Brand Protection In The EU: Why, With Brexit, Brand Owners Are Starting To Look More To Madrid Than To Alicante

The announcement in October 2017 by the World Intellectual Property Organisation (WIPO) that the International Trade Mark system (usually referred to as the Madrid Protocol) has passed the 100 country-member mark is good news for brand owners. With Indonesia joining in January 2018, this means that three quarters of the 20-strong members of the G20 Group of leading industrialised countries will now be part of the system. Already, most of the world’s major economies are members of The Madrid Protocol, including the United States, China, India, Japan, and Russia.

By using the Madrid Protocol, a brand owner can make a single application in one language using one set of filing fees to protect its brand in one or more of these 100 countries or territories. To apply, you need to have made a trade mark filing in your base country. You can then file your International trade mark application before your base country’s Trademarks Office which will check details before transmitting it to WIPO in Geneva which in turn will transmit it to the Trademarks Office of each of your chosen countries or territories for full examination under their own national laws.

Advantages of using the Madrid Protocol System

The key advantages of using the International Trade Mark system are the potentially large cost savings. Instead of filing a separate application in each chosen country, which usually means retaining a local a lawyer or attorney, you can usually save thousands of pounds by using the Madrid Protocol system.  There is just one renewal fee to be paid every ten years before WIPO. Moreover, if you make changes to your International Trade Mark, such as a change of owner, or change of name or address, this can be done centrally before WIPO without the need to apply to record the change before each individual Trademarks Office.

What does the heading above mean then, when it says that brand owners for the EU market are starting to look more to ‘Madrid’ than to ‘Alicante’ following the Brexit decision?

Since the decision of the UK to leave the European Union, many brand owners are looking to the advantages of the Madrid Protocol system over the European Union Trade Mark (EUTM) which is administered by the EUIPO with its seat in Alicante. This is particularly the case for UK brand owners as well as brand owners for whom the UK is its most important market within the EU.

Since its launch in 1996, the EUTM (or Community Trade Mark – ‘CTM’ – as it was known until 2016) has been hugely successful, with brand owners seeking protection of their trade marks in the EU. A key feature of the EUTM is that by means of a single filing before the EUIPO in Alicante, it is possible to protect your trade mark across the entire EU territory, currently comprising 28 member states (at least until Brexit happens in March 2019 when that figure will fall back to 27).

However, while the EUTM enjoys protection across the EU, it is also the case that, after it has been registered for 5 years, it is enforceable only to the extent that it has been put to genuine use in the EU. Recent court decisions have cast serious doubt as to whether use of an EUTM in just one EU state is sufficient for that purpose.

This poses a potentially serious problem for UK traders or brand owners for whom the UK makes up all or most of their business in the EU market. After Brexit, EUTM holders may no longer be able to rely on their UK trade in showing genuine use of their EUTM (especially in the long term, after any Brexit transitional provisions have expired).

Why Applying for an EUTM Via Madrid System Avoids Problems

In contrast, for brand owners using the Madrid Protocol system to protect their brand for the EU market, such potentially serious problems can be avoided. Even though the International Trade Mark system, like the EUIPO, requires just a single filing, the resulting trade mark protection remains on a country-by-country basis. It follows that the genuine use requirements for a registered trade mark under the Madrid Protocol are decided on a country-by-country basis.

In practical terms, this means that a brand owner who has chosen the Madrid Protocol system instead of the EUTM to protect his brand for the EU market, need not have any of the concerns about the potentially-serious impact of Brexit on the enforceability of EUTMs, at least to the extent that such brand owner is using its trade mark in the selected countries.

Indeed, recent statistics from the UK Trademarks Office (UKIPO) suggest that, in light of Brexit, many brand owners are likely to choose the Madrid Protocol system rather than the EUTM in order to secure protection of their brands within the EU market. In future, more and more brand owners are likely to look to Madrid rather than Alicante, at least when it comes to brand protection for the EU market.

Here at Azrights, we advise the full range of businesses and entrepreneurs about brand strategy, including how best to secure trade mark protection in light of the impact of Brexit. Please contact us if you want to know more about securing protection of your branding assets.

Kieran Heneghan and Shireen Smith

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