Making a mark in global markets

Trademarks are an integral part of any shopping experience. They not only attract, lure and seduce us, but also act as a quick and reliable guide to the quality of a particular product or service. A world without marks is hard to imagine. How could we, as consumers, otherwise be sure of the origin of the products and services we purchase? How would companies build up their reputation in the market and instill consumer confidence and trust in, and loyalty for, their goods and services?

Trademarks underpin brands, which are now widely recognized as key factors in creating business value. Strong brands command customer loyalty and premium prices and contribute to healthy profit margins and growth, enabling companies to distinguish themselves and their products and services from those of their competitors. Successful brands underpinned by trademark protection are a key to a company’s sustained financial viability.

Often the most valuable commercial asset of a business, marks frequently command market values far exceeding the value of a company’s physical assets. Take Coca Cola for example. Its physical assets are valued at an estimated US$20 billion, while its brand value is an estimated US$70 billion, according to the Interbrand Consultancy. The way a company develops and manages its marks is a key determinant of commercial success.

In the face of rising levels of trade in counterfeit goods, tough market conditions and slow economic growth, it is critically important that companies defend their products. A necessary first step is to secure the legal right to prevent a third party from using a trademark for their own business purposes. Trademark registration establishes an official record of a trademark owner’s rights to a particular mark. Businesses need to be able to secure and manage their trademarks cost-effectively and easily.

WIPO’s Madrid System for the International Registration of Marks – the Madrid system - offers a low-cost and smart business solution for any company seeking to protect and manage its marks in international markets. What do companies such as the multinational food company, Nestlé, tech giants Google and Apple, and small and medium-sized enterprises (SMEs) such as Austrian eco company Grüne Erde have in common? They each have recognized the advantages of registering their trademarks under the Madrid system. Interestingly, some 80 percent of the users of the system are SMEs holding one or two marks.

In its 120-year history the Madrid system has constantly expanded and evolved in tandem with the changing commercial landscape. Since its establishment in 1891, it has helped businesses establish over a million trademarks worldwide. A brief scan of the International Register reveals a colorful array of iconic trademarks from Disney characters (Bambi, Mickey Mouse, Pluto and Pinocchio, etc.) to Lego (toys), Rolex (watches), Renault (cars), Miele (consumer goods) and even British Airways. The first international trademark was registered in 1893 by Swiss chocolate-maker Russ-Suchard & Company. That same year, the Swiss watchmaker Longines registered what is the oldest international trademark registration still in effect (as a result of multiple renewals).

In the 15 years since the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, one of the two treaties governing the system, became operational on April 1, 1996, the system’s membership has expanded from 49 to 85 contracting parties. The Protocol introduced greater flexibility to the system, enhancing its attractiveness as an option for companies to register their domestic trademarks abroad. Today, it is dynamic and expanding.

At present, the Madrid system has 85 members. These include major economies like China, the USA, Japan, the Russian Federation, the European Union (EU), Turkey and the Nordic countries. “Global IP systems are an essential element of the global economy,” said WIPO Director General Francis Gurry in a recent interview. “We are seeing an increasing interest in the Madrid system, and I am very confident that it will expand from its current membership of 85 to well over 100 in the next three or four years.”

On-going discussions with members and experts at WIPO are focusing on how to further refine the system so that it continues to meet the needs of established users and attract emerging companies seeking to operate in international markets.

In a highly competitive marketplace, a company’s fortunes will depend in large part on its ability to break into established markets and to create new markets for its existing and new product ranges. It makes little sense – unless there is no alternative - for a company to add to its advertising and packaging costs by trading the same products under different trademarks in different countries.

The Madrid system is a “one stop shop” for the registration and renewal of trademarks. Not only does it streamline the process of registering and renewing trademarks internationally, it also offers valuable business information about the legal status of trademarks held by competitors.

How does the Madrid system work?

In possession of a national trademark application or registration – a so-called “basic” application or registration - an applicant can file a single international application, in one language (English, French or Spanish), and pay fees in one currency (Swiss francs). The applicant ends up with one international registration covering a number of countries with just one renewal date to monitor. This cuts the administrative work involved and saves trademark owners time and money.

Once the trademark office of the territory concerned – the “office of origin”- certifies and forwards the application for international trademark registration to WIPO, it is checked to ensure it complies with formal requirements and the mark is recorded in the International Register and published online in the WIPO Gazette of International Marks. Protection begins from the date of the international registration¹. WIPO then notifies the trademark offices of all countries (or regions) designated in the international application which confirm or reject the international registration within a prescribed period of 12 or 18 + months. If a refusal has not been received within the applicable period, the applicant can legally assume that the trademark is protected in that country. As of January 1, 2011, offices designated in an international application are required to issue a statement of grant of protection once an application has been examined. This gives trademark holders timely and positive information about the status of their mark. The rights in a registered mark may be maintained indefinitely by paying a prescribed fee every 10 years.

As companies expand into new markets - beyond those in which their trademark is protected - they can extend territorial protection of their internationally registered trademarks to other contracting parties in a single, affordable step. This does not change the fact that there is still just one international registration number and one renewal date to manage. As new countries join the system, these too can be added to an international registration. Subsequent amendments to a trademark registration - changes in company name or address or ownership - may also be easily and inexpensively recorded.

The Madrid system increases predictability and its flexibility makes it easier for companies to protect their trademarks abroad.

Supporting applicants

WIPO offers a range of useful online tools and services which support trademark owners in registering and managing their marks and which are also a rich source of useful business information. Available online at www.wipo.int/madrid/en/ and free of charge, they include:

• an international application simulator;
• a fee calculator (applicants from least developed countries benefit from a 90 percent reduction in the basic fee);
• The WIPO Gazette of International Marks (online);
• The ROMARIN database containing information on all international marks recorded in the International Register and currently in force or that have expired in the past six months. It also includes data on international applications and subsequent designations currently being processed by WIPO;
• Country fact sheets on national/regional IP office procedures;
• Online payment for selected transactions and renewal of international registrations;
• Madrid Goods and Services (G&S) Manager – a new online tool to help trademark applicants compile the list of goods and services that must be submitted when filing an international application;
• The Madrid Portfolio Manager, a web-based tool designed to enable trademark holders and their attorneys to access and manage their trademark portfolio directly is being tested;
• The Madrid Electronic Alerts System is also under development. Once operational, companies will be able to keep track of the activities of competitors and to identify future trends through a system of e-mail alerts which inform users about changes in international registration as and when they occur.

Trademarks drive business development and can significantly enhance company value. These valuable business identifiers also support economic growth and international trade by enabling companies to gain access to new markets, develop their export potential and help create a more favorable climate for foreign investment in home markets. They are also an essential tool in combating illegal counterfeit products. Companies seeking to protect these important business assets abroad want to be able to do so quickly, efficiently and cost-effectively. WIPO’s Madrid system is a smart business solution for all companies seeking to license or otherwise commercialize their products in overseas markets.

CJ

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1  This will be, in principle, the same as the date on which the international application was received by the office of origin.