Trademark Annuities...

In case the title of this blog left you with a quizzical look, no, the title is correct. Those of you that work across intellectual property rights (e.g. in both patents and trademarks) will be familiar with the payment of patent annuities.

However, there's a select group of jurisdictions where annual fees are payable to maintain trademark registrations.

Annual fees make the Cayman Islands one of the most expensive jurisdictions in which to maintain trademark registrations (although recent hikes in the official fees in the UAE and Venezuela means it's not the only place where maintaining a trademark registration can cost a fortune).

The Cayman Islands Registry used to allow representatives from anywhere to attend to matters before them. This changed in 2012 so that a local representative was required. I've previously worked with the local Registry but this change prevented me from doing so directly and therefore being able to maintain trademarks most cost-effectively for clients. Local agents in the Cayman Islands tend to be expensive reflecting the high cost of living there. It is worth considering paying all the annual fees (up to a registration's renewal date) in bulk to reduce the level of professional fees.

It's also worth being 'tactical' and avoiding registering trademarks in December. Annual fees fall due on 1 January each year so if you register in December you'll find yourself with an immediate payment to be made to keep the registration you have only just got in force.

The Cayman Islands are now looking to introduce a fresh trademark law (that removes its dependency on UK or Community registrations). It will be interesting to see how they set their official fees. Annual fees may be abolished but they will need to bring in examiners to handle applications filed under a new substantive trademark law so an increase in initial filing fees and, possibly, renewal fees could be anticipated.

Like the Cayman Islands, the Turks and Caicos Islands are a British Overseas Territory. They also share a need for annual fees to be paid to maintain trademark registrations. With a population roughly half that of the Cayman Islands and an economy that is not as developed, the number of trademarks registered in the Turks and Caicos Islands is a lot less.

Remaining firmly in the Western Hemisphere, Honduras is another country where annual fees are due. Again, I think it's worthwhile considering paying them in bulk up to a registration's renewal date as it can make the management of the registration easier.

Don't confuse these annual fees for Honduras with rehabilitation taxes. These taxes, which are unique to Honduras, are an optional payment. When paid they will protect a registration from being cancelled for non-use. Therefore, you only need to pay them if you're not using a trademark.

Rehabilitation taxes can easily be forgotten about and this is understandable when they are optional and not a mandatory maintenance requirement. They can be paid retrospectively. Therefore, if you have a registration that is vulnerable to cancellation on the grounds of non-use but you wish to file an opposition based on this registration, you would just need to back-pay any rehabilitation taxes prior to filing an opposition to help avoid a counter cancellation action on the grounds of non-use.

So annual maintenance payments to maintain trademark registrations may not be common, but if you help manage trademark renewals or maintenance then be aware that they can crop up from time-to-time. Even if you don't have patents under your responsibilities, you may also come across annual fees/annuities when maintaining design registrations (particularly in countries where the design law is a subset of the patent law) or domain names.

Caribbean IP Part 9: Cayman Islands

ISO 3166 country code: KY.

I have previously blogged on developments in the Cayman Islands so will avoid repeating the same here.

Quite simply, registering patents and trade marks in the Cayman Islands requires a UK registration to be extended. In the case of trade marks, Community and International Registrations (designating the UK) are also acceptable bases to an application.

It would be preferable to many brand owners to have a more substantive law in the Cayman Islands. The proposed law in the British Virgin Islands would also fit the requirements of the Cayman Islands better; there being a lot of similarities between the high income, financial services and tourism charged island groups. However, with a recent change to the procedures in obtaining IP rights in the Cayman Islands, it is difficult to see that there will be additional amendments (improvements) in the immediate future.

Trade Marks and Tax Havens

Having recently returned from a trip to Gibraltar, I thought I'd write a piece on tax havens and intellectual property, specifically trade marks. It'll explore some jurisdictions in western Europe and the Caribbean and won't be an exhaustive tour of all tax havens; the definition of 'tax haven' varies depending on your sources anyway. The term 'tax haven' is often applied negatively these days but my aim is not to label these places - I have visited many of them, visited one regularly on business, and even lived in another and certainly did not regard myself as a tax exile.

