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Foreign trade mark strategies for Australian Take-away tips
Some Australian traders omit clearance searching • Develop and implement a foreign trade mark because of the high cost. While a full trade mark search strategy — avoid approaching foreign trade marks with a legal opinion from an attorney in each country can be costly, cheaper search options are available.
• Clearance searches and ongoing watches are impor- While these cheaper options may not be as comprehen- tant — you cannot rely on foreign Trade Marks sive as a full clearance search, they may provide a sufficient level of comfort to proceed to use and registera mark in a country. Some foreign Trade Marks Offices • Consider developing and registering foreign lan- offer free easy-to-use searches of their Trade Marks Registers,2 and searches can also be carried out by • The Madrid Protocol and Community Trade Mark international trade mark search companies (which offer systems have many benefits, but are not always the different levels of searching at different cost points).3 Other Australian traders omit clearance searching in Australian traders are increasingly looking outside the belief that the foreign Trade Marks Office will Australia for new markets for their goods and services.
conduct and supply such a search (at no extra cost) when In 2011, the top 10 export markets for Australian traders they examine the trader’s own trade mark application in were (in order) China, Japan, South Korea, India, the the country. There are a number of problems with this United States, New Zealand, the United Kingdom, Taiwan, Singapore and Thailand. Other major tradingpartners include Malaysia, Germany, Indonesia, Italy, • Delays in examination: Some countries take Papua New Guinea, the United Arab Emirates, France, many months or even years to examine trade mark Vietnam, Hong Kong, the Netherlands, Canada, Bel- applications. Use of the trade mark in the country could take place well before such examination.
Australian traders should develop and implement a • Standards of examination: Standards for search- foreign trade mark strategy to support and protect these ing for prior marks in each country vary, and the foreign market activities. This article will discuss such level or scope of searching by an examiner is strategies and point out the benefits of having a planned likely to be limited. For example, examination strategy at the early stages of product development and may be limited to identical or near identical marks, brand selection. The article will also look at some of the or may be limited to a very narrow class of goods factors that trade mark attorneys need to consider when deciding which of the different foreign trade mark • Countries that do not examine on relative grounds: Many Trade Marks Offices only exam- Trade mark clearance searches
ine and/or raise objections on formalities and The first step in a foreign trade mark strategy is a absolute grounds (such as non-distinctiveness), clearance search to identify whether there are any risks and not on relative grounds (namely, conflict with of infringement if the branded goods are sold in the earlier registered marks). These countries include country, and whether the investment in establishing a member states of the European Union, which uses market in the country can be protected with a registered the unitary Community Trade Mark (CTM) sys- mark. A clearance search can also identify problems and tem, as well as, at a national level, Germany, obstacles early, which can then (it is hoped) be over- France, Italy and, most recently, the United King- • Registration does not confer a defence to infringe- registration in China). Australian traders should there- ment: In many countries, including those that do fore attend to early registration of their marks in the not examine on relative grounds, registration of a countries in which the branded goods are manufactured mark in the country is not a defence to an infringement action by the owner of an earliermark. The problem of overlapping registered rights First-to-file (as opposed to first-to-use)
countries

is particularly common in Europe, where differentowners often become registered for identical or The general rule of registered trade mark systems near identical marks via the CTM and/or European around the world is that rights are afforded to the trader national trade mark systems. In a recent decision who first files an application to register the mark.
However, the trade mark systems of most countries of the Court of Justice of the European Union, it also allow another trader to challenge the applicant’s was suggested that holders of earlier CTM regis- right if the other trader can show a prior right (such as trations have superior rights, and can even sue prior use of the mark or a prior reputation). In those those holders of later CTM and national registra- countries, called “first-to-use” countries, the trader who tions for the same mark (without the need to first is the first user of the mark is the one who is entitled to invalidate those later registrations).4 A further problem in Europe is that an Australian trader may However, in some countries, called “first-to-file” secure a CTM registration for a mark, but the countries, the rights of a prior user do not defeat the registered owner of an earlier national European rights of the trader who filed the mark first. Important mark could sue that trader for infringement of the first-to-file countries include China, Indonesia, the Phil- national mark if the trader uses the mark in that ippines, Vietnam, South Korea and Taiwan. Australian traders should therefore put these first-to-file countrieshigher on their filing priority list.
Which marks and goods, and in which
Each first-to-file country has its own limited excep- countries should they be filed first?
tions to this first-to-file rule, so specific advice should besought in each case.
Due to cost constraints, a foreign trade mark program For example, in China, a first-filed application can be must involve a setting of filing priorities. Priority should challenged if it has been filed in “bad faith”. One of the be given to core or house marks over secondary marks, means of proving bad faith has been to prove “well- and to core goods over secondary goods. Applications known status” in China. However, foreign brand owners should be filed in those countries in which a trader sells have found it very difficult to prove the requisite or intends to sell its goods, with priority to those reputation, particularly if that reputation is primarily countries where sales are, or are likely to be, greatest.
foreign (not in China). Another exception in China is Consideration should also be given to filing applications where the applicant is a business partner or potential in neighbouring countries where cross-border trade is business partner of the trader challenging the applica- common, such as Singapore/Malaysia, Hong Kong/ tion. However, again, success on this ground depends on China, the United Kingdom/Ireland and the United clearly proving the requisite business relationship.
States/Canada. However, special attention should begiven to the countries in the categories discussed below.
Should a new foreign mark be developed
for non-English-speaking countries?

