International or National Trademark Registration- What’s Better for Your Company?



28 
Dec 2018

We previously outlined the reasons why you should protect your intellectual property rights in our blog post IP Theft on the Rise – Have You Protected Your Business’s Intellectual Property Rights?

Now that you have decided that trademark registration is a step in the right direction for your company, you may be wondering whether to register a national trademark, EU trademark or an international trademark? With this blog post, we aimed at providing a distinction between national and international trademark applications, national and international trademark, their mutual relationship, trademark registration procedures and other related issues.

THE PRINCIPLE OF TERRITORIALITY: TRADEMARKS ARE TERRITORY BOUND

A trademark is protected in the territory of the country where it has been registered. Meaning, if you register a (national) trademark in Serbia with the Intellectual Property Office, the trademark shall be protected in the territory of our country. Vice versa, a trademark registered in Serbia as a national trademark shall not be protected beyond the borders of our country. Hence, a trademark holder may face problems if the holder starts exporting goods. It’s highly likely that the holder will encounter trademark infringement issues. It is also possible for another person to register the same trademark for (their) same or similar goods, for example, in France and Austria, even before the holder of the national trademark rights registers it. This poses a huge problem for the holder of the national trademark, who will essentially be prevented from using their trademark in these countries, thereby seriously rendering to threaten their brand. From the abovesaid, it can be concluded that a national trademark is “sufficient” only in the event you plan to place the goods exclusively in the domestic market, without exporting it, or if you do not plan to provide your services abroad. As soon as the goods/services leave Serbia, a national trademark ceases to provide security to its owner. At that moment, the importance of the international trademark registration becomes of paramount importance.

For example, let’s say you are in the shoemaking business and plan to export overseas to five different European countries. You hold a registered sign that you have put on those sneakers in Serbia, which is why in Serbia, only you and no one else has the right to place that sign on the same or similar goods. Nevertheless, that is the situation in Serbia, but how about abroad? How will you secure your product in those 5 countries where you intend to export the sneakers? Being that you haven’t registered your sign in these countries, you, therefore, face the possibility that another manufacturer may use it for their sneakers. That might create confusion with both groups of customers on whose sneakers they are buying. This is where the international trademark protection comes to the rescue. It allows you to extend your right at the national level to those countries where you intend to export your goods or to provide services.

STEPS TOWARD INTERNATIONAL TRADEMARK PROTECTION

The great news is that you do not have to travel to, let’s say, France, Hungary and (or) Italy if you intend to expand your business there and to apply for trademark registration before the authorities of those countries. Thanks to the Madrid System (Madrid International Registry of Trademark Registration), trademark registration at the international level is achieved by submitting a trademark application in your country. That means that in Serbia, you may request to register a trademark for the territory of Serbia, but also for the territories of other countries (in fact, for more than 80 countries!). And all of this may be done by submitting a single application in the local language, and by paying a single fee1. Surely, you may submit the application to the authority of the country in whose territory you seek to register the trademark, but this option has proven to take more time, to be more expensive and more complicated. Theoretically, that would mean:  how many countries – that many applications, that many different languages, that many fees. You must admit – not simple at all.

Would you like to know which conditions you should fulfill in order to file an international application? If you are planning to submit the application to the Intellectual Property Office in Belgrade and are a citizen of the Republic of Serbia or hold the Serbian residence, i.e., if the applicant is a legal entity with serious and genuine industrial headquarters in Serbia – that’s it! You meet the conditions. You might have noticed that a legal entity needs a serious and genuine industrial seat and not just a registered office in the Business Registers Agency. Connect this with the aim of registering a trademark – i.e., to protect the signs that will essentially be used on the market to specify specific goods or services. The reason behind this is to prevent the accumulation of the so-called “dead trademarks”, i.e., signs that are not used in practice.

THE MADRID SYSTEM – LEGAL FRAMEWORK

The Madrid System is legally constituted by the Madrid Arrangement and the Madrid Protocol, which are managed by the International Bureau of the World Intellectual Property Organization (WIPO). In the process of the international registration, you will also need to get acquainted with the Paris Convention for the Protection of Industrial Property[1], or to put it simply: this is done for you by an attorney specialized in this area of law. Both for the international and national trademark, you need to get acquainted with the Nice Classification of Goods and Services[2] in order to complete the registration application in a more complete, correct and orderly way. This document contains a list of classes in which goods and services are sorted. Since you are registering a sign for goods/services, then you must find those goods/services in the classification and list it in your application.

To illustrate this with an example: if you are in computer programming or computer software design business and wish to register a trademark for that service, you will be interested in class no. 42.

THE MADRID SYSTEM APPLICATION HAS BEEN FILED – WHAT’S NEXT?

