Protection of Trademarks and Geographical Indications

Document Sample
Protection of Trademarks and Geographical Indications Powered By Docstoc
					                                                                                   E
WIPO
WORLD INTELLECTUAL PROPERTY ORGANIZATION
                                                             GENEVA




         PROTECTION OF TRADEMARKS AND GEOGRAPHICAL INDICATIONS:
                              AN OVERVIEW


                          Document prepared by the International Bureau of WIPO




c:\winnt\apsdoc\nettemp\504\$asqprotection of trademarks & geog. indications.doc
                                               page 2



I.    TRADEMARKS


History of Trademarks

1.     The concept of a trademark is not a new one. For centuries merchants and
manufacturers have been labeling their products with signs of one sort or another to
distinguish them from those of their competitors. The modern concept of a trademark first
appeared in the 18th century when the revolutions of that time led to the passage of laws
guaranteeing freedom of commerce and industry. As a result of those laws, individual
merchants and manufacturers began using symbols or signs to enable the public to identify
their goods. A further impetus came with the industrial revolution. Before that, traders
generally sold goods which they had themselves produced, for example shoes or dairy
products. Following the development of the factory system, it became the norm for shops to
sell a wide range of goods produced by different manufacturers, and for manufacturers to send
their goods over long distances to be sold by traders in other towns and countries.

2.    Commercial success breeds imitation, and it was soon recognized that there was a need
for legal protection of trademarks, both to safeguard the legitimate interests of those whose
marks were being copied and to prevent the public from being misled. The most effective and
legally certain way of achieving such protection is by a system for registering trademarks.
During the 19th century, most industrialized countries introduced such systems.


International Agreements

3.     At the same time, there were moves towards international cooperation in this area. The
first multilateral international agreement to contain provisions affecting the registration of
trademarks was the Paris Convention for the Protection of Industrial Property, concluded in
1883. Those provisions have been added to over the years. At the same time, the membership of
the Paris Convention has grown and, at July 29, 1997, stood at 143 countries.

4.    The Paris Convention contains a number of important and detailed provisions relating to
trademarks. In particular, it establishes the principle that a State may not refuse to register the
trademark of a foreign company or the grounds that it has not been registered in the country of
origin.

5.    International obligations in the field of trademarks can be divided into four categories:

      –     facilitating the registration and protection of trademarks;

      –     deregulation of requirements concerning the use, assignment or maintenance of
trademarks;

      –     protection of certain marks or emblems against unauthorized registration or use as
trademarks;

      –     rights conferred by registration of a trademark, and enforcement of those rights.
                                               page 3

6.     The Paris Convention is strong in the first three of these categories. It is less strong on the
rights which attach to a trademark (which, after all, is the reason why trademarks are registered),
and on the enforcement of those rights. This fact, and the world-wide growth in the trade in
counterfeit goods, was a major impetus for the inclusion of those aspects of intellectual property
rights which affect international trade in the Uruguay Round of multilateral trade negotiations
held under the framework of the General Agreement on Tariffs and Trade (“GATT”).

7.     The agreement embodying the results of those negotiations, the Agreement
Establishing the World Trade Organization (“WTO Agreement”), was adopted on April 15,
1994, in Marrakech, and entered into force on January 1, 1995. The provisions on
intellectual property rights are contained in the Agreement on Trade-Related Aspects of
Intellectual Property Rights (the TRIPS Agreement), which is an Annex to the WTO
Agreement, and is binding on all WTO Members. Industrialized countries were required to
apply the provisions of the TRIPS Agreement by January 1, 1996. Developing countries are
allowed a further four years, and least developed countries a further ten years to comply.

8.    The TRIPS Agreement contains some important provisions relating to trademarks, and
reference will be made to these in the course of this paper.

9.    Mention will also be made of the Trademark Law Treaty (TLT), concluded in 1994
under the auspices of WIPO, which aims to deregulate and simplify procedures relating to
trademark registration. The overall goal of this treaty is to make trademark registration
systems more user-friendly, by simplifying and harmonizing procedures and requirements of
trademark offices.


Service Marks

10. It has already been mentioned that trademark registration systems came into being in
response to the growth in the trade in manufactured goods. More recently, and particularly
over the past half century, there has been a rapid development in the services sector of most
economies, for example, tourism, hotel and catering services, transport services and financial
services such as banking and insurance. Such services can be particularly important in the
economy of a developing country since, unlike many manufacturing industries, they do not
generally entail heavy capital investment or imported technology.

11. It soon became apparent that successful service providers, like successful
manufacturers or traders, are at risk of having competitors copy or imitate the marks which
they use to designate their distinctive services. Accordingly, obligations to protect service
marks were included in the Paris Convention; and both the TRIPS Agreement and the TLT
state that provision must be made to register them, and in general to treat them in the same
way as trademarks for goods. There are in fact very few countries in which marks are not
already able to be registered for services.
                                            page 4

Function of a Trademark

12. A trademark is a sign used in connection with the marketing of goods or services. It
may appear on the goods themselves or on the container or wrapper in which the goods are
when they are sold. It may equally be used in advertisements (newspaper, television, etc.) or
in the windows of the shops in which the goods are sold. In connection with services, for
example, hotels, restaurants, airlines, tourist agencies, car-rental agencies, laundries and
cleaners, the mark may appear in point of sale notices and other literature.

13. In general, it may be said that a trademark performs four different, but related,
functions.

14. The first function of a trademark is to distinguish the products or services of one
enterprise from products or services of other enterprises. Trademarks facilitate the choice to
be made by the consumer when buying certain products or making use of certain services.
The trademark helps the consumer to identify a product or service which was already known
to him through advertising, or to make a repeat purchase of goods with which he is already
familiar.

