Congratulations on eyeing the international market for your business growth. We are living in an age of globalization and more and more companies are recognizing the profitability of taking their products and service offerings globally at a relatively small incremental cost. It is an easy calculus to recognize that international consumers are able to be reached with the power and affordability of internet advertising and complete more online purchases globally.
While your global business reach is expanding, it’s critical to understand the importance of trademark protection for your company and products brand in these international markets. Trademarks, including your company name, the name of your product or service offerings, logo, & tagline, can be among your company’s most valuable assets.
“more companies are recognizing the profitability of taking their products and service offerings globally at a relatively small incremental cost”
A trademark is a national right that requires registration in each country that you seek protection for your brand. Even if you have a registered US trademark, no international trademark protection exists for your registration. That means that even if you are using your brand name for business, if you did not file for foreign trademark registrations early enough, someone else can lawfully own the trademark in a particular country. We’ll discuss how to avoid that scenario as you look to grow your businesses and brands internationally.
1. Time is of the essence.
When dealing with trademark registrations, time is of the essence. Typically, many civil law jurisdictions rely on a first to file system to give priority to a trademark holder. This can happen because unlike the common law trademark system in the USA, where trademark rights accrue through use in trade and commerce, most foreign jurisdictions are governed by civil law systems. Given these circumstances, it is best not to delay filing trademark applications abroad, particularly if you intend to launch a product or service in the near future.
Oftentimes, one of the biggest issues business owners face when trying to register their trademarks outside of the USA is “brand squatting,” which describes the situation when an unaffiliated third party registers a brand owner’s trademark first in a jurisdiction only seeking to eventually sell the hostage trademark registration for a ransom to the true brand owner. As in the famous Starbucks case in Russia, where a Russian businessman made a living by registering trademarks and selling them to American companies, there are unscrupulous characters who will engage in “brand squatting” by identifying up and coming brands in the USA and then file applications first in civil law countries.
While cost can be a concern, and some jurisdictions charge high fees to register, the costs to negotiate the buy back of a registration for your own trademark can be even higher. There is the registration and filing fees and then the time of the attorney’s involved.
2. Do your homework.
Before thinking about filing internationally, you need to do your homework and recognize in which countries your product or services will have the greatest market. We recommend that clients often begin with grouping countries into A, B, and C tiers in order to prioritize the filings by market size and value. This helps save time and money in focusing on the most important filings first.
In choosing where to file, consider:
- What countries have sizeable revenue streams or consumer bases for your company?
- Do you have business operations (e.g. offices, distributors, partnerships or manufacturers) overseas?
- Is your company’s relevant market or targeted need growing or significant in a particular country or region?
- Do you have anticipated expansion plans abroad?
- Consider “defensive” filings in countries with high rates of counterfeits like China, Brazil and India.
Furthermore, to protect your product or service trademark in another country, it is important to know how the system in that particular country relates to the laws in the USA.
If you’re going at it alone, take the time to familiarize yourself with the trademark rules and regulations of other countries where you are seeking registration. Some great research resources include The International Trade Administration as well as the WIPO. If you, understandably, feel overwhelmed look at step 3 next.
3. Hire a trademark attorney.
Whether you are registering your trademark only in the USA or planning on filing internationally as well, the guidance of an intellectual property attorney will help attend to all the details and smooth your trademark application process. Without an attorney, you can find yourself paying a lot of money, only to have your trademark application rejected, sometimes in manners that are not correctable.
There are several different kinds of errors that can occur during the course of a trademark application– errors in the mark, errors in the recitation of goods and services, errors in the specimens or descriptions of the mark, and errors in ownership of the mark. The first four errors are fairly common and are typically able to be corrected. The test is if the change to correct the error does not materially change the trademark or expand the goods and services outside of the original scope of the application.
There are fatal errors to a trademark application when filing on your own without an attorney that are incapable of being corrected. The most typical of these fatal errors in the application are errors in ownership that can create problems well down the line of the trademark registration and may not be correctable.
Additionally, there are several countries not protected under the Madrid Agreement, such as Saudi Arabia, Canada, and South Africa that it would be wise to hire an attorney in the country you are looking to register your trademark.
When hiring an attorney, you want to ensure they are registered to practice before the USPTO. You can search USPTO registered attorneys here. You can also search for an attorney via the International Trademark Association that will list attorneys specializing in trademark law.
4. Register in the USA.
We’re often asked which country a global brand should be registered in first. We always advise that before seeking international trademark protection, your first step should be to register your trademark in the USA through the U.S. Patent and Trademark Office (USPTO).
Not only is the USA the biggest market in the world, but it also has a fast and electronic application system that can be completed online through the USPTO website. Additionally, registering in the USA first will give your application stronger credibility and priority when you seek to register in other countries and jurisdictions that we will discuss further under point 6 below.
“Priority” refers to how early your trademark rights start in a particular country. Having early priority is important because if multiple parties dispute over who has the right to use a particular brand name (e.g. you discover a competitor using a similar name), whoever has the earlier trademark priority would have the right to use the trademark.
That’s why registering in the USA first provides the best basis for foreign registrations, facilitating protection of your marks worldwide as business expands.
5. Know what your trademark means when translated.
As with every product naming decision, you should carefully consider what the foreign translations of your product names and services mean when they are being advertised in foreign markets.
The classic example of such an issue blowing up in the brand owner’s face is when Chevrolet tried to market their Nova sedans in the Spanish speaking world, where Nova was translated as “no va” or “no go” in Spanish. This was not only a public relations embarrassment, but it also cost millions in dollars in lost marketing and rebranding to the company.
In another example, Parker Pens reportedly made a mistake in the translation of the advertising slogan “It won’t leak in your product and embarrass you.” Someone on the translation team apparently thought the Spanish word embarazar meant “embarrass.” The slogan ended up saying “It won’t leak in your pocket and make you pregnant.” Obviously, the poorly translated slogan would not be something Parker would seek to trademark.
Ensure your marketing and business team takes into consideration the foreign translation of whatever brand name, logo, term or slogan you are seeking to use in that particular market. It often makes sense to hire a local in the region that you are targeting for their market expertise.
6. International trademark treaties.
For international trademark applications, the Madrid System is an international treaty that provides a single solution for registering and managing trademarks worldwide.
Under the Madrid Agreement, trademark applicants can submit one application to protect their work within a coalition of countries that have signed the treaty to harmonize applications. The Madrid Union is made up of countries that recognize these international trademarks.
There are a total of over one hundred countries (118) that currently offer protection under the Madrid Agreement, including China, France, Italy, Australia and the European Union. This makes it an ideal solution for optimizing a global launch of a product or service.
The Madrid Agreement allows you to select specific countries, or you can choose to protect your trademark in all 118 countries that are available. While there is a processing fee for registering a trademark with the WIPO, it is much less costly than filing individual applications within each country that makes it a very effective option to consider.
According to the WIPO, their Madrid Yearly Review 2018 noted over 56,ooo international registrations for trademarks under the Madrid Agreement alone- a 26% increase in the previous year. This statistic clearly shows how popular and attractive an option pursuing the international trademark treaty is for businesses looking to expand globally.
For many businesses, their brand is their most valuable asset. Through a few judicious steps in seeking trademark protection you can ensure that your company brand is secured and flourishes with the international growth of your business in global markets. You can learn more about trademarks and intellectual property protection by visiting this Intellectual Property Introduction.
Feel free to contact Feras Mousilli at Lloyd Mousilli, LLC if you would like to discuss your trademark strategy.