U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

79–118

" ! SENATE 106TH CONGRESS

2d Session

TREATY DOC.

2000

106–41

PROTOCOL RELATING TO MADRID AGREEMENT

CONCERNING INTERNATIONAL REGISTRATION OF

MARKS

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

PROTOCOL RELATING TO THE MADRID AGREEMENT CONCERNING

THE INTERNATIONAL REGISTRATION OF MARKS ADOPTED AT

MADRID JUNE 27, 1989, ENTERED INTO FORCE ON DECEMBER

1, 1995. ALSO TRANSMITTED A FEBRUARY 2, 2000, LETTER FROM

THE COUNCIL OF THE EUROPEAN UNION REGARDING VOTING

WITHIN THE ASSEMBLY ESTABLISHED UNDER THE PROTOCOL

SEPTEMBER 5, 2000.—The Protocol was read the first time, and together

with the accompanying papers, referred to the Committee on Foreign

Relations and ordered to be printed for the use of the Senate

(III)

LETTER OF TRANSMITTAL

THE WHITE HOUSE, September 5, 2000.

To the Senate of the United States:

I transmit herewith, for the advice and consent of the Senate to

accession, the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks adopted at Madrid

June 27, 1989, which entered into force December 1, 1995. Also

transmitted for the information of the Senate are the report of the

Department of State with respect to the Protocol and a February

2, 2000, letter from the Council of the European Union regarding

voting within the Assembly established under the Protocol.

The Protocol will offer several major advantages to U.S. trademark owners. First, registration of trademarks internationally will

be possible without obtaining a local agent and without filing an

application in each Contracting Party. If the United States accedes

to the Protocol, the Protocol will provide a trademark registration

filing system that will permit a U.S. trademark owner to file for

registration in any number of Contracting Parties by filing a single

standardized application in English, and with a single payment in

dollars, at the United States Patent and Trademark Office (PTO).

The PTO will forward the application to the International Bureau

of the World Intellectual Property Organization (respectively, the

‘‘International Bureau’’ and ‘‘WIPO’’), which administers the Protocol. Second, under the Protocol, renewal of a trademark registration in each Contracting Party may be made by filing a single request with a single payment. These two advantages should make

access to international protection of trademarks more readily available to both large and small U.S. businesses.

Third, the Protocol will facilitate the recording internationally of

a change of ownership of a mark with a single filing. United States

businesses experience difficulties effecting valid assignments of

their marks internationally due to burdensome administrative requirements for recordation of an assignment in many countries.

These difficulties can hinder the normal transfer of business assets.

The Protocol will permit the holder of an international registration

to record the assignment of a trademark in all designated Contracting Parties upon the filing of a single request with the International Bureau, accompanied by a single payment. To carry out

the provisions of the Protocol, identical implementing legislation,

which is supported by my Administration, was passed by the House

of Representatives and introduced in the Senate.

Accession to the Protocol is in the best interests of the United

States. Therefore, I recommend the Senate give early and favorable

consideration to the Protocol and give its advice and consent to acVerDate 11-MAY-2000 15:30 Sep 06, 2000 Jkt 079118 PO 00000 Frm 00003 Fmt 7633 Sfmt 7633 E:\HR\OC\TD041.XXX pfrm11 PsN: TD041
IV

cession, subject to the declarations described in the accompanying

report of the Department of State.

WILLIAM J. CLINTON.

(V)

LETTER OF SUBMITTAL

DEPARTMENT OF STATE, Washington, July 11, 2000.

The PRESIDENT,

The White House.

THE PRESIDENT: I have the honor hereby to submit to you, with

a view to its transmittal to the Senate for advice and consent to

accession, the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (‘‘Protocol’’), adopted at Madrid June 27, 1989, which entered into force December 1,

1995. Also enclosed for the information of the Senate is a February

2, 2000, letter from the Council of the European Union regarding

voting within the Assembly established under the Protocol.

The Protocol traces its genesis to the Madrid Agreement Concerning the International Registration of Marks (1891), revised at

Brussels (1900), Washington (1911), The Hague (1925), London

(1934), Nice (1957) and Stockholm (1967), and amended in 1979

(‘‘Madrid Agreement’’), which established an international trademark registration system that is administered by the International

Bureau of the World Intellectual Property Organization (respectively, ‘‘International Bureau’’ and ‘‘WIPO’’). As of May 10, 2000,

fifty-two countries are Contracting Parties to the Madrid Agreement. The United States is not a Contracting Party to the Madrid

Agreement.

Between 1986 and 1989, the International Bureau convened

meetings of governmental experts to develop an international

trademark registration system that could gain wide acceptance.

These experts conceived of a protocol based upon the Madrid

Agreement, but with certain changes to attract a broader adherence. On June 27, 1989, at a Diplomatic Conference held in Madrid, the States party to the Madrid Agreement concluded a Protocol, which was signed by 27 of the 29 States then party to the

Madrid Agreement. The Protocol establishes an international

trademark registration system that is independent of, but in many

respects similar to, that of the Madrid Agreement.