15. In view of the fact that a trademark has the function of distinguishing, only signs which
are capable of distinguishing the goods or services of one enterprise from those of other
enterprises are regarded as capable of being protected as trademarks.

16. The second function of a trademark relates to origin, i.e., to a particular enterprise which
offers the goods or services on the market. This function is important in the definition of the
scope of protection of trademarks. The decisive test for that scope is whether the average
consumer, seeing identical or similar trademarks relating to goods or services of the same
kind or of similar kinds, is likely to believe that those goods or services originate from one
and the same enterprise.

17. The third function of trademarks is to refer to a particular quality or quality consistency
of the products or services for which the trademark is used. Quality consistency is an
important consideration in the licensing of trademarks. The quality guarantee function of a
trademark is of a pragmatic rather than a legal nature. There is, in general, no legal
requirement for a trademark owner to maintain the quality of the goods or services sold under
the mark. However, the mark is a badge of goodwill and reputation, and it is therefore in the
trademark owner’s economic interests to maintain a consistent quality in the goods and
services which he, or a person licensed by him to use the mark, supplies.

18. The fourth function of trademarks is to promote the marketing and sale of products and
services. Trademarks help inform the consumer as to the products and services available on
the market. Therefore, it is important that marks should not be confusingly similar or
deceptive, should not be used in false or misleading advertising and should not contribute in
any other way to acts of unfair competition.


Territoriality: Speciality

19. It is important to bear in mind two basic principles of trademark protection. The first is
the principle of territoriality. A mark is registered under the law of a particular country, or
under a regional arrangement conferring protection in several countries. (Examples of such
regional trademarks are the Benelux trademark, the European Community mark or, in the near
                                              page 5

future, a mark registered with the Office of ARIPO under the Banjul Protocol). The
registration of a mark confers protection only within the jurisdiction in question. Indeed,
Article 6(3) of the Paris Convention states that the registration of a mark in one country shall
be regarded as independent of any registration of the same mark in another country.

20. It follows that similar or even identical trademarks may legitimately be owned by
different persons in different countries. This can happen because two businesses
independently start using the same mark in different countries. Or it can happen because a
company sells its business (including its trademark rights) in one country while retaining it in
another country.

21. The second principle is sometimes referred to as speciality. This denotes the fact that a
trademark is registered with respect to particular goods or services. This leads to the
consequence that the same mark may be registered independently for different goods. For
example, in the United Kingdom, the mark PENGUIN is registered both for books and for
chocolate biscuits. Both these marks are long established. There is no connection between
the respective businesses but, because of the very different nature of the goods concerned,
there is no conflict between the interests of the companies concerned nor any risk of
confusion of the public.

22. A problem can arise if one of the businesses starts to expand its interests towards the
area of the other. For example, APPLE was registered by separate companies for
gramophone records and for computers. A dispute arose when the latter company expanded
into audio equipment. Like many trademark disputes however, it was resolved by agreement
rather than litigation.

23. The list of goods or services for which a mark is registered determines the protection of
the mark. Traditionally, in some countries, the protection was only in respect of the exact
goods or services covered by the registration. A more modern approach, and indeed an
approach required by Article 16.1 of the TRIPS Agreement, is that the protection extends to
goods or services which are similar to those for which the mark is registered, where use in
relation to those goods or services would lead to a likelihood of confusion on the part of the
public.

24. Because of the important role played by the list of goods and services, there exists an
International Classification of Goods and Services for the Purposes of the Registration of
Marks. This is maintained under the Nice Agreement, and is generally referred to as the Nice
Classification. 51 States are currently party to the Nice Agreement, though the system is used
in many more countries that are not actually party to the Agreement. The Nice Classification
will be the subject of a separate presentation, so it suffices to say that it comprises 34 classes
for goods and eight classes for services (though there are proposals to increase the number of
service classes).

25. Finally, it should be stressed that, as its title indicates, the Nice Classification is solely
for the purposes of the registration of marks. In other words, it is purely an administrative
tool and the classification of particular goods or services has no substantive effect. In
particular, goods or services should not be considered as being similar to each other on the
ground that they appear in the same class; nor should they be considered dissimilar on the
ground that they appear in different classes. This principle is set out in Article 9(2) of the
TLT.
                                                page 6

Protectable Subject-Matter

26. Article 15 of the TRIPS Agreement indicates the kinds of signs that should be registrable
as trademarks. Paragraph (1) of this Article reads:

      “Any sign, or any combination of signs, capable of distinguishing the goods or services of
      one undertaking from those of other undertakings, shall be capable of constituting a
      trademark. Such signs, in particular words including personal names, letters, numerals,
      figurative elements and combinations of colors as well as any combination of such signs,
      shall be eligible for registration as trademarks. Where signs are not inherently capable of
      distinguishing the relevant goods or services, Members may make registrability depend on
      distinctiveness acquired through use. Members may require, as a condition of registration,
      that signs be visually perceptible.”

27. It is worth examining this provision in detail. The first sentence provides that any sign
may constitute a trademark, provided that it is capable of distinguishing the goods or services of
one undertaking from those of another. In other words, if a sign functions in the market place as
a trademark, it is a trademark.

28. The commonest forms of trademark are mentioned in the second sentence. In fact, most
trademarks consist of words, or of pictorial designs, or combinations of the two. The words may
be ordinary words (such as PUMA for sports goods), names (such as MERCEDES BENZ or
FORD), deliberate misspellings of ordinary words (such as KWELLS for tablets that quell
indigestion), or invented words (such as KODAK). Since however a trademark has to be
capable of distinguishing the goods or services of the trademark owner from the goods or
services of another enterprise, it follows that words which have a reference to the goods or
services concerned do not make strong trademarks, and may in fact not qualify for protection.
The same applies to personal names, particularly common names, which other traders may
legitimately wish to use in the course of trade. As will be seen later however, overtly descriptive
words or common names can become distinctive through use. That is, if they are used by a
business widely enough and for long enough, they become associated in the mind of the public
with the goods or services of that business.

