With 128 member countries and counting, the Madrid System is a shining example of intellectual property (IP) harmonization. Tom Phillips spoke to attorneys working in its newest member states about what joining means to them.
Originally conceived in 1891 to offer a single and inexpensive international trademark registration across multiple countries, the modern-day Madrid System for the International Registration of Marks has come a long way.
It was not until the adoption of the Madrid Protocol more than 100 years later, that a true IP success story was born. In 1988, there were only 25 members. A year later, the Protocol was adopted, adding more flexibility for users and national IP offices. And after it came into operation in 1996, membership rocketed.
Now, users can pay one set of fees and register, manage, and protect a trademark in two-thirds of the world. From Afghanistan to Zimbabwe, the 112 current members of the Madrid Union (contracting parties to the Madrid Protocol), covering 128 countries, have enjoyed the System’s benefits, with the newest recruit as of April 2022 being the Republic of Cabo Verde, an archipelago in the Atlantic Ocean off Africa.
The reduced costs, simplicity, accessibility (applications can be made in English, French, or Spanish), plus an easy renewal process, have proven popular with rights holders and the System now contains over 1.3 million marks.
Its success is built upon its “solid design back in 1891,” and its promise to make international trademark filing and management cheaper and easier “has withstood the test of time,” said David Muls, senior director, Madrid Registry, World Intellectual Property Organization (WIPO) (Switzerland).
Also important is the impact of the Madrid Protocol, he noted. The Madrid Protocol took the System global while cementing its value in the European Union by allowing a European Community Trademark (CTM) (1996) registration to be used as a “home” registration, upon which a Madrid System registration could be established.
“The Protocol was designed to make the System appealing to all countries in the world and that has been a big success,” Mr. Muls said.
Benefits of the System
In the past four years, Brazil, Canada, Malaysia, Samoa, Trinidad and Tobago, Jamaica and the United Arab Emirates are among 10 countries that have adopted the Protocol. Adoption has brought with it changes for trademark attorneys in those countries, as they manage a drop off in domestic filings and increases in foreign applicants and navigate its integration with national IP laws.
For lawyers in Brazil, adoption has driven much-needed updates to the country’s domestic IP regime. When Roberta Arantes, partner, Daniel Law (Brazil), started her legal career in the early 2000s, a trademark application could take five years to be issued and an appeal ten years to be decided. Following Brazil’s ratification of the Protocol in 2019, an application can now be issued in eight months.
“Brazil entering the System was really a catalyst for bringing more business to the country,” said Ms. Arantes. “We have applicants filing from all over the world.”
Ms. Arantes said it also prompted the Brazilian National Institute of Industrial Property (INPI) to make a “huge effort” to expedite decisions, review its internal proceedings, and reduce red tape to be more responsive.
In Canada, Philip Lapin, partner, Smart & Biggar (Canada), said that, like many of the smaller Madrid Union countries, national filings “dropped precipitously” when Canada joined in June 2019.
“Total filings have now gone back to where they were two years ago,” he confirmed. “One of the hopes of Madrid was there’ll be more total filings in Canada, because it is easier to file through Madrid, than to file nationally. That has been the case.”
A similar thing happened in Malaysia, reported Hardeep Singh, manager of Trademarks, Designs and Franchising Division, KASS International (Malaysia).
He said Madrid applications have largely replaced direct foreign filings, due in part to foreign applicants filing via Madrid in their home country without seeking Malaysian IP counsel. Many local applicants are now utilizing the Madrid Protocol to file their local trademarks in jurisdiction overseas. And larger companies are also using the System to register secondary trademarks, something they did not often do pre-accession, he added.
Mr. Singh noted that his firm has helped many local businesses expand their brand outside Malaysia. “In the past, due to budget constraints and other reasons, this was not possible,” he said.
Jonathan Aumonier-Ward, principal, AJ Park (New Zealand), said joining Madrid has been positive for Samoa. “Many rights holders used to skip Samoa before it was part of the Madrid System. And now, likely due to cost savings, it is firmly on the radar for filings,” he said.
Mr. Aumonier-Ward believes Samoa has seen a drop in national filings since it joined three years ago. This has coincided with a “dramatic uptake” in IP rights via Madrid designations—“which is great,” he said.
