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Malaysia's Accession to the Madrid System: Advantages and Disadvantages to your Business

Overview of The Madrid Application


Malaysia's accession to the Madrid System facilitates the registration of trade marks in multiple jurisdictions by local brand owners. A Madrid application must be based on a national application of the same trade mark to the Intellectual Property Corporation of Malaysia (MyIPO). Nevertheless, the Madrid application can be done in conjunction with the national application or at any time after that.


While making the Madrid application, brand owners must designate their jurisdictions of interest. The option for subsequent designation to new export markets is still available even after the trade mark has been registered under the Madrid System.

The examination of the trade mark filed under the Madrid System would be conducted by the local trade mark offices in the jurisdictions designated respectively, where they would give a decision on whether the particular trade mark is granted in that jurisdiction.


Advantages of the Madrid System


- Simplified procedure - Brand owners would only have to pay a single set of fees in one currency (Swiss Francs) and submit a single application. No additional fee on translation, notarization and legalization is payable and no Power of Attorney is required to be submitted for each designated jurisdiction.


- Centralised management – The Madrid system offers the advantage of a centralised management for a company's portfolio of trade marks. The maintenance and renewal processes have become relatively easier since the Madrid registration only has a single registration number and renewal date regardless of the number of jurisdictions designated.


- Cost savings – Furthermore, brand owners are able to save significant costs via the Madrid System if multiple jurisdictions are designated. The fees and costs associated with making separate filings in different jurisdictions (including the fees and costs of the local counsel), are avoided and replaced with the lower overall fees and costs of the Madrid System. Small Medium Enterprises (SMEs), in particular, are able to leverage on this huge cost reduction which allows them to concentrate their scarce resources on other business objectives.


- Time sensitive – IP offices in the designated jurisdictions would have to examine the applications and provide their response within a stipulated timeframe, hence this will expedite processing period in some jurisdictions.


Disadvantages of the Madrid System


- Central attack – The main disadvantage of the Madrid System is that brand owners are exposed to the risk of the "central attack" at any time during a 5-year period starting from the date of the Madrid registration, which is the process by which the Madrid registration may be defeated for all countries in which it is protected, by means of a single invalidation or revocation action against the registration. However, based on statistics provided by the World Intellectual Property Organization (WIPO), the central attack is a rare phenomenon. In any event that the central attack does occur, brand owners are able to initiate damage control by transforming their Madrid registration into separate national registrations in the jurisdictions that they have designated.


- Series mark not available – Applicant can only choose to file 1 mark (either in colour or black and white) in the designated jurisdictions under Madrid System.


- Not all countries part of Madrid Union – Currently, there are 106 Madrid Union members, covering 122 countries, not all countries are members of the Madrid Union, for example, Hong Kong, Taiwan, Saudi Arabia and the United Arab Emirates. This would mean that brand owners would have to resort to engaging local counsel and authorities to seek for trade mark protection in those countries.


What Brand Owners Should Consider Before Making a Madrid Application


- Number of designated countries – It is advisable for brand owners to conduct a cost-benefit analysis before making a Madrid application. The main consideration that should be taken into account is the number of jurisdictions that will be designated. Depending on the number of jurisdictions of interest, it may be cheaper to file separate national applications. The Madrid system is mainly beneficial towards brand owners who have many export markets scattered across multiple jurisdictions.


- Conduct searches beforehand – trade mark searches are important to ascertain whether there are any prior marks filed in the jurisdictions designated. If there are prior marks that may be problematic, national applications with different mark representation may be more suitable, depending on a case to case basis.

- Consider manner of trade mark use – As the local laws pertaining to what constitute trade mark use in each jurisdiction varies, you may need to consider what filing strategy would be most suited for your mark and whether the Madrid route is the most preferred option as only one (1) mark representation can be chosen for filing.


Conclusion


The Madrid System plays an important role in providing an easier way for international protection of trade marks. It is a platform for brand owners to promote and protect their brands worldwide. In considering whether to opt for the Madrid System, brand owners should analyse the relevance and cost implications of seeking protection for a given mark in a given jurisdiction. A comprehensive branding strategy needs to be promptly developed in order to harness the maximum potential value of their trade mark rights.