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From PLI’s Course Handbook Understanding Trademark Law 2008

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CREATING A TRADEMARK PROTECTION PROGRAM IN THE UNITED STATES AND ABROAD

Jon O. WebsterBausch & Lomb Incorporated

This paper is a modified and updated version of CREATING A TRADEMARK PROTECTION PROGRAM by Jon O. Webster, Joe Kucala and David B. Sherman included in the Understanding Trademark Law 2007 PLI Program.

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CREATING A TRADEMARK PROTECTION PROGRAMIN THE UNITED STATES AND ABROAD*

Jon O. Webster

* This paper is a modified and updated version of CREATING A TRADEMARK PROTECTION PROGRAM by Jon O. Webster, Joe Kucala and David B. Sherman included in the Understanding Trademark Law 2007 PLI Program.

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Biographical Information

Name: Jon O. Webster

Position or Title: Senior Counsel – Trademarks

Place of Business: Bausch & Lomb Incorporated

Address: One Bausch & Lomb Place, Rochester, NY

14604

Phone: (585) 338-8905

Fax: (585) 338-8706

E-Mail: jon.webster@bausch.com

Primary Areas of Practice: Intellectual property; litigation

College: University of Chicago

Law School: State University of New York at Buffalo

Work History: 1984-1986 – Judicial Law Clerk, NYS

Appellate Division

1986 – 1989 Nixon Peabody

1989 – Current – Bausch & Lomb

Incorporated

Membership in Associations, Committees, etc.: INTA, NYS Bar Association, Speaker at INTA, PLI, NYS Bar Association

I. Introduction ............................................................ 2 A. Trademark Basics.......................................................2B. Trademark Registration in the U.S. and Abroad........2C. Creating a Trademark Protection Program.................2

II. Trademark Basics.................................................2A. What is a Trademark / Service Mark..........................2B. Types of Trademarks..................................................3C. Choosing Which Trademarks To Register: Practical Considerations....................................................................4D. Obtaining Protection in the U.S. and Abroad.............8

III. Trademark Protection in the U.S. and Abroad..............................................................................12

A. Federal Trademark Registration in the U.S..............12B. Trademark Registration Abroad...............................14

IV. Creating a Trademark Protection Program...........................................................................29

A. International Registration Strategies....................29B. Protection Strategies.............................................31C. Internal Licensing Situations................................32D. Portfolio Management & Review.........................33E. Effective Docketing Procedures...........................34F. Extracting Value from the Portfolio.....................34

V. Conclusion..............................................................35

Introduction

These materials provide a basic overview regarding developing and implementing a global trademark registration and protection program, including strategies for selecting, registering and enforcing marks.

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Creating A Trademark Protection Program

I. Introduction

A. Trademark Basics

B. Trademark Registration in the U.S. and Abroad

C. Creating a Trademark Protection Program

II. Trademark Basics

A. What is a Trademark / Service Mark

1. A trademark can be any word, phrase, name, symbol, logo, or design used to identify and distinguish one’s goods.

Some examples of trademarks are KODAK® film, the McDonald’s® Golden Arches, the WHOPPER® hamburger, and GE® light bulbs. The script form of word marks can be protected as a design as well, as in the case of the Coca-Cola® cursive mark.

2. A name used to identify your business entity or a fund is a service mark.

3. The financial product, itself, may be a trademark or service mark.

4. Both are a different type of mark but accorded the same rights and benefits, and subject to the same risks and criteria for assessing that risk.

5. A trade name is merely the name of a business used to distinguish that business from others. A mark such as McDonald’s® can be a trademark (for food), a service mark (for restaurant services), and a trade name (for the business

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itself) at the same time.

B. Types of Trademarks

In general and specifically for registration purposes, the mark should ideally be as “inherently distinctive” as possible in order for the United States Patent and Trademark Office (the “USPTO”) to approve registration. The USPTO views the strength of a mark on a scale of distinctiveness, with generic terms at one extreme and arbitrary and fanciful marks at the more desirable opposite extreme.

1. Generic

Generic terms include the common names for goods, such as BOAT for a boat or BANK for a financial institution; these terms are not likely to distinguish any goods or services from others and therefore they are not awarded protection as trademarks or service marks.

2. Descriptive

Descriptive marks are stronger than generic marks; these marks describe one or more characteristics of the goods, such as EXTRA CRISPYTM fried chicken. Still, it is difficult to register and to enforce exclusivity of descriptive marks unless the owner can demonstrate an acquired distinctiveness or secondary meaning due to extensive use and publication of the mark. It must be demonstrable that the public associates this mark with the particular source of the goods.

3. Suggestive

Suggestive marks are more easily registered with the USPTO. These marks suggest (instead of describe)

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one or more of the characteristics of the goods or services they are intended to identify. Some famous suggestive marks are IVORY® for soap, COPPERTONE® for suntan lotion, and ARRID® for deodorant. This type of mark need not prove secondary meaning or acquired distinctiveness in order to meet the standards of registration and protection.