Countries in which goods are made for export
to Australia

Australian traders who decide to use and register their English language mark in foreign countries, and who In many countries, the manufacture of branded goods refuse to create or register a foreign language mark, may in a country for export constitutes ‘‘use” of the mark in that country, even if no sales are made in the country of In such cases, there is a risk that foreign distributors and consumers, unable to pronounce or remember the For example, a common scenario is where an Aus- English language mark, will create and use their own tralian trader engages a Chinese contract manufacturer local language version of the mark. That local language to make and export the branded goods from China to version may not be to the liking of the Australian trader.
Australia. A trade mark “pirate” then secures registration Further, and more worryingly, a trade mark “pirate” for the mark in China and threatens to use the Chinese could register the local language mark in that country, Customs Service to block the export of the branded and then try to prevent the Australian trader from later goods (on the basis that such use infringes the pirate’s A well-publicised example is Pfizer’s long-running attack” on the Australian mark will cause the entire Madrid Protocol registration to be can- (Weige), the Chinese language mark that the Chinese celled. The Madrid Protocol system should there- trade and consumers had created and used to refer to fore not be used if there is a risk that the home Pfizer’s VIAGRA product. Another trader, Guangzhou mark will not be registered or will be challenged.
Viamen, filed the Chinese language mark first and wasultimately successful in retaining ownership of the mark, • An Australian trader may not in fact own a home despite prior use of the mark for Pfizer’s products and Australian mark for the mark that it wishes to use in the foreign markets. For example, an Australian The adoption of a foreign language mark is an art, trader may wish to use a local language version of and advice should be sought from a knowledgeable trader or marketing expert in the country. Options • If the Australian trader’s marks are owned by a group IP holding company that is registered in a • transliterating the English mark (so that the local non-Madrid country (such as certain “tax haven” language mark sounds like the English mark); countries), it may not be able to use the Madrid • adopting a mark with a similar idea; or • The mark in the Madrid Protocol registration must • creating an entirely different and distinctive mark.
be identical to the Australian home mark. Even Once such a foreign language mark is adopted, it slight changes in style, spelling or punctuation are should be registered promptly in the foreign market. If the English mark will also be used in conjunction with • In Australian practice, marks are usually registered the foreign language mark, the English mark should also in plain block letters (on the basis that they cover any style or font). However, in some countries, Madrid v CTM v National — which foreign
such as China, registration of a mark needs to be trade mark registration system should be
in the form in which it is used, which may be in a stylised form or accompanied by a logo. Registra- Foreign trade marks can be registered through the tion of a block letter word mark in those countries national trade mark systems of each country, through the may therefore not adequately protect the mark in Madrid Protocol or through the CTM system. Some of the advantages, limitations and pitfalls are discussed • Registration of marks using the Madrid Protocol cannot be broader than the goods or services in the Advantages of the Madrid Protocol
Australian home mark. Accordingly, the Austra- • There is a very broad coverage of countries7 — lian home mark must be sufficiently broad to cover including most of the key foreign markets for the goods and services of interest in the foreign Australian traders, such as China, Japan, South Korea, Singapore, Vietnam, the United States, • The descriptions of goods and services in the New Zealand, the European Community, the United Australian home mark, which are usually accept- able to the World Intellectual Property Organiza- • Further countries can be added when they become tion (WIPO), will not necessarily be acceptable in members in the future (as a “subsequent designa- each Madrid Protocol member country. Some countries may consider that the goods and services • The cost is lower, both at filing/registration and at are vague and require further clarification. For example, while broad claims to “clothing” are • There is a single application form, in English, with acceptable in Australia, they are not acceptable in no powers of attorney or appointment of foreign many countries, such as the United States (where attorneys (initially at least), and easier management.
