SHOULD INDIA JOIN MADRID PROTOCOL.

    By K.K. SHARMA
    Advocate and IPR Consultant

    WHAT IS IT ?

 Madrid System of International Registration of Trade Mark has 2 Components namely :

 1.  MADRID AGREEMENT      2. MADRID PROTOCOL

3. LANDMARKS ACHIEVED BY MADRID SYSTEM OF INTERNATIONAL    REGISTRATION OF TRADE MARKS.

4. ANALYSIS

 

 1.  MADRID AGREEMENT

The Madrid Agreement came into force in 1891 and it has simplified procedure for filing application for international registration of trademarks. In the absence of Madrid Agreement, the applicant who wanted to have registration of their trademarks in several countries was required to file separate applications in the respective national trademark registry offices, which was time consuming and expensive exercise. The applicant was required to pay attorney’s fees in all these countries, which was sometimes beyond the scope of a small company, and thus small sector companies with limited budget could not avail the facility of international registration of their trademarks.

The Madrid agreement allows anyone established or domiciled in any Madrid Agreement country, with the trademark registration in his or her country of domicile, to file one international application for registration of the trademark that can be extended to one or more Madrid Agreement countries. The central international application is filed with WIPO in GENEVA, designating to which countries it is to be extended. WIPO then takes the responsibility for passing the application on each of the designated national registry, where application proceeds according to national trademark laws and procedure in such designated countries. Although the Madrid Agreement provides facility of registration of trademark in as many as countries, by making a single application but it has the following limitations: -

  • 1.      BASE REGISTRATION:

In order to able to file an international application with WIPO under Madrid Agreement, an applicant must have an existing registration of trademark in his HOME COUNTRY. (Home country means the country, where trademark owner is national or domicile or has real or effective industrial or commercial establishment and such home country must be a contracting party to a Madrid Agreement). 

The Madrid Agreement has helped the trademark owners of the country, which have less stringent examination system (popularly called DEPOSIT SYSTEM, where there is little or no examination of prior rights). It puts to disadvantage to the trademark owners of the countries like India, U.K., Australia, where stringent examination system is followed and filing rates of applications for registration of trademarks are quite high.  

  • 2.      TIME LIMIT :

For raising objection, the other requirement under Madrid Agreement is that once an international application is filed with WIPO and its designated trademark registry is required within 12 months to raise objection about the registrability of the trademark. If no objection is raised in that period, application automatically proceeds to registration. In such situations the countries where filing rate is quite high and strict examination procedures are followed, this time limit of 12 months may not be possible to adhere to and the national registry may fail to raise objection to such registrations which may result in the registration of unregistrable trademarks in the national registration offices and block the national register of trade mark which may lead to discrimination between the national applicants and international applicants. 

  • 3.      CENTRAL ATTACK :

The other disinteresting feature of the Madrid Agreement is that if base registration is cancelled within 5 years after the date of registration, all dependant applications/ registrations automatically stands cancelled.

  • 4.      LANGUAGE:

Under Madrid Agreement, only French is declared as official language. It is a discouraging factor for member countries, where French is not the national language, translation or transliteration apart from being very expensive, can fail to carry the intentions of the applicants because there may be certain national words which may have no equal or same word in French language. This assumes the significance in the light of the fact that WIPO does not examine applications other than compliance of formality.

  • 5.      SUBSEQUENT DEALING :

The international registration is liable to be cancelled if registration during its 5 years, is assigned to a person of country other than the country of original applicant, if no consent is taken from the national office of country of origin of new proprietor and similarly an international registration cannot be assigned to person who is not entitled to file an international application. 

  • 6.      INFRINGEMENT :

The Madrid system creates series of national registrations and as such in case of infringement of trademark it is subject to adjudication according to the national laws of respective countries. 

These may be the reasons that total No. of members under Madrid Agreement is at a low figure of 11 only as against 65 countries who are members of Madrid Protocol.

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WHAT IS MADRID PROTOCOL?

  • This agreement was adopted by the assembly of Madrid Union, with effect from 1st April 96.

  • The broad objective of Madrid Protocol is to make Madrid Agreement system more palatable.

  • It is open to anyone with a pending applications, in protocol country, which is their home country. This is the first advantage of protocol over Madrid Agreement – namely possibility of filing national applications for registration of trademark and immediately thereafter filing protocol applications with WIPO to extend the protection to designated protocol countries.

  • The major differences between Madrid Protocol and Madrid Agreement are as follows

  • a) As international registration can be based either on an application or a registration in the applicant’s own country, provided this country is a contracting state. The original Madrid agreement allowed the international registration to be based on a home registration.

  • b) An international registration can also be based on an application or a registration obtained at an intergovernmental organization. This means that a community Trademark can be basis for application or registration for an international registration.

  • c) A contracting state has the right to declare that the time limit during which it can object to the extension of the international registration to its territory is to be 18 months, not 12 months as under the agreement.

  • d) A contracting State may also object to the extension to its territory of the international registration on the grounds of an opposition brought by a third party, and if so can reject the international registration more than 18 months after the filing date. This is subject to the proviso that the contracting State must have notified the International Bureau when it acceded to the protocol of the possibility that oppositions could be filed after this time limit.

  • e) In the case of refusal based on opposition proceedings, the notifications of rejection must be within seven months of the start of the opposition period or one month from the expiry of the opposition period whichever is shorter.