4. Arbitrary and Fanciful

The strongest marks and the marks most readily registrable are arbitrary and fanciful marks, which bear no apparent relationship to the goods or services they identify. An arbitrary mark employs an ordinary term that is unrelated to the product, such as TIDE® detergent, CAMEL® cigarettes, or APPLE® computers, while a fanciful mark uses an invented term with no ordinary meaning such as KOTEX® feminine products, XEROX® copiers, or KODAK® cameras. These types of marks are granted the widest range of legal protection as they are considered the most inherently distinctive.

C. Choosing Which Trademarks To Register: Practical Considerations

1. The Trademark Owner

Before attempting to obtain trademark protection, a trademark owner must identify which mark(s) it seeks to register including the rationale and basis for seeking registration. In doing so, the trademark owner may consider the following factors:

Corporate structure: Who will be the owner?

o National or Multinationalo Parent / Subsidiaries

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o IP Holding Company

Budget

o Search and clearance feeso Application and registration filing feeso Attorneys fees (domestic and international)o Maintenance costs (guarding against dilution,

preventing trademarks from becoming generic, maintaining use and registration, monitoring the marketplace, conducting periodic audits, etc.)

Trademark development costs

o Return on investmento Projected saleso Life expectancy of trademark (long vs. short)

Geography

o Scope of present and future sales and advertisingo Promotional and marketing activities may impact

whether to file only in Roman letters/English or in other languages (Chinese traditional/simplified, Japanese/Katakana, Korean, Cyrillic, etc.)

o Location of production

In many territories, the production of a product bearing a trademark constitutes use of that mark. Accordingly, the mark should be searched and registered in any territory prior to manufacturing in that territory. Otherwise, you can encounter a situation where a third party owns your mark and shuts down your plant in the middle of production, which is costly. This is an important part of trademark searching and filing strategy. In some territories, one solution

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to the problem of a third party owning the mark is to have the product manufactured there and the labels applied in another territory – this is done in China sometimes – but this not always a cost effective remedy.

o Location of competitors

Defensive registrations

o Prevent third parties from obtaining presumptive rights that may impact your ability to adopt marks, even if the proposed mark is arguably descriptive

o Attempting to register purportedly descriptive/non-distinctive terms

Domain names

o Primary registrationso Defensive registrationso Registering formative domain nameso Cost / benefit analysis: How far do you go?

2. Types of Goods and Services

Likelihood of counterfeiting

Importance of branding to the target consumers?

Consumer or trade item?

“Impulse” item?

Cost of registering in multiple classes

Specifications of goods / services

o Broad vs. narrow protection

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o Narrow protection may provide limited rights, reduced ability to enforce rights just outside the ambit of coverage

o Broad protection could delay, complicate, and increase the costs of registration

o For example, in the U.S. and Korea, it is not possible to obtain registration for marks under class-wide headings or extremely broad classifications of goods / services in the same way that it is possible under Madrid.

o What is an appropriate balance?

3. Value of the Trademark: Balancing the Relative Importance of Marks

Primary Trademarks

Logos

o If a company is going to invest in the development of a particular stylized mark, such as the script Coca Cola mark or the Nike Swoosh design, they may want to register it to prevent another company from using a similar stylization/color scheme, in addition to registering the word mark alone, which allows for the broadest protection.

Sub-brands and Secondary Marks

4. Registrability

It is generally less costly from both the filing and enforcement perspective to use trademarks that are easily registrable.

Arbitrary and Fanciful Marks are the most readily registrable because they are considered the most

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inherently distinctive.

Suggestive Marks are more registrable than generic or descriptive marks because they are considered to be more inherently distinctive and do not require a showing of secondary meaning or acquired distinctiveness to obtain registration.

Descriptive marks are more difficult to register because they require the party seeking registration to prove that the mark has acquired secondary meaning. Even when such a showing cannot be made to obtain registration, it may be valuable to attempt to register descriptive marks in order to defend against registration attempts by other parties. Nevertheless, such marks might require less time and money in building brand awareness.

To aid in the registration process, it is helpful to develop standardized descriptions of goods / services to apply generally and to the extent possible.

Of course, the successful and continued registration of a mark depends upon additional factors, including but not limited to searching, clearance, filing, examination, foreign filing, maintenance, and policing the mark.

D. Obtaining Protection in the U.S. and Abroad

1. Types of U.S. Trademark Applications

Intent-to-Use: An application for registration of the mark can be filed before the mark is actually used. The advantage of this intent-to-use application is that it provides notice of your claim to a mark prior to actual use of the mark and therefore, would make the mark unavailable to others.

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Use-Based: An application for registration of a mark can be filed based on actual use of the mark in commerce. The advantage is that no additional filing perfecting use of the mark needs to be made before the mark can be approved for publication.

