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Madrid Protocol Hong Kong Applicant’s Guide

The Madrid Protocol is not expected to apply to the Hong Kong Special Administrative Area until 2022-23 at the earliest.

When the Madrid Protocol (Hong Kong) is eventually introduced, local Hong Kong businesses will be able to access the Madrid system and enjoy the benefits it offers in terms of securing trade mark protection overseas.

It will also allow foreign applicants to extend their international registrations to Hong Kong, making it potentially easier for foreign applicants to obtain registered trade mark protection in Hong Kong.

This guide seeks to clarify how the Madrid system works and how your business can use the Madrid Protocol (Hong Kong) to secure trade mark protection overseas.

Can You Register a Trade Mark Internationally?

Yes and no.

There is no such thing as a single trade mark registration that covers every country in the world so, in that respect, it’s not possible to register a trade mark internationally.

However, the Madrid system brings us a step closer by providing a single trade mark filing procedure that allows an applicant to effectively ‘bolt-on’ individual national trade mark registrations to an international registration.

What is the Madrid System?

As you may already have gathered, the Madrid system is an international trade mark system that allows the filing of a single trade mark application for a single set of fees to apply for protection in up to 119 countries (correct as at the time of writing).

An international registration can be thought of as a bundle of separate national trade mark registrations that are centrally administered.

The Madrid system is governed by two treaties known as the Madrid Agreement and the Madrid Protocol. Hong Kong will adopt the Madrid system governed by the Madrid Protocol.

There are two treaties because, when the Madrid Agreement was first concluded in 1891, several countries, notably the USA, UK, and Japan, had concerns about the terms of the Madrid Agreement and refused to join. Accordingly, the Madrid Protocol was introduced to appease these nations and provide an alternative set of articles with which these nations could agree.

Consequently, some countries are party to the Madrid Protocol only. This means that an international registration originating from a country that is party only to the Madrid Protocol can only be extended to other countries/territories that are, likewise, party to the Madrid Protocol.

However, since most countries are party to both the Madrid Protocol and the Madrid Agreement and since (at the time of writing) no country is party to the Madrid Agreement only, this is not currently an issue (although I’ve been in the profession long enough to remember when it was!). A full list of contracting states can be found here.

The type of treaty is still important, though, because the treaty under which an international registration is submitted dictates the rules that apply and can even affect the type of forms that are used.

Since it is proposed that the Madrid Protocol will apply to Hong Kong, this guide will focus on the Madrid system as governed by the Madrid Protocol.

The Madrid Protocol (Hong Kong) is imminent, so it’s important for local businesses to understand how the Madrid system works.

How Does the Madrid System Work?

Who Can Apply?

First things first, an applicant must be qualified to apply for and own an international registration.

To qualify the applicant must be:

  • a national of, or
  • domiciled in, or
  • have a real and effective commercial or industrial establishment in

either a country which is a contracting party of the Madrid Protocol or a country which is a member state of a contracting organisation of the Madrid Protocol.

The interpretation of “national”, “domicile” and “real and effective commercial or industrial establishment” is a matter for the laws of the contracting parties to determine.

Generally speaking, though, a national is a natural person of a contracting party or a legal entity that is incorporated in that contracting party.

The country of domicile is usually the country of nationality although in some circumstances, this can be different and, again, this is a question for national law.

A company can have a real and effective commercial or industrial establishment in more than one country. However, to qualify, the establishment must be one at which some industrial or commercial activity takes place (as distinct from a mere warehouse). Whilst it does not have to be the principal place of business, clearly there must be genuine activity rather than fraudulent or fictitious.

The Intellectual Property Office (“IP Office”) of the country via which the applicant qualifies to apply for an international registration is the office of origin and this is the office through which the application for international registration must be submitted.

If the applicant qualifies in several different countries e.g. because it is a national of one contracting party and has a real and effective commercial establishment in another, the applicant may choose the country via which it submits its international registration.

If you have a company incorporated in Hong Kong, when the Madrid Protocol (Hong Kong) is introduced, that company will qualify as a national of Hong Kong and may therefore apply for an interantional registration through the Hong Kong Intellectual Property Department as office of origin.

However, to apply for an international registration, the applicant must have a “basic application” or “basic registration” in the country of origin.

Base Application/Registration

The basic application or basic registration serves as the root of the international registration. Accordingly, if an applicant in a contracting state or contracting organisation wants to file an international registration it must first have a trade mark application or registration in that contracting state or contracting organisation.

The international registration must be for the same mark as the national/regional application or registration and can only specify the goods or services contained in that national/regional right.

However, if an applicant has two or more such basic rights that each cover different goods and services, the applicant can base an international registration on two or more of those basic rights and thereby specify goods and/or services from each of those rights. In effect, the international registration can combine two or more national/regional rights to seek corresponding protection overseas.

Applying for an International Registration

Assuming an applicant qualifies under one or more of the above mentioned criteria and has a national/regional trade mark application or registration, the applicant must complete the official form MM2 and submit the application to the office of origin i.e. the office of the contracting state or organisation through which the applicant qualifies.