  • f) Registration is for a period of 10 years, renewable for the further period of 10 years, rather than the periods of 20 years as specified in the Agreement.

  • g) The International Registration becomes independent of the home registration after 5 years. However, in the case of a successful ‘central attack’ during the first five years, the Proprietor has the right to ‘transform’ the international registration into a series of national applications all enjoying the same filing date, and, if applicable, the same priority date as the international registration. Such transformation must be effected within three months of the loss of the international registration, must be for the same goods or services and must comply with all other requirements of the national law concerned. Under the Madrid Agreement, ‘central attack’ was fatal to all dependent national registrations.

  • h) A contracting state can ‘opt out’ of the distribution of fees collected by the International Bureau and instead charge its own fees. Such fees may not exceed the amount, which the contracting State’s office would be entitled to receive from an applicant for a 10 year registration or from a proprietor in respect of a 10 year renewal at that office.

  • i) The working languages of the protocol are French and English.

Thus, it may be seen that Protocol goes considerable way towards meeting the concerns, which prevented Madrid agreement from gaining Universal acceptance, although in many respects it is essentially same system.

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LANDMARKS ACHIEVED BY MADRID SYSTEM OF INTERNATIONAL REGISTRATION OF TRADE MARKS. 

  • The following is the data of landmark achievements of Madrid System as per WIPO report for the year 2003.

  • There are 76 members of Madrid system (65 bound by Madrid Protocol and 11 members bound by Madrid Agreement).

  • A total of 23,872 applications were received and 21,850 registrations were published.

  • Most of the applicants designated 12 countries as the choice for registration of their trademarks.

  • Spanish has been included as a third working knowledge effective from 1st April 2004. This is another healthy sign.

  • The trend of filing applications indicates that the highest filing of applications was from Germany followed by France, Switzerland and Benelux.

  • Top 20 users of Madrid system during the year 2003 were top players in pharmaceutical, electronic and automobile industries. The list includes HENKEL, SANOFI, UNILEVER, JONSON PHARMACEUTICAL, L’OREAL, NESTLE, BAYER, NOVARTIES, SIEMENS, ITM, BOHRINGER, BIOFARMA, PHILIPS, ELECTRONICS, BASF, MERCK, SYNGENTA, FIAT, KODAK, BENGRAIN.

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ANALYSIS :

The Annual report of WIPO for 2003 is indicative of few things namely, Madrid Protocol is gaining ground as against Madrid Agreement due to formers flexible provisions, which encourages trademark offices of developing countries to adopt. Secondly the filing rate is quite high in case of member countries having depository system as against the countries, which follow comprehensive system of examination of applications for registration of trademark. Thirdly major users of the system are pharma and electronic industry followed by automobile industry. Indian Trademark Registry follows rigorous system of examination of applications and the examination standards are at par with U.K. and Australian trademark offices. The filing rate of application for registration of trademarks in India is quite high and the infrastructure and resources available with Indian TMR are insufficient as compared to other countries having lesser or same filing rates. Although the Indian Trademark Registry has cleared the backlog of 5 years by adhoc measures and is in a position to join Madrid Protocol but needs long term strategy not to allow backlog to resurface after some time as the human mechanism cannot be sustained for long. This needs strengthening of infrastructure & raising IT levels supports. The IT system in Indian Trademarks Registry needs holistic total revamping for which strong support is needed from Indian Govt. and WIPO and also dedicated term of officers. At present the working strength of officers is insufficient to discharge day to day statutory duties. If these officers are diverted possibility of backlog resurfacing is not over ruled. One of the solutions could be hiring experts in the technical as well as legal fields. Having said so, is this exercise worthwhile! The initial experience of other members of Madrid Union is that a few applications were received. There is possibility of increase in such filing of applications once U.S.A. joins Madrid System.

The analysis of Annual report of trademark registry for the year 2002-03 indicates that the major chunk of applications for registrations of trademark was filed in Class 5 i.e. 22,462 out of 94,120 applications filed for registrations of trademark which roughly constitutes 4.19%, followed by applications in class 16 i.e. 9113, which constitutes around 10.33%, then comes Class 30 i.e. 7905 (pertaining Coffee, Tea, Cocoa etc.) which constitutes around 11.90% and then Class 9 i.e. 7617 (pertaining to Scientific, Nortical, Electrical) which constitutes roughly around 12.35%. Keeping aside the cost factor, the pharma industry will be the major beneficiary in the event India decides to join Madrid protocol and the benefit of pharma

industry will also be percolated to other industries such as Coffee, Tea, Cocoa and Electronic industry. The major gainer may be the corporate houses while the small sector industries may not be the beneficiary because of the high cost. There is another fear among Indian Legal fraternity that it may mean loss of business to them but the advantage to the applicants outweighs the disadvantages to legal fraternity. And one thing that is overlooked by legal fraternity is that this will give them international exposure and in any case because of litigation, the services of professionals will be required and another area where the services will be required is to obtain prior search of existing trademarks in the records of the national trademark offices and also an opinion to ascertain whether such trademarks qualifies for registration according to the National laws because WIPO at present does not provide such facility.

In the fairness of the scheme it seems beneficial for India to join Madrid protocol and help Indian business community to get international registration of their trademarks at affordable cost and in a time bound manner but before that the infrastructure and the resources available to Indian trademark registry needs to be strengthened and there is great need to train the officials of TMR to handle such international applications by adequate training and similar training to the legal fraternity is desirable with assistance from WIPO.    

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