Global Brand Expansion Via Madrid System: An Indian Perspective

Introduction – Need to protect brands internationally

India, a democratic republic with the world's largest population, is home to innumerable flourishing start-ups and rapidly growing home-grown businesses. These businesses often start from someone's home office, but can reach international markets, attract international clients and achieve global recognition quickly. In fact, approaching the European and American markets is the most lucrative way of global expansion for Indian businesses since these countries offer a vast consumer base and visibility to foreigners and non-resident Indians residing in these countries. In such a case, an entrepreneur often worries about protecting their brand in multiple countries without contacting a frenzy of lawyers, tracking complicated registration processes, and paying hefty fees worldwide.

A sure-shot measure to resolve this issue, in most cases, is the Madrid System. The Madrid System is a convenient solution for registering and managing trademarks worldwide. Under the Madrid System, an applicant may file a single international trademark application and pay a single set of fees to apply for protection in any of the 131 countries covered. As a centralised system, the Madrid system may be used by businesses to modify, renew, and enlarge their global trademark portfolio.

India joined the Madrid System for the international registration of trademarks on July 8, 2013, as the 14th G-20 country to accede to the Madrid Protocol.

The Madrid System

The Madrid System, administered by the World Intellectual Property Organisation (WIPO) in Geneva, provides a centralised route for international trademark protection, i.e., filing one trademark application in one country and paying one set of fees per country. The Marid System is governed by two treaties, the Madrid Agreement, 1891 and the Madrid Protocol, 1989.

The key features and benefits of the Madris system are as follows:

1. Single trademark application: The Madrid System permits an applicant to file one application, designating several countries through their home country's trademark office, the Office of Origin.
2. Easy, centralised management of trademark applications: Once registered, the Applicant can renew the application centrally through the WIPO. Moreover, changes in ownership details, such as the Applicant's name and address, can be updated via a single application.
3. Cost-effective way of protecting trademark: Filing one international application and designating several countries under it is a cost-effective way of obtaining international trademark registration. Filing separate national applications in several countries would be far more expensive. That said, this applies only if several countries are to be covered. If only one or two countries are involved, the basic fee for Madrid filing is usually unjustified.
4. Flexibility in expanding trademark rights: Applicants can easily add a new member country as a "subsequent designation" in their Madrid application, allowing them to add international jurisdictions to their existing trademark application as their business expands into a new international jurisdiction.
5. Enhance brand value: Trademarks are an asset for any business, and obtaining global trademark protection across several international jurisdictions boosts the company's brand value and builds trust and reputation amongst its investors, stakeholders, and consumers.

Filing an International Trademark from India

To file an international trademark application from India, the Applicant must either be a citizen of India, domiciled in India, or have a real and effective industrial or commercial establishment in India. Additionally, the Applicant must have a "basic mark" in India, i.e., a pending application or a registered trademark filed before the Indian Trade Marks Registry.

The filing particulars of the international application, such as the trademark, the Applicant's details, class(es) covered and the specification of goods and services must correspond to those of the basic mark, i.e., the Indian application/ registration.

A step-by-step outline of the process of filing an international application from India is listed below:

Step 1: Filing Form MM2 with the Indian Trade Marks Registry

The Madrid Protocol prescribes Form MM2 for filing an international application. Form MM2 is submitted to the Indian Trade Marks Registry, designating the member countries where the trademark protection is sought.

The application must be accompanied by the applicable fees, which include the fees to the Indian Registry for forwarding the application and the fees to WIPO. The 'Madrid System Fee Calculator' helps applicants estimate the cost of registering their mark through the Madrid System; and also helps estimate other expenses related to managing the international trademark, such as the renewal, the subsequent designation, the second fee tax for certain Contracting Parties and all the Madrid transactions with fees.

The MM2 must contain the following information:

1. Applicant's name and address;
2. The reproduction of the trademark – it must be identical to the basic mark in India;
3. The specification of the goods/ services for which protection is sought must be identical to the basic mark in India or be fully covered within the scope of the goods/ services covered in the Indian application.
4. A list of the member countries to be designated under the application.
5. An indication of the Applicant's entitlement to file – establishment or domicile in India or Indian nationality
6. Trade mark priority claim, if applicable;
7. Details of the legal representative
8. Application number and the basic mark

The WIPO Guide to the International Registration of Marks, pages B.II.7 to B.II.20, provides complete details and guidelines on how to fill out MM 2 for a new Madrid Application.

Step 2: Certification by the Indian Trade Marks Registry

The Indian Trade Marks Registry examines the international application to check for procedural discrepancies, such as consistency with the basic application/ registration. Once verified, the Indian Trade Marks Registry certifies and transmits the application electronically to WIPO.

Step 3: Formal Examination by WIPO

Thereafter, WIPO examines the international application to check for procedural discrepancies. The mark is recorded in the International Register and an International Registration (IR) number is assigned to the application when accepted. However, if WIPO finds deficiencies, it issues an irregularity notice and seeks the Applicant to respond and rectify the discrepancy within the specified time period.

Step 4: Substantive Examination by Designated Countries

Once the IR number is assigned, the WIPO forwards the international application to each designated country. As a next step, the national trademark office examines the application per its domestic laws and issues a provisional refusal if deemed fit. The Applicant has to address such a refusal with the concerned national office through local counsel.

Protection is granted in that jurisdiction automatically unless a provisional refusal is issued within 12–18 months,

Step 5: Post-Registration Management

Once protection is secured, the international registration is valid for ten years and can be renewed every ten years, centrally through WIPO indefinitely. Similarly, the Applicant has to record changes relating to ownership, address, or limitation of goods/services through WIPO rather than filing them separately in each jurisdiction.

Limitations under the Madrid System

While applying the Madrid System streamlines international trademark protection, the process has inherent limitations and shortcomings.

1. Central Attack – Dependency on the base application/registration: For the first five years, the international registration depends on the basic application or registration. The international registration will also be cancelled – even in countries where protection was already secured if the basic application/ registration is withdrawn, refused, or cancelled during this period.
2. Prosecution Costs: Although, there is a single filing fee but the subsequent processes of prosecution of the application and responding to respective refusals issued in different designated countries requires local legal assistance increasing the expenses.
3. Limited scope of the international registration: An application filed through the Madrid route cannot exceed the basic application/registration scope. The applied-for trademark's representation must remain consistent with the basic mark, and the goods/services filed under the application must be within the scope of the goods/ services covered in the basic application.
4. Local laws still apply, leading to multiple levels of scrutiny and examination: An application filed through the Madrid route is first examined by the home country, then by the WIPO and finally by the Trade Marks Office of the designated country.
5. Protection is not universal: Several countries are still outside the Madrid club. Protection in non-member jurisdictions such as South America, some African countries and some Middle Eastern countries still requires national filings before the local Trade Marks Offices.

Conclusion

The Madrid Protocol has allowed entrepreneurs to secure trademark protection globally by streamlining and simplifying the trademark registration mechanism. Evidently, the Madrid Protocol is a game-changer for businesses with global dreams

That said, before applying this system, entrepreneurs must consider the system's limitations— particularly the dependency on the base application, multi-layered examination, and the possibility of objections in foreign jurisdictions. In some cases, filing a national application in the country of interest may be a more strategic option.

The Madrid Protocol is an effective gateway to global brand protection; however, factors such as filing fees, prosecution costs, the likelihood of objections and the enforcement strategy must align with the business's expansion plans and risk appetite! All in all, entrepreneurs must consult their trademark counsel to weigh the benefits of the Madrid Protocol against direct national filings keeping in mind that global brand protection requires a concerted strategy while optimising costs.

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.