specific items of clothing need to be specified).
Limitations of the Madrid Protocol
Also, while a broad claim to “retailing services” is • A Madrid Protocol registration is “dependent” on acceptable in Australia, it is not acceptable in an Australian home registration for a period of five China (where only a limited class of retailing years. There is therefore a risk that a “central services is allowed). Further, China has a complex system of subclasses of goods, and it cannot be Kingdom. A CTM is not recognised as a national assumed that the goods described in the Australian registration of an individual EU country. For home mark will provide adequate coverage in all example, the Pacific Island countries of Kiribati, the Solomon Islands and Tuvalu require a national • In theory, a trade mark is “deemed” to be protected UK registration, while New Caledonia, French in a designated Madrid Protocol member country Polynesia, and Wallis and Futuna Islands require a after 12 or 18 months if the country’s Trade Marks Office does not raise any objections. However,there are many member countries that do not The importance of ongoing watch
appear to have enacted the necessary local enabling A final, and important, piece in any foreign trade legislation required for those countries to recognise mark strategy is an ongoing worldwide trade mark Madrid Protocol marks. Such countries include watch for similar marks. Such watches are particularly Ghana, Sierra Leone, Liberia, Egypt, Sudan, Zam- important in those countries that do not examine marks bia, Namibia, Botswana, Swaziland and Lesotho.
on relative grounds (that is, their Trade Marks Offices do The status of Madrid Protocol designations in not object to later trade mark applications on the basis of earlier similar registrations). A watch of accepted marks • To date, four countries — the Philippines, Estonia, will give an Australian trader the opportunity to oppose Namibia and Turkey — do not accept subsequent later marks, and will alert it of an infringement or designations based on international registrations threatened infringement in the foreign country. There are obtained before those countries became members many companies that provide watch services at a rea- of the Madrid Protocol.8 Effectively, this precludes an owner of a pre-existing Madrid Protocol regis-tration from later designating these countries.
Conclusion
Foreign trade mark protection is not straightforward Advantages of a Community Trade Mark
and there is no one-size-fits-all strategy. Consideration • The cost is lower, both at filing/registration and at needs to be given, on a case-by-case basis, to a variety renewal, compared to national registrations in of factors, such as which mark and goods, in which country, and in which filing priority order. Often, despite • There is a single application form, in English, and their obvious advantages, systems such as the Madrid Protocol and the CTM cannot be relied on exclusively,and national trade mark systems also need to be used.
• The mark need not be used in each EU member Australian traders should develop a foreign trade mark country. A recent decision of the Court of Justice strategy at the early stages of product development and of the European Union has held that a CTM can be brand selection. Further, the strategy should be revisited maintained through use of the mark in a single EU and reviewed regularly, to adapt to changes in foreign trade and future trading intentions.
• A CTM is enforceable throughout the EU, and a court decision in one EU country is enforceable inother EU countries.
• It can be designated as part of a Madrid Protocol chris.sgourakis@griffıthhack.com.auwww.griffıthhack.com.au Limitations of a Community Trade Mark
• A CTM can be opposed on the basis of a prior national registration or common law right in anyEU country. If the opposition is successful, thewhole CTM fails. Given the large number of Footnotes
member countries, oppositions against CTM marks Department of Foreign Affairs and Trade Composition of Trade Australia 2010–11, available at www.dfat.gov.au/publications/.
• A CTM can be rejected if it is descriptive in any This report also includes a useful breakdown of exports by one of the languages of the EU member countries.
types of goods and services in each country.
• Certain smaller countries and territories are cov- See the World Intellectual Property Organization’s (WIPO’s) ered by national trade mark registrations of Euro- list of websites of Trade Marks Offices around the world, pean countries, such as France and the United available at www.wipo.int/directory/en/urls.jsp.

Source: http://www.griffithhack.com.au/Assets/2825/1/LexisNexisIntellectualPropertyLawBulletin.pdf

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