Trademark Registration Protection for Global Expansion – How to Protect Trademarks Globally
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How to Protect Trademarks Globally
How to Protect Trademarks Globally and Maximize Company Goodwill and Asset Valuations.
This post summarizes how U.S. and global trademark rights are created and the importance of trademark registration for national and global brand expansion.
I. Introduction
U.S. brand owners should register their trademarks with the U.S. Patent and Trademark Office (“USPTO”) to receive the full protection of U.S. trademark laws. Otherwise, failure to do so may restrict future geographic expansion of branded products.
Furthermore, companies conducting international business should also seek trademark registration in countries where they conduct business because the majority of countries do not recognize trademark rights absent a country trademark registration, except under rare circumstances. Accordingly, even if companies have used their marks for many years globally without registration, the majority of countries will not recognize that use as creating any trademark rights.
Those issues may limit a company’s ability to expand nationally and internationally. Furthermore, those issues may present serious concerns during a sale of a company or company’s assets and may affect purchase price, since buyers expect sellers to adequately protect their intellectual property in countries within which they conduct business and are not eager to buy uncertainty.
II. How are Trademark Rights Created and How to Protect Trademarks Globally?
There are two primary ways in which trademark rights are created globally and they are as follows:
1. “First to file” principle: meaning whoever files a trademark application first, and secures trademark registration, is generally considered the trademark owner of the registered mark for the listed products in the majority of countries.
2. “First to use” principle: meaning whoever uses a mark first is typically considered the owner of the mark for the associated products (assuming there are no earlier-filed trademark applications). However, trademark rights are created only in the geographic regions within which the mark is actually used – leaving open other geographic regions for other parties to create rights in the same or confusingly similar mark, which may block both parties from freely expanding their brands nationally.
Accordingly, obtaining trademark registration in first to use countries is recommended for securing future geographic expansion rights, as well as for other valuable rights.
Therefore, brand owners must understand that their U.S., or home country, trademark rights and registrations typically do not provide any trademark rights in other countries, since trademark rights are country specific.
III. Global Trademark Registration and Strategy Considerations
Brand owners should prepare laser-focused filing strategies based upon core trademarks, core products and key countries and avoid the “reactive strategy.” A “reactive strategy” is one that responds to “emergencies” at the detriment of protecting the core marks and products, while exhausting the annual budget. Companies must also make difficult decisions regarding which of their trademarks and products to protect and where to protect them. They should also review their filing strategies periodically and modify them, as necessary.
Accordingly, trademarks should be prioritized based on “value,” which may include the following factors:
First tier: includes house marks and major product names used in all markets
Second tier: includes important product names used in all markets
Third tier: includes important names used in certain regions, and sub-brands
Fourth tier: includes slogans.
Core products should be identified and may be prioritized based upon their value to the company and company revenues.
As for country selection, companies should focus initially on top-tier countries, which may include where the:
- Majority of sales take place
- Key customers are located
- Distributors / licensees are located
- Manufacturing takes place
Clearance How to Protect Trademarks Globally
Once the marks, products and key countries have been identified, the next step is to conduct trademark clearance searches. The searches should assess the risks of infringing third party marks and whether any third party marks and/or registrations may block the use and registration of a trademark in selected countries.
Furthermore, the searches should reveal whether proposed marks are distinctive (i.e., they function as source identifiers) and whether there are any cultural and/or connotation issues that may require modification of marks.
IV. International Treaties and Laws
There are several key international treaties and laws that companies should consider when preparing trademark filing strategies. Those treaties include the Madrid Protocol, European Union Trademark system and Paris Convention for the Protection of Industrial Property.
Madrid Protocol
A Madrid Protocol application, also referred to as an International Trademark Application and ultimately an International Registration (or a/k/a an “IR”), is an international trademark application that is filed through the applicant’s home country trademark office. The USPTO is the home trademark office for most U.S. companies, which allows them to easily file trademark applications in multiple countries via one trademark application with the USPTO.
The USPTO reviews a Madrid Protocol application and, if it meets filing requirements, forwards it to the World Intellectual Property Organization (“WIPO”). The WIPO then reviews the application and, if it meets WIPO’s minimum filing requirements, forwards it to each of the designated country trademark offices.
Case Study
If a U.S. trademark owner designates the EU, India, Mexico and U.K. in a Madrid application, the WIPO essentially “files” those applications on behalf of the trademark owner in each of the designated country trademark offices. Just like anything else, however, the Madrid Protocol has advantages and disadvantages.
Advantages include:
1. Lower initial filing costs vs. national application filings – savings can exceed 40%!
2. May currently select up to 119 countries (80% of global trade) in one Madrid filing
3. May continue to designate additional countries in the same registration.
Disadvantages include:
* A Madrid filing and all designated country filings are dependent upon the underlying trademark filing(s) for the first five years of the IR. Therefore, if the underlying trademark filing(s) expire within that five-year period, all designated country filings would also fail.
Accordingly, for those reasons, companies should consider the practicality of using the Madrid Protocol strategy and not focus only on cost savings… no matter how enticing they may be…
European Union Trademark (EUTM)
The EUTM trademark registration covers all EU member countries in a single trademark application. Advantages include:
1. One application covers all EU member countries, one filing fee and one renewal fee
2. EUTM registration covering all EU member countries may be less expensive than filing 2 or 3 separate country applications
Disadvantages include:
* EUTM trademark registrations are either “good to all” EU member countries or “good to none.” Meaning if there are parties with prior rights in any EU member country and should a party successfully object to the EUTM filing, the EUTM filing would fail.
Paris Convention for the Protection of Industrial Property
The Paris Convention is an international treaty that allows trademark applicants a six-month priority period within which to file subsequent foreign trademark applications and receive the same priority filing date as listed in its first-filed application.
Therefore, companies should utilize this powerful tool when undertaking a global trademark filing strategy, which allows brand owners to spread out costs over the six-month priority period while maintaining the earliest possible priority filing date in key countries.
V. International Trademark Filing Strategies
Once brand owners identify their core marks and products, select the primary countries of interest, identify members of the Madrid Protocol and European Union, if EU countries are contemplated, as well as any other country pacts for filing strategy, they are ready to formalize their trademark application filing strategies.
As a next step, brand owners should undertake a cost estimate review for the selected countries. A filing strategy may consist of a one to three year (or more) “rolling” filing strategy depending upon budget and spread out the costs, including during the six-month priority period.
How should companies proceed with trademark protection? Should they use the Madrid Protocol? European Union trademark filing? Or national filings? Or possibly all three?
Companies should consider the risks of using the Madrid Protocol and EUTM filings, including the risks listed above, and prepare the filing strategy based upon those risks, practical business factors and budget.
VI. Closing
Brand owners that fail to implement a well-crafted and coherent global trademark strategy will likely find that they have failed to maximize brand protection, possess inadequate trademark protection for key brands and products in key markets, have not minimized business and infringement risks and consistently run over budget.
Contact Us for assistance with your U.S. and global trademark protection.
Music: Special thanks go out to Jelsonic and Jeremy Wray for the fabulous music contained in my podcasts titled “The Returning.”
- Music:“The Returning” by Jeremy Wray – Copyright Jelsonic (jelsonic.com)
- The music is licensed under creative commons attribution license available on the Free Music Archive
- The music contained in this podcast is only a portion of the original; to hear the full version click here