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Madrid Protocol is good news – ignore the naysayers

Despite what naysayers might suggest, recent legislation that prepares the way for New Zealand to accede to the Madrid Protocol is good news.

Paul DaviesAround 60 countries have agreed to the Madrid Protocol, which allows businesses to file a single international trademark application and designate multiple countries to pursue it in based on an application in their home country. This condenses into a single step the burden of filing applications in many countries. However, each country is still responsible for examining, registering and enforcing the trademark in their own territory so those national costs remain.

Parliament ratified our ability to accede to the Protocol under the Trade Marks (International Treaties and Enforcement) Amendment Act 2011. This is good news for New Zealand exporters who want to utilise their trademarks in a significant number of signatory countries because it will:

• reduce compliance costs (especially filing costs) for seeking trademark protection in many countries
• reduce filing costs
• enable some administration to be consolidated (e.g. changing the trademark owner’s name can be handled centrally).

I know of several New Zealand businesses that previously opted to file trademark applications through an off-shore parent located in a country that is signatory to the Protocol to save themselves time, cost and hassle. The new legislation makes life easier for such exporters to file in multiple countries.

Over time it is likely that the Madrid Protocol will make it easier for overseas companies to file here. This means our economy will likely benefit from an increased number of filings by foreign companies of trademarks into New Zealand, many of which are likely to be filed in advance of launching new products and services that can then be purchased by Kiwi organisations and individuals.

There is, however, a minor risk associated with the Protocol. Traditionally many New Zealand businesses rely on a simple survey of local businesses and services – rather than checking the trademark register – to indicate whether a brand or trademark will be available for their future use. Searching the local marketplace does not detect trademarks that are registered but not currently in the market, and the Madrid Protocol increases the risks for local businesses who neglect to undertake a formal search of the New Zealand trademarks register.

Some commentators have suggested the best response is therefore to file potential trademarks in New Zealand now to avoid a coming “land grab”.

We suggest New Zealand businesses resist any attempts to be panicked into a blizzard of filing trademarks to beat the so-called rush. Apart from depleting your bank account, filing new trademarks won’t achieve anything more than could be done with some good old-fashioned searching of trademark registers.

In many respects it will be ‘business as usual’ under the Protocol. Matters of enforcement or conflict resolution between trademarks remain in New Zealand and the rights local businesses have gained through prior registration or local trademark usage are undiminished.

Despite negativity from some quarters, the development is good news – exporters can relax and enjoy the benefits. 

Paul Davies is director of intellectual property at EverEdge IP