Is Your Business Ready for Foreign Trademark Registrations?

By John DiGiacomo

 

international trademark registration

  1. Do You Have a Us Trademark Registration or Pending Application?
    • Certain international treaties provide some advantages to filing based on your US trademark application or registration. Your international trademark is dependent on your domestic registration for the first five years. Anything that happens to your home trademark registration in the first five years of international registration will also affect international registration. If a competitor has good cause to attempt to have your home registration canceled during this dependency period, you can lose the international registrations too.
    • Three important treaties affect international trademark filing. The 1883 Paris Convention is the largest and oldest. It has 177 member nations. The Paris Convention established the right to claim an earlier filing date as a “priority right,” if it is filed less than six months after another filing in another member nation. The 1891 Madrid Agreement has 55 member nations and the 1989 Madrid Protocol has 98. Together, the Madrid Agreement and the Madrid Protocol comprise the “Madrid System” for international trademark registration. The World Intellectual Property Office (WIPO) is the authority that administers international applications.
    • You may want to vet your potential brand in the US before finalizing the mark. Vetting your brand before launch, or filing a trademark application, is the prudent thing to do. This helps make sure that you won’t waste valuable time and money advertising the brand, then learn someone else is already using it, and you have to start over with a different brand.
    • Before you file a trademark application or select a brand name, always have a clearance search done first. Clearance searches examine whether a mark is previously unused and available for registration. For maximum efficiency, a clearance search should include a thorough review of: (1) Unregistered brand that are already in use in the US and on social media, such as Twitter, Instagram and Facebook; (2) Previous trademark applications and registrations, both federal and state; and (3) Trade bureau label applications.
    • This availability evaluation process for a prospective trademark or brand can be very difficult, particularly since so many companies and individuals are doing business across the US and around the world, using marks that are unregistered. It’s best to obtain the assistance of a veteran trademark attorney to lead this process and evaluate the risks faced when using a proposed mark or brand.
  2. Are You Doing Business Outside of the United States Now?
    • If so, you’ll be able to prioritize regionally based on business priorities. We can discuss risks which we’ve observed, and which nations are most important for your business strategy. The economy is steadily globalizing, so keeping pace with a multinational business strategy is necessary to make a small company grow, and serve unsatisfied demands in foreign markets. Methods such as exporting, franchising, licensing, and direct capital investment in foreign nations, have proven to be successful in making small companies grow and perform well.
  3. Do You Sell Products Online Through Amazon, Alibaba, or Other Marketplaces?
    • Policies of private companies that affect your business may come into play when you decide how to protect your trademark abroad. The passage of time has revealed, through creation and evolution of e-commerce sites, that gray-market goods, counterfeits, and goods that infringe upon trade dress always find their way into such marketplaces. The VERO (Verified Rights Owner) program was one of the first by an e-commerce site to give brand owners the power to monitor, review, and take down the sale of infringing goods through VERO. Amazon’s Project Zero, as well as efforts by Alibaba, are parallel programs to remove counterfeit and infringing goods from their sites, so that major brands continue to sell goods on their sites.
    • Are these enforcement and take-down services genuinely effective? They will work if participating companies actively use the tools that are offered, and enforce their rights to their own brands and trademarks. If a product or brand rapidly becomes popular, it can help your company grow but it also entails two substantial infringement risks. First, you may not yet have trademark registrations in the nations where your mark is being infringed. Such registrations are needed for brand defense. Second, you may not have enough resources allocated to monitor, review, and take down the infringing goods.
    • Brand owners interested in enrollment in Amazon’s Project Zero need to have a registered trademark and enrolled their brand(s) in Amazon Brand Registry. The Project Zero program requires a registered trademark for brand owners to enforce their rights, so even a well-known brand lacking registration can’t be enrolled.
    • Owners of established, well-known brands need to prove their identity and the registration of their marks, and they need to have a response team available when an infringer is found. Brand owners with these assets have found that the tools provided by VERO (eBay) and Project Zero (Amazon) can be effective, but the site managers often err on the side of caution in enabling such take-down efforts. Rogue sellers on these e-commerce sites can challenge your take-down, and file a challenge or appeal. You must be prepared to offer a comprehensive response.