Acceding to the Protocol offers significant advantages to U.S.

trademark owners. Registering a trademark internationally will be

possible without obtaining a local agent and incurring attendant

costs. Registration can be accomplished by filing a single standardized application in English, with a single payment, in dollars, at

the United States Patent and Trademark Office (‘‘PTO’’). Cost savings to U.S. trademark owners are expected to be substantial.

VI

BACKGROUND

The United States has never belonged to an international trademark registration system, but has considered it in the past because

of the trade advantages such a system would offer. Trademarks,

representing the good will of a business and identifying its products and services, are among the most valuable assets of a business. In most countries other than the United States, trademark

rights are obtained only by registration. One major obstacle to the

international protection of trademarks is the difficulty and cost of

obtaining and maintaining a registration in each and every country.

In the late 1960s the United States considered joining the Madrid Agreement, but concluded that it contained provisions disadvantageous to U.S. trademark owners and was unworkable under

existing U.S. law. Specifically, the following provisions of the Madrid Agreement were considered undesirable by the United States:

(1) the requirement that the international application be

based on an Office of origin registration (given the long pendency of applications in the United States at that time the requirement for use of a trademark prior to filing, this requirement would have required the U.S. trademark owner to wait

beyond a reasonably prudent time before seeking registration

internationally under the Madrid Agreement);

(2) the provision called ‘‘central attack,’’ which results in the

cancellation of the international registration in all Contracting

Parties if the Office of origin registration is canceled in the

first five years;

(3) requirement that the application be in the French language;

(4) the provision for a maximum 12-month period within

which the Contracting Party could refuse to effect the international registration (at that time, the normal time period for

completing the first examination of an application by the PTO

was substantially more than 12 months; thus, the United

States could not be sure that all refusals could be raised within

the prescribed time period); and

(5) the provision designating low filing and renewal fees for

the national office, which were less than the comparable national fees in the United States.

The Protocol establishes a separate international trademark registration system from, and contains significant modifications to, the

Madrid Agreement. These modifications address and resolve the

concerns that led the United States to reject accession to the Madrid Agreement. Thus, the Protocol provides:

(1) under Article 2(1), an Office of origin application may be

the basis of an international application;

(2) if the basis of an international registration is extinguished during its first five years as set out in Article 6, then

Article 9quinquies allows the registration to be converted into

a national or regional application in a designated Contracting

Party and retain its original effective filing date;

(3) the working languages, as set forth in the Common Regulations under the Madrid Agreement Concerning the InterVerDate 11-MAY-2000 15:30 Sep 06, 2000 Jkt 079118 PO 00000 Frm 00006 Fmt 7633 Sfmt 6602 E:\HR\OC\TD041.XXX pfrm11 PsN: TD041
VII

national Registration of Marks and the Protocol Relating to

that Agreement (‘‘Regulations’’) are English and French; thus,

for example Rule 6(1)(b) specifies that, ‘‘[a]ny international application governed exclusively by the Protocol or governed by

both the Agreement and the Protocol shall be in English or

French according to what is prescribed by the Office of origin’’;

in accordance with Rule 6(3)(b), ‘‘the recordal in the International Register and the publication in the Gazette of the

international registration resulting therefrom . . . shall be in

English and French’’; Rule 6(4)(a) provides, in turn, that ‘‘[t]he

translations from English into French or from French into

English . . . shall be made by the International bureau’’;

(4) under Article 5, a Contracting Party may have up to 18

months to refuse to effect an international registration, and,

with appropriate notice, an additional 7 months from the beginning of the opposition period to notify the grounds for opposition (over the past few years, the average time to issue a refusal in the examination of a trademark application at the

PTO, has been about 5 months); and

(5) under Article 8, a Contracting Party may charge the

equivalent of its national (or, in the case of an intergovernmental organization, regional) filing and renewal fees (renewals are for ten-year periods) diminished only by any savings resulting from the international procedure.

As described in more detail below, the Protocol establishes an

international procedure for the filing of trademark applications.

Adherence will not require the United States to adopt any changes

to its substantive trademark laws. Legislation has been introduced,

and has already been passed by the House of Representatives, to

implement the changes in procedure needed to fulfill the obligations of the Protocol.

THE PROTOCOL PROCESS

In the event that the United States accedes to the Protocol and

Congress passes the necessary implementing legislation, the Protocol would operate in the United States as follows.

The Protocol will provide a trademark registration filing system

that will permit a U.S. trademark owner to file for registration in

any number of Contracting Parties by filing a single standardized

application, in English, with a single payment in dollars, at the

PTO. Pursuant to Article 3, the PTO must review the international

application and certify that it is identical to the underlying U.S.

application or registration that is claimed as the basis for the international application. If the international application meets that

test, the PTO must forward the international application to the

International Bureau. After a formalities check, the International

Bureau then registers the application as an international registration and forwards the data in the application to the Contracting

Parties that applicant has selected. Thus, international registration

may be obtained without obtaining a local agent and without filing

a national or regional application with each Contracting Party.

