Managing international trademark portfolios in the Age of Globalization

By James Theo & James Dimitrijevs
September 12, 2018

Managing international trademark portfolios in the age of globalization can be a fickle endeavor.  Ecommerce has blown the top off traditional thinking as it relates not only to advising your clients on what and where to file, but also how to strategically maintain those filings in the face of an increasingly crowded and adversarial global marketplace.  When a brand attempts to gain a foothold with an emerging clientele, fortune tends to favor the strategically bold.  For this reason, companies are often trying to establish their IP rights in countries where actual use or implementation may not be in the cards for years.  In the case of trademarks, the benefits are obvious: if/when a product is launched, a service begins, or a brand is introduced, a strong and enforceable portfolio is waiting to greet and protect it.  However, in jurisdictions around the world, such a strategy leaves open the possibility of an attack on these rights, most commonly in the form of a non-use cancellation action.  Thus, when considering a trademark filing strategy for international clients, it is important to contemplate a workable scheme to protect the filings from eventual vulnerability.

If use of the trademark in association with the goods/services for which it is registered is sufficient, vulnerability is not a concern.  But what if there is only partial use?  What if there is no use at all?  Assuming the trademark owner maintains an interest in protecting the assets, there are helpful considerations for formulating a vulnerability strategy.

  • First, know your client’s portfolio in a given country. This will likely require a regular review of the portfolio to determine what is in use, what remains of high interest/importance, and, most importantly, which filings are technically vulnerable to cancellation?
  • Second, maintain a working knowledge of what constitutes satisfactory use to effectively “cure” vulnerability, or rebut a challenge based on non-use. Whether this means keeping in close contact with peer counsel abroad or diligently studying local laws, it is imperative to know what constitutes use in a given country, as these requirements vary.
  • Third, consider the objectives of your client. How important is a jurisdiction and its consumers to your client?  How important is a given suite of marks to your client’s international business strategy?  Are there limitations on the resources your client is willing to commit, or a level of risk your client is willing to accept?
  • Finally, be aware of the options for overcoming vulnerability in ways that will maximize the trademark protection for your clients.

Knowing your client’s portfolio, and their related business strategy abroad, seems like a no-brainer.  However, it requires a proactive attitude of communication and understanding (after all, a client’s most common complaint of their representation is lack of open dialogue).  Ask questions to try and understand their thinking – What countries take priority?  Which marks are most important to their business?  What are the core goods/services which they hope to protect?  Where are they currently using the mark, and where do they plan to use it?  Once you know these details, come up with a strategy or a timeline to regularly review the portfolio to identify those registrations that may be vulnerable.  It’s important to keep in mind this varies from country to country.  A three year old registration in Argentina is perfectly safe, while a sister registration filed at the same time in China or Canada is open to attack by any interested third party.  Know your client.  Know your jurisdiction.

Now that you’ve identified what may merit protection and what is technically vulnerable to cancellation, you must understand what constitutes satisfactory use to effectively “cure” vulnerability, or rebut a challenge based on non-use.  Again, this is a jurisdictionally-specific question that requires the lawyer to be diligent in keeping up with country-specific norms.  As an example, assume your client has a handful of premier marks central to their image and business as a high-end clothing and fashion brand.  In order to crack into developing marketplaces, they filed broadly in Class 25 for a variety of clothing and accessories, but begin using the mark only in association with dresses.   Among the targeted countries are Chile and China.  In Chile, there is no use requirement whatsoever, i.e. attack on the ground of non-use is not available to third parties.  Your client can rest assured their current limited use (or no use at all) does not leave the filing vulnerable to a non-use cancellation.  However, the same cannot be said for China, where partial cancellation is allowed.  If a third party was to attempt to cancel the registration, and evidence of the client’s sole use in association with dresses was presented, the remainder of the broad Class 25 filing could be cancelled.  Knowing how liberal or strict use requirements are in a given country will not only inform your vulnerability strategy, but should also be a consideration when developing the initial filing strategy.  A little foresight is likely to lead to a more cost-effective trademark protection strategy.

Of course all of this sounds good in theory, but at the end of the day, you serve your client, their wishes, and their wallet.  That’s why it’s also important to take a step back, and consider the practical.  Knowing what you know about your client and the countries, is it even worth attempting to cure vulnerability?  As with anything, calculated risk can be your friend.  Ask trusted local counsel to offer their opinion on how likely a challenge based on non-use actually is.  Why expend resources to shield against an eventuality that in practice does not exist?  If you report to a client there is extremely low-risk of a third-party challenge, chances are the related cost of fortification will seem an unnecessary gouge.  The same holds true for jurisdictions and marks that are of lesser importance.  Harkening back to the “know your client” cliché, if a given country is not an integral part of their business model, or a given set of trademarks is being deemphasized, how can one expect a pitch to expend the necessary resources to fortify be met with anything other than an eye roll or an budgeters scorn.  If you can make the case for accepting certain risks, your clients will thank you for it.  It’s often better to be seen as practical than to be seen as overzealous.

Taking into account the above considerations, you should now have a working idea of “what/where.”  That is, considering cost, strategy, and legal particulars; you are ready to submit to your client a group of filings ripe for fortification.  To fortify a given portfolio is to overcome vulnerability.  In most instances this means refiling, thus starting the vulnerability clock over in a given country.  In many situations, refiling to overcome vulnerability will come at time when the client’s goods and services of interest have evolved.  Therefore, refiling will provide an opportunity to have the goods and services in the filing more accurately reflect the current interests of the client.  Where there is no use, it often makes sense to file broadly for the core goods/services of interest to your client that reflects their current business goals, but at the very least covers those goods/services that are not currently being used.  Even if your client decides to take on the risk of vulnerability, it is important to reinforce that this does not mean not you are failing to renew a registration, or actively allowing it to lapse, it just means accepting the risk of a potential (often times unlikely) third-party challenge.

Your international clients, at a certain point, want business in new and enticing marketplaces.  This often requires aggressive and forward thinking measures, such as establishing IP rights before beginning business in earnest.  The benefits of such a strategy are obvious, but so are the risks.  Our job as corporate attorneys is to mitigate this risk as much as possible while integrating ourselves into the goals and mindset of our clients.  In the case of trademark portfolio management, an increasingly important facet of this job is recognizing the need to protect vulnerable assets so they retain robust and powerful protection for our clients’ business when they finally come ashore.  Creating a strategy to protect vulnerable filings around the world by considering local law, legal reality, and client temperament can help businesses claim and maintain a foothold in an increasingly frenzied international market.

Image Source: Deposit Photos

The Author

James Theo

James Theo is an associate in Dinsmore’s Chicago office. He assists clients in managing international trademark portfolios from clearance and registration through opposition and enforcement.

For more information or to contact James, please visit his Firm Profile Page.

James Theo

James Dimitrijevs is a partner in Dinsmore’s Cleveland office. He advises domestic and international clients on strategic management of Intellectual Property, including obtaining trademark and copyright registrations, and the licensing, acquisition and sale of IP assets.

For more information or to contact James, please visit his Firm Profile Page.

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There are currently 1 Comment comments. Join the discussion.

  1. J. September 13, 2018 4:32 am

    Care to comment on what constitutes use in China? Have heard it’s a complex issue.

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