on a case-by-case basis to determine whether a Madrid application is the most effective way to protect a particular mark in specific international markets.

The Protocol does not attempt to harmonise substantive trade mark law among the 85 different jurisdictions in which it has been adopted. Instead, the Protocol provides a streamlined process to apply to register a mark in some or all of its members. For example, once a New Zealand trade mark owner establishes a "home country" registration or application for a mark with IPONZ, the owner can submit a single application to register that trade mark in Australia, China, Japan, the European Union, the US and any other member of the Madrid Protocol.

After the initial Madrid application is submitted to IPONZ, it is forwarded via the World Intellectual Property Organization (WIPO) to the local trade mark registry in each country covered by the application. Each registry will separately review the application under local substantive law, and will publish the application for opposition. A successful application will receive a single international registration, which WIPO prefers to characterise as a "bundle of national registrations" from each country that accepts the application.

Advantages vs Disadvantages

This unified system has many advantages. The trade mark owner can submit a single, multi-country application to IPONZ in the English language for a single payment in New Zealand dollars, avoiding the burden and expense of retaining local agents or counsel to submit separate applications in each jurisdiction. Once issued, registrations of the same mark in different countries share the same renewal date, simplifying the renewal process. Assigning ownership, changing the name or address of a registrant and other administrative activities can be done by submitting a single notice and paying a single fee covering all jurisdictions. Each of these present the opportunity for cost savings and more efficient administration of worldwide trade mark portfolios.

These advantages must be weighed against the potential disadvantages of using the Madrid system. Some of the issues trade mark owners will need to consider include:

  • As discussed in our earlier articles of February 2009 and June 2010, the possibility of a "central attack" on the home country registration represents one of the most significant risks of using a Madrid application. If the home country registration or application is cancelled, withdrawn or not renewed during the first five years, every international registration based on that home country registration or application automatically becomes invalid.
  • A Madrid application does not necessarily eliminate the need to retain local counsel. If issues arise during a local examiner's review of an application, or if third parties oppose registration in a particular jurisdiction, local counsel will be required.
  • Registrations issued under the Madrid Protocol can only be assigned to a person or company located within countries using the Madrid Protocol, preventing assignments to companies from countries who are not Madrid members, such as Canada. On the other hand, now that New Zealand has joined the Madrid Protocol, foreign trade mark owners will now be able to assign Madrid registrations to New Zealand companies and individuals.
  • The specification of goods and services in a Madrid application cannot be broader than the goods and services in the home country application or registration. Foreign applications relying on a New Zealand home country registration will be limited to the goods and services accepted by IPONZ. As a result, using the Madrid Protocol may cause New Zealand trade mark owners to miss out on the wider scope of protection available in countries with more lenient registration practices than those followed by IPONZ.

The Protocol will require several months to be fully implemented in New Zealand, and trade mark owners will require additional time to adapt to the procedures of the Madrid system. However, the experiences of other countries who have joined the Madrid Protocol indicate that it will have a significant effect on the management of multi-national trade mark portfolios belonging to Kiwi companies and to foreign companies doing business in New Zealand.