Intellectual property rights, Part 3: trademarks, collective marks and geographical indications S.K. Matlani is an entrepreneur based in the State of Madhya Pradesh in India. In 1985, Matlani set up a small company to manufacture mosquito repellent mats, selling them under the trademark JET. JET repellent mats proved to be success- ful in the market and Matlani was soon competing neck-to-neck with the largest competitor. It’s all in the mark Export Marketing & Management By Esteban Burrone, WIPO In 1995, one of India’s large industrial groups was looking for mark in the marketplace has become such a key issue for com- options for entering the mosquito repellent market and entered panies, particularly exporters operating in distant markets. If into negotiations with Matlani to buy the JET trademark. After you´re entering an export market, having ´the right trademark´ lengthy negotiations, Matlani agreed to sell the JET trademark is crucial to attracting consumers. But having the right trade- for a reported total of approximately USD 6,500,000. The facto- mark can mean many things. Here are three key factors: ries and remaining tangible assets remained his and he closed 1 From a commercial point of view a trademark should be easy them down shortly after. Clearly, the only thing the conglome- to read, write and remember for consumers. It should not rate was interested in was the trademark. The JET trademark have a negative connotation in relevant foreign languages, had over the years achieved an enviable reputation, gaining the too. CBI News Bulletin Page 6 trust of many consumers. The large conglomerate did not need 2 From a legal standpoint, your trademark must meet the the factory or the tangible assets: what it needed to get a necessary requirements for registration. In particular, it must foothold on the market for mosquito repellents was the trade- be distinctive. For instance, you cannot use the generic name mark 1). This is true for many companies worldwide. A trade- of the product and the trademark may not be considered mark embodies the reputation and image of a product and is descriptive, deceptive or contrary to public order or morality the direct link between the company and its clients. A client and should not be an official state emblem or flag (for more that is satisfied with a given product is likely to come back for information on legal requirements for registering a trade- more products bearing the same trademark. As a company, a mark go to ttp://www.wipo.int/sme/en/documents/guides/ trademark enables you to differentiate your goods and services making_mark.html). If your trademark fails to meet these from those of competitors. It is also an incentive to invest in requirements, it may not be registered, which means that in developing a quality product. A trademark appreciated by con- general you´ll be powerless to stop other companies from sumers is extremely valuable, and, as was the case with JET, using it. may be your company´s most precious asset. 3 Your trademark may not be identical or confusingly similar to that of another company and many national trademark ´The right trademark´ offices will check this while examining the trademark prior to This is why the selection and adequate management of a trade- its registration. To check whether this is the case, you can conduct trademark searches in foreign countries. Some How to register national trademark offices have an online trademark data- There are essentially three ways of registering a trademark base for this purpose. For a more exhaustive investigation of abroad. possible similarities to other marks, it is generally advisable 1 You can go directly to a national trademark office and file to hire a trademark expert. your trademark application in the relevant language. You will need to pay the national fees, and, in many countries, to hire Registration a local trademark agent. Having the right trademark, like having a good car or a nice 2 Use a regional system for the protection of trademarks. For house, is worth little without the necessary papers to prove your registering Community Trademarks in the European Union company´s ownership. To make sure you have exclusive rights you can go to the regional Office for the Harmonisation of over a trademark in a foreign market, you must apply for regis- the Internal Market (OHIM). It is based in Alicante, Spain. tration with the national (or regional) trademark office, pay the The Community Trademark provides exclusive rights in the applicable fees and obtain a certificate of registration. 25 EU member countries. By registering the trademark, your company acquires exclusive 3 Companies based in member countries of the Madrid rights to stop or prevent others from using the same or a con- System for the International Registration of Marks can avail fusingly similar trademark for identical or similar goods and themselves of this system to significantly reduce costs and services. Note that the exclusivity applies to identical or similar limit formalities for trademark registration in foreign coun- goods and services and not to any goods or service. This means tries. Under the Madrid system, you can submit a single that if you´ve registered a trademark for a given class of goods application form in one language, paying one set of fees for and services – say class 15 of the International Classification of protection in up to 78 member countries. You don´t have to Goods and Services, which is for musical instruments – another appoint a local lawyer to handle the registration unless your Having the right trademark is nothing without the necessary papers to prove your company’s ownership company will probably be able to use an identical or similar trademark application is refused in a given country and you trademark to sell food products or car engines without wish to respond to the decision. Another advantage of this infringing on your rights (for more information on this matter system is that you