Accordingly, when the Madrid Protocol (Hong Kong) is finally introduced, a Hong Kong company that owns a Hong Kong trade mark application would complete form MM2 with the required details and submit the application form to the Hong Kong Intellectual Property Department for processing.

The form must specify the contracting party whose office is the office of origin and include details of the applicant, how the applicant qualifies to file the application, and details of the basic application(s) and/or basic registration(s) on which the international registration is based.

If the international registration is applied for within six months of first filing a trade mark application for the same mark and the same goods and services, the applicant can claim priority to that earlier first filing regardless of whether that first filing was made at the office of origin. Claiming priority has the effect of back dating the international registration to the filing date of the earlier filed first filed trade mark application.

Of course, the application should include a representation of the mark and a list of goods and services that are to be covered by the international registration. As mentioned, these goods and services must be contained within the basic application(s) and/or basic registration(s).

Optionally, the applicant can tailor the goods and services according to different contracting parties that are to be designated in the international registration. For example, the international registration may cover clothing, footwear, and headgear in class 25 but the applicant may only want to cover clothing for the US designation of its international registration. Which brings us neatly to the designated states…

The applicant must specify which members of the Madrid system the international registration should designate. Designating many member states increases the cost but also makes the international registration more cost-effective.

A useful fee calculator is available on the World Intellectual Property Office (WIPO) website. However, since, at the time of writing, the Madrid Protocol (Hong Kong) has not yet been implemented, it does not currently allow for the calculation of fees for an international registration originating from Hong Kong. Nevertheless, we expect the fees are likely to be the same as those of an international registration originating from China so you can use that as a reasonable yard stick for what the charges might be when the Madrid Protocol (Hong Kong) is finally introduced.

When the form is completed, it is submitted to the office of origin for verification and handling.

The International Registration Procedure

Formality Checks

Upon receipt, the office of origin certifies that the details contained within the application form match those of the basic application or basic registration. The office of origin also certifies the date on which the international application is received and forwards the application to the WIPO for further processing. This date is important because it will be the date of the international registration.

The WIPO conducts a formal examination of the international application and, once approved, records details of the mark in the International Register and publishes the details in the WIPO Gazette of International Marks.

The WIPO then issues an international registration certificate to the applicant and notifies the Intellectual Property Offices in each of the member states designated in the application. The IP Office of each designation then conducts its own substantive examination to ensure the application satisfies local laws.

So, an international application designating US, China, and the EU will be sent by the WIPO to the IP Office of each of these contracting states/organisations for a detailed examination.

Therefore, it’s important to note that issuance of an international registration certificate does not mean the process has ended and protection has been secured in each designated state.

Substantive Examination

Each IP Office of a designated state will examine the international application according to its own laws.

An IP Office has 12 or 18 months (most commonly 12 months) to complete its examination and raise any objections by issuing a provisional refusal.

If no objections are raised, the IP Office will issue a Statement of Grant of Protection where no Notification of Provisional Refusal has been Communicated. This statement is recorded in the International Register by WIPO and published in the Gazette, and a copy is transmitted to the holder of the international registration.

If an IP Office wishes to raise an objection to the international registration, it must transmit a provisional refusal to the WIPO. In these circumstances, the WIPO will inform the applicant who must then appoint a local representative in that member state to address the objections raised.

Since trade mark law varies considerably across different member states, the international application can be, and often is, the subject of different objections in different member states.

One of the major obstacles that an international application may encounter in a designated member state is an earlier right. In some countries such as the US, an earlier conflicting right can result in refusal of the application by the IP office. Furthermore, in most, if not all, member states, an earlier conflicting right can be used by the owner to object to an international application.

Depending on the type of objection raised at the national/regional level, it can take several months to finally resolve any objections.

If any objections raised cannot be overcome, the IP office in question will issue a Confirmation of Total Provisional Refusal. In these circumstances, the international registration will no longer apply in that member state.

If the objections are overcome such that protection has been partially or totally granted to the mark, the IP office will issue a Statement of Grant of Protection Following a Provisional Refusal.

Either way, these statements are recorded in the International Register, published in the Gazette and a copy is transmitted by the WIPO to the holder of the international registration.

At the end of the substantive examination process, an international registration may find itself with some refused designations and, for certain designations, a more limited list of goods and/or services than originally filed. Nevertheless, the situation may not have been too different had the applicant opted for individual national/regional applications.

Given the differences in trade mark laws across different countries and the possibility of earlier conflicting rights, it is prudent for applicants to seek advice locally in each designation of interest before applying for international registration. Doing so can save time, pain, and additional costs further down the line.

The International Registration

The international registration has effect from the date of registration (date of receipt by the office of origin) unless the designated state in question is a subsequent designation (see below). However, since an international registration can be thought of as a bundle of national/regional trade mark registrations, where necessary, it must be enforced separately in each designated state.

Owners should be aware that an international registration can be invalidated in respect of one or more designations, for example due to non-use. Therefore, even though an international registration has been granted in a designation, that is not the end of the matter and the mark must be used and potentially defended in each designated state.

