A. The history of the Madrid Agreement for the International Registration of Marks

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1 My presentation this afternoon is concerned with the Madrid Protocol and the forthcoming link between it and the CTM system. This link is coming as we all know. The necessary Regulations have been adopted, and all that remains is for the Commission to deposit its instrument of ratification with WIPO. This is expected to occur before July 1 this year, so that the target date of October 1, 2004 can be met. As you heard from Wubbo de Boer yesterday, the Office in Alicante will be ready to go from that date and that there should be no bugs in the system owing to extensive testing between the Office and WIPO.. To effect the accession by the European Community to the Madrid Protocol, there have had to be a Council Decision, and 3 separate Regulations. These total some 30 pages, and contain a lot of reading matter. Copies of all of them are attached to my paper, but to summarise all of the information they contain, I will inevitably need to present you with a lot of facts and figures and I therefore accept that my offering this afternoon on this aspect will probably read rather better than it sounds. Also, I suspect that many of you will know by now the main features of the EC s forthcoming ratification, and may have begun to plan your strategies, because the original Regulation was adopted 6 months ago in October I do not know about you, but at a recent meeting I heard the representatives of several large European companies express doubts as to whether they would seek to protect their CTMs through the Protocol. As you all know, there are two Madrid Agreements (even though one is called a Protocol) the latest one was adopted only 13 years ago in 1989, but the first is well over 100 years old. So, since the facts of the EC ratification are already widely known, I thought that it might be more interesting for you, the audience, if I divided my talk today into two parts. In the second part, I will give details those facts, but in the first part I will treat you to a little history of the Madrid Agreements. In doing so I am indebted to the WIPO whose book celebrating 100 years of the Madrid Agreement supplied me with a great deal of material for this talk. A. The history of the Madrid Agreement for the International Registration of Marks Early History The precursor to the 1891 Madrid Agreement was of course the Paris Convention which, with its various amendments is the cornerstone for all subsequent international cooperation in the field of industrial property. Article 15 of the original Paris Convention made it clear that the contracting States reserve the right to make separately between themselves special arrangements for the protection of industrial property, in so far as these arrangements do not contravene the provisions of the present Convention. This provision paved the way for what eventually became the Madrid Agreement, after two conferences had been held, both of them in Madrid (in 1890 and 1891). 1

2 At this time, towards the end of the 19 th Century, the world was just starting to draw breath from the heady progress made during the second phase of the Industrial Revolution. One of the principle manifestations of this had been the creation of railway networks. These networks made it possible for trade and commerce to move rapidly, not just within a country but across national frontiers, and not just into traditional markets in neighbouring countries, but much further afield. As the demand for new products grew, so did the activities of copiers and counterfeiters who lay in wait for an unsuspecting, a gullible and a barely educated public. [Plus ça change, plus ça la mĕme chose]. Thus, manufacturers and traders, both large and small, began to clamour for some way of securing legal protection for their names beyond the borders of their own countries. As there was no international application/registration system, a trader had to ensure that his name or mark was correctly protected in each of the countries where his goods or services were traded. This was a time-consuming and sometimes expensive business and one that was not always universally successful as we all know!. The historic Paris Convention of 1883 was followed by an International Conference that was held in Rome in The delegates did actually have before them a draft Agreement for the international registration of marks, but it was decided that more time was needed to consider this particular question. The only decision of note therefore on the subject was to hold another Conference to discuss it a few years later, in Madrid. Meanwhile, in 1889, at an Industrial Property Congress held in Paris, a resolution was passed calling for an international trade marks regime, so that a trade mark deposited in one country which is a member of an International Union is protected in all the member states by means of a deposit with the International Bureau of that Union. Spain and Madrid It was clear therefore that the calls from industry and commerce for a means of international trade mark protection had been heard by the politicians, by the diplomats, and by the civil servants all of whom were now actively seeking a means for answering this call. The moment was therefore opportune for the next International Conference, which was held a year later in Madrid. But why Spain and why Madrid? In the context of European history in the 19 th century Spain was among those European countries which had suffered most from the foreign and domestic political crises of that century. Its institutions were in a period of transition. The Cortes was not yet a proper Parliament or National Assembly, and much power still resided in a system of metropolitan, provincial and local patronage. The King, Alfonso XII, was only the first Spanish monarch of the 19 th Century to be able to reign uninterruptedly from his accession in 1875 until his death in All the others had at some point been forced to leave the throne or had abdicated. So, when the Rome Conference in 1886 settled on Madrid as the place to hold the next International Conference, for some 11 years, Spain had enjoyed an unprecedented period of political stability. This was in stark contrast to the strife of international and civil war, 2