Equally important, under the Protocol, renewal of all the of the extensions of protection may be made by filing a single request with

a single payment under Article 7.

VIII

1. Filing of an international application

Pursuant to Article 2, where the owner of a U.S. trademark application or registration is a national of the United States, or is

domiciled, or has a real and effective industrial or commercial establishment, in the United States (‘‘U.S. trademark owner’’), that

U.S. trademark owner will be able to file with the PTO, which will

be considered the Office of origin, an application for international

registration along with a request that the international registration

be effected in at least one Contracting Party other than the United

States. (Pursuant to Article 3bis, the international registration may

not be effected in the territory of the Contracting Party of the Office of origin. Thus, the trademark owner whose Office or origin is

the United States could not obtain protection for its trademark in

the United States through the Madrid Protocol system.)

Pursuant to Article 3, the PTO must certify that the particulars

in the international application correspond to those in the underlying U.S. application or registration and forward the international

application to the International Bureau. Non-U.S. trademark owners may obtain protection in the United States by following the

same procedure in their respective Offices of origin and, pursuant

to Articles 3bis and 3ter, specifying the United States as a Contracting Party in which they are seeking protection.

2. Issuance of international registration

The International Bureau must issue the international registration if all filing requirements are met, and, pursuant to Article

3(4), must publish the mark in its International Gazette, a periodic

publication containing all relevant data recorded during the period

concerning international registrations. Pursuant to Article 3ter, the

International Bureau must forward the request for territorial extension of the international registration to the Contracting Parties

specified, either at the time of filing or later, if the applicant requests a territorial extension of its international registration at

some time after the international registration is effected.

In accordance with Article 4 and 5, those Contracting Parties will

consider the extension request pursuant to the their applicable legislation. Once the extension request is either approved through the

examination process, or the applicable time periods set out in Article 5 pass without a refusal or a successful opposition, the extension of the international registration to a particular Contracting

Party has legal effect.

Pursuant to Article 6(i), registration of a mark at the International Bureau is effected for ten years, with the possibility of renewal under certain conditions discussed below. Pursuant to Article 4, the effect of such registration shall be the same as if the

mark had been deposited directly with the Office of the particular

Contracting Party to which the registration is extended.

3. Request for extension of protection to the United States by the foreign holder of an international registration

When the United States receives a request for extension of protection of a mark in an international registration, the PTO must

examine the request in the same manner, and pursuant to the

same requirements, as a regularly-filed U.S. application. When the

IX

examination of the extension request is concluded, and all of the

formalities and/or refusals raised in the examination process are

settled, the mark will be published for opposition.

If the formalities and/or refusals are not settled between the applicant and the examiner, then the applicant may either abandon

its application or institute an appeal to the Trademark Trial and

Appeal Board, which is consistent with Article 5’s provision that a

holder shall have the same remedies in the event of a refusal as

would be available if the mark had been directly deposited with the

PTO. The Trademark Trial and Appeal Board must determine

whether the application should be denied or should be published

for opposition. The applicant can appeal its determination to the

Court of Appeals for the Federal Circuit or ask for a trial de novo

in a U.S. District Court. If no opposition is filed or is successful,

the Director of the United States Patent and Trademark Office

must issue a certificate of extension of protection, which will have

the same effect and validity as a U.S. registration on the Principal

Register, the official U.S. register of distinctive marks.

The Protocol, pursuant to Article 5, requires the national or regional office considering an extension request to notify the International Bureau of all refusals, which would include examination

refusals and the possibility of opposition, as well as the ground(s)

for opposition, within specified time periods. Under Article 5, Contracting Parties that make appropriate declarations (discussed

below) may have up to 18 months, from the date of notification of

the extension of protection, to state the grounds for refusing an extension of protection from the international registration, and, with

appropriate notice, an additional 7 months from the beginning of

the opposition period to notify the grounds for opposition. Absent

timely refusal, Article 5 requires the national or regional office (the

PTO in the case of the United States) to extend protection to the

international registration.

The United States may require non-U.S. trademark owners seeking trademark protection in the United States under the Protocol

to declare, at the time the extension of protection is requested, that

they have a bona fide intention to use the mark in commerce. Rule

7(2) specifies that, ‘‘[w]here a Contracting Party requires, as a Contracting Party designated under the Protocol, a declaration of intention to use the mark, it shall notify that requirement to the Director General. Where that Contracting Party requires the declaration to be signed by the applicant himself and to be made on a separate official form annexed to the international application, the notification shall contain a statement to that effect and shall specify

the exact wording of the required declaration.’’

Rule 9, the rule that sets out the permissible requirements for

an international application, provides in subsection 9(6)(d) that

‘‘[t]he international application shall also contain, where a designation concerns a Contracting Party that has made a notification

under Rule 7(2), a declaration of intention to use the mark in the

territory of that Contracting Party. . . .’’