    • Such rogue sellers are never identified to the brand owner by either VERO or Project Zero, even if they file a challenge or appeal. Identifying the rogue sellers through other means is very important in monitoring and enforcing brands against infringement, both online and in brick and mortar stores. These rogue sellers can establish fake profiles on e-commerce sites that are almost untraceable, so these sites have become their “happy hunting ground.” If their products are taken down for infringement, they simply set up new profiles and keep selling their infringing goods. Brand owners must remain vigilant, and the best practice is to clearly identify the actual name and location of the rogue seller.
  4. Are You Concerned About Using Your Mark in China?
    • China presents some unique risks. Because of rampant IP fraud and their investment in heavy manufacturing, registering your marks in China prior to entering the market is a wise precaution. The Chinese government is getting tougher on IP theft because it is on the rise, and such protection now also protects jobs in China. As with e-commerce sites, it may be difficult to obtain the name and location of the infringer. The very concept of IP isn’t really consistent with Chinese culture or the communist government. But companies that encounter IP fraud should report it to the Chinese authorities immediately, and seek local legal counsel. Chinese courts can be slow to take action, but cases have been pursued with success, particularly where Chinese manufacturing jobs are at stake.
    • China is a WIPO member and has signed 16 international copyright and trademark agreements. China has also passed laws providing equivalents to American “passing off” protection, which protects trademarks even if they are not registered in China. Thus, American companies can have the same protections under law that they enjoy at home. If you can prove that your mark is already registered in your company name, and that infringers in China intend to defraud your potential customers, you can theoretically defend your mark effectively. The key is effective legal counsel to ensure that the national laws are enforced at the local level.
  5. Do You Plan to Start Selling, Distributing or Manufacturing Outside the United States?
    • If you haven’t already globalized your business, we can help with creating a strategy for the future that fits in your budget and maximizes your legal protections. Today’s international competition in many industries is very different from the 1950s and ’60s. To succeed, an international company may consider transforming from a multi-domestic competitor, which enables company subsidiaries to independently compete in regional domestic markets, to a global competitor, which builds and engages with a worldwide network of market positions and products against competitors.
    • The global company seeks to manipulate leverage points, from its foreign competitors’ cash flow, to international production and economies of scale. Unconventional or counterintuitive steps, such as lowering prices, can make a competitor’s response more difficult, time-consuming, and costly. The goal of the leverage point strategy is to strengthen your own company while weakening competitors.
    • Some companies should consider foregoing a global strategy and remain in their home nations. Competing globally offers both great rewards and great risks, and often requires substantial policy and operational changes are required. For example, personnel policies which work well in the US may result in a labor strike in France or South Korea. A multinational business strategy may require unconventional management methods to occasionally enable:
      • Profit goals that vary substantially among different nations due to local tax burdens, labor costs, or resource opportunities.
      • Products that are underpriced or over-designed in some markets.
      • Investments that produce zero or even negative returns.
      • Building production facilities in both high and low-cost labor markets.
      • Perceiving nation-by-nation market positions as interdependent, rather than stand-alone elements of an international bundle, to be expanded, contracted or closed based solely on the profitability of each element.
    • Some international companies are simply not naturally well-positioned for global competition. These are naturally multi-domestic and are likely to stay that way, competing on a regional basis within their home countries. These businesses often have products which have high transportation costs, differ substantially between regions, or fail to provide sufficient economies of scale to yield a competitive advantage in international trade.
    • To help mitigate the risks of foreign infringement, it’s important to know those risks before expanding internationally. To avoid trademark conflicts with any foreign competitors on their own turf that they can easily win, company management must clear and monitor their own trademarks. The best method for risk mitigation is a thorough clearance search by a firm that focuses on such searches, followed by an evaluation of the search results by a trademark attorney who is knowledgeable in the relevant product classes, and can properly counsel management on the risk levels faced by a proposed mark or brand.
    • Armed with a clearance search report, an experienced trademark attorney can also advise management about the relative strength or weakness of the proposed mark, and possible alternatives that would be easier to protect. The bottom line is that a particular mark doesn’t need to be identical to an existing mark, owned by a competitor, to infringe on that mark. Business managers often fail to realize that infringement doesn’t require an exact match, so a new mark must be chosen carefully and then monitored.