Gibraltar

It can be tax efficient to own intellectual property by entities based in such tax havens. It is argued that this deprives Governments of significant income that could aid development, but I won't discuss any ethical issues. I'm also not a tax expert and will not look at the best jurisdiction for tax purposes. Furthermore, I will not advise on how easy it is to incorporate and manage companies in the referred jurisdictions.

I will look at the internal trade mark systems of such tax efficient locations. Given that a home jurisdiction can impact on how protection of trade marks in other countries is obtained there are things to be considered from this perspective, and the work involved in the management of such a trade mark portfolio. Any increases in trade mark costs are likely to be easily offset by the tax savings, but a trade mark owner (specifically those responsible in-house for the trade marks) who is thinking of such an ownership model should consider their additional budget required and resources (e.g. people) required to effectively manage this.

Beginning with Gibraltar, 'the Rock' is rebranding itself as a non-tax haven. Nevertheless, taxes are not as 'invasive' here as they are in other places.

Gibraltar has an ambiguous situation with respect to trade marks. As I have blogged before, OHIM considers Community Trade Marks to cover Gibraltar. This is based on an understanding of Gibraltar's status with the EU under Article 299(4) of the Treaty of Rome. However, there do not appear to have been amendments to Gibraltar's local Trade Marks Act to reflect this. As a Common Law jurisdiction, it should enact local legislation to reflect any European or International arrangements in place and so I believe the enforceability of a CTM in Gibraltar is questionable.

The existing trade marks law provides for the re-registration of United Kingdom National registrations.

Conversely, Gibraltarian companies can own Community Trade Marks and, being a part of the European Union, there is the possibility to file Madrid Protocol applications based on such Community Trade Marks. Perhaps a word of caution - although I admit I do not have personal experience of this situation - I would anticipate some designated countries would issue Provisional Refusals/Office Actions seeking clarification of the applicant's nationality; perhaps this could even come from WIPO. However, I think these could be overcome once and they would not arise again.

This could create a bizarre and unique situation where the home mark you base your Madrid Protocol application on does not actually cover your home jurisdiction.

Remaining on the Iberian Peninsula and the Pyrenean co-principality of Andorra has a trade marks law dating from the 1990s (its first trade mark legislation). Andorra has not joined the Madrid Protocol although it is a quick registration jurisdiction and would have little trouble meeting Madrid Protocol examination deadlines. Despite being sandwiched between France and Spain, neither French or Spanish enjoy official status; Catalan is the official language. Andorra is not part of the European Union and therefore not covered by a Community Trade Mark, although it uses the Euro.

Another mountainous European principality, Liechtenstein, has more registered companies than it does citizens. The local Trade Marks Office works efficiently and Certificates are issued quickly; note that there are no provisions for trade mark oppositions in Liechtenstein. At 400 Swiss francs (around £270/$425/€335) for the initial filing fee it is not the cheapest country around particularly when the population is little over 30,000. If you need to use an agent, quite possible if your Liechtenstein company is just a tax vehicle that employs few people, then expect high agent charges in this extremely wealthy country. However, Liechtenstein is a member of the Madrid System, and its simple domestic trade mark system minimises the risk of "central attack". Liechtenstein is not a member of the European Union although it participates in the European Economic Area.

Neighbouring Switzerland is also famed for its low tax status, most notably the Canton of Zug. Swiss domestic trade mark law is robust and efficient although with many well known and sophisticated businesses and a population attractive to foreign brand owners, its Trade Marks Register is much larger than that of smaller jurisdictions. Switzerland has been at the forefront of international trade marks being an original signatory to the Madrid Agreement effective 15 July 1892. Also dating from 1892 is the 'German-Swiss agreement concerning mutual recognition of patent, design and trade mark protection' that means use of an identical German trade mark, which is registered for the same goods/services in Germany and Switzerland, counts as valid use in Switzerland (and vice-versa) provided the owner has a place of business/legal seat in either country. I am not aware that this agreement would extend to German owned Community Trade Marks, and most will know that the proudly neutral Swiss have not joined the European Union and so CTMs do not provide coverage ordinarily.