Consistent with these rules, the Department of State would, at

the time of deposit of the instrument of accession, have the United

States notify the Director General of its intention to require, from

the date of entry into force of the Protocol in the United States, a

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statement of bona fide intention to use a mark in commerce of all

holders of international registrations requesting extensions of protection to the United States.

4. Maintenance of an international registration and extensions of

protection

Pursuant to Article 3ter(2), an extension of protection to additional Contracting Parties may be requested at any time during the

life of the international registration. Article 7 provides that an

international registration is renewable every ten years upon payment of the appropriate fee(s) to the International Bureau. Rule

31(2) of the Regulations specifies that, ‘‘[t]he effective date of the

renewal shall be the same for all designations contained in the

international registration, irrespective of the date on which such

designations were recorded in the International Register.’’

Additionally, for the extension of protection to remain in force in

the United States, the proposed legislation to implement the Protocol requires the periodic filing of affidavits of continued use in

commerce of the subject mark. Inasmuch as these affidavits are not

considered to be part of the renewal process, they are not governed

by the restrictions on renewal set out in the Protocol. Indeed, such

affidavits of use have long been required by a few of the current

Contracting Parties to the Madrid Agreement and, therefore, there

was general agreement from the Committee of Experts that such

affidavits fell outside of the restrictions of the Protocol and were allowed as a national practice.

5. Cancellation or limitation of international registration

If the national or regional application or registration forming the

basis of an international registration is restricted, abandoned, cancelled, or has expired, pursuant to applicable law, and any of these

effects occur as a result of an action commenced within five years

of the date of international registration, then, pursuant to Article

6(3), the Office of origin must notify the International Bureau. It

must, in turn, similarly cancel or limit the international registration. For example, if, during the five years after international registration, some goods or services have been deleted from the identification of goods or services in the national or regional application

or registration that forms the basis for the international registration, then pursuant to Article 6(3), those same goods or services

must be deleted from the international registration and any extension requests that exist for the international registration. Similarly, if the national or regional application or registration that

forms the basis for the international registration has been abandoned, cancelled or has expired, either during the five years after

international registration or as a result of an action that commenced during the five-year period, then, pursuant to Articles 6(3)

and 6(4), the International Bureau must cancel the international

registration and each Contracting Party that has extended protection to that international registration must cancel the attendant

extension of protection. Otherwise, if no such restriction, abandonment, cancellation or expiration occurs during the five years after

international registration (or as the result of an action begun in the

first five years after international registration), then, pursuant to

XI

Article 6(2), the international registration becomes independent of

its underlying national or regional application or registration.

However, if such a cancellation occurs, Article 9quinquies of the

Protocol permits transformation of existing extensions of protection

into national (or regional, in the case of intergovernmental organization Contracting Parties) applications in the Contracting Parties

in which the international registration had been extended. The

holder of the cancelled international registration may file, within

three months of the cancellation of the international registration,

national or regional applications for the same mark in relation to

the cancelled goods or services in each Contracting Party that had

extended protection to the international registration. Provided that

the applicant complies with the applicable law, each application

will obtain, as a filing date, the date of the international registration or, if the extension of protection was sought after international

registration occurred, the date of the recordation of the extension

of protection for that particular Contracting Party.

6. Recordation of assignment or change of ownership

Often, U.S. businesses experience difficulties effecting valid assignments of their marks internationally due to the burdensome

administrative requirements for recordation of an assignment in

many countries. These difficulties can hinder the normal transfer

of business assets. Pursuant to Article 9, 9bis, and 9ter, the Protocol permits the person in whose name an international registration stands to record the assignment of its trademark in all designated Contracting Parties by making a single payment and filing

one document, provided that the new holder is entitled to file international applications under the Protocol.

7. Protocol system not exclusive of national and regional trademark

registration systems

Use of the procedures established by the Protocol is optional for

applicants. Applicants may continue to file individual trademark

applications in each Contracting Party in which they seek trademark protection. In the event that they also file an international

registration, Article 4bis deems the international registration to replace the national or regional registration, under certain conditions, but without prejudice to the rights acquired under the national or regional registration. Furthermore, the Protocol in no way

diminishes the right of priority and national treatment that applicants are accorded under the Paris Convention for the Protection

of Industrial Property (1883), as revised and amended.

THE ASSEMBLY OF THE MADRID UNION

Article 1 of the Madrid Agreement provides that the countries

party to the Agreement ‘‘constitute a Special Union for the International registration of marks.’’ Article 1 of the Protocol provides

that the Contracting Parties to the Protocol ‘‘shall be members of

the same Union of which countries party to the Madrid (Stockholm)

Agreement are members.’’ Article 10 of the Protocol provides, in

turn, that the Contracting Parties to the Protocol are members of

the same Assembly as are the Contracting Parties to the Madrid

Agreement. Article 10(3)(a) provides that only Contracting Parties

XII

to the Madrid Protocol have the right to vote on matters concerning

only the Protocol (and, of course, only Contracting Parties to the

Madrid Agreement may vote on matters concerning only the Madrid Agreement).