  6. Do You Have Business Partners Outside of the United States?
    • You will want to make sure that partners you work with are using your brand in a way that protects it as opposed to causing potential risk. After you’ve produced goods, obtained exclusive rights to those goods, or created a brand, you can license other companies or people in other countries to produce, market, and sell the same goods under your brand. In return, you get royalties or other forms of compensation. These licenses work well to profit from your goods and your brand, and to expand your markets. However, agreements for foreign licensing carry certain risks and your company and its brand require protection. By partnering with foreign companies who have established distribution networks, you only need to license them to market your goods using their networks, and then wait for the royalties to start producing revenue for your company. Carefully select your business partners, negotiate a contract under the terms and conditions that protect your company and its brand, and monitor your foreign partners’ progress in marketing and using your goods and your brand.
    • The expertise of your foreign partners must always be verified. You probably don’t know them personally, so you need to get references and their experience with licensing other goods of the same type. This is much the same as vetting a new employee before offering the job, but it is far more important. Licensing companies should be willing to give you client lists and contact information for those clients. Seek out the candid opinions of those clients about a prospective foreign partner’s general quality of service, including accounting practices and timeliness. If your prospective partner is relatively new, check out its leadership and their business connections. If a former top executive of another licensing company is in charge, this indicates that the new company is competent despite its lack of an established track record.
    • Registering your trademarks in countries where you are planning to partner with foreign distributors or manufacturers helps you maintain control of your brand. Foreign trademarks can also be used as leverage in your licensing agreements. All of these measures are best pursued under the direction of an experienced U.S. trademark attorney.
  7. What Is Your Budget and Potential Future Budget for Brand Protection and Legal Risk Mitigation?
    • If we help give you the information, you can better plan for protecting your marks through trademark registration. Also, we can help avoid costly litigation. Brand protection must be tailored to the needs of the brand owner and the business plans of the company. Most companies have staff members who are assigned to brand protection, but each company has its own set of goals to pursue. These goals vary from industry to industry, but also vary from company to company within the same industry.
    • These differing goals lead to differing strategies when countering and mitigating risks to these companies’ brands. Your company’s philosophy and specific set of goals should be carefully reviewed and fully understood before developing and implementing a brand protection program. The true definition of success can be challenging and the support of competent counsel is necessary, particularly if a return on investment (ROI) is unlikely.
    • Some sort of effective strategy must be developed and implemented to protect your investment in your brand. Actively protecting your company, your brand, your image, and your investments is absolutely vital. Foreign trading activity in your industry must be monitored and infringement must be countered promptly and aggressively, or the legal standing and reputation of your brand can be irreparably damaged.
  8. Have You Performed International Market Analysis or Trademark Searching for Your Brand?
    • Conducting trademark searches is an essential part of the process of choosing and protecting new brands. It is often the most tiresome step of the brand protection process, since it is possible that a proposed trademark is already in use, and the company needs to choose a new mark and try it again. Before selecting a new trademark, it’s important to learn its availability for both registration and use. Spending precious capital on brand creation and marketing is pointless if the company later learns that the new brand is unavailable, because it infringes a previously registered trademark. The reason for clearance searches is to learn whether the selected mark would infringe an existing mark registered by a third party, and whether an application to register the selected mark is probably going to be blocked, either by the trademark office or by a third party.
    • Registering a trademark provides the exclusive right to use the mark in commerce for the goods described in the registration, and also extends to similar trademarks and similar goods. If the mark is fairly distinctive or unique, the owner may enjoy a broader degree of protection, going beyond prohibiting use of an identical mark for identical goods, to prohibiting a merely similar mark for merely similar goods. Also, in most countries, the applicant is not required to use a registered mark for five years after it is registered, so a registered owner can prevent others from using the mark, or one like it, to market the protected class of goods even if the owner is not using its registered mark at all. Therefore clearance searches are vital before the official launch of a brand.