“But for local attorneys, objections by the local examiner are rare, meaning the fees that the [attorneys] lost due to not filing as many national applications may not have been completely made up with the additional work from Madrid designations, since the vast bulk of those are going straight through to registration.”
Bumps in the Road
Implementation of the Madrid System does not always run smoothly, as Mr. Lapin can testify.
When Canada ratified, examination delays at the Canadian Intellectual Property Office led to a gap in work as attorneys, who were experiencing a drop in domestic filings, waited for the Madrid applications to be processed.
Mr. Lapin said most clients were receiving Provisional Refusals or Approval Notices about 17 months after filing (the Madrid System requires national offices to complete initial examination within 18 months), but once the applications had been processed, the phone started to ring again.
In Brazil, Ms. Arantes noted a different approach by INPI toward Madrid filings compared to local filings.
In practice, this “imbalance in the application of the law” means issues such as the duality of marks—where a titleholder owns the same registration for the same mark in the same class for an identical product, prohibited in Brazilian law—are not being applied to Madrid filings, said Ms. Arantes.
Madrid applications are also processed faster than Brazilian marks, plus some multiclass filings filed under Madrid are more successful.
“There are differences between the prosecution of local and international filings. This is our most sensitive area: the subjective criteria toward the registration of marks that can cause some sort of imbalance in the decisions,” she explained.
Also, Brazilian law requires a local attorney to be engaged in the proceedings, but this is not being rigidly applied and could be raised later in a dispute as grounds to nullify a registration.
Ms. Arantes added: “Brazil law is behind the current Madrid proceedings, so changing the law would have been necessary prior to adopting Madrid, but this didn’t happen.”
Debbie Roenning, WIPO’s director, Madrid Legal Division (Switzerland), has worked closely with INPI on its implementation. She believes that any problems will be ironed out over time “as the regulatory framework, agents, and representatives adapt to how the system works.”
Mr. Muls said while all countries must be properly prepared before they can join, WIPO has to be flexible to “recognize the diversity” of different IP regimes.
“We understand that in certain cases things may not always be perfect from the get-go for the user. We monitor any lingering problems and try to settle them over time in cooperation with the local authorities,” he explained. “It’s a process of bringing the countries in and then having a phase of stabilization.”
System Relies on Critical Mass
The System relies upon a critical mass of acceptance among countries within a region, to the point where joining is too compelling to ignore.
This is playing out in Trinidad and Tobago. Brien A. de Gannes, partner, J.D. Sellier & Co (Trinidad and Tobago), said like in other jurisdictions, there was a “tremendous” decrease in overall filings after the country’s January 2021 adoption. He estimates the System now accounts for 20 percent of its trademark applications.
Uptake among locals has not been high, which he links to low adoption of the Protocol by Caribbean Community (CARICOM) states.
According to Mr. de Gannes, local rights holders “have not benefited” as the vast majority are only interested in filing in CARICOM countries, and no other CARICOM territory except Antigua and Barbuda, Cuba, and, most recently, Jamaica, are members.
But Ms. Roenning said CARICOM may soon be reaching the “tipping point,” with a possible accession by Belize this year and conversations with Saint Vincent and the Grenadines, which she said is “taking the first steps” to join.
In Trinidad and Tobago, Fanta Punch, partner, M. Hamel-Smith & Co. (Trinidad and Tobago) said it may be too early to assess the impact of the Caribbean’s country’s accession.
“Where brand owners choose to use the international registration route more and more, there will be a knock-on effect on the flow of work for local trademark attorneys for registration work,” she said. “In a small jurisdiction like this, local trademark attorneys are vulnerable to brand owners choosing to use an international registration system instead of local filings.”
Mr. Aumonier-Ward called Samoa’s adoption a “Pacific Island success story,” but he flagged a potential issue over whether the country’s trademark registry could keep up with the increased demands on examination and maintenance.
“There will undoubtably be a lot of learning that needs to go on now that it is dealing with both national and Madrid rights,” he cautioned.
Mr. Muls said WIPO’s success in adding countries to the System now has to be matched by increasing use among new members, especially among small- and medium-sized enterprises.
“We need to bring the level of awareness and understanding in those countries up to the same level as any other country, so that the trademark owners and their agents and representatives can make the rational and optimal choice, of whether they want to use Madrid or go direct,” said Mr. Muls.
He added: “We will soon be shifting our focus from accessions to use in the new countries.”
Interview published on INTA Daily News.