A mechanism exists under the Patent Cooperation Treaty (PCT), administered by the World Intellectual Property Organisation (WIPO), whereby applicants can make international patent applications, however this merely simplifies the process to make national applications in each PCT member state (of which there are over 125) and protects the applicant’s rights to a national application for a limited power of time.

Similarly with trade marks, international registrations can be made via the Madrid Protocol (to which there are currently 84 member states, but of Latin American countries, only Cuba is a member state) and the Paris Convention (to which there are over 100 members), however there is no mechanism in place that provides international ‘blanket’ patent/trademark protection.

Significant benefits arise from these international treaties/conventions, however many applicants and/or patent/trade mark owners misunderstand their international IP rights. Depending on the status of any patent/trademark application with IP Australia, further applications can leverage off those IP Australia applications courtesy of these treaties/conventions.

All Australian businesses that currently operate, or intend to operate, in the Latin American market should review their current IP rights in relation to the region.

IP applications in Latin America

National applications need to be made in each individual country in Latin America and in some countries, for instance Brazil, the process can take a minimum of three years until final registration. In general, however, the process takes approximately two years from application until final registration, presuming that no objections are raised by the authorities or the public.

All applications need to be filed in Spanish, except Brazil, which requires that the IP Rights in Latin America application is filed in Portuguese, and those translations need to be certified.

The applicant may choose to have a local representative in that country of application, and that relationship will need to be evidenced in the form of a power of attorney from the applicant to the agent.

Just like those applications in Australia, the application will need to include designs and/or drawings (in the case of patents), logos, descriptions of those goods/services in which it seeks to protect its trademark and so forth.

Applications are reasonably straightforward, however the authorities can take a hard line on accepting some trade marks in the event of the prior registration of a same and/or similar trade mark, and even in some cases where the chances of there arising confusion in the market are minimal. Any objection raised by the authorities, can be appealed by the applicant.

Practical Tips

It is common to see Australians come to Latin America and market their product and/or service, for example through various trade shows, set up, trade and then realise they have no protection, or even worse are in infringement of a third party’s IP rights.

Before setting up, ensure your IP rights are protected and check whether you can use your IP. This can be achieved by conducting quick and inexpensive searches.

From a business perspective, we have found that clients that have had their IP in order send a good message to the marketplace as they are strategically and effectively able to transact with their buyers, especially in the case where the buyer is a large multinational, which in some cases require that you are the owner of the IP rights prior to entering into a purchase contract.

In most Latin countries, the rule of law is adhered to and strictly enforced, regardless of whether or not you are a foreigner, so protection of one of your business’ most valuable asset is a worthwhile cause.

—Harris Gomez is the managing principal of Latin American specialists, the Harris Gomez Group (hgomezgroup.com)

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The Madrid Protocol is a system designed to simplify the protection trade marks internationally. Providing the trade mark owner resides in a member country, they can protect their trade mark in several member countries at once by filing an application directly with their own national or regional trade mark office; in Australia, that office is IP Australia.

Tom Rinder, a trade marks attorney at MacMillan Trademarks explains: “For an international business, the Protocol means that a single trade mark application can be undertaken to register a company brand—name or logo or slogan or other—throughout a large part of the world.” Additionally, other Protocol countries can be added after international registration. Each member country still examines the application according to its own laws, and if the trade mark needs to be renewed or any changes recorded, this can also be done in a single request. Rinder notes: “The registration of a trade mark should be undertaken in every country where the business brand will be used, sold or licensed. Typically the Protocol works best where a number of countries are included in the application.”

There are several advantages of the Madrid system for trade mark owners:

• The ease of filing: Rather than filing applications in several countries, in different languages and paying several different fees, international registration can be achieved with one application, in language and with only one set of fees to pay.
• The ease of renewal: One payment, every ten years to the International Bureau of WIPO
• Ease of alteration: A change of name or address is easily recorded with all member states by means of one form.
• Quicker processing: The time period for overseas trade mark offices to issue a provisional refusal of the mark is limited to 12 or 18 months.

Administered by the International Bureau of the World Intellectual Property Organisation (WIPO) in Geneva, the Madrid system for the registration of marks was established in 1891 and operates via two treaties, the Madrid Agreement Concerning the International Registration of Marks (1891) and more recently, the Madrid Protocol, which came into force on April 1, 1996. The two treaties together provide an international system for the registration of trade marks, with the aim of making protection easier and simpler to achieve and manage. Both are open for membership to any state that is a party to the Paris Convention for the Protection of Industrial Property. In addition, the Madrid Protocol is open to an intergovernmental organisation such as the European Union, if the organisation satisfies certain criteria.