Practice Point: Specification of Goods: USPTO’s decisions holding any error in specifying the goods or services claimed in an application (or a Section 8/15 affidavit or renewal) will almost ensure an application or registration will be lost in its entirety irrespective of the owner’s intent (see, Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ 2d 1205 (TTAB 2003)). It is important to therefore accurately set forth the description of goods/services to those actually contemplated.

Priority Filings: US trademark law provides several mechanisms pursuant to which a foreign trademark owner can use the priority established by a foreign trademark filing when making a filing in the United States.

o Section 44(d) of the U.S. Trade Mark Act provides the trademark owner with a basis for receipt of a priority filing date in situations where the U.S. filing is made within six months of the filing date of the foreign application. A Section 44(d) filing is treated as if it were filed in the United Sates on the same day as the filing in the foreign country and will receive priority over any application for a confusingly similar mark filed in the U.S. after the priority date. The Section 44(d) filing only provides a basis for receipt of a priority filing date, however, but not a basis for publication or registration.

o Section 44(e) of the U.S. Trade Mark Act allows a

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foreign trademark owner the luxury of relying on a registration granted by the applicant’s country of origin as a basis for registration in the United States. Although the Section 44(e) filing does not confer on the trade mark applicant a priority filing date, benefits of such a filing include that the applicant does not need to allege use or provide specimens of use in order to secure registration, all that is needed is an assertion of a bona fide intention to use the mark in commerce.

o Regardless of the priority of the foreign filing, in order to obtain a federal trade mark registration, there must not be any third party applications or registrations for confusingly similar marks which predate the Section 44 filing which could be cited by the Examining Attorney as an impediment.

o Practice Point: Another reason to consider filing for registration protection even for proposed use is that foreign fame may not be enough to justify trademark protection for unregistered marks in some U.S. jurisdictions (see, e.g., ITC Limited v. Punchgini, Inc., Case No. 05-0933 (2nd Cir. Feb. 26, 2008)).

o Practice Point: Fourth Circuit held in 2007 that a foreign company, whose only contact with US is an application in the USPTO, may nonetheless be required to produce a foreign witness to testify at a deposition (Rosenruist-Gestao E Services LDA v. Virgin Enterprises Ltd., 511 F.3d 437 (4th Cir. 2007)).

State Registrations: Many states have their own trademark registration systems. If a mark is only used in one state, this is a way to obtain a registration, as use in interstate commerce is required for federal

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registration. On the same token, a prerequisite of obtaining state registration is that the trademark is used in the state where protection is sought. While state registration systems do not include any substantive application review, they provide a low-cost way for the owner of a trademark that is used only locally or regionally to provide legal notice of their use to others.

Common Law Protection: Because protection under the Lanham Act, 15. U.S.C. § 1051(d), is based on use in commerce, registration is not required to obtain protection. Therefore, unregistered trademarks may be protected in the U.S. under common law within the geographic area in which they are used.

2. International Applications: Registration-Based Protection

In the vast majority of the world, registration is essential because trademark rights stem solely from a registration. Under such a regime, a party does not have any trademark rights unless they have a registration. As a result, a party could not sue an “infringer” and it could be sued for infringement by a registrant – even if the registrant is a pirate.

For example, under the Community Trade Mark system, protection is contingent upon registration. Unlike the U.S., no use or intent-to-use is required to obtain registration.

Protection is country-specific. Thus, a U.S. trademark does not grant the user any protection outside of the U.S.

Priority Filings: Various foreign trademark regimes provide mechanisms pursuant to which a U.S.

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trademark owner may use the priority established by a U.S. trademark filing to register abroad.

o For example, under the Madrid Protocol, a claim of priority in an international application may be based on a U.S. application in accordance with Article 4 of the Paris Convention (even if the filing date of the basic application precedes the implementation date of the Madrid Protocol in the United States). The international application must both (1) assert a claim of priority and (2) be filed in the USPTO within six months after the filing date of the basic application that forms the basis of the priority claim.

III. Trademark Protection in the U.S. and Abroad

A. Federal Trademark Registration in the U.S.

1. Registration with the USPTO

Although trademark rights in the U.S. accrue from use instead of registration, it is safer and less expensive to register a trademark with the USPTO than it is to use the mark and then, upon learning of another’s use of the mark, file an opposition or cancellation proceeding with the USPTO or file a trademark infringement lawsuit.

Current USPTO filing fees are:

o $375 per class for an application filed on paper;o $325 per class for an application filed electronically

using the Trademark Electronic Application System (“TEAS”); or

o $275 per class for a TEAS Plus application that

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meets the requirements of 37 C.F.R. §§2.22 and 2.23.

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A full USPTO fee schedule is available at: http://www.uspto.gov/web/offices/ac/qs/ope/fee2007february01.htm.