can make changes to registration details, go to http://www.wipo.int/classifications/nice/en/). such as an address, and renew the trademark with a single procedure rather than submitting multiple forms for the A Cuban example trademark offices of different countries. The cost savings The story of Cuban textile company Alba Confecciones illus- achieved in this way can be significant. For more information trates the importance of registration. In 2001, the company on the Madrid system and a list of Member States go to: inquired at the trademark office about the procedures for pro- http://www.wipo.int/madrid/en/. tecting the name of the company, which had been used as a CBI News Bulletin 2006 trademark for some of its textile products for the previous six Collective marks years. The company was surprised to find out that it had no While trademarks are key elements of the marketing strategy of exclusive rights, as the trademark had not been registered 2). Not any company, small companies may have difficulty gaining only that, but a foreign company had registered the trademark recognition for their mark given strong competition from other Alba in Cuba under class 25 of the International Classification producers. The solution in such cases may be to join hands of Goods and Services, which relates to clothing, footwear and with other producers and use a collective mark. This option headgear. This situation presented a serious problem. may be particularly interesting if you´re seeking to export to Eventually, Alba Confecciones was lucky: it discovered that the highly competitive markets. foreign company had not been using the trademark for three Anybody living in or near Peru who has tasted the chirimoya years or more, which under Cuban law makes it possible to fruit, a tropical fruit that grows in the Andean region, knows cancel a registration. Having learned a lesson, the company is that the chirimoya from the Cumbe Valley is very special. Local May/June Page 7 now looking into registering its other trademarks nationally as villagers realised they could exploit the distinctive reputation of well as in its main export markets 3). the Cumbe fruit by registering the Chirimoya Cumbe as a col- lective mark. They gave it a characteristic logo and all producers It is not just SMEs that run into trouble for not registering their agreed to abide by a set of internal regulations. The collective trademarks. Countless companies have run into trouble after mark proved a doorway to success: producers were able to use neglecting registration in a foreign market. In what is probably it to promote their product in the main wholesale markets in one of the most famous cases, a large sportswear multinational the capital and beyond, thus strengthening the product´s repu- found that its trademark had been registered by a different tation. The collective mark registration is owned by the village company in Spain and could not use the mark in its advertising of Santo Toribio de Cumbe 4). campaigns during Spain´s 1992 Summer Olympics. The risk is Collective marks can be a very powerful legal instrument for two-fold: firstly you run the risk of losing sales to competitors groups of producers, business associations and cooperatives in and potentially tarnishing your trademark´s reputation. any sector. They enable small businesses to benefit from the Secondly, you may be accused of infringing on the trademark collective reputation of a product and from economies of scale. rights of others, thus compromising your entire marketing Collective marks are often used to promote products characte- strategy in a given market. ristic of a particular region. In such cases, the creation of a col- lective mark not only helps producers to market the product domestically and internationally, but also provides a framework for cooperation between local producers. Part of the suc- cess of collective marks, in fact, is the development of product standards and a common strategy 5). It is important to note that the Madrid System described above may also be used to register collec- tive marks abroad. Geographical indications Geographical indications are another powerful tool for producers. Depending on national legislation, they are also known as appellations of origin. A geo- graphical indication can be granted to a product whose reputation, quality or other characteristics can essentially be attributed to its geographic origin. Geographical indications are usually applied to agricultural products whose characteristics are determined by specific local climatic or soil conditions. Famous examples include the Mexican drink Tequila and India´s Darjeeling Tea, which currently gives employment to over 50,000 people in India 6). The Chirimoya Cumbe, currently registered as a collective mark, is also likely to acquire a geographical indication in the course of 2006. Many other products from developing countries may qualify and numerous countries are making efforts to register geographical indica- Export Marketing & Management tions in order to promote the economic development of regions, communities or provinces. For a further introduction to trademarks for SMEs go to http://www.wipo.int/sme/en/docu- ments/guides/making_mark.html. FOOTNOTES: 1 For a full case study go to: http://www.wipo.int/sme/en/case_ studies/jet_mosquito.htm. 2 Cuban legislation, like that of many other countries worldwide, requires a trade- CBI News Bulletin Page 8 mark to be registered under the national trademark law for obtaining trademark rights in its territory. 3 For a full case study go to http://www.wipo.int/sme/en/case_ studies/alba_confecciones.htm. 4 For a full case study go to http://www.wipo.int/sme/en/case_ studies/chirimoya.htm. 5 Most trademark offices require appli- cants for collective marks to submit a copy of their internal regulations. 6 For a full case study go to http://www.wipo.int/sme/en/case_ studies/darjeeling_tea.htm.
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