Articles 10 and 13 establish the functions of the Assembly. Under

Article 10(2), these are: dealing with all matters concerning implementation of the Protocol; giving directions to the International Bureau concerning preparation for revision conferences; adopting and

modifying provisions of the Regulations; and performing such other

functions as are appropriate under the Protocol.

In addition, as is a common practice in multilateral intellectual

property treaties that include provisions for an assembly to facilitate treaty implementation, certain provisions of the Treaty may be

amended by a super-majority of the Assembly, without the need for

a revision conference (see, e.g., Paris Convention for the Protection

of Industrial Property of March 20, 1883, as revised and amended

(Stockholm, July 14, 1967) (Article 17); Patent Cooperation Treaty

of June 19, 1970, as amended and modified (Article 61); Strasbourg

Agreement Concerning the International Patent Classification of

March 24, 1971, as amended (Article 11); Berne Convention for the

Protection of Literary and Artistic Works Paris Act of July 24,

1971, as amended (Article 26); and Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure of April 28, 1977, as amended (Article

14)). Under Article 13(1), proposals for the amendment of Articles

10 (Assembly), 11 (International Bureau), 12 (Finances), and 13

(Amendment of Certain Articles of the Protocol) may be initiated

by a Contracting Party or by the Director General of WIPO.

According to Article 13(2), adoption of any amendment to Article

11, 12, or 13 requires a three-fourths majority of the votes cast at

the Assembly at which it is addressed. In addition, under Article

13(2), any amendment to Article 10 or Article 13(2) itself, requires

a four-fifths majority of the votes cast at the Assembly.

In each case, in accordance with Article 13(3), amendments

adopted by the requisite super-majority of the Assembly enter into

force for all Contracting Parties to the Protocol one month after

written notifications of acceptance, effected in accordance with

their respective constitutional processes, have been received by the

Director General from three-fourths of those States and intergovernmental organizations that, at the time the amendment was

adopted, were members of the Assembly and had the right to vote

on the amendment. The large size of the super-majorities and the

requirement that notifications of acceptance be effected in accordance with constitutional processes combine to provide substantial

assurance that the amendment process will be used sparingly and

in a manner that will not disserve U.S. interests.

From the perspective of the United States, the most controversial

aspect of the Protocol has been the voting provision contained in

Article 10(3)(a), which provides that ‘‘[e]ach Contracting Party shall

have one vote in the Assembly.’’ Since, in accordance with Article

14, not only States but also intergovernmental organizations may

become Contracting Parties, this provision has the effect of allowing an intergovernmental organization (such as the European Community (‘‘EC’’)) to have an additional vote separate and indeVerDate 11-MAY-2000 15:30 Sep 06, 2000 Jkt 079118 PO 00000 Frm 00012 Fmt 7633 Sfmt 6602 E:\HR\OC\TD041.XXX pfrm11 PsN: TD041
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pendent from that of its member States if it were to become a Contracting Party to the Protocol. The United States has consistently

opposed such voting as an unwarranted expansion of the voting

power of intergovernmental organizations and their member

States—and a correspondingly unwarranted dilution of U.S. voting

power.

The United States harbored significant concerns that the Protocol would establish an unfavorable precedent and that comparable voting provisions would be adopted in other treaties, to the

detriment of U.S. interests. In the aftermath of the negotiations

that led to the Protocol, in the field of intellectual property alone,

the European Union (‘‘EU’’) proposed concurrent voting for the EC

and its Member States in the negotiating texts of numerous proposed treaties. During the negotiation of the Trademark Law Treaty, EU insistence on an independent vote forced negotiators to accept a compromise arrangement whereby all provisions relating to

voting were dropped from the agreement—a development that significantly constrains the ability of the parties to effect necessary revisions.

The United States was an observer, not a participant, in the negotiations leading to the Protocol. More than a decade has passed

since that negotiation was concluded. Throughout this period, the

United States has forcefully and successfully opposed every attempt by the European Union to include comparable voting provisions in other treaties. Last year, in the context of negotiations for

the Hague Agreement Concerning the International Deposit of Industrial Designs, the EU and its Member States did not press for

an independent vote for intergovernmental organizations such as

the EC. That marked a watershed because in prior years the EU

had repeatedly described the Hague Agreement context as involving concurrent competence analogous to that in the Protocol and

warranting analogous voting provisions. We are now satisfied that

the United States opposition to such voting provisions has been

heard and that the Protocol cannot be considered a paradigm for

voting provisions in multilateral treaties.

While certainly desirable, revising Article 10(3)(a) of the Protocol

is not a feasible prospect at this juncture. However, the United

States, the EC (which, like the United States, is not yet a Contracting Party to the Protocol), and its Member States have been

able to reach an accommodation regarding the voting issue.