3 disputed royal successions, and the ambition of groups and of individuals under which the country had suffered for three-quarters of a century. The building in which the Madrid Conference was held was the San Fernando Royal Academy of Fine Arts in the Calle de Alcala. The Conference 1889 had been originally fixed as the year for the Madrid Conference, but the King, Alfonso XIII, had only succeeded his father in 1885 and he was only 3 years old. Also, as much preparatory work had to be done, a royal order postponed the Conference to the following year, The Ministry of Development was instructed to make the necessary arrangements. All the countries which were members of the Paris Union at the time of the preliminary organisation of the Conference were invited and the following were represented: Belgium, Brazil, France, Great Britain, Guatemala, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Tunisia, and the USA. Representatives from Germany were also present, even though Germany was not yet a member of the Paris Union. The Conference began on Wednesday April 2, 1890, and it continued until Monday April 14, 1890 when its ninth and last session was held. It was a technical Conference which had to debate several matters left over from the Rome Conference of Only one of these was concerned the international registration of marks, the others being: the prevention of false indications of source, the proper interpretation and the application of the Paris Convention, and the setting up of the International Bureau. It was in the fourth session of the Conference that discussion on the draft Agreement concerning the international registration of marks began, and this was completed in the fifth session, held on the afternoon of Thursday April 10, 1890, when an agreed text was adopted by 9 votes for (Belgium, Guatemala, Italy, Netherlands, Norway, Portugal, Spain, Sweden and Switzerland) and 5 abstentions (Brazil, France, Great Britain, Tunisia and USA). The drafting of the Regulations was assigned to the International Bureau, under the supervision of the Swiss Government. The Madrid founding fathers actually toyed with the idea of introducing a unitary system under which a single registration would provide protection in every contracting State, but they felt that the differences between the different national laws made this impossible. However it is interesting to see from the notes of the Conference that the framers of the Agreement did think that a unitary system will perhaps be achieved one day, but that moment is still far off. It was of course achieved over 100 years later when the Community trade mark became a reality. 3

4 The ninth and last session of the Conference, held on the afternoon of Monday April 14, 1890 was an elegant affair, as one could have expected from diplomats at that time. It was presided over by the Duke of Varagua, who was the Spanish Minister for Development. He expressed pride in the role Madrid had played in advancing the system of the Union, by consolidating its base in such a way as to satisfy the industrial interests of most of the States represented. Equally eloquent was the last speaker, Commander Puccioni of Italy, who was the Vice- Chairman of the Conference. Amidst much applause he said, of the President: I, as an Italian, cannot pronounce his name without emotion: Cristóbal Colón (Christopher Colombus), Duke of Varagua, is a direct descendant of the illustrious man from Genoa, who, in the fifteenth century, brought together in common glory two peoples of one race, who still continue to have reasons to remain on a path of the closest possible fraternity. (Although of course he said it in French!) Exactly a year after this technical Conference, a Diplomatic Conference was convened in Madrid, for Tuesday April 14, By that time there were 16 member States of the Paris Union, all of which were invited (Belgium, Brazil, Dominican Republic, France, Great Britain, Guatemala, Italy, Netherlands, Norway, Portugal, Serbia, Spain, Sweden, Switzerland, Tunisia and USA). All were represented except the Dominican Republic and Serbia. The meetings were again held at the San Fernando Royal Academy of \Fine Arts, lasting the 2 days of April 14 and 15, 1891 and the Madrid Agreement was signed during the last session by the delegates of Belgium, France, Guatemala, Italy, Netherlands, Portugal, Spain, Switzerland, and Tunisia. Revisions Since it adoption, the Madrid Agreement of 1891 has been revised on 6 occasions: at Brussels in 1900, at Washington in 1911, at the Hague in 1925, at London in 1934, at Nice in 1957 and at Stockholm in Originally, the intention had been that the effect of an international registration would be absolute, and that the only means of refusing registration would be through the invalidation of protection by the courts. However in the end a right was granted to contracting parties to refuse registration within 1 year. At the Brussels Conference in 1900, this was clarified so that refusal could only be on one of the grounds contained in the Paris Convention. At the London Conference in 1934 it was agreed that WIPO should inform applicants of the reasons for any refusal, and also that applicants should have an opportunity to argue against any refusal. From the outset, an international registration had an automatic effect in all the contracting States, but at the London Conference in 1934 it was proposed that applicants should be required to designate the countries in which they required protection. However, strangely enough, this was considered too radical at the time, and it was not until the Nice 4