Within the EU, the world's only remaining sovereign Grand Duchy, Luxembourg follows Liechtenstein and Switzerland in boasting wealth and low taxes. Covered by a Benelux Trade Mark (covering a market of over 28 million people) or a Community Trade Mark (covering a market of over 500 million) this would be one of the more difficult of tax havens to get a domestic trade mark registered because of larger numbers of existing trade mark registrations. Luxembourg has membership of the Madrid System (in addition to the European Community being a party to the Madrid Protocol).

Maintaining a francophone connection we will move on to the Channel Islands. The French language has official status in Luxembourg and the Channel Islands, albeit most use being in administrative or ceremonial circumstances. The larger of the two Channel Islands, Jersey, is in the midsts of revamping its IP laws. For now, the trade mark law allows for the re-registration of United Kingdom National Registrations (as per Gibraltar) and for the automatic protection of Community Trade Marks. This latter situation is different to Gibraltar as it is due to legislation enacted locally in Jersey. On the contrary, whilst a Jersey company can file for a Community Trade Mark (and it would provide protection to the island), it could not base a Madrid Protocol application based on a Community Trade Mark as it not a part of the European Union.

If it doesn't confuse matters further, International Registrations designating the United Kingdom also have automatic coverage to Jersey but a Jersey company cannot file a Madrid Protocol application based on a United Kingdom National trade mark. It's easy to see why Jersey wants to introduce new IP legislation as currently it is far more straightforward for foreign applicants to protect their trade marks in Jersey than it is for local applicants to protect them at home.

Just to the north, Guernsey has already introduced a far more sophisticated trade mark system, modelled to some extent on how the UK IP Office operates, and it wants to be seen as a very forward thinking and progressive intellectual property hub; it is planning on being the first jurisdiction worldwide to introduce Image Rights registrable protection.

The trade mark system allows for direct applications (although if you have a UK trade mark or CTM in place you can use this to 'support' your Guernsey application and benefit from lower official fees). Guernsey is not a member of the European Union or the Madrid Protocol.

We will remain in the 'Atlantic Archipelago' - the term British Isles, although currently geographically correct, is controversial in Ireland (the British Lions rugby team has been the British and Irish Lions since 2001). Ireland provides similar benefits to Luxembourg in being a member of the European Union and a party to the Madrid Protocol.

Perhaps useful to North American brand owners is that Ireland is an hour closer to them than continental Europe. This might not sound much but consider 09.00 in Los Angeles is 17.00 in Dublin, but 18.00 in Paris, (Gibraltar and Luxembourg). Ireland is also natively English-speaking, although so is Gibraltar and you would be hard pressed to find a business person not fluent in English (or French or German) in multilingual Luxembourg.

Moving to sunnier climes and the Cayman Islands, where there is a need for a UK registration or CTM registration or International Registration designating the UK to form the basis of a local application. Additionally, there is no membership of the Madrid Protocol.

The Bahamas can at least boast an independent trade mark system where registration in the UK or CTM is not a prerequisite. However, a single class system that uses the archaic former British classification is in place. This means you would need to 'translate' specifications of goods into the International Classification when ready to file in most other countries, there is no provision for service marks and the Madrid Protocol is unavailable. It can also take some time to obtain registration; the Registry's indication that this can "take up to 18 months" does not match my experience that has taken around double this timeline at times.

Returning closer to home (well closer to home for me and just a 30 minute flight away) and we have the Isle of Man. The birth place of the late Bee Gees brothers and the resting place of Sir Norman Wisdom, the island also lays claim to having the oldest parliament in the world, The High Court of Tynwald.

The Isle of Man is a self-governing Crown Dependency and the United Kingdom does not normally interfere with its internal legislation. However, when it comes to trade marks, the UK Trade Marks Act 1994 covers the Isle of Man automatically (and there is no separate local registration possible). Under Section 108(2), "references in this Act to the United Kingdom shall be construed as including the Isle of Man", and a Community Trade Mark is also effective although the Isle of Man is not a part of the European Union. Furthermore, the UK Government ratified the Madrid Protocol "with respect to the United Kingdom and the Isle of Man". A Manx company can therefore take advantage of the Madrid Protocol, although as with the EU-Gibraltar nationality entitlement example above, I would not be surprised in receiving the odd Office Action from overly ardent examiners requiring ownership clarification.