29. This list is not exhaustive, as is demonstrated by the words “in particular.” Thus, for
example, it does not mention three-dimensional marks, such as the shape of goods or their
packaging. Thus WTO Members are not expressly required to regard these as trademarks,
though they are free to do so. It must be stressed that the first sentence of this Article refers to
any sign capable of distinguishing goods or services.

30. The third sentence of paragraph 1 of Article 15 of the TRIPS Agreement states that, where
a sign is not inherently distinctive, Members may make registration conditional on acquired
distinctiveness. The clear implication is that, where it can be demonstrated that a mark has
acquired distinctiveness in a particular country, registration may not be refused in that country.
In other words, an Office may hold, in a particular case, that a personal name, a geographical
name, or a combination of numbers and letters, or a simple combination of colors is not
distinctive. An Office may not however operate a general rule that, for example, common names
or numerals must be kept free for use by others and can never be protected as trademarks,
however distinctive they are shown to be.

31. The final sentence of this paragraph says that Members may require, as a condition of
registration, that signs be visually perceptible. The implication is that signs which are not
visually perceptible, such as sounds or smells, may constitute trademarks. There has been much
                                               page 7

discussion about whether such non-visual signs can function as trademarks, and about the
problems their registration might cause, both for registering authorities and for the public at
large. The text of Article 15 accordingly recognizes, if only by implication, that they may be
regarded as trademarks but, in order to avoid difficulties for small or inexperienced Offices, does
not impose a requirement to register them. It seems likely however that both the commercial
importance of non-visual marks and the difficulties that might ensue have been exaggerated.
The vast majority of trademarks will continue to be words, pictorial devices or combinations of
the two.


Grounds for Refusal of Registration

                                                r
32. Paragraph 2 of Article 15 of the TRIPS Ageement states that a WTO Member may
refuse registration of a trademark on grounds other than the ground that it is not a protectable
sign. Such grounds for refusal must not however detract from the provisions of the Paris
Convention.

33. In particular, this has in mind Article 6quinquies of the Paris Convention. As already
stated, it is not necessary for an applicant for the registration of a trade mark to have already
registered the mark in his country of origin. If he does however have a home registration, he
may be able to invoke this in support of this application, under the so-called telle quelle principle
of Article 6quinquies of the Paris Convention. Where this principle is invoked, the registration
of a trademark may be refused or invalidated only on the grounds mentioned in paragraph B of
that Article.

34.   In full, that paragraph reads:

            “Trademarks covered by this Article may be neither denied registration nor
      invalidated except in the following cases:

            1.    when they are of such a nature as to infringe rights acquired by third parties in
            the country where protection is claimed.

            2.    when they are devoid of any distinctive character, or consist exclusively of
            signs or indications which may serve, in trade, to designate the kind, quality,
            quantity, intended purpose, value, place of origin, of the goods, or the time of
            production, or have become customary in the current language or in the bona fide
            and established practices of the trade of the country where protection is claimed;

            3.     when they are contrary to morality or public order and, in particular, of such a
            nature as to deceive the public. It is understood that a mark may not be considered
            contrary to public order for the sole reason that it does not conform to a provision of
            the legislation on marks, except if such provision itself relates to public order.

      This provision is subject, however, to the application of Article 10bis.”

35. This provides a useful codification of the reasons for refusing registration of a trademark--
in brief, lack of distinctiveness, conflict with an earlier right and deceptiveness or other public
policy reasons. This formulation has found its way into many national laws. Most recently, by
being incorporated into the European Community harmonization directive, this wording is found
in the trademarks legislation of all EC Member States.
                                               page 8

36. Therefore, although an applicant is not obliged to have a home registration, where there is
such a registration, Member States of the Paris Convention (and, by extension, of the WTO) are
not free to apply grounds for the refusal of registration other than those specified in this
provision. This does not mean however that a trademark that has been registered in the country
of origin must necessarily be registrable in another country, even if its laws are (as regards
grounds for refusal) essentially the same as those of the country of origin. A country is not
bound to accept another country’s judgment as to what is a distinctive trademark. There may in
any case be differences in the extent of use, and the existence of conflicting rights. Registration
in the country of origin may not have been subject to examination. At least however this Article
provides an international standard as to what are proper grounds for refusing the registration of a
trademark.

37. Grounds for the refusal of the registration of a trademark are sometimes divided into
“absolute grounds” (those which relate to the nature of the mark) and “relative grounds” (those
which relate to conflict with the rights of a third party, usually an earlier registered trademark).


Absolute Grounds for Refusal

38. The first absolute ground is that a mark cannot be validly registered if it lacks
distinctive character or consists exclusively of a sign which may serve, in the course of trade,
to designate the kind, quality, quantity, purpose, or value, etc., of the goods or services
concerned. In other words, a mark is not valid if it is merely descriptive of the goods or
services which it is supposed to distinguish. The reason for this ground is two-fold. First,
there are only a limited number of words or pictures which may be monopolized. Second, if a
sign is descriptive, it is inherently incapable of distinguishing one good or service from
another; yet it is just the ability to distinguish which is the purpose and function of a mark.

39. A descriptive sign can generally be considered to be one which would normally and
naturally be employed by an enterprise in describing the particular goods or services
concerning the mark which is used. For example, the expression “Rich in Chocolate” could
not be protected as a trademark for chocolate fudge. Other examples of marks which would
be inadmissible because they are descriptive could include “Quilt-down” for sleeping bags
made of quilted goose down, “Chunky Cheese” for cheese-flavored salad dressing containing
chunks of cheese, “Noclamp” for glue which does not require clamps to work effectively, or
“24-Hour Service” for a dry cleaner which will clean and return garments in 24 hours’ time.