5 Conference in 1957 that it was finally introduced. Of course designations of further countries can be made at a later date. From the beginning, an international registration was permanently dependent on its basic registration in the applicant s country of origin. This remained the case until the Nice Conference of 1957 when that dependency was reduced to 5 years. Again at Nice it was agreed that registration should be by class, with a supplementary fee being paid for each class above the first 3. Nice also saw the introduction of Article 9 quarter which smoothed the way for the 3 Benelux countries to continue to be individual members, while at the same time operating a Common Office The Stockholm Conference in 1967 established the cascade system for determining the country of origin of the applicant. More Recent Developments The Madrid System has been an undoubted success. There are over 400,000 International Registration s in force today and, since each is extended to a number of other countries, these registrations could be said to be the equivalent of approximately 5 million national trade mark registrations. However by the latter part of the 20 th Century, it was generally agreed that the Madrid Agreement was still not universal enough, and that it had never realised its full geographical potential because there were important countries that remained outside the system. In a world in which national and regional markets were becoming increasingly integrated into one global market, attention within the IP community turned to ways in which a truly universal international registration system for marks might be achieved. The first attempt at establishing such a universal system was the Trademark Registration Treaty (TRT) which was adopted by a Diplomatic Conference in Vienna on June 12, It only ever attracted 5 members, and a motley group they were! (Burkina Faso, Congo, Gabon, Togo, and USSR). This was a completely new Treaty, one which was outside the Madrid system, but which at the same time sought to incorporate some of the advantageous features of the Madrid system. It was framed very much with the USA in mind, but the US never signed up. The TRT was very similar to the Madrid Agreement, but its principal difference was that an application did not need to be based on a mark that was already registered nationally. Thus, the international registration would be independent in all of the countries in which it had effect. The TRT entered into force on August 7, 1980 but it was an abject failure. Only 2 registrations were ever taken out under it both by a Soviet car manufacturer and, when these lapsed in 1991, the Treaty fell into disuse and it was eventually cancelled. 5

6 When it became clear that the TRT was not going to win widespread acceptance, the strategy at WIPO shifted away from a completely new Treaty, like the TRT, to the possibility of revising those features of the Madrid Agreement which seemed to be why so many of the non-contracting States refrained from joining it. The difficulty with such an approach, however, was that the parties to the Madrid Agreement were extremely satisfied with it in its current form and were not keen to risk a revision which might prejudice the benefits of the efficient functioning of the system that it created. There were lengthy discussions in committees of governmental experts convened by WIPO in the years 1986 to 1989, out of which was conceived the idea of a Treaty in parallel to the Madrid Agreement. This would be based on the Madrid Agreement, but with the necessary modifications to attract certain non-members of the Madrid Union into the Madrid system. At the same time existing members of the Madrid Agreement could also become parties to the new Protocol but still remain members of the Madrid Agreement. Both groups of countries would belong to the Madrid Union which would administer both the Agreement and the Protocol. The Madrid Protocol The newly-conceived idea became a reality like the original Agreement of 1891 in Madrid. The Conference at which the final document was agreed was held in the Instituto Nacional de Industria. It opened on June 12, 1989 and what came to be called the Madrid Protocol was adopted on June 28, There were 4 main features of the Madrid Agreement which were widely perceived as constituting impediments to the enlargement of the membership of the Madrid Union. All of these were modified in the Madrid Protocol. 1. The basic right. Whereas the Madrid Agreement requires the international application to be based on a national registration, the Madrid Protocol allows it to be based on a national application, as well as a national registration. The modification was introduced for the benefit of those countries whose offices examine applications ex officio both on absolute grounds and on relative grounds and where the processing an application typically requires more than 6 months, so that it would be very difficult to file an application for an international registration based on a national registration utilising the 6 month priority period established by the Paris Convention. 2. Time Limits In countries in which the national Office carries out a full ex officio examination, the time limit for refusing the effect of an international registration under the Madrid Agreement (1 year) was perceived as being too short. To deal with that difficulty, the Madrid Protocol allows 18 months for refusals and an even longer period in the case of oppositions. 6

