Trade mark filing strategy post-Brexit

At the end of December 2020, the Brexit transition period ended and the UK dropped out of the EU trade mark registration system. Those who had EU registrations at 31 December 2020 have automatically retained protection in both the EU and UK, while provisions are in place for owners of EU trade marks for which the applications were pending at 31 December to extend their protection to the UK, claiming priority from the original EU application. However, what does this mean for future trade mark applications?

For businesses who trade around Europe it will no longer be possible to rely on a single EU application to cover the United Kingdom and the (now) twenty-seven countries of the EU; instead it will be necessary to file separate EU and UK applications (and, as before, to consider filing in non-EU countries such as Switzerland, Norway and Turkey). For UK-based companies, this is likely to push trade mark owners towards making greater use of the Madrid Protocol.

There are two routes to trade mark protection in most territories. Nearly all countries have national registries, making it possible to file a direct national application (or a direct regional application such as an EU, Benelux , or Gulf Cooperation Council application). Additionally, in many territories it is possible to file a Madrid Protocol application via the World Intellectual Property Office (or WIPO) which selects, or ‘designates’, the territories of interest, leading to bespoke international protection. Most, but not all, commercially important territories, including the EU, can be designated in a Madrid Protocol application. Madrid Protocol applications must be based on an existing registration or application for the trade mark of interest which, for a UK company, will usually be a UK application or registration. Where possible, we recommend that a Madrid application be based on a registration rather than an application in order to reduce the risk of the Madrid application failing due to problems with the home application (see ‘disadvantages’ below).

A Madrid Protocol application that designates just one territory (e.g. the EU) is rarely cost-effective, but cost advantages becomes apparent fairly quickly, with three designations tending to be the tipping point between ‘not worth it’ and ‘definitely worth it’. Also worth noting is that additional territories can be designated at any time after the original application has been filed at a relatively low marginal cost. Essentially, as the protection that is sought becomes geographically broader, the more cost-effective this route becomes.

Other advantages of Madrid Procotol applications include:

• The cost of designating a territory is typically less than the cost of filing directly at the relevant IPO
• Local counsel need not be instructed in designated territories unless the application encounters issues such as examination objections or oppositions. Since many designations proceed to registration without difficulty, this can keep post-filing costs to a minimum. This does come with a caveat, however, as cheaper is not always better (see 'disadvantages' below)
• A single renewal fee is payable centrally for all designations, once registration has been granted
• The possiblity of adding and removing designations allows trade mark protection to be tailored to reflect the trade mark owner's requirements.

It is also important to appreciate that the Madrid Procotol has a number of disadvantages:

• The ease of designation can encourage the filing of applications without taking local advice, which may lead to unexpected issues, and unanticipated costs, that may have been avoided with direct national applications filed through a local representative. For this reason, we always recommend taking local advice before filing in core markets: while this may take away some of the cost advantages associated with a Madrid Protocol application, it can minimise the risk and associated cost of filing aplications for unregistrable or otherwise problematic trade marks
• There are limitations on who is entitled to file or own a Madrid Protocol trade mark, which introduces a degree of inflexibility
• Obtaining protection can be slow in comparison with some direct applications (for example, an EU application), although the process can also be quicker in some territories
• It is not possible to file divisional applications for different goods and services, which means that it is not possible to obtain a statement of grant of protection for some goods or services in a territory as long as objections remain to other goods or services listed in the application
• Unlike direct US applications, a US designation in a Madrid Protocol cannot be filed on the basis of actual use, which means that additional evidence requirements apply
• The Madrid Protocol registration is dependent on the homs application or registration for the first five years. This means that if the original application or registration on which the Madrid application was based fails for any reason, for example, the home application is refused due to examination objections or an opposition, or the home registration is cancelled or is not renewed, the Madid registration will also fail. While it is possible to save the individual designations in a process called transofmration, this is a costly and inconvenient process

Notwithstanding the disadvantages, the Madrid system for the international registration of trade marks is, on balance, a cost-effective and administratively straightforward route to obtaining bespoke and flexible international protection.

With the departure of the UK from the EU, many businesses will find that they wish to file both UK and EU trade mark applications, and UK applicants who wish to protect their trade marks in the EU and at least a couple of additional territories may find that the Madrid Protocol route is an attractive option. The flexibilty and affordability of the Madrid system may also encourage applicants to include other European countries such as Switzerland, Norway and Turkey, which have historically often been omitted due to the cost of filing direct national applications.

As a result, we anticipate an increase in Madrid Protocol applications, based on UK applications or registrations, that designate the EU and other territories.

Please get in touch for our expert advice on the most appropriate filing strategy to achieve optimum international trade mark protection.