2. Benefits of Obtaining U.S. Trademark Registration

Constructive notice to public of claim of ownership

Legal presumption of ownership of mark and exclusive right to use mark

Ability to bring an action in federal court

Additional protection

o A federally registered trademark used continuously for a period of five years may become “incontestable” upon the filing of a declaration with the USPTO. 15 U.S.C. § 1065. Therefore, registration provides a trademark owner plaintiff with a sword by making infringement easier to prove, and because it provides a trademark owner defendant with a shield against lawsuits by an alleged prior user.

Use of U.S. registration as a basis to obtain foreign registration

3. U.S. Customs Protection

In the U.S., the owner of a valid federal trademark registration may register that mark with U.S. Customs & Border Protection (“CBP”), which is a bureau of the Department of Homeland Security and maintains a trademark recordation system for marks registered with the USPTO. CBP collects information from trademark owners relating to the trademark (i.e., who

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is authorized to use mark and where the mark is manufactured, sold, etc.) and enters that information into an electronic database that CBP officers use to actively monitor shipments entering the U.S. and prevent the importation of infringing goods. See http://www.cbp.gov/.

The appropriateness of foreign Customs registrations can be evaluated on a country-by-country basis, however there are obviously some territories in which counterfeiting is a more notorious problem. While certain countries may provide certain benefits from customs recordals, such benefits may be ineffective or unavailable in other countries.

B. Trademark Registration Abroad1. Individual Country Registrations

Traditionally, parties seeking foreign trademark protection secured foreign local counsel and filed individual applications in the trademark office of each country in which it sought protection.

Because registration procedures and the protection flowing from a registration vary by country, there are many reasons why individual country filings might be preferred. Such reasons may include the substantive examination procedures of each country, the cost of individual registrations, the number of countries in which protection is sought or may be sought in the future, the duration of review and the time in which protection may be obtained, or the suitability of the available international protection schemes to a particular registrant’s needs.

Individual registrations are necessary if international registration is sought in countries that are not

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members of the European Union or Madrid Protocol.

Practice Point: United Kingdom: As of October 1, 2007, the UKIPO no longer examines trademark applications on relative grounds (e.g. where a filed mark is confusingly similar to a prior registered mark for identical or related goods/services) but only on absolute grounds (i.e. non-distinctive descriptive marks).

Practice Point: United Kingdom: The UKIPO has issued a “fast track” application process whereby an application would be examined within ten (10) business days of receiving a completed electronically filed application and a premium fee of about US $1,000 (as of April, 2008).

2. The Community Trade Mark (“CTM”)

a. Introduction

A unified system of protection in all 27 European Union (“EU”) member nations: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. Map of the EU available at: http://en.wikipedia.org/wiki/European_Union#Member_states.

The CTM does not include Norway or Switzerland

Who may file: Nationals of the EU, of the 171 contracting members to the Paris Convention (See http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=2 ), and of other countries

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granting reciprocal rights.

Applications are filed with the Office for Harmonization in the Internal Market (“OHIM”) in Alicante, Spain. See http://oami.europa.eu/.

Embraced by the legal community as an increasingly popular option.

b. CTM Characteristics and Benefits

Much less expensive than filing applications in 27 separate countries. Current CTM filing fees are:

o 900 Euros ($1,414) filing a CTM application for three classes of goods, plus 150 Euros ($236) for each additional class

o 750 Euros ($1,178) for electronically filing a CTM application for three classes, plus 150 Euros ($236) for each additional class

o 850 Euros ($1,336) to register a CTM in three classes, plus 150 Euros ($236) to register in each additional class

o While these are the basic fees, an easy to use fee calculator is available on the OHIM’s website at: http://oami.europa.eu/en/office/marque/taxes.htm.

*Rounded to the nearest dollar using exchange rate as of April 4, 2008.

One application covers all of the member nations.

As the EU expands, CTM protection extends to new member nations.

Enforcement of rights is EU-wide. In other words, a party may bring one enforcement action, which would apply to the entire EU, and obtain an EU-wide

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injunction to enforce its CTM rights.

Does not require the existence of an application or registration in the applicant’s home country. Moreover, priority under the Paris Convention based on a previously filed application may be claimed, but additional goods and services may also be covered (without priority). In addition, once a CTM issues for a trademark, prior national registrations for that trademark can be abandoned without losing the original national priority dates.

While use of the mark is not required to maintain registration, a CTM registration will become vulnerable to cancellation by a third party if the mark is not used in the EU for a period of five years or more. Significant use in only one country of the EU is sufficient to protect the registration from cancellation on the ground of nonuse. Therefore, it is advisable to maintain use of the mark in at least one member country of the EU to protect your investment in the registration.

3. The Madrid Protocol and filing with the WIPO

a. Introduction

The Madrid Protocol serves as the primary international system for the registration of trademarks and is administered by the International Bureau (“IB”) of WIPO, which is located in Geneva, Switzerland. While the Protocol and the Madrid Agreement are referred to jointly as the “Madrid System,” they are separate and distinct from one another. Thus, many nations, including the U.S., are party to the Protocol but not the Agreement. As a result, the Madrid Agreement is not available to U.S. entities.

