By an application of international registration according to the Madrid system a trademark can be registered in a number of countries and regions in a more time and cost efficient way compared to filing of national applications only.
In contrast to international registrations for designs or patents, the Madrid System requires a domestic application or registration as basis for the international registration. The basic right requirement originates from a time when numerous countries required that foreigners had a domestic registration.
International registrations are dependent on its basic right for a period of five years. This means the international registration ceases to have effect to the same extent as the cancelled basic right during that period (so-called central attack). This happens regardless of if the ground for cancellation is limited to the territory of the basic right or not. Consequently, the dependency on the basic right may be very painful or at least incur unwanted sunk costs.
However, it seems the dependence principle may come to an end. WIPO’s Working Group on the Legal Development of the Madrid System has discussed the dependency principle in several meetings and WIPO has just conducted a Madrid-user survey on dependency principle issues.
Good trademark portfolio management usually means cost chasing efficient filing strategy. However, the current dependency requirement and the wish to minimize the risk of central attack affect the filing strategy. One example is that Swedish companies often chose to apply for Swedish basic rights despite plans to designate EU. This, because Sweden is a small market where prior rights are automatically examined as ground for refusal and thus seen as a territory where more reliable basic rights can be established compared to unexamined CTMs and national registrations in member states that cover a larger market. This practice also often leads to that the holders chose to refrain from priority requests as the basic applications seldom are granted before the time period for priority requests have expired.
As I see it, the greatest advantages with an abolishment of the dependency principle are quicker cost-efficient filing strategies and better long-term predictability as the risk for central attack would disappear. There would be no reason to await the registration of a basic right before the filing of an international registration nor a five year long uncertainty as to the international protection since the international registration will be upheld on the merits of each territory regardless of if there may be grounds for refusal or cancellation in another (domestic) territory. For keeping the dependency principle some argue that that patent owners have expressed a need for the possibility of a central attack in the European patent system. However, the situation is different for trademarks which lack the novelty requirement.
Angela Boman, Attorney at Law, Partner