The Trans-Pacific Partnership, which a number of nations have signed, now awaits ratification in the United States. It has aroused extensive controversy and has been a topic of discussion in this year's presidential election. The Intellectual Property Chapter (Chapter 18) among other sections, raises a number of potentially troubling issues. Commentators have paid much attention to the Intellectual Property Chapter's controversial copyright provisions. The trademark provisions raise similar concerns. As with the copyright provisions, virtually all of the trademark provisions in the TPP appear to favor protections for established trademark claimants over new entrants. While some commentators have suggested that the IP provisions of the TPP generally align with existing U.S. law, a close review of the trademark provisions in the IP chapter reveals that is not the case. In many instances, these provisions significantly extend trademark claimant powers in the Agreement on Trade-Related Aspects of Intellectual Property Rights and are inconsistent with the balance present in relevant provisions in U.S. law. Consequently, the language of the TPP trademark provisions could support arguments that current U.S. law should be changed, and stakeholders should understand and consider carefully the implications of those changes. Those possible changes appear to favor the positions of the largest brand owners, potentially at the expense of small businesses, emerging brand owners, consumers, and the public generally. Here is a look at a number of the TPP's key trademark provisions.
The Range of Registrable Marks
Article 18.18 of the TPP establishes an expansive range of registrable marks that includes sound and scent marks, which are nontraditional in many countries, although more familiar in the United States. Notably, this is a departure from TRIPS Article 15.1, which provides that members to that agreement may require that marks be visibly perceptible to qualify for registration. But in a departure from established U.S. law and practice (see 37 C.F.R. § 2.52(e)), Article 18.18 does not require that the claimant represent the mark graphically or submit a written description of the mark for registration. Consequently, this provision has the potential to promote indeterminate claims of trademark rights, which could lead to abuse.
Moreover, the TPP does not appear to require any level of distinctiveness of a trademark, for example, that a mark be capable of distinguishing goods or services from others. As a result, the TPP appears to authorize rights in generic and merely descriptive terms or signs.
Registered vs. Common Law Marks
The TPP trademark text appears to favor later-registered trademarks over earlier common law trademarks. For example, Article 18.20 governs the use of identical or similar signs and delineates the exclusive rights in such marks, but it applies only to "the owner of a registered trademark" (emphasis added). Although this language mirrors language in TRIPS Article 16.1, it departs from U.S. trademark law under the Lanham Act, which provides for exclusive trademark rights to owners of both registered and common law marks.
The Presumption of a Likelihood of Confusion
Article 18.20 allows a conclusive presumption of likelihood of confusion for use of identical marks for identical goods or services, mirroring similar language in TRIPS Article 16.1. But there can be occasions where marks that appear to be identical on paper may not be identical in real-life marketplaces, and a presumption of likelihood of confusion could thwart a newcomer's legitimate noninfringement arguments. For example, a trademark registration for "computers" might appear to preclude a new trademark of another company for "computers," but if one trademark is only for mainframe computers and the other is only for a smartphone – both of which may accurately be described as "computers" – there may well be no likelihood of confusion. It is not clear what national interest supports including this provision in the agreement.
It is also unclear what effect this presumption could have on the power and discretion that U.S. courts have to issue injunctive relief, as Article 18.20 provides an "exclusive right to prevent third parties . . . from using" a registered mark, but contains no reference to any equitable limitations on that right (emphasis added).
Absence of Provisions Regarding Use of a Trademark
The TPP contains no provisions that require use of a trademark at any time. For example, Article 18.26 provides a term of protection for trademarks of no less than 10 years for initial registration and each renewal thereafter, but it is silent on the issue of whether registration or renewal requires the registrant to demonstrate trademark use. In contrast, Section 8 of the U.S. Lanham Act provides a virtually identical term of protection but requires that the registrant periodically file affidavits attesting to use of the mark in commerce in connection with goods and services. In the TPP, there is no provision allowing a member country to require anything like the Lanham Act's Section 8 periodic declaration stating that a mark is in use. Nor does the TPP contemplate cancellation for nonuse. Similarly, it offers no provisions to address any kind of abandonment, including abandonment for nonuse or a presumption of abandonment based upon a period of nonuse. The only provision that touches on the issue of abandonment is in Article 18.32, which governs grounds of opposition and cancellation of Geographical Indications, not trademarks. Consequently, it appears that the TPP promotes trademark rights even absent use in the market to distinguish goods or services, the core function that trademark rights serve. This will potentially allow for "dog-in-the-manger" abuses of trademark rights (where a rights holder with no need of or use for the trademark he owns can prevent others from using the mark) and inefficient holding and warehousing of marks.