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b. Description of the Madrid Protocol

Under the Madrid Protocol, the owner of an application or registration (a/k/a the “basic” application or registration) in a country that is party to the Protocol may obtain an international registration from the IB and request an extension of the protection afforded under the international registration into any other contracting member nation. During the first five years from the date of international registration, the extension of the protection into additional nations is dependent upon on the “basic” application or registration.

The Madrid Protocol provides trademark owners with the option of filing one application in the U.S. (or any other contracting state) and designating any combination of the 72 contracting members to the Madrid Protocol to be part of their registration. See http://www.wipo.int/madrid/en/members/pdf/members.pdf.

All applications and communications are in the applicant’s chosen language of English, French, or Spanish.

Trademark assignments and registrant changes may be filed centrally at WIPO rather than individually with each national trademark office.

International registration term is 10 years, renewable for additional 10-year periods. In order to maintain extensions of protection in each country, it is necessary for the applicant to comply with all local requirements, such as affidavits of continued use, which may be required by the individually designated countries. Still, maintenance fees under Madrid are arguably lower under the Protocol than under

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individual national registrations because only one renewal fee must be paid to the IB.

Enforcement: Action for infringement is taken through the courts of the country concerned. Generally, any injunction extends to that country only.

c. Fees

The WIPO website provides an easy to use fee calculator that may be used to facilitate the comparison of costs. See http://www.wipo.int/madrid/feecalc/FirstStep. The following fees, which do not consider the cost of the “basic” application, are payable directly to the IB, in Swiss francs only, for the filing of an international application:

o A basic fee of 653 Swiss francs ($647) or 903 Swiss francs ($895) where the mark is in color;

o Either a standard designation fee of 73 Swiss francs ($72) or an individual designation fee whose amount is fixed by the country concerned (but may not be higher than the amount that would be payable for registering the mark directly with the office of the country concerned) for each designated country;

o A supplementary fee of 73 Swiss francs ($72) for each class of goods and services beyond the third (however, no supplementary fee is payable where all the countries designated are ones in respect of which an individual fee is payable).

*Rounded to the nearest dollar using exchange rate as of April 4, 2008.

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In addition to the fees mentioned above, the Office of origin may charge a handling fee for forwarding the international application to the International Bureau. See http://www.wipo.int/madrid/en/faq/20questions.htm#P6_37.

When filing through the USPTO, an international applicant must pay fees to the USPTO and to the IB. The USPTO charges a fee for certifying international applications and transmitting them to the IB, called a “certification fee.” The certification fee is $100, per class, if the international application is based on a single U.S. application or registration. The certification fee is $150, per class, if the international application is based on more than one U.S. application or registration.

d. Applications Originating from the U.S.

Madrid application may be filed based on a U.S. application or registration.

Who may file: Filing party must be either (i) a U.S. national; (ii) domiciled in U.S.; or (iii) have a “real and effective industrial or commercial establishment in the U.S.”

Process for filing: The owner of a U.S. application or registration may seek protection in any of the countries party to the Madrid Protocol by submitting a single application to the IB of WIPO through the USPTO.

Date of international registration: If the IB receives application within 2 months of date of receipt in the USPTO, the date of international registration is the

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date of receipt in USPTO. However, if the IB receives application later than 2 months after date of receipt in the USPTO, the date of international registration is the date of receipt in the IB.

Costs: On its surface, the Madrid Protocol appears to be a cost-effective way to obtain extremely broad international protection through an easy-to-use, centrally administered registry. Since the U.S. only joined the Protocol on November 2, 2003, there is still debate over whether any financial benefits will actually result from a Madrid application (given that prosecution of an application in the U.S. takes several years). Therefore, parties and their attorneys must weigh the advantages and disadvantages of Madrid registration and determine whether it is right for them. As more applications are filed and more data relating to the costs of prosecution is gathered, we will be able to develop a more informed opinion regarding the relative costs of Madrid applications.

e. Advantages of the Madrid Protocol and the WIPO

A trademark owner who has an existing (“basic”) trademark application or registration in a member jurisdiction may obtain international registration and trademark protection from the WIPO.

Registrants may make a “subsequent designation” to extend the protection afforded to the international registration to one or more member jurisdictions that were not identified on the original international application. Thus, filing under Madrid may allow for protection in territories not normally covered (are those markets important?).