40. A second absolute ground is that a mark cannot be validly registered if it consists
exclusively of a sign which has become, in the current language or in a bona fide and
established practice of the trade of the country, a customary designation of the goods or
services concerned. Put simply, the common or generic name of a product cannot be validly
registered as a mark.

41. In addition to marks which are descriptive or generic, any mark, which for any other
reason, is incapable of distinguishing the goods of one enterprise from those of other
enterprises is also inadmissible and cannot be validly registered. This would be the case with
relatively common personal names, or signs which are too simple, for example, an
alphabetical letter or a single number.

42. One final comment about distinctive marks in this context. In determining whether a
mark can or cannot be registered on the ground that it does not sufficiently distinguish the
goods or services concerned, it is necessary not only to examine the sign itself but also to take
                                              page 9

into account all the surrounding relevant factual circumstances, in particular, the length of
time during which the mark has been in use. It sometimes happens that, through an intensive
advertising campaign and extended exclusive use, a mark which initially was not distinctive,
that is, was not inherently capable of distinguishing the particular goods or services
concerned, takes on in the public mind what is called a “secondary meaning.” “Secondary
meaning” means that, because of its extended use, the mark in question is no longer perceived
by the public as a mere common name or description of the product or service but serves
instead to indicate the origin of the particular product or service. Put briefly, a mark which
initially lacked distinctive character may become distinctive and therefore registrable.

43. On the other hand, a mark which, at the time of its registration, was distinctive can, as a
result of use by the general public, lose its distinctiveness and become the generic name for
the goods or service concerned. When this happens, the owner of the mark loses his exclusive
rights in that mark.

44. To return to the list of absolute grounds for refusal of registration, marks which are
contrary to morality or public order or which are of such a nature as to deceive the public may
be refused registration. What constitutes a mark contrary to morality or public order depends,
of course, upon the law and traditions of the country concerned. With regard to marks which
are liable to deceive the public, a good example would be a picture of a dairy cow as a mark
for margarine, since a dairy cow gives the impression that the product concerned contains
butter or some other milk product.

45. A further absolute ground for refusal of registration is that a mark reproduces or imitates
the armorial bearings, flags, emblems, initials, names or abbreviations of a State or an
intergovernmental organization, without the authorization of the competent authorities of the
State or organization concerned. The reason for this is self-evident; it is to prevent the
registration of marks which would create the false impression that there is an official link
between the goods or services concerned and the State or organization whose flag, emblem,
name, sign, etc., was reproduced or imitated. It should be noted that, under Article 6ter of the
Paris Convention, there is a procedure whereby States and organizations can communicate to
each other, through the International Bureau of WIPO, the emblems and signs, etc., for which
they wish protection.


Relative Grounds for Refusal

46. The most straightforward case of relative grounds for refusal is the following: a mark
cannot be validly registered if it is identical to another mark which bears an earlier date and
was already filed or registered by a third party, in respect of the same goods or services.

47. If two identical marks could be registered by different enterprises for the same goods or
services, the system of marks, the purpose of which is to distinguish the goods or services of
one enterprise from those of others, would make no sense. It follows logically from this that a
mark cannot be admissible if the same mark has already been registered or filed for
registration by someone else for the same goods or services. For example, Enterprise X
cannot register the trademark “Alpha” for tires if Enterprise Y has already registered that
trademark also for tires.

48. A mark is inadmissible, not only if it is identical to a mark which has already been
registered or filed for registration, but also if it is confusingly similar to a mark which has
already been so registered or filed. A mark is “confusingly similar” when it resembles
                                             page 10

another mark in such a way as to be likely to mislead the public. A similar rule applies to the
goods or services with respect to which registration of a mark is applied for; registration may
be refused where, because of an existing registration for similar goods or services, there is a
likelihood of confusion on the part of the public. The question of whether, in a given case,
two marks are or are not similar and whether the respective goods or services are similar, will
depend on the facts of that particular case, including the nature and extent of the use made of
the respective marks.

49. The last case of inadmissibility on relative grounds concerns the special case of well-
known marks. It should be noted that article 6bis of the Paris Convention deals with the
question of well-known marks. A mark cannot validly be registered or used if it constitutes a
reproduction, in whole or in part, an imitation or a translation, likely to mislead the public, of
a mark which is well-known and belongs to a third party. This is so, moreover, irrespective of
whether the well-known mark has been registered, or even used, in the country concerned.
By virtue of a mark being well-known, consumers are very likely to be misled into believing
that the source of all goods or services bearing that mark or a confusingly similar version is
the owner of the well-known mark. The use of a well-known mark on goods other than those
covered by that mark can therefore result in consumer deception. Examples of well-known
marks are “Coca-Cola,” “Vuitton,” “Gucci,” “Lacoste” and numerous marks for cars.


Procedure for Registration of a Trademark

50. Registration of a trademark is obtained by applying to the appropriate national or regional
Office. The conditions for filing and registering a mark are matters for domestic legislation; this
principle is stated in Article 6 of the Paris Convention.

51. Article 3 of the TLT sets out a list of the maximum indications or elements that an Office
may require as the contents of an application for the registration of a trademark. The most
important are the name and address of the applicant, a reproduction of the mark and a list of the
goods and services for which registration is sought. An Office may require that this list be
grouped according to the Nice Classification.

52.   The examination procedures followed by trademark offices can be grouped as follows:

     (a) examination by the Office on both absolute and relative grounds (e.g. Spain, United
Kingdom, United States of America);

      (b) examination by the Office on absolute grounds only, with a procedure for opposition
on relative grounds by the owners of earlier rights (e.g. Germany, Switzerland, OHIM);

       (c) examination by the Office on absolute grounds only, with no opposition procedure
(e.g. Benelux);

      (d)   examination on formal grounds only (e.g. Italy).