International trademark registration appears to be somewhat peculiar and “upside-down” in relation to the national trademark registration. What do we mean by that? The procedure works the same way, regardless of the type of the application filed, i.e., you are supposed to wait for a positive decision by the competent authority, after which the right is acquired (in this case, a trademark is registered). The procedure is essentially the same with the national trademark registration. You should wait in order to get the trademark certificate and then you know that your sign has passed all the tests and has been registered. However, international trademark registration works a bit differently, which is completely understandable from the practical point of view.

How is this reflected in practice? Firstly, a trademark is registered or entered into the register of international trademarks at the international level. From that moment on, the authority of the country in which territory the protection is sought (usually some foreign institution, such as our Intellectual Property Office) has a certain period (12-18 months) to inform the applicant whether their sign has been registered in that country. It is now apparent why we say the procedure is a bit “upside-down”: they first register your trademark, and then you wait for the deadline to pass, during which the application can be rejected.

It would be best to think of this procedure as entering the trademark into a database of the International Bureau, rather than an actual registration, even if that is the term being used. So, the International Bureau first registers (enters) the international trademark, but the trademark has not yet been registered in a specific country (the so-called “designated country”). From the moment the International Bureau registers a trademark, the deadline (12-18 months) starts to run for the specially designated country within which period the country may refuse the registration of the trademark. The reasons for refusal could be found in the provisions of the Paris Convention. In the event of a refusal, you will need an attorney to know how to appeal against a decision of refusal, to whom, within which deadline…The level of complexity of this stage in the procedure is best demonstrated by the fact that the Intellectual Property Office itself recommends that applicants hire an intellectual property attorney. Moreover, do not expect to receive the decision of refusal in the Serbian language, as it is delivered only in English, French and Spanish.

WHEN DO YOU KNOW YOUR INTERNATIONAL TRADEMARK REGISTRATION HAS BEEN A SUCCESS?

The answer is:

1) if you have not received the decision of refusal;

2) if the deadlines to reject your trademark have passed (12-18 months) in the designated countries for which territory you are applying for registration;

3) if the designated countries have sent you a notice that your trademark has been approved.

Such a procedure is understandable, since, if the procedure for international trademark registration would be the same as the national trademark registration, that wouldn’t have any effect, to say the least.  During the above-mentioned deadlines of 12, i.e., 18 months, the institutes of the countries in which you are seeking to register your trademark are examining your application, and if the sign meets the requirements for protection, it is finally registered. If no – the application is rejected, and the mark shall not “remain” registered (documented).

In practice, it is normal that not all trademark offices decide on applications for registration at the same time, however, it is important to know that, even then, there is only one date of termination of the validity of the trademark. Any other solution would certainly cause a lot of headache to the holders of this right.

NATIONAL vs INTERNATIONAL TRADEMARK APPLICATION

If you wish to file an international trademark application, you should know that this will not be possible without filing a national trademark application. More precisely, an international application can be filed by a person who:

(a) has already filed a national application with the Intellectual Property Office (these two applications being submitted simultaneously) or

(b) a person who has already registered their trademark before the Intellectual Property Office.

The relationship between national and international applications does not end here. Perhaps it has been already clear from the provided information so far, but we would like to emphasize the fact that these two applications have to be the same, i.e., the trademark has to be identical, the person applying for the trademark should be the same, and that the list of goods and services (which must be supplied with the application) must be the same or even shorter.

You are probably wondering what the difference between (a) is filing an international application based on a national application and (b) filing an international application based on a nationally registered trademark. It is important to know that if you choose to go with option (a), the registered international trademark shall be deleted from the international register if the application for the national stamp has been rejected.

This shows that the negative outcome of the national application implies a negative outcome for the international application.

FOR WHAT PERIOD IS THE TRADEMARK PROTECTED?

(1) The national trademark essentially lasts for an indefinite period, as it can be prolonged for an unlimited number of times. However, in practice, this means that the trademark lasts for 10 years for which you paid the registration fee. In other words, as our Law on Trademarks states: The trademark terminates with the expiration of the 10-year period for which the prescribed fee has been paid, if its validity does not extend.[1]

(2) The international trademark also lasts for a period of 10 years. It can be extended the same way and for an unlimited number of times.

THE EU TRADEMARK

Bearing in mind that Serbia is a candidate country for the accession to the European Union (hereinafter: the EU), the process of trademark protection on the territory of Serbia should be elaborated. It is also important to point out to the numerous advantages of the EU trademark.

The registration process takes place under the auspices of the EUIPO organization of the EU. In addition to providing the trademark protection, this organization also deals with the protection of industrial design. The system functions the following way: a person submits the application to the EUIPO organization, for the entire territory of the EU. When a trademark is registered or recognized, protection is valid in the territory of all EU Member States. It is particularly important to point out that the EU is a member of the Madrid System. It should also be noted that the trademark recognized in the EU does not replace the national trademark under the described system. National trademark and so-called EU trademarks parallelly exist.

There are four possible types of trademark registration in the EU:

WHAT IS THE REGISTRATION PROCESS?

INTERNATIONAL TRADEMARK vs EU TRADEMARK

Now that we have outlined the basic features of the Madrid System and the EU trademark application procedure, let’s compare the pros and cons of these two systems.