As with the examples of Ireland and Luxembourg and, to a lesser extent, Switzerland above, a Manx company (by virtue of its home jurisdiction being effectively the United Kingdom for trade mark purposes) would have to contend with having to deal with more crowded Trade Mark Registers domestically.

Do not overlook a general ownership concern for companies from Gibraltar, Jersey, Guernsey, the Cayman Islands and the Isle of Man. The foreign affairs of all of these are managed by the United Kingdom and the fact they do not have diplomatic recognition themselves can create issues in some foreign countries. Some explanations and proof that Gibraltar, etc. provide reciprocity to nationals of their country may need to be filed with a foreign Trade Marks Office.

Management of trade mark portfolios in tax havens can be complicated at the best of times but when these are your home jurisdictions - and thus impacting on your global trade mark portfolio - you will see there can be some added obstacles to navigate.

I'll conclude with a table summing up various places visited in this blog.

Jurisdiction	Currency	Time Zone	Local registration	Community Trade Mark	Madrid Protocol
Andorra	Euro	CET	Yes	No	No
Bahamas	Bahamian dollar (pegged to US dollar 1:1)	EST	Yes	No	No
Cayman Islands	Cayman Islands dollar (pegged to US dollar 1:1.2)	EST	Yes but must be based on UK National or IR, or CTM Registration	No	No
Gibraltar	Pound sterling (Gibraltar pound also in circulation (same value))	CET	Yes but must be based on UK National Registration	Questionable	Yes (based on a CTM)
Guernsey	Pound sterling (Guernsey pound also in circulation (same value))	GMT	Yes	No	No
Jersey	Pound sterling (Jersey pound also in circulation (same value))	GMT (proposal to switch to CET defeated in 2008 referendum)	Yes but must be based on UK National Registration	Yes	No
Ireland	Euro	GMT	Yes	Yes	Yes (based on national trade mark or CTM)
Isle of Man	Pound sterling (Manx pound also in circulation (same value))	GMT	UK is local	Yes	Yes (based on a UK trade mark)
Liechtenstein	Swiss franc	CET	Yes	No	Yes
Luxembourg	Euro	CET	Benelux is local	Yes	Yes (based on a Benelux trade mark or CTM)
Switzerland	Swiss franc	CET	Yes	No	Yes

The benefits of UK registration in addition to a CTM

The United Kingdom (despite a fair bit of internal Euro-scepticism) is an integral part of the European Union. Community Trade Marks provide for trade mark protection to the country like they do to all other member states of the EU.

The Community Trade Mark is not designed as a supplement to any national trade mark rights, more of an alternative. It is designed for those with business interests throughout the trading block (although use in one member state should be regarded as sufficient use to stave off cancellation proceedings). Naturally, some local companies may register in the home country first of all before they develop expansion plans for the EU and then file a CTM.

However, are there any reasons or benefits to obtaining national protection separately and in addition to CTM protection?

When it comes to the United Kingdom the answer is "yes". Although the reasons stretch beyond Europe and are more relevant to global trade mark owners.

A UK National registration either covers automatically or can be extended to former or current UK territories. The same right is not accorded to Community Trade Marks with a few exceptions. UK legislation is not extended to its territories automatically and the territories have a distinct legal status so they would need to change their own laws to cater for CTMs. Most have not done so.

UK legislation is directly extended to the Isle of Man. In this sense it also provides for protection of Community Trade Marks.

Jersey has introduced legislation that allows for Community Trade Marks to cover the island automatically. This is a special situation as United Kingdom National registrations do not cover Jersey automatically but must be extended to the island with the filing of a local application.

The situation with Gibraltar is, in my view, ambiguous. OHIM indicates that a Community Trade Mark does cover Gibraltar. This is based on an understanding of Gibraltar's status with the EU under Article 299(4) of the Treaty of Rome. However, there do not appear to have been amendments to Gibraltar's local Trade Marks Act to reflect this. The 'usual' way to protect a trade mark in Gibraltar is to extend a UK registration by making a local application. Confusingly, it is also possible to extend a Community Trade Mark to Gibraltar (in addition to it apparently covering the territory automatically). This news release from Gibraltar offers some evidence of the indecisive situation.