53. Where the law provides for opposition (whether as an alternative to, or as a back-up to,
ex officio examination by the Office), this must be filed within a specified period (usually a few
months) from the date of the publication of the mark in the official Gazette. If no opposition is
filed within this period, the mark will be registered.
                                             page 11

54. Where there is no provision for the Office to refuse registration on absolute or relative
grounds, whether ex officio or by way of opposition, any objection by a third party on such
grounds must be considered by a court.

55. As can readily be imagined, the examination as to substance of a mark is an extremely
complex and time-consuming task. It requires numerous and highly qualified personnel as
well as a complete set of trademark documentation (whether in paper or electronic form).
Because of these requirements the system of examination as to substance might not—or might
not immediately—be within the means of every country. Where the legislation of a country
does not provide for examination as to substance, this step in the procedure is most often
simply left out and the weeding out of inadmissible marks is left either to the opposition
procedure or to subsequent court actions to have the registration declared invalid. An
alternative—or intermediate—solution might be to limit the examination as to substance to
the absolute grounds for inadmissibility.

56. This is not to say, however, that a system of examination as to substance does not
provide distinct advantages; indeed, wherever it is feasible to implement such a system, it is
preferable to do so, because this reduces the chance that inadmissible marks will be
registered. It thus provides the greatest security for the owners of marks as well as for
consumers and reduces the subsequent burden on the courts.

57. It should be noted that the refusal of the registration of a mark may be either total or
partial. That is, the Office (or a court) can approve registration for some of the goods or
services listed in the application but refuse it for others.

58. Article 62 of the TRIPS Agreement deals in general terms with the procedures for
acquisition and maintenance of industrial property rights. Members may require, as a
condition of the acquisition or maintenance of industrial property rights, compliance with
reasonable procedures and formalities. Any procedures for grant or registration must permit
the granting or registration of the right within a reasonable period of time. Procedures
concerning acquisition, maintenance, administrative revocation and inter partes procedures,
such as opposition, revocation or cancellation, must be fair and equitable. They must not be
unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
Decisions on the merits of a case should preferably be in writing and reasoned, and should be
made available to the parties concerned without undue delay. Such decisions must be based
only on evidence in respect of which the parties were offered an opportunity to be heard. Final
administrative decisions must be subject to judicial or quasi-judicial review.

59. In addition, Article 15.5 of TRIPS provides that third parties should have a reasonable
opportunity to petition for the cancellation of the registration of a mark.


Term of Protection and Renewal

60. Article 18 of the TRIPS Agreement provides that the registration of a trademark shall be
renewable indefinitely, and that the initial registration and any renewal shall be for a period of
not less than seven years. The TLT is more generous to trademark owners; Article 13 states that
the duration of the initial registration and each renewal shall be 10 years. (In fact, 10 years was
already becoming a generally-accepted standard.) That Article also provides that renewal of the
registration of a mark shall, in effect, be a simple procedural step, subject only to the making a
formal request and the payment of the requisite fees.
                                               page 12


Requirements Concerning the Use of the Mark

61. Most countries do not require that a trademark be actually used before it may be registered
(a notable exception being the United States). Most countries do however provide for the
registration to be canceled if the mark is not put to use, or if it falls out of use. This is recognized
by paragraph 3 of Article 15 of TRIPS, which states that Members may make registrability
dependent on use of the mark. However actual use may not be required as a condition of
registration. Nor may registration be canceled on the ground that intended use has not taken
place within three years of the application.

62. Article 5C, paragraph (1) of the Paris Convention also recognizes the possibility of
cancellation for non-use. It provides that the registration may be canceled for non-use “only after
a reasonable period, and then only if the person concerned does not justify his inaction.” This
provision is rather imprecise. In the first place, it leaves it to each country to decide what is a
“reasonable period.” In the second place, what is the scope of the requirement that the trademark
owner justify his failure to use the mark? Does it simply mean that he must be given an
opportunity to defend his rights? Or is it intended to indicate that there may be circumstances in
which non-use is justified and should not lead to cancellation? The answer to the latter question
is probably “yes,” but this is rendered somewhat nugatory, because TRIPS deals with this in
more detail.

63. Article 19 paragraph 1 of TRIPS states that cancellation may take place “only after an
uninterrupted period of three years.” It is still left to national law to fix the actual period, but at
least we know that it cannot be less than three years, instead of merely that it must be
“reasonable.” Countries may set longer periods. UK law, and the laws of those Commonwealth
and other countries derived from it, also has a five-year period and this is also the period under
the European Community harmonizing directive, and thus of the laws of all EC Member States.

64. This paragraph goes on to state that a mark may be canceled after three years of non-use
“unless valid reasons based on the existence of obstacles to such use are shown by the trademark
owner. Circumstances arising independently of the will of the owner of the trademark which
constitute an obstacle to the use of the trademark, such as import restrictions on or other
government requirements for goods or services protected by the trademark, shall be recognized
as valid reasons for non-use.”

65. In other words, a company that is ready and willing to trade in a particular market, but is
unable to do so because of restrictions beyond its control, may not be penalized by cancellation
of its trademark registration. It is of course recognized that developing countries in particular
may find it necessary to impose import restrictions, for example in order to defend their
currencies. It would be wrong however if this led to a trademark registration being canceled,
possibly allowing a local company to attempt to register the mark without having contributed to
the good will and reputation attached to it. Such a move would also lead to consumers in the
market concerned being deceived.

66. The second paragraph of Article 19 states: “When subject to the control of its owner, use
of a trademark by another person shall be recognized as use of the trademark for the purpose of
maintaining the registration.” This means that use of the trademark by a licensee is sufficient to
maintain the registration, provided that such use is subject to the control of the trademark owner.
It is important to establish this principle. There was formerly a view that the public could be
deceived if a trademark were applied to goods by someone other than the owner of the mark.
                                              page 13

Consumers have however become accustomed to the fact that trademarked goods may emanate
from a licensee (even if they are unaware of the details of such arrangements).

