When you need to sprint to the Trademark Office: Trade protection around the globe

By Daniella Fiocco

What’s in a name?

“What’s in a name? That which we call a rose by any other

name would smell as sweet.”

– William Shakespeare

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William Shakespeare may have been a brilliant poet, but he was no intellectual property expert; if he were he would have known that a name, and by extension a trademark, is a most valuable asset, forming the very identity of a brand.

Apple, Nike, Coca-Cola, Adidas, Maybelline… they are brands of incomprehensible worth and worldwide acclaim, recognized by their inherently distinctive trademarks that act as a mark of superior quality across the globe. They are the greatest demonstrations of why protecting your trademark is so vital; the monopolistic, exclusive rights owned by the companies prevent people from copying or passing off goods as belonging to the renowned brand.

Trademark law operates to eliminate confusion amongst consumers and to aid businesses in the building of brand reputation by granting the proprietors of Marks the exclusive right to use the Mark. As was noted by the U.S. Supreme Court in Qualitex Co. v. Jacobson Products Co., trademarks operate to “quickly and easily assure potential customers that the item with the mark is made by the same producer as the other similarly marked items… and at the same time, the law helps to assure a producer that it (and not an imitating competitor) will reap the financial, reputation-related rewards associated with a desirable product.” Trademarks are undeniably valuable in the marketplace.

In a world in which more and more companies are “going global”, however, it’s important for companies to be aware of the different registration systems around the world and, in particular, the point at which trademark protection applies in each jurisdiction.

First to File

At the conclusion of 2011, the world looked on in amazement as Apple – a leading international brand – lost its ability to hold exclusive rights to the trademark “IPAD” in China, because another brand had registered the Mark for their own use earlier. Two years later, Apple again failed to have their “IPHONE” trademark registered in China, as a company was already using the Mark on their leather goods. The sword on which the multinational technology company fell is one known as the “first to file” rule, applying strictly in China and in other jurisdictions such as Indonesia and the Philippines. In these nations, a premium is placed upon the registration process and there is no hope of protecting your Mark against the world without proof of such registration. It doesn’t matter if you are a multinational company who has been in use of the Mark was more than 50 years facing off against a small family business who applied for registration two weeks ago; if another party makes it to the national IP office with their registration application before you do, the Mark is theirs.

This legal principle can be contrasted with another that operates in many nations around the world; the “first to use” rule.

First to Use

As an Australian currently working in Malaysia, I’ll be the first to admit that I am biased towards the excellent common law doctrine that is the “First to Use” rule. In jurisdictions where this rule applies, protection of a trademark rests on its use in the course of trade; that is, if you have been using an unregistered mark in the course of trade and in good faith prior to a competitor applying for registration of your mark, your rights to the mark will be recognized and protected at law.

This does require some evidence of use in the course of trade (invoice letter heads, traded products bearing the mark, etc.), however under this principle decisions favour the prior user of the mark, regardless of registration or application dates.

Comparisons

It is unsurprising that the use of one rule or another is not universal across the world; simply put, there are pros and cons to both rules.

When a country operates on a first-to-use basis, the registration system is capable of being undermined and is almost certainly undervalued. Although registration is still recognized as prima facie evidence of trademark ownership, an applicant in many ways can never be certain that the mark they are hoping to register in good faith is not already being used in the marketplace. As the Examiners in IP Offices in these countries are unable to comprehensively survey the entire trade industries for identical or confusingly similar marks that are not registered (and it would be ridiculous to request them do so), the result of this system is to bring more (often trivial) cases before the Courts, as an infringement will only become apparent after it has been seen in the course of trade.

The first-to-file rule, in many respects, provides answers to these issues. The strict application of law in relation to exact time of filing, however, results in well-recognised brands, such as Apple, risking the loss of rights to a mark simply because in that specific country another party had managed to hand a piece of paper in first. Though the rule abolishes uncertainty about overlapping marks and provides more definitive protection at the registration stage, it limits the ability for a case-by-case analysis and determination, which in turn may result in unjust decisions. It is also the cause of “trademark squatting”, a strange creature of the trademark system in these countries where a party registers a mark, often without the intent of ever using it, but simply in order that another brand (often a famous one) is unable to register its mark in that country.

So given that there are advantages and disadvantages to both systems, what’s the solution for businesses acting in good faith, hoping to have their trademark registered internationally?

Sprint or Secure

The first step for any brand hoping to launch internationally, now or in the future, is to identify the countries into which they intend to enter, and check which rule their trademark registration process adheres to. A comprehensive country list divided by rule can be seen below.

If you are hoping to break into China, the Philippines, Indonesia or Brazil with your brand, you’d best run – no, sprint – with your trademark application to the registration office as early as possible – even before your brand or product launch in the respective countries. A brand will soon fall on its sword if it fails to do so.

For those mark-bearing-products comfortably residing in Australia, the United Kingdom or Malaysia with a lack of registration, they can rest assured that they are protected – provided that there is some proof lying around that the trademark was, in fact, used in the course of trade before anyone else used it. Given also that registration is prima facie proof of trademark ownership, it’s best to secure your rights by beginning the application process anyhow.

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KASS

Communications at KASS International Sdn Bhd

KASS International is an established Intellectual Property Firm which offers a one-stop solution for IP matters in Malaysia, South East Asia, and worldwide.