Centralized filing system: All applications and communications are in the applicant’s chosen

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language of English, French, or Spanish. Trademark assignments and registrant changes may be filed centrally at WIPO rather than with each national trademark office. Maintenance fees for an international registration will be lower because only one renewal fee must be paid to the IB. The Protocol arguably provides for lower costs and faster, more efficient administration because it requires only one application, one file, one set of fees, one process for renewals, licensing, transfers, and administration.

f. Disadvantages of the Madrid Protocol and the WIPO

Dependence and Central Attack:

o For a 5-year period from the date of international registration, the registration is “dependent” on the basic application or basic registration. This 5-year period creates the possibility that all rights could conceivably fall with a single objection not otherwise possible, which could not be asserted against multiple filings.

o If the basic application or registration is restricted, abandoned, cancelled or expired within 5 years of the international registration date, or because of a proceeding initiated within 5 years of the international registration date, the IB will restrict or cancel the international registration accordingly.

o If the IB cancels the international registration as a result of central attack, the holder may “transform” the international registration into national applications in the offices of the member nations that were designated for extensions of protection, such that (i) the holder request it within 3 months of the date of cancellation of the international registration; (ii) the filing date for the new national

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application becomes the registration date of the international registration; and (iii) the application is then examined as a regular application under the law of the particular member nation. The cost of "transforming" the registration will vary based on the number of nations in which the mark is centrally attacked and the cost of transformation in those nations.

o In addition to the fact that transformation is often an expensive process, any restrictions or cancellation of the “basic” mark pose a direct threat to the registration and protection of the holder’s trademark. As a result, the cost savings realized at the beginning of the registration process may be eclipsed by the costs of filing new applications during the three-month transformation window.

o Despite these potential risks, it may be quite difficult to lodge a successful central attack. The success of a central attack generally depends upon the trademark laws of the base registration country. For example, attempting to attack a Swiss-based Madrid application is a costly proposition because of Swiss law. While parties should consider the potential costs of central attack and transformation, they should also consider the likelihood of central attack and the potential probability of a successful attack because such factors could affect the registrant's choice of where to file the "basic" application.

o Selection of home country: A party should consider the likelihood of registration and the expediency with which a registration may be obtained. For example, a party may choose to file its "basic" application in a place like Benelux (Belgium,

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Netherlands, Luxembourg), where registration may be obtained in a matter of days. This would permit a party to obtain protection in countries party to the Madrid Protocol and Madrid Agreement, which the U.S. is not a party to. However, one drawback to registering in a place like Benelux is that it has not been tested whether a U.S. company can register there in its own name or whether it must register in the name of a foreign subsidiary, which could then transfer the mark back to the U.S. parent.

o Is the risk worth the reward? Given the benefits that international registration may provide, it may be worth the risks created because of the registration’s dependency upon the “basic” registration. While this determination should be made on a case-by-case basis, the risks of relying on Madrid to obtain international protection must not be overlooked.

While the Madrid Protocol application procedure has been promoted as a less expensive foreign filing method, the initial savings may be eliminated during the application process. Indeed, U.S. attorneys may file Madrid Protocol applications without incurring the costs of securing foreign local counsel, and in countries such as Germany and Italy, where there is little-to-no substantive examination of a trademark application, extensions of protection may be obtained without the additional counsel. However, in countries with strict examination procedures, such as the United Kingdom and Japan, a request for extension of protection is likely to face initial rejection, and response to such rejection requires the assistance of counsel. This assistance may actually make filing under Madrid more expensive because foreign counsel must review the original filed application and

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make a substantive reply to the initial refusal.

Applicants who base their Madrid application on U.S. filings will often be forced to limit their identification of the goods and services involved. While applicants filing national applications in foreign countries could tailor their descriptions by country and thereby expand the scope of protection of the mark beyond what was permitted in their U.S. filing, this is not possible under the Protocol because the identification of goods or services in a Madrid Protocol application must be identical to those in the basic application or registration. Therefore, depending on the types of goods and services of the applicant, the U.S. applicant may inadvertently narrow or restrict the scope of its international protection by choosing to apply for protection under the Protocol.

Where the only designated countries are the U.S. and members of the EU, there might not be any significant cost savings or benefits from filing a Madrid Protocol application, and the potential for “central attack” could make the process longer and more costly.

It generally takes longer to obtain registration under the Madrid Protocol application than it does to apply for and obtain trademark protection in the U.S. or under the CTM. More specifically, it may take up to two years before extensions of protection issue from a Madrid Protocol application, whereas the filing of a U.S. application and priority CTM application could yield registration within only one year. As a result, the Madrid Protocol often leads to a lengthier period of prosecution and vulnerability of the international registration.

International registration and extensions of protection

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may be assigned only to parties of the Madrid Protocol. This might be a disadvantage to multinational corporation trademark owners that may be more likely to enter into assignments of its trademarks with various international parties.

Corporations looking to enter into licenses of their marks may be disadvantaged by filing a Madrid Protocol application because any delays in registration, and thus being able to prove ownership, may present obstacles to potential licensing agreements. Where a trademark owner intends to license its mark outside the U.S., these delays should be carefully considered.

Prohibition on Amending the Mark or Application Over Time, Even at Renewal

For more information, see http://www.dlapiper.com/global/publications/detail.aspx?ref=snapshot&pub=292.

