The Madrid Protocol offers a simple route to international trademark registration. Seventy-eight countries including New Zealand have approved the Protocol, which allows businesses to file a single international trademark application and designate multiple countries to pursue it based on an application in their home country.
AJ Park senior associate Jonathan Aumonier-Ward tells us what it might mean for New Zealand companies thinking about protecting their trademark overseas.
What kind of effect does the Protocol have on New Zealand companies that own trademarks, in terms of registering for and protecting those trademarks overseas?
We expect there may be an increase in the number of foreign companies registering their trademarks here, because the marginal cost of ‘adding’ New Zealand to their filing program will be significantly reduced under the Madrid Protocol.
In the past some foreign companies may have chosen not to file here because of the relatively small size of our market and the accompanying costs of filing here. Now, with the reduced costs, those companies might decide to file here. This could mean that, over time, the New Zealand trademark register becomes more ‘cluttered’, particularly with foreign-owned trademarks that are not yet being used here. This may mean New Zealand companies take increased risks if they adopt a new trademark without searching them first.
On the other hand, it’ll become significantly cheaper for local companies to expand their IP protection overseas. There will often be no need to appoint local representatives in each country. Companies will be better placed to establish their legal rights overseas earlier, perhaps avoiding unfortunate situations where New Zealand-owned companies have previously not filed overseas because of low cash flow, and have had to deal with serious problems downstream when other companies had come into their foreign market with a similar or even identical trademark.
Are there any risks involved?
Your international registration can be removed via a challenge to your home trademark for the first five years after registration. That means if you lose your home trademark in the first five years, then you also lose your international registration.
This could be a bit more of an issue for New Zealand applicants. Currently trademarks here can be removed after only three years if they are not being used. Many overseas jurisdictions – such as the UK – have a five-year non-use period.
But it’s not as bad as it sounds, because you can convert your international registration into a bunch of national applications in response to this. There will be costs for doing so, but it is expected that those costs would be less than having filed them as separate national applications in the first place.
Does it present any unique considerations for companies seeking help from IP firms?
The Madrid Protocol provides an excellent opportunity for New Zealand businesses (particularly exporters) to get significant cost savings when protecting their IP overseas. It won’t be the right option for everyone, but it is something your IP advisers should be discussing with you. This is particularly the case for New Zealand companies wanting to go into multiple foreign markets. The more markets you want to go into, the more significant the cost savings.
Some have suggested the best response is to file potential trademarks in New Zealand now to avoid a coming ‘land grab’. What are your thoughts?
I think these kinds of comments are simply scaremongering designed to generate more work for IP lawyers. We’ve seen this kind of thing with domain names where new top level domains come onto the market, such as .name and .info. Businesses should instead get advice from an IP lawyer and then make a conscious and strategic decision about what to spend their cash on.
I always advise clients to think carefully about how to protect their trademarks. I make sure our clients know the real value and costs of doing so. It is important to extract maximum value from decision about IP. For many SMEs (with tight cash flow), the priority is (rightly) going to be paying staff salaries first!
However, the Madrid Protocol makes it significantly cheaper to protect trade marks overseas, so New Zealand companies should think seriously about whether this is now a good time to nail down their IP protection in key overseas markets.
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