67. Article 20 of TRIPS is also relevant to the question of requirements concerning the use of
the mark. It prohibits Members from imposing special requirements on the use of a trademark,
such as use with another trademark or use in a special form or in a manner detrimental to its
distinctive character. In this latter connection, there has been criticism of the requirements
imposed by some countries that a trademark on the packaging of pharmaceuticals must be
accompanied by the generic name of the product. While such requirements are in principle
permitted, it can be argued that, if the requirements are such that the generic name is not merely
brought to public attention, but actually displaces the trademark in the mind of the public, this
would be contrary to Article 20 of the TRIPS Agreement.

68. The second sentence of Article 20 expressly recognizes and allows the practice of those
countries which require that, where goods bearing a foreign-owned trademark are in fact made
under license by a domestic company, that company, must also apply its trademark. Such
requirements must not however compel the two trademarks to be linked.

69. Article 21 of TRIPS prohibits the compulsory licensing of trademarks. There may be
circumstances in which the compulsory licensing of other intellectual property rights can be
justified, in the public interest, for example in the case of abuse of monopoly position or in order
to make available technology that is not otherwise being exploited in the country concerned.
There is no such public interest in facilitating the use of trademarks. If a trademark owner does
not supply a particular market, or supplies it only at a higher price, other undertakings can step
into the breach, using their own trademarks. There is no reason however why they need to use
someone else’s trademark. Indeed this would be a fraud on the public in the market concerned.


Assignment of Trademarks

70. The assignment of trademarks is taking place more and more frequently. This may occur
because of the complete take-over of one business by another, or when an undertaking sells part
of its business (because it is no longer interested in trading in certain products), or when an
undertaking, while continuing to trade in those goods, is no longer interested in a particular
product line, it may even occur when company A seeks to register a trademark and finds this
blocked by an earlier registration in the name of company B, which company B is not in fact
using. In such a case, the most convenient course is often for company A to purchase the mark
rather than to seek to have the registration canceled for non-use.

71. Article 21 of TRIPS states that Members may determine the conditions on the assignment
of trademarks. This covers both the procedural and substantive aspects of assignment.

72. This provision does not affect paragraph (2) of Article 6quater of the Paris Convention,
which leaves member States free not to regard as valid the assignment of a trademark, if the use
of such mark by the assignee would be of such a nature as to mislead the public, particularly as
regards the origin, nature or essential qualities of the goods to which the mark is applied.
National law may treat an assignment as not valid if, for example, a trademark is assigned for
part only of the goods to which it is applied, where those goods are similar to other goods for
which the mark is not assigned. In such cases the public may be misled as to the origin or
essential qualities of similar goods to which the assignor and assignee independently apply the
same trademark.
                                               page 14


Rights Conferred by Registration

73. Since the purpose of registering a trademark is to protect it against unauthorized use by
other traders, it is essential that legislation on trademarks define what are the rights which are
conferred by the registration of a trademark. The Paris Convention is silent on this question.
This gap is filled by Article 16 of TRIPS, paragraph (1) of which states:

      “The owner of a registered trademark shall have the exclusive right to prevent all third
      parties not having his consent from using in the course of trade identical or similar signs
      for goods or services which are identical or similar to those in respect of which the
      trademark is registered where such use would result in a likelihood of confusion. In case
      of the use of an identical sign for identical goods or services, a likelihood of confusion
      shall be presumed. The rights described above shall not prejudice any existing prior rights,
      not shall they affect the possibility of Members making rights available on the basis of
      use”.

74. WTO members are therefore required to protect registered trademarks against use of an
identical or similar sign in connection with goods or services which are similar to these for which
the trademark in question is registered. This requires a change on the part of those countries
whose law limits protection to the precise goods or services covered by the registration.

75. Where there is identity of the marks and the goods or services, protection is absolute; the
trademark owner does not have to show that there is likely to be confusion.

76. Paragraphs (2) and (3) of Article 16 of TRIPS deal with well-known marks, and refer to
Article 6bis of the Paris Convention. The first sentence of paragraph (2) of Article 16 states that
Article 6bis of the Paris Convention (which requires countries to protect well-known marks
against use in connection with identical or similar goods) shall apply also to services.

77. The second sentence of paragraph (2) of Article 16 states that, in determining whether a
trademark is well-known, account must be taken of knowledge acquired as a result of promotion
of the mark. This means that a well-known mark does not have to be actually used in a given
country in order to benefit from the protection of Article 6bis; it is sufficient that it has become
well-known in that country, e.g. through international travel or advertising. Moreover account is
to be taken of the state of knowledge in the “relevant sector of the public.” For example, if a
trademark is used in relation to automobiles, it is sufficient, in order to benefit from protection as
a well-known mark, that it is known to that sector of the public which buys automobiles.

78.   Paragraph (3) of Article 16 of TRIPS is more problematic. It reads:

      “Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or
      services which are not similar to those in respect of which a trademark is registered,
      provided that use of that trademark in relation to those goods or services would indicate a
      connection between those goods or services and the owner of the registered trademark and
      provided that the interests of the owner of the registered trademark are likely to be
      damaged by such use.”

79. This could be taken to mean that a country is obliged to protect a mark that is well-known
in that country (whether registered or not), not only in the circumstances described in Article 6bis
(“used for identical or similar goods”), but also when used for non-similar goods with the results
(indication of a connection with the trade mark owner or damage to his interests) set out in the
                                              page 15

provision. On the other hand, the provision (unlike Article 6bis) refers, not just once, but three
times to the well-known mark being registered; this would point to an interpretation that, where
a trademark which is registered in a member country is a well-known mark within the meaning
of Article 6bis, that country is obliged to give it the wider protection provided for in this
paragraph.