Note, however, that Australia is a signatory only to the Protocol, meaning that an Australian business would typically only file an international trade mark under the Madrid Protocol, not the Madrid Agreement.

The treaties are parallel and independent, but in 2008 new rules allowed that states previously bound by both the Agreement and the Protocol, will now only be bound by the provisions of the Protocol, the more recent and flexible of the two treaties. Also in 2008, the Madrid System became fully trilingual, meaning applications can be filed in English, French or Spanish.

While also historically significant, the Madrid Protocol is more influential now than ever, with the number of member countries increasing. In 2008, WIPO received a record 42,075 applications for the international registration of trade marks, reporting a 5.3 percent growth rate.

Who uses the Madrid Protocol?

In 2008, WIPO reported that applicants from Germany topped the list of filers for the 16th consecutive year, followed by France, USA, and the European Community. WIPO director general Francis Gurry said: “Even in economically difficult times, businesses continue to recognise that a trade mark is a smart investment in a company’s reputation and long-term sustainability.”

Businesses looking to sell their products overseas are advised to protect their investment with international trade mark registration. It is a cost effective way to protect your name, brand, product, and reputation overseas, and hence, is a critical step for exporters. Registering trade marks provides the exclusive legal right to use, license or sell the goods and/or services for which it is registered. Protection of intellectual property and product or corporate branding are both vital when you’re launching a new product or into a new territory.

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As shocking as that may sound, even a natural person has no absolute right to use their own name in business. Attaching your name to a product in trade may in certain circumstances causes deception. This is clear and reinforced by such cases as Bradmill Industries Ltd v B & S Products where Bradmill, a substantial and well known textile manufacturer, was successful in restraining B&S from marketing textile products under the name ‘Bart-Mills’ despite the owners of B&S being Mr Bart and his son. The court took the view that the use of the family name in this instance would cause confusion among consumers.

Merely because a name is registered is no defence to a claim of passing off or an action under Section 52 of the Trade Practices Act for ‘misleading and deceptive’ conduct. As noted by Young J in Wallace v Baulkam Hills Smash Repairs (1995): “The purpose of the (business names legislation) is not to create property in a name, but to record for the public protection the identity of the person using the name…” The same applies to domain names.

A domain name or URL (uniform resource locator) is simply an internet address. The name and address being governed by a set of protocols between the various bodies that manage the internet. Internationally domain names are regulated by a US-based not-for-profit corporation called the Internet Corporation for Assigned Names and Numbers (ICANN).

Each domain name contains a generic top level domain that indicates the type of activity engaged in by the domain name owner e.g. ‘.com’ or ‘.org’ etc. It may also contain a country code, e.g. ‘.au’ that indicates Australia.

ICANN licenses domain name registers in various countries, which in turn licences registries such as AusRegistry to maintain a database of names ending in ‘.au’ which in turn accredit various registrars who are authorised to make registrations of domain names on behalf of applicants, in effect selling the domain names.

Is cybersquatting a crime?

Cybersquatting is where a domain name is registered in the name of a person or organisation that has no intention of using it. The registrant merely wishes to occupy the domain name to stop others from using it. Frequently, this is in the context of the cybersquatter in turn seeking to sell the domain name.

In the 2003 case of CSR Ltd v Resource Capital Australia Pty Limited, Justice Hill suggested that cybersquatting could be described in “probably less flattering names that could be used that might suggest the conduct verges on the criminal”.

In many cases it is simply cheaper to pay the asking price and buy the domain name from the cybersquatter than to go to the trouble and expense of seeking the deregistration of the domain registrant following arbitration by an accredited arbitration organisation including the World Intellectual Property Organisation (WIPO).

In the United States, the Anticybersquatting Consumer Protection Act 1999 permits an action by trade mark owners against cybersquatters who register, traffic in or use confusingly similar domain names with a “bad faith to profit”. There is no similar legislation in Australia.

From an Australian perspective it is not always the case that it is cheaper or easier to resolve these disputes by arbitration. Especially if the complainant must first show that the domain name is “identical or confusingly similar” to the trade mark and that the registrant of the domain name “has been registered and is being used in bad faith”.

In the 2003 CSR case, the court restrained the use of domain names including terms such as ‘CSR’ and ‘CSR Sugar’ by a company that had no obvious connection or interest in these names. In the United Kingdom, in the case of British Telecommunications plc v One in a Million (1998), the court described the domain names secured by a cybersquatter as “instruments of fraud” stating that the use of the domain names with associations to “British Telecom” and “Marks & Spencer” were done “with the purpose of appropriating the (plaintiffs) property, their goodwill, and with an intention of threatening dishonest use”.