It’s worth noting that since an international registration is administered centrally, the transfer, licensing, and renewal of an international registration can be procedurally simpler and more cost-effective than separate national trade mark rights.

Subsequent Designations

One major benefit of the Madrid system is the ability to add subsequent designations to an international registration later. This provides owners with the option to bolt on additional member states as and when the need arises or when member states of interest subsequently join the Madrid system. It also allows owners to re-apply for previously refused designations where the previous grounds for refusal no longer apply.

One downside is that a subsequent designation will not enjoy the registration date of the international registration but will instead have the date on which it was received by the International Bureau or the office of the contracting party of the owner as the date of registration. This means that more potentially conflicting earlier rights may exist since the original international registration was filed.

Dependence on Basic Registration

One of the biggest potential downsides of the international registration is its dependence on the basic application or registration for a period of 5 years from the date of registration.

If an international registration is based on a basic application which is refused or withdrawn during this five-year period or as a result of an action commenced during this period, the international registration will be cancelled.

Likewise, where the international registration is based on a basic registration (whether registered at the time of filing the international registration or subsequently) and the basic registration ceases to have effect during this dependency period or as a result of an action commenced during this period, the international registration will no longer be protected.

Consequently, this dependency period exposes an international registration to a so-called ‘central attack’ whereby a third-party may attempt to invalidate the basic registration and, thereby, destroy the international registration.

In any of these circumstances, if the basic application or registration is lost, the owner of the international registration will have to “transform” each designation into a national or regional trade mark application. This can be a very costly and time-consuming process and is best avoided if possible.

For these reasons, the owner of an international registration should maintain control of the basic registration for as long as possible and at least for the initial 5-year dependency period.

The good news is that once outside of this initial 5-year dependency period, the international registration is no longer linked to the basic registration and may therefore survive independently.

Advantages

The Madrid system can be a very cost-effective way to protect a trade mark in multiple overseas territories. It requires only a single trade mark application in a single language and the payment of a single set of fees. Accordingly, it is more administratively simple than filing separate national and regional trade mark applications and additionally avoids the need to pay local agents in each country/region of interest (at least initially).

The ability to add subsequent designations as well as the ability to break the international registration up for change of ownership purposes also makes it an extremely flexible system for trade mark owners.

Furthermore, the fact that it is centrally administered means that changes in applicant name, address, or ownership can be easily recorded. It also allows for the payment of a single set of renewal fees, thereby keeping costs to a minimum.

Provided the various designations do not raise any objections, it is an excellent and cost-effective system that can greatly simplify the management of global trade mark portfolios.

Disadvantages

It’s not all roses, however. The 5-year dependency period does expose the international registration and can make it easier for third parties to attack an owner’s trade mark portfolio.

In addition, objections to the international registration require the appointment of local attorneys to deal with such objections. This can quickly eliminate the cost savings that might otherwise have been made.

Finally, and peculiar to Hong Kong is the fact that a Hong Kong based international registration will not be able to designate China. It’s complicated but it brings us nicely to our next question…

How Will the Madrid Protocol Apply to Hong Kong?

Some questions remain as to how the Madrid Protocol (Hong Kong) will be implemented.

Hong Kong’s status as a special administrative area of the People’s Republic of China makes the application of the Madrid Protocol complicated. This is because only sovereign states or qualified inter-governmental organisations (e.g. the EU) may become contracting parties to the Madrid Protocol. Hong Kong will not therefore become a separate member state of the Madrid Protocol or Madrid Agreement.

However, the Central People’s Government of China can apply the Madrid Protocol to the HKSAR in accordance with Article 153 of the Basic Law. This will allow the Hong Kong Intellectual Property Department to become a second trade mark office for filing international registrations through the PRC’s membership of the Madrid system. In other words, the Hong Kong IPD will become an office of origin for international registrations.

This means that an international registration will be able to originate from Hong Kong based on a Hong Kong trade mark application. It also means that foreign applicants will be able to designate Hong Kong on their international registrations.

The only complication is that, since Article 3bis of the Madrid Protocol does not allow an international registration to designate the contracting party of the office of origin, it will not be possible for an international registration originating from Hong Kong to designate China. Accordingly, applicants whose international registrations originate from Hong Kong and that require trade mark protection in China will have to file a separate national trade mark application in the PRC.

We await further details regarding the implementation of the Madrid Protocol (Hong Kong) and will provide an update on our website when such details are made available.

The Takeaway

The Madrid system can be a cost-effective and administratively simple way to obtain trade mark protection in many overseas territories. If everything goes smoothly, it is a fantastic way to build and manage a trade mark portfolio across multiple jurisdictions.

We welcome the move by the Hong Kong Government to introduce the Madrid Protocol (Hong Kong). It will give local Hong Kong businesses access to the Madrid system and its many benefits. It will also allow foreign owners of international registrations to easily seek trade mark protection in Hong Kong.

We eagerly await the introduction of the Madrid Protocol (Hong Kong) and look forward to advising our clients on this great new option when it finally does arrive. In the meantime, if you have any questions on trade mark matters, please contact us.

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