80. The TRIPS Agreement also contains important provisions concerning the enforcement of
intellectual property rights, in particular trademark rights, including border control measures, that
is, measures directed against the importation of counterfeit goods. These provisions are outside
the scope of this presentation.


II.   GEOGRAPHICAL INDICATIONS

Introduction

81. The protection of geographical indications plays an important role in commercial
relations both at the national and international levels. Wrongful use of geographical
indications is contrary to honest practices in industry and trade, is misleading for purchasers
of the goods for which the indications are used and the persons who wrongfully use such
indications secure an unfair advantage over their competitors. Geographical indications are
applied to both natural and agricultural products and to the products of handicraft and industry
such as wood, sugar, fruit, wine, coffee, tea, tobacco, textile goods and woven goods. A
geographical indication can contribute to the reputation of a product. It creates goodwill
among consumers and can assist immensely in export promotion.


The Importance of Geographical Indications

82. “Bordeaux,” “Bernkastel,” “Parmigiano,” “Pilsen,” “Porto,” “Sheffield,” “Havana,”—
these and many others are the names which have become geographical indications and are
used as such in order to identify the geographical origin of specific products. Typically, those
indications are used for products of a high quality. Sometimes they are even considered to
form part of the cultural heritage of a country.

83. Among the products for which geographical indications are used, are, of course, wines,
in respect of which there is a long-standing tradition of protected geographical indications.
Indeed, the quality of wine—perhaps more than any other product—is determined by factors
prevailing in the geographical area where the grapes from which it is made have been grown.
Those factors include, in particular, topography, soil and climate; no less important however
are so-called “human factors,” that is, the skills and traditions in a region where such a
product has been made for many years. In addition, there are many other products for which
geographical indications are also used and which, through such use, have obtained a particular
reputation, namely, several kinds of beverages (mineral water, beer, cider, spirits), cheeses,
cigars, coffee, tea and certain manufactured goods, such as textiles, cutlery, etc. What all
those products have in common is that their quality and characteristics typically depend on a
particular geographical origin.

84. The reputation connected with geographical indications typically exists not only in the
country where the geographical area to which the indication refers is located, but also in other
countries, in many cases even worldwide. Indeed, many of the products for which
geographical indications are used are marketed in many countries of the world and represent a
                                            page 16

substantial share of the volume of exports of certain countries. However, the success of
geographical indications in the appreciation of consumers has not always been to their
advantage, as we shall see in a few minutes.

Historical Developments

85. Geographical indications as a means of designating the geographical origin of products
have been used for a long time, in a number of cases for many centuries. However, precise
definitions of the geographical area to which they relate were established only fairly recently
when the question of legal protection arose. Indeed, the setting-up of a system of legal
protection was a process which practically started only about a hundred years ago. At that
time, an historical development had already taken place which is of great importance for the
role played by geographical indications in various parts of the world.

86. For a long time, certain geographical indications were used in some European countries,
particularly in France, Germany, Hungary, Yugoslavia, Italy, Spain and Portugal. When
Europeans migrated to the Americas, Africa and other continents, such as Australia, they
frequently continued in their new surroundings exercising the same professions as they had
exercised in Europe. Thus, for example, wine producers would typically settle in regions of
the new world or other continents where vine could be grown and would again start wine-
making in their new home. Quite naturally, they would use geographical designations to
which they were accustomed in Europe, in order to designate products of a comparable
quality. Thus, in a number of countries, geographical indications were used for products not
originating from the geographical area to which the indication referred.

87. As a result of this development, a certain number of geographical indications, some of
which are those with the highest reputation, have been used in different countries with a
different meaning. In a number of countries they are used in the true sense of a geographical
indication, whereas in other countries they are used as a generic designation of the product
(sometimes with the indication of the true origin in order to underline the meaning of the
originally geographical indication as a generic designation). Use of such indications as
generic designations is opposed by countries in which the area denoted by the geographical
indication is situated. In such situations, efforts are often made to solve the problem by
negotiation. For example, as part of a bilateral agreement between the European Community
and Australia, the use in Australia of geographical names such as Champagne as generic
terms is being phased out.


Basic Principles of the Protection of Geographical Indications

88. When speaking of the protection of a geographical indication, we mean protection
against a use of the geographical indication for products not originating from the geographical
area to which the indication refers. The term “geographical area” has a broad meaning: it
may refer to a relatively small piece of land (like the vineyard of “Clos de Vougeot”), a whole
region like “Beaujolais”) or even a whole country (like Switzerland in connection with “Swiss
watches”).

89. There are two reasons for such a protection: firstly, consumers deserve to be protected
against misleading practices. If a geographical indication is used in connection with products
which do not originate from the geographical area to which the indication refers, consumers
are liable to be misled.
                                             page 17

90. Secondly, a geographical indication may be considered as a distinctive sign, the use of
which ought to be reserved to the enterprises located in the geographical area to which the
indication refers. Thus, the laws of some countries provide protection for geographical
indications as a protected subject matter, a kind of industrial property right, which entitles the
enterprises that are located in the designated area to exclude others from using the indication.

91. When considering geographical indications as a special kind of distinctive signs used in
commerce and thus as a particular category of industrial property, it is important to
distinguish them from trademarks; whereas a trademark distinguishes the enterprise which
offers certain products or services on the market, a geographical indication identifies a
geographical area in which one or several enterprises are located which produce the kind of
product for which the geographical indication is used. Thus, there is no “owner” of a
geographical indication in the sense that one person or enterprise can exclude other persons or
enterprises from the use of a geographical indication, but each and every enterprise which is
located in the area to which the geographical indication refers has the right to use the said
indication for the products originating in the said area. In addition, the right to use the
indication may depend on certain quality requirements which the products in question must
fulfill, according to the applicable regulations.