7 3. The Fee Structure For those countries conducting a full ex officio examination of an application, the capacity to receive a fee for a designation which was equivalent to the national fee was considered necessary in order to maintain the resources required for the examination system. The Madrid Protocol, accordingly, provides that the national office of a designated country may, if it so desires, receive the full amount of the fee that it would charge for a national registration, or a substantial proportion thereof. 4. Central Attack Where the reason for a cancellation of the international registration exists only in the country of the national registration on which it is based, the effects of relative dependence, namely the complete loss of the international registration in all the other designated countries, was thought to be unfair. So, to deal with this difficulty, the Madrid Protocol allows the transformation of a failed international registration into a national application in each designated country, such national applications having the date of the international registration. In addition to the four main modifications, the Madrid Protocol also established the possibility of a link between it and regional trade mark systems, such as the Community trade mark which at that time was still being negotiated. The Madrid Protocol was signed by 18 States, including several that were not party to the Madrid Agreement. It now has 64 members (65 in August 2004 when Syria becomes a member) and it is soon to be ratified by its first intergovernmental organisation the European Community. The Agreement has only 55 members, 9 of whom are not yet members also of the Protocol. The number of members of the Protocol overtook the number of members of the Agreement in As we heard yesterday from Mr. Rubio, every continent is represented. It is a truly global system. B. The Link between the CTM system and the Madrid Protocol I now come to the second part of my talk the Link between the CTM system and the Madrid Protocol the Missing Link. As I said at the beginning, the date for ratification by the European Community has not finally been set yet, but everyone is working on the assumption that the European Community will deposit its instrument of ratification before July 1 this year so that the EC can become a member of the Protocol on October 1, All the EU member States are, individually, members of the Protocol except Malta. As I have just explained, one of the principle changes introduced by the Madrid Protocol was Article 14.1(b) which allowed so-called inter-governmental organisations to become a party to it. The definition of an inter-governmental organisation is: (i) that at least 1 of its member states must be a party to the Paris Convention; and 7

8 (ii) that it has a regional office for the registration of trade marks, provided this regional office is not a common office as described in Article 9 quater (i.e. like Benelux). This of course is a precise description the EC, and indeed the Article was framed with the EC in mind because in the late 1980s, when the Protocol was being debated, it was wellknown that discussions were in progress to establish the CTM system, and that there was sufficient political goodwill for them eventually to succeed. We first heard about the possibility of a ratification by the EC in 1996, when the Commission published a proposal to do so. This attracted considerable opposition much of it in my view unfounded. However despite having been approved by the European Parliament, the proposal was shelved. It surfaced again last year, and the first step was the adoption by the Council of a Decision on October 27, 2003 to do 4 things To approve the text of the Madrid Protocol; To authorise the President to deposit an instrument of accession to the Protocol in order to establish a link between it and the CTM; To authorise the Commission to represent the EC at meetings of the Madrid Union; To deposit 2 Declarations and 1 Notification as follows: A Declaration that, in accordance with Article 8.7(a) of the Madrid Protocol, the EC wished to operate an individual fee system instead of sharing in the revenue produced by the supplementary and complementary fees. A Notification that if the EC designation of the International Registration is refused or ceases to have effect, it may be converted into either a national trade mark application, or a designation of a EU Member State that is party to either the Madrid Agreement or the Madrid Protocol (provided the requirements of the current Articles 108 and 110 CTMR are met). The Official Fee for either course of action is 200. A Declaration that the period for the refusal of an International Registration designating the EC will be 18 months instead of the 1 year specified in Article 5.2(a) of the Madrid Protocol. At the same time, Regulation (EC) No. 1992/2003 was adopted. This sets out the main changes to the Community Trade Mark Regulation which are contained in a new Title XIII that consists of entirely new Articles In summary, these are as follows An application for an International Registration may be based on either a CTM application or registration and must be filed at the OHIM. If it is based on a still pending CTM application, the applicant must state whether the resulting International Registration is to be based on the CTM application or the resulting registration. If the latter, then the International Registration will be given the date on which the CTM application is 8