2. Other Regional Applications

a. South American Regional Filings

Andean Pact

o A regional trade agreement that seeks to increase the economic integration of Bolivia, Columbia, Ecuador, Peru and Venezuela. Under the Andean Pact, a party may file an opposition in any of the contracting countries based upon a registration in another other Andean Pact country. From a practical perspective, it is worth it for a party to register in one of the four countries early on to establish rights in all four. In addition, it is worth it for a party to search all four countries even if that

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party is only interested in using the mark (i.e., for manufacturing) in one country, as such a registration can be a sword or a shield.

MERCOSUR:

o A regional trade agreement Argentina, Brazil, Uruguay, and Paraguay intended to promote free trade and the fluid movement of goods, peoples, and currency. The headquarters are in Montevideo, Uruguay. See http://www.mercosur.int/msweb/.

b. African Regional Filings

African Regional Intellectual Property Organization (“ARIPO”)

o A regional trademark treaty for the following fifteen (15) countries: Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. The ARIPO office is located in Harare, Zimbabwe. Under the centralized registration system created by the Banjul Protocol, applicants may file a single trademark application in one language with either the national office of a contracting state or directly with the ARIPO office. After conducting a formal review of the application, the ARIOP office assigns a filing date and sends it to the designated states, which have twelve months to conduct a substantive review under their national standards. If there are no objections, the application will be accepted and registration will become effective in the designated states. Post-registration procedures such as oppositions, cancellations, and infringement actions are handled in the contracting countries. See http://www.aripo.org. A fee schedule is available at

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http://www.aripo.org/file/new_patent_fees.pdf.

African Intellectual Property Organization (“OAPI”)

o A regional trademark treaty group for the following sixteen (16) French-speaking African countries: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Republic of Congo, Cote d’Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea Bissau, Mali, Mauritania, Niger, Senegal, and Togo. The headquarters of the OAPI are located in Yaounde, Cameroon. An OAPI registration is valid in all OAPI countries. Post-registration procedures such as oppositions, cancellations, and infringement actions are handled in the contracting countries. See http://www.oapi.wipo.net.

c. American Agreements

North American Free Trade Agreement ("NAFTA")

o A regional agreement between the United States, Canada and Mexico to facilitate cross border trade that specifically establishes minimum standards of intellectual property protection, requires effective enforcement of intellectual property rights at the borders of NAFTA states to prevent infringement by imported products, and establishes a dispute-resolution procedure with trade-related sanctions to increase the enforcement of intellectual property rights.

Pan-American Convention for Trademark and Commercial Protection

o An agreement between Bolivia, Brazil, Chile, Columbia, Costa Rica, Cuba, Ecuador, the Dominican Republic, Guatemala, Haiti, Honduras,

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Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, the United States and Venezuela that permits the owner of a trademark in one of these Contracting States to obtain reciprocal trademark protection in any of the other Contracting States "either by applying directly to the proper office of the State in which he desires to obtain protection or through the Inter-American Trade Mark Bureau referred to in the Protocol on the Inter-American Registration of Trade Marks, if this Protocol has been accepted by his country and the country in which he seeks protection." See http://www.wcl.american.edu/faculty/farley/internationaltrademark/interamer.cfm/.

IV. Creating a Trademark Protection Program

A. International Registration Strategies

1. File in the U.S., and file extensions under Madrid

Probably less expensive, more convenient.

Limited by U.S. restrictive description of goods/services requirements.

Restricted by U.S. intent to use requirements.

More rigorous U.S. trademark examining procedures. As a result, there is a potentially greater chance the U.S. application will fail and the international registration therefore will be cancelled.

Careful consideration should be paid before adopting this approach. This could be the best strategy for a strong mark and a consistent set of goods and / or services. However, another approach would be to file

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a federal registration in the U.S., file nationally in key Asian and European countries, and then file a CTM extension under Madrid in case the CTM is opposed (upwards of 50% of CTM applications are opposed).

2. File abroad, and file extensions under Madrid

Basic application will be examined under procedures of home country, which might be more advantageous.

But for a U.S. extension, still stuck with more restrictive U.S. requirements for description of goods, U.S. intent to use requirements, more rigorous U.S. trademark examining procedures.

Probably a rare situation that a brand is well-established abroad and only tentatively moving into the U.S.

3. File in U.S., and file CTM using Paris Convention priority (or vice versa)

E.U.-wide injunction

CTM examination not dependent on U.S. examination

No protection in (most) Eastern European, Asian or Russian countries

Arguably better where mark is primarily used in few European countries

4. File under Madrid for countries where there is little to no examination, and file separate national applications

Considering the national registration strategies available, companies and brand owners that have a new product, brand, or house mark may want to file

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nationally and not risk registering under Madrid. However, Madrid may be a way to obtain broad coverage at a considerably lower cost.

B. Protection Strategies

1. Watch Services

There are a variety of watching services available to trademark owners. They range from monitoring the filing of new applications in jurisdictions around the world to more comprehensive search companies that proactively monitor the marketplace and Internet for infringing content. Just as the type of services vary, so does the cost.