    • Many types of searches are available, depending on the company’s budget for this purpose. The most inexpensive are free online trademark searches, using online search engines and databases provided by the USPTO and WIPO, and can be done by any company manager or a paralegal in the company’s legal department. These services can provide your company a rough idea of the trademark landscape around the company’s selected trademark, but this view is limited to finding registered marks that are basically identical or nearly identical. In other words, relevant marks which are registered or unregistered, and could present a serious risk of infringement, may not be uncovered. A full clearance search by a professional search company is more expensive, but is much more dependable, and seeks to identify any prior trademark applications and registrations which may be relevant, as well as public domain terms that are already in use.
    • An existing user of a brand might be able to successfully object to the registration or use of your new trademark through unregistered trademark rights, even if that user never filed an application to register the mark. In the US, these common law rights are based on unregistered legal rights such as passing-off rights. However, the mark is not registered, it will not be revealed in a trademark register search and can only be found, if at all, by a professional search of commercial activity, such as phone directories, online search engines such as Google, trade directories, and searches of company names and Internet domains or trade directories. Such common law searches are not 100% reliable but they can make infringement risks much more manageable.
    • Launching a new brand without any prior searches at all can be disastrous. For example, the company might be sued for infringement by an existing owner of a registered trademark owner, or by an unregistered user who claims that your goods are being passed off as theirs. Such a lawsuit, if successful, usually produces an injunction: a court order prohibiting any and all commercial use of the offending mark. Also, such a lawsuit also can yield money damages for your competitor, and even confiscation of all infringing goods and promotional materials. Potential catastrophes such as this mean that paying for a full pre-launch clearance search is money well-spent. Without such a search, your company could have its trademark application blocked by the trademark office, or successfully opposed by an existing trademark owner or unregistered brand user.
  9. Is Your Trademark a Foreign Word and What Is the English Translation or Translation?
    • If there is a chance that consumers might become confused, the doctrine of foreign equivalents prevents the registration of foreign words or phrases if the equivalent words in English have already been registered or used for products that could be believed to come from the same company. If an American consumer might understand the descriptive or generic term, registration of that term as a trademark is not allowed. There are exceptions, however.
    • The doctrine calls for a trademark examiner to translate the term into English to learn whether it is generic or descriptive, and whether it is sufficiently similar to existing trademarks in English to cause confusion. The doctrine only applies if an American consumer would translate the term into English. Previous decisions indicate that if an applicant argues that typical American consumers do not speak a particular language, the argument will probably be rejected. Examiners have researched the percentage of American consumers who speak that language and, even if it is a small percentage, decided that the language is not obscure enough to allow registration. If the evidence is inconclusive, examiners may seek out additional evidence, such as whether the home nations of that language are significant trading partners with the United States.
  10. Do the Words or Designs in Your Trademark Have Any Cultural Connotations That May Affect the Brand Impression Overseas?
    • When considering expansion to a foreign market, the proposed mark should be presented to a native speaker of the language, to find out whether it has any negative connotations. It can be humiliating, and very expensive, to register a mark and learn later that it translates into an obscenity, or its pronunciation is similar to a word or phrase with other negative connotations. The most notorious example may be the “Nova” brand of Chevrolet vehicles, since the phrase “no va” means “doesn’t run” in Spanish. Another example is the “Esso” brand of petroleum products marketed by the Standard Oil family of companies in the 1970s. After an extensive clearance search, which was done after (rather than before) the brand launch and problems were encountered, this was changed to “Exxon,” which has no meaning in any language. Many trademarks are selected because they have specific national cultural connotations. If your company’s goods are seen as carriers of cultural meanings–particularly if they refer to the home, family, or religious values, if they are used in the home, or if they are considered indispensable such as food, fuel, and reliable transportation–trademark translation must focus on different customs in different cultural backgrounds, in order to avoid negative associations and misunderstanding.

If you seek help with international trademark registration, contact one of our trademark registration attorneys today at +1 (231) 714-0100.

Leave a Reply

Your email address will not be published. Required fields are marked *

Put Revision Legal on your side

LET’S DISCUSS YOUR CASE