Guernsey operates a separate and modern Intellectual Property Office. It allows for purely local applications but also 'supported' applications which can be based on inter alia a UK or CTM registration. A benefit to 'supported' applications is a reduction in the official fee due.

Outside of Europe, a Community Trade Mark is going to be sufficient if you need protection in the Cayman Islands as it is possible to extend a CTM registration locally in addition to a UK registration. The Falkland Islands introduced legislation to coincide with the start of the Community Trade Mark in 1996 which allows for automatic protection of UK and CTM registrations. It previously required a UK registration to be extended to the Islands - making it the world's smallest jurisdiction with a formal trade mark law by population - but the General Registry no longer maintains a Trade Marks Register of its own.

Neighbouring South Georgia and the South Sandwich Islands has a Trade Marks Ordinance from 2001. This covers trade marks "having effect in the United Kingdom" and I interpret this as including Community Trade Marks, particularly as the legislation dates from when the CTM was already operational. It is not exactly densely populated!

Outside this a UK registration is a prerequisite basis to making local applications in Grenada, Kiribati, St Helena, Solomon Islands and Tuvalu. Note that with the exception of St Helena, all of these are now independent of the UK. If you need service mark protection in the British Virgin Islands ("BVI") then a UK registration is also required. This will (probably) change soon with the adoption of a new Trade Marks Act in the BVI. The UK IPO's website indicates that a Community Trade Mark has effect in Kiribati, but I cannot see on what basis this statement is made and I cannot see any amendments to the local legislation. It might be based on an informal interpretation from the Administration in Kiribati which I would be wary of relying upon.

The British Indian Ocean Territory introduced a Trade Marks Ordinance in 1984 allowing for the automatic protection of UK registrations. I cannot locate this legislation on-line but suspect this is only with respect to UK National registrations.

This table may help clarify the incoherent situations:

Jurisdiction	UK	CTM
British Indian Ocean Territory	Automatic	No
British Virgin Islands (service marks)	Extendable	No
Cayman Islands	Extendable	Extendable
Falkland Islands	Automatic	Automatic
Gibraltar	Extendable	Automatic and Extendable but questions remain
Grenada	Extendable	No
Guernsey	Can 'support' an application	Can 'support' an application
Isle of Man	Automatic	Automatic
Jersey	Extendable	Automatic
Kiribati	Extendable	No
St Helena	Extendable	No
Solomon Islands	Extendable	No
South Georgia and the South Sandwich Islands	Automatic	Automatic
Tuvalu	Extendable	No

In short this explains why a UK National registration can be of use in addition to a Community Trade Mark registration.

Those who examined the OHIM's notice may note that a French registration also has value above a Community Trade Mark. France has overseas departments and territories sometimes referred to as "DOM-TOM". The DOM is for the departments which are covered by a CTM. The TOM is for the territories which are not and are only protected by a French trade mark.

The Faroe Islands and Greenland are constituent countries of the Kingdom of Denmark. They are outside of the EU and therefore not covered by a CTM. They do not maintain separate trade mark regimes so registration in Denmark covers them both.

Italy and San Marino have an Agreement of Amity and Good Neighbourhood which provides for mutual recognition of trade mark rights from one to the other without the need to register in both. This is not provided for under the CTM but in this event it is a simple case of registering locally in San Marino. It can be added that Sammarinese registrations are usually obtained far quicker than Italian registrations.

With other EU countries, the situation is more straightforward with National and Community rights (including International designations) providing automatic protection. This applies to the Atlantic island groups of the Azores, Madeira and the Canary Islands, the Spanish possessions in Morocco of Ceuta and Melilla and the Swedish-speaking autonomous Åland Islands of Finland.

In the other places that OHIM indicates are not covered by a CTM, local filing routes are generally available and I would be happy to advise where required.

Companies with global needs reaching out to far flung places should be wary of the limitations of a Community Trade Mark in its wider context and consider filings in Denmark, France and the United Kingdom. Please also be aware that whilst a designation of France in an International Registration is fine, designations of Denmark or the United Kingdom are not always recognised in the same manner as National applications. Please do not hesitate to get in touch if any advice on this is required.

We will take a look at the situation with UK Registered Designs shortly.