On
October 16, 2012, the New York City Bar Association hosted a panel event
entitled “Brands Abroad: International Trademark Issues Facing In-House Counsel
and Those Who Advise Them.” As someone
interested in the intersection of international law and intellectual property,
I was eager to attend. The impressive
panel featured three attorneys: John M. Bergin, Chief Trademark & Copyright
Counsel at Avon Products, Inc., Clark W. Lackert, Partner at Dickstein Shapiro,
LLP, and Doreen L. Costa, Partner at Baker Botts, LLP.
To
start off the panel, Mr. Bergin began with some remarkable facts about Avon
Products, Inc. He told the audience that
Avon has over 45,000 trademarks registered throughout the world and that one
attorney and four managers handle all the clearance, applications, and maintenance
associated with those trademarks. He
explained that trademarks should be viewed as an asset or investment rather
than an unnecessary expense.
Undoubtedly, many other companies view trademarks in the same light as
the numbers of trademark applications and registrations have drastically
increased in the last few years.[1] With these unprecedented numbers, it can be
challenging to search and clear new marks.
An interesting concern that he also pointed out is that when the
marketing department is suggesting names for a new brand, it is not uncommon
that a particular name may not work in certain countries due to cultural
differences (e.g. it does not translate well, means something distasteful, or
lacks the intended pizazz). In a global
economy and social media age, it is important to appeal to consumers around the
world. Additionally, Avon’s brochures
are harmonized so if the company is unable to obtain a mark in one country
because it does not work or is blocked, it will have to come up with a different
mark that is usable worldwide.
The panelists
went on to discuss the process of clearing a trademark and explained the
“likelihood of confusion” standard that is used in trademark law. When choosing a mark that will not be
confused with an existing mark, one needs to consider the strength of the mark
(including its distinctiveness or fame[2]),
the similarity between marks, the quality of the products, the competitive
proximity of the products, and the sophistication of the customers. When conducting searches, it is helpful to do
an online “quick and dirty” search, but then you also should have a trademark
agent conduct a full search.
The panelists
explained that there is no such thing as a world trademark; trademark rights
are territorial by nature. This makes it
essential to create a network of reliable local counsel in every country with
whom you can work. While it is important
to consider their advice, attorneys need to also use their own independent
judgment to make final decisions.
Another word of caution is that these overseas trademark agents
typically are not attorneys and under many local laws there is little to no
attorney-client privilege.[3] The granting of rights that come with
trademark ownership also varies from country to country. In commonwealth countries like the United
Kingdom, these rights are given through use, whereas in civil law countries
like Japan, China, and Germany, these rights are given through registration
which makes it all the more necessary to register one’s trademark in these
countries in order to avoid piracy.[4] As Baker Botts’ co-panelist, Ms. Costa,
commented, it is always cheaper to register for a mark in the first place than
subsequently having to buy a mark from another party because you did not act
first.
Usually marks are filed regionally such as through
groups like the Organisation Africaine de la Propriété Intellectuelle (“African
Union” or “OAPI”) and the European Community Trademark (“CTM”). Similarly, for
countries that have signed on to the Madrid Protocol, like the OAPI or CTM, it
offers trademark owners a way of obtaining a trademark registration that covers
multiple countries. In other words,
under all these systems, the process is greatly streamlined by only requiring a
single fee,[5]
one renewal fee,[6] and
filing in just one language. This route
is especially recommended for registrants that do not have local agents. However, a registrant needs to know that
there are several differences between the Madrid System and these other
regional trademark schemes. For example,
under the CTM,
a registrant is not required to maintain a commercial establishment in the EU,
but a Madrid registrant must be a national or domiciled in one of the member countries
of the Protocol. Also, if registering
under the CTM, the registrant must register under all included countries,
whereas under the Madrid Protocol, the registrant is free to pick and choose
among member nations which countries in which it wants to register. Another difference is that under the Madrid
Protocol, the registrant will still have to meet the individual
countries’ requirements which can be quite rigid, but under the CTM, an application can
only be refused on absolute grounds.[7]
Once a trademark
is registered, it is vital that the owner be vigilant in policing the mark so
its goods and services do not become a target for counterfeiting. There are many treaties that govern the
enforcement of trademark protection.
These include the Paris Convention (1883), the Madrid Treaty on False
Designations (1891), the Pan American Convention (1925), the Lisbon Treaty
(1958), the Agreement on Trade-Related Aspects of Intellectual Property Rights
(“TRIPs”) (1994), and the Anti-Counterfeiting Trade Agreement (2010 draft). Ms. Costa spoke about the importance of
getting law enforcement authorities and the United States Customs and Border
Protection involved so as to work closely with trademark registrants,
especially when there is an expected illegal shipment. Often counterfeit products are made by
“second shift” workers who work in factories making the legitimate products and
then, with the access they have to the materials, create counterfeit goods
after their shift ends. However, when
conducting investigations overseas, one must be aware of espionage laws as some
countries require investigations to be run exclusively by the government and
not private citizens.
The panelists
ended the discussion with an overview of social media and the added
complexities of trademarking and brand protection with the proliferation of the
Internet. Overall, it was a very
informative presentation. It reminded me
that, as with most areas of international law, there is a delicate balance that
must be achieved between globalization and harmonization of laws and respecting
individual countries’ desires to make their own political decisions of how to
implement and enforce domestic law. Therefore,
attorneys in the United States must do what they can to properly search,
register, and police trademarks abroad, while being mindful of potential
pitfalls like confidentiality concerns, country-specific trademark
requirements, and domestic espionage laws.
Also, even as trade and commerce becomes international, allowing
companies to reach a larger consumer base, there will remain cultural
differences that impact and complicate decisions companies make (such as
choosing a brand name) and companies must be sensitive to that.
[1]. Worldwide
trademark applications grew from 2.3 million to 3.3 million from 2002 to 2007
and worldwide trademark registrations grew from 1.7 million to 2.2 million from
2002 to 2007. The U.S. Patent and
Trademark Office alone sees over 250,000 filings each year. To give perspective on this, Mr. Bergin
highlighted the fact that there are only 200,000 words in an average English
dictionary.
[2]. When it comes
to relying on fame, it can be difficult to prove and the public knowledge of
your mark must be local (not just general or by means of the internet).
[3]. In countries such as Germany and Belgium, the
privilege often ends with the attorney opinion letter and search report
itself. In countries such as Italy,
France, and Sweden, there is no attorney-client privilege between in-house
counsel and business associates.
[4]. Not only does
registration provide notice, but it is usually necessary for combating
counterfeiting and for customs records.
[5]. The fee is
$19,000 for one good per class for registration in the 84 Madrid Protocol
countries. If the registrant had to make individual filings, the cost would escalate to
$160,000.
[6]. Trademarks
usually must be renewed every ten years.
Under the Madrid Protocol, if the registration in the home country fails
during the first five years, then the international registration will also
become invalid. However, if there is no
issue in the first five years, then the international registration becomes
independent. In contrast, a registration
with the CTM will be independent of any other application or registration from
day one.
[7]. This list of
differences between the CTM and Madrid Protocol is not meant to be
exhaustive.
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