At the request of the United States, the EC and its Member

States have affirmed, in a February 2, 2000, letter from Margarida

Figueiredo, Chairwoman of the Permanent Representatives Committee on behalf of the Council of the European Union, their commitment to a consensus-based decision process within the Assembly

of the Madrid Union. They have also indicated that, in the event

that a vote is called for, they will endeavor to conduct consultations

with the United States and, where appropriate, with other likeminded participants. The February 2 letter also affirms that, where

these consultations do not lead to a common position among the

United States, the EC, and its Member States on the subject put

to a vote, it is the intention of the EC and its Member States to

use their voting rights in such a way as to ensure that the number

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of votes cast by the EC and its Member States does not exceed the

number of the EC’s Member States.

Consensus-based decision making has long been used in the Assembly of the Madrid Union. Indeed, we understand that no issue

has been put to a vote since the early 1970s. Accordingly, we have

concluded that, although the unilateral statement of intent reflected in the Council of the European Union’s February 2, 2000,

letter is not an ideal resolution of the voting issue and is certainly

not an acceptable model for future agreements, it does provide sufficient protection for U.S. interests in the unique context of the

Protocol to allow me to recommend that the United States now become a Contracting Party.

FUNCTIONS OF THE INTERNATIONAL BUREAU

Article 11 deals with the duties of the International Bureau of

WIPO as they relate to the Protocol. The International Bureau

maintains the International Register; makes preparations for the

conferences of revision of the Protocol; is authorized to consult with

intergovernmental and international non-governmental organizations concerning preparations for such conferences of revision; and

carries out any other tasks assigned to it in relation to the Protocol. Pursuant to Article 11(2)(c), the Director General and his

designees take part, without the right to vote, in discussions at any

conferences of revision. As noted above, this Article can be amended by a three-fourths majority of the Madrid Assembly members

that are Contracting Parties to the Protocol.

FINANCES

Article 12 provides that, as far as Contracting Parties to the Protocol are concerned, the finances of the Union shall be governed by

the same provisions as those in the Madrid Agreement, except that

the Protocol provides an alternative for the collection of national or

regional fees rather than the complementary and supplementary

fees (and the resulting fee-sharing arrangement) set out in the

Agreement. As noted above, this Article, which concerns only the

finances of the Union and its budget for administering the Madrid

Agreement and the Protocol, can be amended by a three-fourths

majority of the Madrid Assembly members that are Contracting

Parties to the Protocol. (In contrast, Article 8, which concerns fees

for international application and registration, cannot be amended

by the Assembly.)

The finances of the Madrid Union include a working capital fund

(established by Article 12(6) of the Madrid Agreement, which applies to Contracting Parties to the Protocol by virtue of Article 12

of the Protocol). Article 12(6)(a) of the Madrid Agreement specifies

that this fund shall be constituted by a single payment made by

each country of the Union, and permits the Assembly to increase

the fund if it becomes insufficient. However, Article 12(6)(d) further

authorizes the Assembly to suspend the application of the payment

provision, so long as the Assembly authorizes use of the reserve

fund of the Union as a working capital fund. Such a suspension

has, in fact, been in place for over 20 years. The working capital

fund was constituted at the level of 2,000,000 Swiss francs in 1979

by a transfer of funds from the reserve fund of the Madrid Union.

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Accordingly, no payment into the working capital fund has been requested of any Contracting Party that has become a member of the

Madrid Union since 1979. A senior WIPO official has advised that

it is not now envisaged that any such payments would be required

in the future pursuant to Article 12(6) of the Madrid Agreement or

Article 12 of the Protocol.

The PTO expects to incur some relatively modest initial costs

(e.g., to modify forms and update computer programs) to enable it

to process applications under the Protocol. However, every request

for an extension of protection will be charged the same fee as is

charged for a regular U.S. trademark application. That fee should

cover the cost of processing the Protocol application. Moreover, the

PTO already accepts electronic filing of applications over the Internet. Thus, much of the Protocol process (e.g., relaying international

applications and requests for extensions to the International Bureau and reviewing similar requests for extensions of protection in

the United States) could be run with a variation of the current

electronic system.

PARTICIPATION BY INTERGOVERNMENTAL ORGANIZATIONS

Article 1 of the Protocol provides that Contracting Parties to the

Protocol may be either ‘‘Contracting States’’ or ‘‘Contracting Organizations.’’ Under Article 14, each Contracting State must be a

party to the Paris Convention for the Protection of Industrial Property of March 20, 1883, as revised and amended. The same article

authorizes an intergovernmental organization to become a Contracting Party to the Protocol if: (1) at least one of the member

States of the organization is a party to the Paris Convention; and,

(2) the organization has a regional Office for the purposes of registering marks with effect in the territory of the organization and

that this regional Office is not operating as a common Office to replace one or more of the national Offices of its member States.

