An IP strategy that is fit for the future also needs to take into account common challenges and pitfalls in the IP registration, enforcement and monetisation processes. This article will cover some of the most common traps when implementing your trademark management strategy and processes, and provide tips on how to avoid or resolve them.
Please see previous articles in our series on IP management best practices for advice on setting the right IP strategy, identifying the best model for IP management (‘outsourced, in-house or hybrid?’) and assigning value to trademark assets.
Tip 1: For international applications, choose your basic country carefully
Companies that operate globally should consider the following:
- Using a Madrid Agreement country can help reduce official feesWhen starting your procedure with a national basic application in one of the countries which joined the Madrid System at the time of the Agreement (1st wave of countries) rather than the Protocol (2nd wave of countries), the official fees will, for some of the designated countries, be lower (as no individual tax is applied). This is particularly relevant for filing campaigns that have a broad material and geographical scope (classes/countries).
- Filing your basic application in a more ‘discreet’ or ‘easy’ country of origin can help to keep a filing project/campaign confidentialShould your competitors watch your new applications in your home country carefully, protecting a confidential project before it is ready to be made public can be tricky. Using a different country of origin, especially for global companies with several entities throughout the world, can help maintain confidentiality until you wish to disclose your new product or brand.
- Choosing a basic country where examination on absolute/relative grounds is more/less strict can be a tool in your protection strategy. Examples of interesting points to consider here are:
- Some countries have a tougher view on absolute grounds of refusal; obtaining a guarantee that your ‘weak’ mark is registrable in the country of origin where a strict approach is adopted can reduce the budget and time involved in managing refusals afterwards;
- On the other hand, if you wish to delay resources needed to address refusals (for example, if you’re waiting to obtain a second round of financing or need to delay spending), you may want to start your registration process in a less strict country of origin. In those territories, your basic application should easily proceed through registration, including for International Registrations. Refusals would then come from the designated countries over the next 12-18 months.
- Some countries do not conduct an examination on relative grounds; this may also be a good criteria when choosing your country of origin.
- Another common trap in international registrations relates to unanticipated costs linked to refusals. To overcome this:
- Plan approximately 50% of filing budget for addressing refusals in years two and three;
- Expect that an International Registration starting from an European country will very likely trigger refusals over the description of goods and services in the major designated countries, such as the US, South Korea, Japan and China. While there is a possibility to adapt these descriptions for each designated country before receiving a refusal, it is our experience that it is a better use of resources to wait until the refusal is known to its full extent. In other words, a more efficient solution is to reduce spending prior to the refusal, but to plan an appropriate budget to address refusals.
Tip 2: For US registrations, applicants will need to be able to show use in commerce
Applicants can pre-empt a number of the common traps involved in the US registration process by ensuring that the following are in order in advance of their applications being filed:
- Product alignment before filing: ensure with product development that the brand is actually ready to enter the US market or determine the target date;
- Determine basis (foreign registration, intent of use, use in commerce): a limited number of choices is open to applicants when filing an US application. The choice will depend on your strategy when approaching the US market and whether the brand is mainly filed for defensive or offensive reasons. Your IP counsel will help you in making the right choice;
- Specify the list of goods and services precisely as the USPTO allows and requires precision in the specifications in a way not used by any other country in the world;
- Collect use samples as these will have to be filed with the USPTO at some time during the registration procedure, depending on the basis you have chosen (see above);
- Budget according to US procedure, as there are several opportunities for incurring costs: two potential refusal rounds, submission of use samples, allowance and publication, all requiring assistance of a US attorney.
Tip 3: Plan properly for transliterations (China, Japan, Korea, Cyrillic characters)
Common traps for protecting marks in countries where a different script is used include both the likelihood of insufficient legal coverage in the local market if you cover your marks only in Latin characters, and the challenge identifying and fighting pirates registering local nicknames for the brand. To avoid and resolve these issues:
- Evaluate business needs and practices for each specific product/service;
- Understand how customers perceive your mark (including nicknames and phonetic versions) in those markets (as an example, see the Michael Jordan/Qiordan dispute);
- Work closely with marketing and communications department to determine needs and effective use in order to ensure that your mark is still valid after the grace period;
- Work with local distributors/representatives on transliteration(s);
- Register several variations for defensive purposes.
In the articles to follow, we will offer further advice on overcoming the potential traps involved in acquiring and protecting trademark rights in China, as well as in the EU/Europe, especially in light of Brexit.