PROS

EU TRADEMARK, i.e., COMMUNITY TRADEMARK
(via EUIPO)
INTERNATIONAL TRADEMARK VIA THE MADRID SYSTEM
(via WIPO)
– Registration is possible for all EU Member States.– The designated countries (the countries for which territory the registration of the trademark is filed) are only those countries in which the claimant really intends to use the trademark. As far as the EU is concerned, protection can be sought for all Member States or individual Member States.
– No effective use of trademark in the territory of all eligible EU members is required. It is enough that the trademark is used effectively in one part of the EU to maintain it throughout the territory of the EU.– If a complaint is filed in one designated country, it does not have an effect on the others.
– Prior national application or registration of a trademark is not required in order to submit a request for registration of the EU trademark.– The designated countries can be added afterward, and at a lower cost than if a new application would be submitted.
– EUIPO does not examine trademark applications by comparing those with the already registered trademarks (this does not mean that this segment is not taken into account, but only that EUIPO transfers this activity to the owners of registered trademarks. They have the right to respond to complaints which pose the threat to violate the trademark right. On the other hand, such a decision protects the applicant from the so-called “dead trademarks”).– Frequently, this system provides protection firstly, before the EUIPO.

CONS

EU TRADEMARK, i.e., COMMUNITY TRADEMARK
(via EUIPO)
INTERNATIONAL TRADEMARK VIA THE MADRID SYSTEM
(via WIPO)
– If a substantiated objection appears in the examination of the application, even in relation to just one EU Member State, this will lead to the rejection of the application as a whole. It is true that in this case, the possibility of convert the application to the national trademark registration remains, but this is a more expensive solution than the national application itself or applications through the Madrid System.– The registration status is as if you have already registered the trademark individually in each designated country. This results in special, independent rights in each of the designated countries. Therefore, the use is necessary in every country to maintain the trademark right (the exception is the EU indication, which we talked about in the EU trademar pros section).
– The previous registration or registration of a trademark in only one EU Member State may lead to the refusal of the application. This is particularly problematic if that particular country is not the country in which you intend to use the trademark.– The previous national / EU application or registration is required. Not only this, but the first 5 years of the international application determines the fate of a national application that is essentially its basis. Refusal of the national application leads to the refusal of the international application.
– The list of goods and/or services in the international application must be the same or shorter than the list in the national application/registration.
– The application examination system differs significantly from the EUIPO system, as in some countries, it is done by comparing the submitted/registered trademarks. This poses an obstacle to registration, even if it’s about trademarks that owners no longer use, nor are they of any importance.

IS IT POSSIBLE TO COMBINE THE TWO SYSTEMS?

A trademark can be protected by combining these two systems, essentially, using the Madrid System, with the EU being identified in the same way as other designated countries.

The advantage of this system is in lower costs when the EU is marked in the application for an international trademark than when the EU trademark application is submitted directly. Also, if the application for the EU trademark gets rejected, it is possible to convert the application to a trademark application in the EU Member States[1], which also reduces costs compared to other options in that situation.

Disadvantages are that the previous national application/registration is required and that there is a link between international and national application/registration for the first 5 years, which we have previously discussed.

CONCLUSION

After you have decided to register a trademark, the first question to ask yourself is: Do I need protection only in the territory of Serbia?

In other words, are you planning to export the goods abroad, or provide services overseas? If so, in which countries? Does this entail only the EU countries or some other countries, or those countries are not among the EU Member States at all?

Furthermore, you should look at the advantages and disadvantages of various trademark registration systems and see whether there are obstacles which might not be able to “overcome”, and what are the decisive advantages that would make you opt for a specific system.

Coming to the definite answers to these questions will guide you to the end of the labyrinth, where the trademark registration system that best fits your needs shall await.

[1] To be specific, when we say that a single tax is paid, we are referring to one international tax, instead of paying as much taxes as there are countries for which territories trademark registration is sought. This international tax is paid to the International Bureau of the World Intellectual Property Organization. Please note that it does not exclude the payment of the so-called domestic taxes or republic administrative fees.
[2] Paris Convention for the Protection of Industrial Property of March 20, 1883, revised in Brussels on December 14, 1900, in Washington on June 2, 1911, in The Hague on November 6, 1925, in London on June 2, 1934, in Lisbon on October 31, 1958, and in Stockholm on July 14, 1967
[3] International Classification of Goods and Services – the Nice Classification; The Nice Agreement on the International Classification of Goods and Services for the Registration of Trademarks of 15 June 1957, revised in Stockholm on 14 July 1967 and Geneva on 13 May 1977 and amended on September 28, 1979.
[4] Article 57, paragraph 1 The Law on Trademarks (“Official Gazette of the Republic of Serbia”, No. 104/2009, 10/2013 and 44/2018 – state law)
[5] The exception applies to Malta, as well as to the Benelux countries, which are treated as one.

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