Such conditions for an intergovernmental organization to become

a Contracting Party are somewhat unusual in that they do not contain the traditional requirements that the organization be duly authorized to become a party and that it submit a declaration of its

competency vis-a`-vis its member States with respect to matters

covered by the Protocol. Nevertheless, given the Article’s requirement for a regional Office, coupled with actual experience under

the Protocol to date, as described below, these conditions for intergovernmental organization participation in the Protocol appear to

be an acceptable substitute to the more traditional standards.

To date, no intergovernmental organization has yet become a

party to the Protocol, and the only one that appears likely to do

so in the near future is the EC. The EC has a trademark office,

independent of that of its Member States, which processes requests

under the EC’s applicable trademark law. Thus, Member States of

the EC and the EC itself each have separate competence to examine a trademark application according to the laws and regulations

in its own legal system. This concurrent competence has been in

place for some time in Europe, is well defined, and is not causing

problems in the trademark area. The Protocol does not create or

alter this system of competence for trademark registration in Europe. It merely facilitates that ability of U.S. trademark owners to

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obtain trademark protection under the systems of each Contracting

Party. Accordingly, the United States would welcome the EC’s participation in the Protocol.

Since the Protocol’s negotiation in 1989, moreover, there has

been no prospect of any other intergovernmental organization

membership that would pose concerns for the United States. With

the benefit of this experience, we are satisfied that, given the Protocol’s procedural nature and the fact that membership is open only

to intergovernmental organizations that actually have a regional

Office for the purposes of registering marks in effect in the territory of the organization, Article 14’s description of the conditions

for an ‘‘intergovernmental organization’’ to become a Contracting

Party need not preclude or delay our becoming a Contracting Party

to the Protocol.

In accordance with Article 14(4), the Protocol entered into force

on December 1, 1995, three months after the requisite number of

instruments of ratification had been deposited. The language of Article 14(4) would have permitted an intergovernmental organization

and its member States to be counted separately toward bringing

the Protocol into force, and thus was objectionable to the United

States as an unwarranted expansion of the power of intergovernmental organizations and their member States without basis in

international law. U.S. concerns about this language have been resolved satisfactorily because: (1) the Protocol entered into force

solely on the basis of instruments deposited by States, without participation of intergovernmental organizations; and (2) the language

has not become a precedent and has not recurred in subsequently

negotiated treaties.

INDUSTRY SUPPORT FOR ACCESSION BY THE UNITED STATES

Accession by the United States to the Protocol has been endorsed

in principle by the Section of Patent, Trademark and Copyright

Law of the American Bar Association; the International Trademark

Association; and the Trademark, Trade Identity and Unfair Competition Committee of the American Intellectual Property Law Association. These endorsements contain the caveat that the United

States should accede to the Protocol only if non-U.S. trademark

owners seeking trademark protection in the United States under

the Protocol are required to declare, at the time the extension of

protection is requested, that they have a bona fide intention to use

the mark ‘‘in commerce,’’ as that term is defined in Section 45 of

the Trademark Act, as amended, 15 U.S.C. 1127. As described

above, the Protocol does not prohibit such a requirement by the

United States, and the Regulations specifically contemplate it.

Industry support for U.S. accession has increased as the number

of Contracting Parties to the Protocol has grown, which has enhanced the economic benefits of U.S. participation—and has increased the disadvantages of non-participation. Japan’s recent accession to the Protocol, in March 2000, is illustrative.

Currently, the pendency from application filing to the registration of a trademark in Japan is several years. However, as a Contracting Party to the Protocol, Japan must process, and register, requests under the Protocol for extension of protection within the

Protocol’s strict time limits. As a result, those filers who cannot use

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the Protocol will be in the unfortunate position of waiting years for

a registration in Japan, while applicants under the Protocol will receive consideration and registration within 18 months (barring the

filing of an opposition).

Comparable situations may arise regarding other Contracting

Parties. U.S. industry is keenly aware of the increasing importance

of the Protocol and has expressed concerns that U.S. trademark

owners seeking international protection may be seriously, and increasingly, disadvantaged unless and until the United States becomes a Contracting Party.

IMPLEMENTING LEGISLATION

To carry out the provisions of the Protocol, identical implementing legislation has been introduced in both the House of Representatives (where it has been passed) and the Senate. To ensure

that our domestic laws conform with our expanded international

obligations, the United States would not deposit its instrument of

accession to the Protocol until enactment of all necessary implementing legislation and until after a period of time sufficient to

allow the PTO to promulgate implementing regulations and to complete the necessary administrative changes.

DECLARATIONS TO ACCOMPANY U.S. ACCESSION

As noted above, the Protocol contemplates that Contracting Parties may make declarations with respect to certain Protocol articles. The Department of State recommends that U.S. accession to

the Protocol be accompanied by three declarations, pursuant to

Protocol Articles 5(2)(b), 5(2)(c), and 8(7)(a), respectively, as described below.

