13 August 2015

Algeria joins Protocol: impacts on trademark portfolios

Recent news from WIPO informs us that Algeria will join the Madrid Protocol from 31 October 2015.

With a population of close to 40 million and being the largest African and Arab country, Algeria's accession will be welcomed in many quarters. American, British and Japanese companies, as examples, will now be able to designate Algeria in International applications.

Previously, as a Madrid Agreement member only, Algeria was only available to entities from other Madrid Agreement countries. This means Chinese companies and those from the majority of continental European countries, for example, have already been able to designate Algeria in International applications for many years.

Algeria was the last remaining bastion of Madrid Agreement only membership.

This development may therefore have practical repercussions. Where a country is a member of the Madrid Agreement and the Madrid Protocol, in simple terms, the Protocol takes precedence. This means the Madrid Agreement is now largely redundant as the system is transformed into "a One Treaty System".

However, Article 9sexies is, at least for the time being, where there are some differences. If the Madrid Agreement is closed down this Article may fall by the wayside.

If you work for or represent companies from the likes of Belgium, China, France, Germany, Italy, Luxembourg, the Netherlands, Russia, Spain and Switzerland (and other Madrid Agreement member countries) then this could have an impact on your budgets.

If you're in the UK or US (or other Madrid Protocol only countries) then you're already paying the higher fees so no need to read on. You might be glad the playing field may soon be levelled.

I've mentioned Article 9sexies a couple of times before (here and here). It basically means that if you come from a Madrid Agreement and Protocol country (let's say France) and designate countries that are members of the Madrid Agreement and Protocol (let's say Benelux and Bulgaria) then you would pay the Complementary fee for each designated state as opposed to the Individual fees Benelux and Bulgaria charge under the Madrid Protocol.

Article 9sexies also impacts examination timelines - designated states only get 12 months through this Article - so this may lengthen procedures if it's abolished. From my viewpoint, this is unlikely to be significant in the majority of cases.

However, I do accept for those countries who can notify oppositions after the expiration of the 18 month period under Article 5(2)(c), - or, in other words, indefinitely - that they bring some uncertainty to applicants. This being more so to applicants who currently rely on Article 9sexies and therefore have more guaranteed timescales. These members are notably China plus Cyprus, Iran, Italy, Kenya and Ukraine; (other countries signed up to Article 5(2)(c) are Protocol only members).

With IP budgets often under scrutiny, it's the fees that some companies may need to be aware of. Let's do some analysis.

The Complementary fee for each designated state is 100 CHF and this includes up to three classes. What happens if you now need to pay Individual fees for three classes:

Armenia: 100 CHF up to 265 CHF
Belarus: 100 CHF up to 600 CHF
Benelux: 100 CHF up to 167 CHF
Bulgaria: 100 CHF up to 327 CHF
China: 100 CHF up to 499 CHF
Cuba: 100 CHF up to 356 CHF (both first and second part Individual fees)
Italy: 100 CHF up to 159 CHF
Kenya: 100 CHF up to 758 CHF
Kyrgyzstan: 100 CHF up to 660 CHF
Moldova: 100 CHF up to 356 CHF
San Marino: 100 CHF up to 178 CHF
Switzerland: 100 CHF up to 450 CHF
Tajikistan: 100 CHF up to 452 CHF
Ukraine: 100 CHF up to 429 CHF
Vietnam: 100 CHF up to 269 CHF

If you can file a word mark application covering those countries using the lower fees now you would pay 2153 CHF (plus your Office of origin's handling charge). Under the higher fees, it works out at 6496 CHF (plus your Office of origin's handling charge) (excluding the second part fee for Cuba of 82 CHF).

If you file in a single class, the lower figure of 2153 CHF (plus your Office of origin's handling charge) remains the same and the higher figure changes to 5068 CHF (plus your Office of origin's handling charge) (excluding the second part fee for Cuba of 82 CHF). Obviously, it's unlikely for anyone to file an International application designating only those countries but you'll get the idea of the costs changes that a trademark holder could be facing. This could be more acutely felt for large international trademark portfolios.

Renewals would also face similar changes in the fees.

We will have to wait and see whether Article 9sexies is something that is abolished - and resistance to this may be strong from those countries who benefit from it. This may mostly be from 'old guard' members from the Madrid Agreement's early days who may find themselves outvoted in any changes as more and more countries become members.

It's perhaps worth mentioning that both Syria and Uzbekistan withdrew from the Madrid Agreement (to rely on the Madrid Protocol only) so they could benefit from increased fees and examination timelines, possibly not prepared to wait for the repeal of Article 9sexies.

When simplification and harmonisation are watch words in IP this may mean the days of Article 9sexies are numbered though and so it might be something that is worthwhile being prepared for.