"Well-Known Marks" and "Niche" Fame
Article 18.22 governs well-known marks. As a preliminary matter, the well-known marks doctrine, memorialized in Article 6bis of the Paris Convention, provides protection over a mark not in use in a particular nation if it is sufficiently well-known in that nation but used elsewhere. See 5 McCarthy on Trademarks and Unfair Competition § 29:61 (4th ed.). There is disagreement among U.S. circuit courts and commentators as to whether U.S. trademark law, particularly the Lanham Act, has incorporated this doctrine.
The TPP's well-known marks provision applies pressure to this ambiguity, incorporating and referencing Article 6bis and setting forth provisions relating to well-known marks. Article 18.22(1) provides that "no Party shall require as a condition for determining that a trademark is well-known that the trademark has been registered in the Party or in another jurisdiction, included on a list of well-known trademarks, or given prior recognition as a well-known mark." This article also expands the reach of the well-known mark doctrine in Article 6bis to apply to goods or services that are not identical or similar to those identified by a well-known trademark if "use of that trademark in relation to those goods or services would indicate a connection between those good or services and the owner of the trademark, and provided that the interests of the owner of the trademark are likely to be damaged by such use."
Finally, footnote 13 to Article 18.22 opens the door to niche fame, or fame within only a particular (small) geographic area, providing that a member nation determining whether a trademark is well known in that nation "need not require that the reputation of the trademark extend beyond the sector of the public that normally deals with the relevant goods or services." Stakeholders should be aware that this is a departure from current U.S. law, specifically the Trademark Dilution Revision Act of 2006, as codified at 15 U.S.C. § 1125(c)(2)(A), which specifically repudiated a niche fame basis for dilution claims.
Limited Exceptions/Fair Use
Article 18.21 governs exceptions to trademark rights and maps directly to TRIPS Article 17. Article 18.21 points out that a party may provide for only "limited" exceptions to trademark rights. The provision further specifies that provision of any such limited exceptions must take into account the "legitimate interest of the owner of the trademark and of third parties," language that resembles the traditional three-step test for copyright exceptions and limitations in other multinational treaties. While this language may not be terribly significant, the text provides no examples of use cases where these limitations are important or where a "limited exception" might actually exist. In this way, it is possible that Article 18.21 will prove to be excessively narrow and favor stronger trademark power, to the detriment of potentially legitimate uses.
Article 18.28 governs domain names and carries potentially significant privacy implications. This provision concerns requirements for member nations' systems for management of country code top-level domain names, including "an appropriate procedure for the settlement of disputes, based on, or modelled along the same lines as, the principles established in the Uniform Domain-Name Dispute Resolution Policy." Article 18.28(1)(a).
Notably, Article 18.28(1)(b) requires that the member nation maintain "online public access to a reliable and accurate database of contact information concerning domain-name registrants." This language jeopardizes privacy protections where domain owners wish to remain anonymous. Although 18.28(1) establishes these procedures and systems "in accordance with each Party's law and, if applicable, relevant administrator policies regarding protection of privacy and personal data," this caveat is unclear and provides no assurance that this provision of the TPP will not degrade the privacy rights of domain registrants.
The benefits of the TPP's trademark provisions to American citizens and enterprises are not apparent, and they may be detrimental to small and medium-sized enterprises that try to enter new markets. While some might consider the TPP trademark provisions to be in line with current U.S. law, this is not entirely the case, and it is unclear why the TPP departs from the balancing provisions of current U.S. trademark law. To date, there has not been a readily apparent forum or mechanism for obtaining authoritative answers to questions about the agreement and its text from the United States Trade Representative. Any potential explanation that only expansion provisions need to be explicit, and that limiting principles need not be expressed, is not satisfying. In this way, the text of the TPP's trademark provisions are emblematic of a disturbing trend at the core of the TPP: the bolstering of statutory monopoly powers on an international scale, often to the benefit of large, multinational companies in a manner that departs from current U.S. law, and the loss of Congress' sovereignty to depart from TPP provisions and decide intellectual property issues in the best interest of U.S. consumers, smaller brand owners, domestic companies, and the public.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.