The first declaration, authorized under Article 5(2)(b), permits

the extension of the time period within which the United States

must notify the International Bureau of its refusal to extend protection to an international registration. Article 5(2)(a) requires the

PTO to notify its refusal to extend protection to a mark in an international registration, along with a statement of all grounds for the

refusal, before the expiry of one year from the date on which the

notification of the extension request was sent to the PTO by the

International Bureau. Article 5(2)(b) provides, however, that the

Article 5(2)(a) time limit of one year may be extended, by a Contracting Party’s declaration, to 18 months. The PTO has

ascertained that a declaration is necessary to ensure that sufficient

time exists for the request for extension of protection to be examined in the PTO and, in the majority of cases, published for opposition.

Accordingly, the Department of State recommends that the following declaration be included in the U.S. instrument of accession:

Pursuant to Article 5(2)(b) of the Protocol, the United

States declares that, for international registrations made

under this Protocol, the time limit referred to in subparagraph (a) of Article 5(2) is replaced by 18 months.

The second declaration, authorized under Article 5(2)(c), concerns

the possibility of a refusal of protection with respect to any given

international registration, as a result of third party opposition to

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the granting of protection. If a declaration is made under Article

5(2)(c), the PTO may notify the International Bureau, before the

expiry of the 18-month time limit for refusal, of the possibility that

an opposition may be filed beyond this time limit and a subsequent

refusal may then be notified by the PTO to the International Bureau after the expiry of the 18-month time limit. However, Article

5(2)(c) requires such a refusal to be notified within a time limit of

not more than seven months from the date on which the opposition

period begins. (If the opposition period expires before this sevenmonth time limit, the notification must be made within one month

from the expiry of the opposition period.) The PTO has ascertained

that a declaration is necessary to ensure that sufficient time exists

for a mark that is the subject of a request for extension of protection to be published and for a third party to exercise its right to

oppose and specify the grounds for opposition.

Accordingly, the Department of State recommends that the following declaration be included in the U.S. instrument of accession:

Pursuant to Article 5(2)(c) of the Protocol, the United

States declares that, when a refusal of protection may result from an opposition to the granting of protection, such

refusal may be notified to the International Bureau after

the expiry of the 18-month time limit.

The third declaration, authorized under Article 8(7)(a), concerns

the fees to which the United States is entitled in connection with

an extension of protection of an international registration. Article

8(1) of the Protocol permits the PTO, when it is the Office of origin,

to fix and collect fees in connection with the filing of an international application or renewal of an international registration.

Article 8(2) through (6) provides for a system of collection and

distribution of the international fees for registration and renewal

of a mark with the International Bureau according to a formula,

which would divide revenues equitably among Contracting Parties.

The Article 8(2) through (6) formula essentially reproduces the system of fees that exists in the Madrid Agreement so that a Contracting Party that elects to be a member of both the Agreement

and the Protocol will be able to adopt the same fee arrangement

for both. However, Article 8(7)(a) permits any Contracting Party to

receive, instead, in connection with each international registration

for which an extension of protection is requested, and in connection

with the renewal of any such international registration, individual

fees that do not exceed the national or regional application filing

fee and registration renewal fee, respectively, in effect at the time

of declaration.

Article 8(7)(a) requires that, in arriving at the appropriate fee

amounts, the national fee be diminished by the savings, if any, resulting from the international procedure. The PTO does not anticipate any savings as a result of the Protocol’s international procedure. The PTO has ascertained that a declaration is necessary to

ensure that the PTO receives sufficient fees to support the costs associated with its obligations under the Protocol.

Accordingly, the Department of State recommends that the following declaration be included in the U.S. instrument of accession:

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Pursuant to Article 8(7)(a) of the Protocol, the United

States declares that, in connection with each international

registration in which it is mentioned under Article 3ter of

the Protocol, and in connection with each renewal of any

such international registration, the United States chooses

to receive, instead of a share in revenue produced by the

supplementary and complementary fees, an individual fee

the amount of which shall be the current application or renewal fee that the United States Patent and Trademark

Office charges at that time to a domestic applicant or registrant of such a mark.

CONCLUSION

The Protocol is of direct and immediate importance to the United

States. It will facilitate the entry of U.S. industry into foreign markets by simplifying the acquisition of trademark protection abroad

and reducing attendant costs. As described above, it will accomplish this by allowing a U.S. trademark owner to file for registration or renewal with any number of Contracting Parties through a

single form filed with the PTO, accompanied by a single payment,

and without the need to retain local agents or file individual applications in each Contracting Party in which protection is sought.

The Department of Commerce and the Office of the United States

Trade Representative join the Department of State in requesting

that the Protocol Relating to the Madrid Agreement Concerning the

International Registration of Marks be transmitted to the Senate

for its advice and consent to accession as soon as possible, subject

to the declarations previously described.

Respectfully submitted,

ALAN LARSON.

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