Protection of Geographical Indications Under the TRIPS Agreement

92. Section 3 of Part II of the TRIPS Agreement, comprising Articles 22 to 24, is devoted to
the subject of geographical indications. Article 22.1 of the Agreement reads as follows:

      “Geographical indications are, for the purposes of this Agreement, indications which
      identify a good as originating in the territory of a Member, or a region or locality in that
      territory, where a given quality, reputation or other characteristic of the good is
      essentially attributable to its geographical origin.”

93.   Article 22.2 of TRIPS provides as follows:

      “In respect of geographical indications, Members shall provide the legal means for
      interested parties to prevent:

      (a)   the use of any means in the designation or presentation of a good that indicates or
            suggests that the good in question originates in a geographical area other than the
            true place of origin in a manner which misleads the public as to the geographical
            origin of the good;

      (b)   any use which constitutes an act of unfair competition within the meaning of
            Article 10bis of the Paris Convention (1967).”

(Article 10bis of the Paris Convention states that “Any act of competition contrary to honest
practices in industrial or commercial matters constitutes an act of unfair competition.”)

94. Paragraph 4 of Article 22 states that the protection as referred to above shall be
applicable against a geographical indication which, although literally true as to the territory,
region or locality in which the goods originate, falsely represents to the public that the goods
originate in another territory.
                                              page 18

95. Article 23.1 of TRIPS makes special provision to protect geographical indications for
wines or spirits against being regarded as generic. It states that:

      “Each Member shall provide the legal means for interested parties to prevent use of a
      geographical indication identifying wines for wines not originating in the place
      indicated by the geographical indication in question or identifying spirits for spirits not
      originating in the place indicated by the geographical indication in question, even where
      the true origin of the goods is indicated or the geographical indication is used in
      translation or accompanied by expressions such as “kind”, “type”, “style”, “imitation”
      or the like.”

96. In the case of homonymous geographical indications for wines, protection shall be
accorded to each indication, subject to the provisions of Article 22.4 of TRIPS. Each Member
shall determine the practical conditions under which the homonymous indications in question
will be differentiated from each other, taking into account the need to ensure equitable
treatment of the producers concerned and the consumers are not misled.


Relationship Between Geographical Indications and Trademarks

97. The TRIPS Agreement further contains special provisions concerning the relationship
between geographical indications and trademarks. Article 22 paragraph (3) provides that:

      “A Member shall, ex officio if its legislation so permits or at the request of an interested
      party, refuse or invalidate the registration of a trademark which contains or consists of a
      geographical indication with respect to goods not originating in the territory indicated, if
      use of the indication in the trademark for such goods in that Member is of such a nature as
      to mislead the public as to the true place of origin”.

98. In the case of geographical indications identifying wines or spirits, the protection is
absolute; it is not necessary that the trade mark be likely to mislead. Article 22 paragraph (2)
states: “The registration of a trademark for wines which contains or consists of a geographical
indication identifying wines or for spirits which contains or consists of a geographical indication
identifying spirits shall be refused or invalidated, ex officio if a Member’s legislation so permits
or at the request of an interested party, with respect to such wines or spirits not having this
origin”.

99. The provisions do also recognize however that a trademark which is also a geographical
name may have been used in good faith. It may for instance have been used fancifully, with no
intention to suggest geographical origin. Or its resemblance to a geographical name may be
coincidental. A word may have been adopted as a trademark in complete ignorance of the fact
that it is also the name of a geographical region. That region may, at the time, have had no
reputation for products originating there, but may subsequently develop such a reputation.
Accordingly, Article 24 paragraph (5) provides that, where a trademark has been applied for or
registered in good faith, or where rights to a trademark have been acquired in good faith before a
geographical indication becomes protected, the right to register or use the trademark shall not be
prejudiced.

Registration of Geographical Indications

100. In some countries, geographical indications are generally protected in an indirect
manner, for example through laws governing the use and registration of marks and the
                                            page 19

prevention of unfair competition and false advertising, and directly, through product labeling,
Customs, and other government regulations, which are directed at consumer protection. This
protection may be supplemented by the registration of a distinctive sign constituting a
collective or certification mark. This is the system of protection that has been mainly used in
the common law countries.

101. In other countries, such as France, Italy and Portugal, on the other hand, protection has
traditionally been based on legal or administrative acts expressly concerned with the
protection of geographical indications as such. These three countries are also parties to an
international agreement, the Lisbon Agreement for the Protection of Appellations of Origin,
which is administered by WIPO. This treaty came into force in 1996, and currently has
18 member States. To date, 725 appellations have been registered under the Agreement.

102. The registration of geographical indications does not create exclusive rights as such. It
authorizes persons fulfilling certain conditions to use the indications. The three conditions
under which the geographical indications may be used are, firstly, that the use should be by a
producer carrying on activity in the geographical area specified in the register, secondly, that
the indication may be used with respect to products specified in the register and, thirdly,
provided that those products possess the quality, reputation or other characteristic specified in
the register.

103. Although the protection of geographical indications by specific legislation has been
slow in winning general acceptance, the trend is in that direction. Within the European
Community, geographical indications are protected by Community-wide legislation, notably
in respect of wines and spirits, but also with the possibility of registering geographical
indications in respect of other agricultural products.

104. Finally, it should be mentioned that Article 23.4 of the TRIPS Agreement states that, “in
order to facilitate the protection of geographical indications for wines, negotiations shall be
undertaken in the Council for TRIPS concerning the establishment of a multilateral system of
notification and registration of geographical indications for wines eligible for protection in
those Members participating in the system.” At this stage however, no progress has yet been
made towards the creation of a system of international registration in the framework of the
TRIPS Agreement (which, it should be recalled was concluded only three years ago).


                                                                              [End of document]