2. Internal Monitoring

An efficient process by which to conduct your own internal monitoring, whether it is by a paralegal or other administrative professional. This individual can utilize search engines or other web-based tools.

3. Brand Guidelines

In order to ensure uniform and acceptable use of your brand, it is important to develop a set of Brand Guidelines. These guidelines will inform internal and external parties on proper usage and display of your brand. Topics will include proper formatting, display in connection with third party trademarks/logos, and the use of any attribution statements, i.e., XYZ is a registered trademark of ABC Corp., or symbols (TM ®.

4. Training of Employees

Some of the best monitoring comes from your own employees. They are in the field of sales or

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marketing and occasionally learn of new product launches. By keeping an open line of communication with these individuals, they may provide you with insight into the relevant marketplace. Moreover, marketing and commercial employees should be familiar with and required to follow brand guidelines established by the trademark owner to ensure the proper use of the mark, both internally and externally.

In addition, employees should know not to use third party trademarks to reference a style or design because internal documents are discoverable in litigation and could be used to prove willful infringement. Similarly, clients should use their own trademarks as adjectives rather than nouns (“PureVision® contact lenses” not “PureVision’s new lens material”) in order to protect against a mark becoming generic. Trademark indicia (i.e. ® or TM) should always be included to provide notice.

5. Regular meetings with Branding/Commercial Teams

Review filing coverage and conflicts to balance priorities and commercial realities. These updates will help identify the focus of filing and enforcement strategies.

Understand and anticipate upcoming projects and programs impacting the trademark portfolio via systematic review sessions.

C. Internal Licensing Situations1. Intracompany Licensing

Depending on the owner of the applications and how the marks will be used, it may be necessary to execute several intracompany licensing agreements. This is more important when the owner of the marks is a

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single entity but the mark is used in multiple jurisdictions by multiple subsidiaries. It also may be necessary from a tax structure perspective or other business considerations.

2. Quality Control Programs

For products that are manufactured under your brand and sold by you, you should ensure that adequate quality controls are in place. These controls should monitor the quality of the output as meeting the set thresholds and brand guidelines.

D. Portfolio Management & Review

1. General information

It is important to regularly review your worldwide trademark portfolio to assess its strengths and weaknesses. This is most easily done on an annual basis by reviewing the registrations that are up for renewal. This will require input from the business as to whether or not the mark is still in use.

2. Additional considerations

Examine new jurisdictions in which your company / client now operates, and consider filing new applications for the house marks or other important sub-brands in those jurisdictions.

Acquisitions: As companies acquire other entities, it is necessary to integrate the acquiree's portfolio into your own and conduct an assessment of that portfolio. For example, does your company intend on launching the acquiree's products into jurisdictions where there is no current protection? Some of this is easier done at the time of due diligence before the acquisition

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closes.

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Internet Searches:

o Domain name registration (affirmative and defensive)

o Meta tag searcheso Proper use on websiteo Brand guidelines

E. Effective Database

In order to properly maintain your portfolio, it is very helpful to have a database system, preferably one that is designed with trademarks in mind. Such systems provide trademark owners with information on filings and the status/progress of applications and registrations around the world. Further, database systems can contain agreement, license, conflict and other types of files that can allow for the effective and efficient management of the trademark owner’s portfolio. Many such databases allow for the standardization of various procedures and processes. Even without a trademark database, it is essential to have a reliable docketing system to ensure timely responses to various deadlines.

F. Extracting Value from the Portfolio

1. Brand Licensing

In addition to having your brand applied to your own set of products, one way to extract value from your trademark portfolio is to license your brand to be placed on third party products. There are risks and benefits with this approach that need to be carefully weighed. It is critical to have a sound quality control program to monitor the quality of these third party goods. Brand guidelines should also be used to make

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this process more effective and more efficient.

2. Sale or Auction of IP Assets

There is a growing interest in the sale of auctioning off of IP assets that are no longer important to the trademark owner. In some jurisdictions, these entities are referred to as "brand brokers." Prior to considering this option, you should confirm that there is no current or future intended use of the mark.

V. ConclusionWhen creating a trademark protection program, it is

critical for trademark owners and attorneys to consider a number of factors. Before attempting to obtain trademark protection, a trademark owner must identify which mark(s) it seeks to register and determine whether registration is appropriate or necessary. In doing so, the trademark owner may consider its corporate structure, trademark budget, the geographic scope of its present and future sales, trademark development costs, and the relevant goods and services, among other factors. Next, the trademark owner must decide where to seek protection. The primary methods for obtaining international trademark protection are to apply for protection in the U.S., and/or abroad using individual country registrations, the CTM, the Madrid Protocol, other regional filing systems, or some combination thereof. Given the costs and benefits of these options, a party seeking to create a trademark protection program should consider the advantages and disadvantages of each potential registration strategy in order to make an informed decision about how to protect its trademarks.