9 registered (new Article 141). The details will be recorded in the file of the CTM application (new Article 143.1); International Registrations having effect in the Community are added to the definition of an earlier mark in Article 8.2(a) CTMR; An EC designation will have the same effect as a CTM, and it will be searched, examined as to absolute grounds for refusal, and be subject to a possible opposition (see below) or invalidation in the same way as a CTM application (new Articles 146, 149, and 153); All International Registrations are published, as a matter of course, in the WIPO Gazette. An International Registration designating the EC will also be published by the OHIM but the only details to be published will be: the date of the registration, the language of filing, the second language, the number, the date of its publication in the WIPO Gazette, a reproduction of the mark, and the numbers of the Classes in which it has been filed. [NB. The actual goods and services will not be published.] (new Article 147). This publication will take the place of the usual publication of a CTM (new Article 146.3) A claim for the seniority of an earlier national mark in a EU Member State may be made in respect of an International Application or Registration designating the EC in accordance with Articles 34 and 35 CTMR (new Article 148); The date from which genuine use is to be calculated will be the date when the International Registration is finally published as being free from any further objection or refusal (new Article 155); An application for an International Registration on the basis of a CTM must be filed in one of the 20 Official EU Languages, and if this language is not one of the 3 languages of the Madrid Protocol (i.e. French, English and Spanish), then the applicant must indicate one of these 3 languages as his second language (new Articles and 142.2). Where the International Application is filed in a language other than French, English or Spanish, the applicant may provide a translation of the list of goods or services into his chosen second language (new Article 142.3); The opposition period is, in effect, 9 months long. A Notice of Opposition must be filed within a 3 month period which begins 6 months after the International Registration designating the EC is published by the OHIM, as described in the above bullet point. Where an EC designation of an International Registration is refused or ceases to have effect, it may be converted into either (a) a national trade mark application, or (b) a designation of a EU Member State, provided that that Member State was a member of the Madrid Agreement or the Madrid Protocol at the time that the conversion application is made. Such a mark will continue to retain the original date of the International Registration (new Article 154); this is the opting-back clause which aroused much antagonism when it was first proposed; If an International Registration that includes an EC designation is subjected to a successful central attack and if it is subsequently 9

10 transformed, in accordance with Article 9 quinquies of the Madrid Protocol, into a EC designation, it will be treated as a CTM application (new Article 156). However if the cancelled International Registration has already been published, then Articles CTMR will not apply, i.e. the mark will not be searched, examined as to absolute grounds for refusal, be re-published, or be subject to the possible filing of either third party observations or an opposition. A CTM may be replaced by an International Registration in accordance with Article 4 bis of the Madrid Protocol (new Article 152); Ratification of the Protocol by the EC recently came a step nearer with the publication of the final two pieces in the complicated legal jigsaw which must be assembled before membership of the Protocol by the EC can become a reality. These are; a Regulation (EC No. 782/2004) to amend the Rules which govern the procedure under which the Office in Alicante operates; a Regulation (EC No. 781/2004) which sets the fees to be paid. ECTA has produced copies of the CTM Regulation, the Rules, and the Fes regulation showing all of the new amendments and also when each amendment comes into force. This is available on the ECRTA website free of charge to ECTA memberds. The Official Fees are payable to the WIPO in Geneva and will be the equivalent, in Swiss francs, of the following amounts: Individual Fees payable either by an applicant for an International Registration which designates the EC, or by the holder of an International Registration who requests a territorial extension to the EC 1875 designation fee for a single trade mark in up to 3 classes, 400 for each additional class after the first 3, 2300 for the renewal of a single designation, and 500 for the renewal of each additional class after the first 3. The equivalent Fees for a Collective Mark are , 800, 4800, and Where an individual CTM designation is refused for all of its goods or services, 1100 will be refunded, plus 200 for each additional class after the first 3. The equivalent figures for Collective Marks are 2200 and 400. The Official Fee for filing an International Registration based on a CTM application or registration is 300. So, there you have it. That is the main details of the new legislation. There are no Guidelines yet, and I cannot tell you whether or not the EC ratification will turn out to be a success. I believe that it will. I have been strongly in favour of the protocol from it very early days. If I was still responsible for the trade mark strategy of a trade mark owner, I believe that would probably be planning to use the Protocol to file my CTMs after a 10

11 few filings to test the water. However your strategy, or those of your clients, will depend on such matters as: cost, the complexity of the procedures, or the particular industry. As my tailor would say, after making me a new suit, I wish you well to wear it. Finally, I have explained to you the history of the Agreement and the protocol, but what of the future? A fact that is sometimes overlooked is that it is written into the Protocol that it can be amended 10 years after coming into force. Article 9 sexies, which is of course the famous clause which safeguards the Agreement, says that this safeguard may be repealed after 10 years, provided 5 years has expired from the date when the majority of the countries that were party to the Agreement have become party to the Protocol. That 5 years has now passed, so the safeguard can be removed. Would it be a good idea for WIPO to take the opportunity thus provided by considering making some amendments to the Protocol? And if so, what amendments would we like to see? Let me throe out a few suggestions Is the idea of Central Attack so sacrosanct? Perhaps we could do away with the idea of an International Registration being based on a national mark and make it totally independent as in the ill-fated TRT? Should even more languages be added to the present 3? Is the restriction of an extra fee for any classes after the first 3 now out of date? These are just a few ideas. I am sure others will have more, but as the 10 year period approaches in 2006, it might be an idea for the IP community to start discussing them. That concludes my presentation, and I thank you for your attention. 11