CIPO’s Consultation

In an effort to maintain “a modern and efficient trade-marks regime” that is globally competitive, the Canadian Intellectual Property Office (“CIPO”) is re-considering whether Canada should ratify the Madrid Protocol. CIPO last hosted an open consultation about this issue in 2005. The impetus stems from Canada’s desire to remove barriers with Canada’s priority trading partners (the US, the EU, China and Japan). In fact, CIPO states that of the 79 countries that are signatories to the Madrid Protocol, Canada is the only developed country that is not yet a party. The consultation period opened on December 15, 2009 and will close on March 15, 2010. Stakeholders’ comments will be posted on CIPO’s website and will be available for general consideration for 3 months following the close of the consultation period.

What is the Madrid Protocol?

The Madrid System, governed by the World Intellectual Property Office, is comprised of 2 international treaties: the Madrid Agreement and the Madrid Protocol. Countries can ratify either one or both of the treaties. The Madrid Protocol was created to overcome the shortcomings of the Madrid Agreement and is favoured among countries. The Madrid Protocol is open to individual countries and inter-governmental organizations, such as the European Union. Canada is considering ratifying the Madrid Protocol, not the Madrid Agreement.

Neither the Madrid Agreement nor the Madrid Protocol govern the examination, registration and/or protection of the trade-marks internationally, rather they function as a gateway for the administration of trade-mark applications globally. Under the Madrid Protocol, a trade-mark application or registration (commonly referred to as a “Home Application/Registration”) can be used as a springboard for an International Application. The International Bureau will examine the International Application only to ensure that it complies with formalities. The brand owner then selects in which countries it wishes to obtain trade-mark registrations. Each country’s national trade-marks office is responsible for prosecuting trade-mark applications and for granting trade-mark registrations in the respective jurisdictions.

What are the Benefits of the Madrid Protocol to the Brand Owner?

Ultimately, the administrative ease of crafting a cohesive global trade-mark portfolio under the Madrid Protocol can significantly reduce costs for the brand owner. For example, the recording of renewals, mergers, assignments and changes of address is centralized through making the appropriate filing in respect of the International Registration; the same changes are then extended to the national applications/registrations. This is more cost-effective (and saves the administrative headache) of individually filing the appropriate documentation with each national trade-marks office on a country-by-country basis, which is the alternative to using the Madrid Protocol.

What are the Disadvantages to the Brand Owner?

The validity of each trade-mark registration granted under the Madrid Protocol relies upon the Home Application/Registration for the first 5 years from the date of the International Registration. Thus, if issues arise with the originating trade-mark application, the remainder of the trade-mark registrations/applications at the national office may be at risk. However, under the Madrid Protocol it is possible to convert the national applications if the underlying home application/registration fails. If the conversion is not made, however, this can be a powerful tool for the brand owner’s competitors. A successful attack may have a domino effect on the global brand, rather than forcing the competitor to launch an attack in each jurisdiction, which can be costly to the competitor.

The scope of protection (i.e. the statement of wares/services protected in the application) for each trade-mark application under the Madrid System must be identical to that of the originating trade-mark application. However, it may be that a company’s brand/product line varies in each country/region depending on consumer trends, cultural considerations and market opportunities. Thus, the brand owner may benefit from increased flexibility in trade-mark protection in each country. If the brand owner wishes to subsequently assign the trade-marks, the new owner must have a real and effective industrial or commercial establishment in the country under the Madrid Protocol. Thus, if the brand owner assigns its brand globally to another party that does not have an establishment in each of the countries under the Madrid Protocol, the new owner cannot be recorded in that country. This could be a significant barrier for the brand owner in the future.

What to Expect?

According to CIPO, the Canadian Trade-marks Act has not been substantively revised for approximately 55 years. The tone of CIPO’s consultation period notice suggests that it is eager to see Canada ratify the Madrid Protocol. However, as we have seen with efforts to revise the Canadian Copyright Act, it is unlikely that this process will be a quick endeavor. Notwithstanding, it will definitely be interesting to get the perspective of Canada’s community of trade-mark practitioners and brand owners on this issue, as facilitated through CIPO’s open consultation.

If you have any questions relating to the above, please do not hesitate to contact me.

Ashlee Froese
Business Law Group
Lawyer
Trademark Agent
Tel: 905.276.0406
E-mail: afroese@kmblaw.com

The comments in this newsletter are of a general nature and are not designed to replace professional advice in specific situations. If you would like extra copies of this newsletter, or you know of anyone who would be interested in joining our mailing list, please contact Cheryl Woolcott at (905) 276-9111.