Where there is genuine confusion caused by the cybersquatter between the domain name and a trade mark, consideration should be given to taking proceedings to restrain the cybersquatter from using the domain name.

Trade marks and exclusivity

Section 20 of the Trade Marks Act 1995 provides that the proprietor of a trade mark, from the date of registration of the trade mark, has the “exclusive right” to use the trade mark in relation to the goods and services for which it is registered. But, and this is a big but, notwithstanding the language of the section this does not necessarily give the exclusive right to use the trade mark.

Prior use by others may mean that they also have the right to use the trade mark. Very importantly, infringement of a trade mark only occurs where the use of the mark is as a ‘trade mark’ and this means use in a commercial sense or “in the course of trade”.

It seems clear from cases such as WD & HO Wills (Australia) Ltd v Rothmans (1956) that use for the purpose of trade mark registration does not include “private or personal use”. It follows that if the domain name is used for a “private purpose” that this will not be an infringement of a trade mark.

An additional difficulty arises because the concept of “use as a trade mark” is not consistent throughout the world. For example, in two cybersquatting cases, one in the United Kingdom and the other in Australia where the issue of trade mark infringement was considered, two different approaches are evident.

In the United Kingdom in British Telecommunications Case, the court was prepared to find that the “mere registration” of a domain name was use as a trade mark. In Australia on the other hand in CSR Ltd v Resource Capital Australia the court felt that more was required than mere cybersquatting to constitute use as a trade mark.

In the United States the Federal Trademark Dilution Act (1995) has been used to protect trade marks where commercial actions, for example registering a domain name that uses the trade mark of another, causes “dilution of the distinctive quality of the mark”.

As can be seen in Australia, United Kingdom and the United States, the registration of a domain name which incorporate another person’s trade mark may, depending on the circumstances, constitute an infringement of that trade mark. Registering domain names in a number of countries, without a thorough preliminary search may leave the registrant open to a claim that the trade mark of another has been infringed.

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Australian Customs will then seize the goods. Notices last up to four years. The owner of the mark then has 10 days to commence legal proceedings for infringement of the trade mark, after which the goods are released to the importer. There is no up front fee for this service.

Note this does not grant the same rights to an unregistered common law trade mark owner. The owner must however indemnify customs for costs incurred of up to $10,000.

Trade mark owners should also consider registering their trade mark in China where it is possible to arrange for the seizure of counterfeit goods at the factory or elsewhere, on a similar basis as in Australia. Again this only applies if the trade mark is registered in China and remember, it is the first to register the trade mark in China that is entitled to enforce the trade mark. A registered trade mark in Australia will not solve the problem at source.

It’s also worth noting that from July 1, 2009 Australian exporters may be able to partially recover the cost of their IP protection including the cost of granting, registering or extending rights under foreign laws as well as insurance costs relating to the rights under Austrade’s Export Market Development Grant Program (EMDG), so the costs of obtaining IP protection in China is now partly helped by the Australian government.

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IP Australia has logged complaints from trade mark owners who have received unsolicited correspondence requesting payment for publication of the trade mark owner’s trade mark details in a register.

IP Australia has stated that the company is not in any way associated with their organisation and has no official or government authority.

“The letters are often designed to trick the account payer into paying for unnecessary services such as domain name registrations, listings on online databases and ads in various publications,” said ACCC deputy chair Michael Schaper. “The end result is the business owner paying for a new listing on a website or in a directory, often of little value.”

IP Australia has advised trade mark owners to check whether the service provider is legitimate and to find out what protection, promotion or value the service will provide before handing over any money.

The ACCC recommends business owners follow these five steps to make sure they get what they pay for:

1. Don’t assume that any ‘renewal’ notice is from your original supplier. You may receive many such offers from operators competing for your business or they could be scammers. Check all the details.
2. Ensure that only authorised employees are responsible for payments and they should have ready access to important dates and suppliers. Update them on any scam or unsolicited service that may be targeting businesses.
3. If the service is something that you would like, shop around to see what deals are available and who are the most reliable suppliers.
4. If you receive letters of demand you may need to get legal advice to understand your rights.
5. Alert your industry association or local business adviser about any offers that you think may be untoward or misleading. They may be able to warn others in your network.

For more information relating to the risks of unsolicited IP services, please visit the IP Australia website.

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The designer began a loungewear label two years ago under her birth name, Katie Perry. She has since traded online and at local markets, and launched a trade mark application last September.

Last week, legal firm Fisher Adams Kelly, acting for the singer, asked her to cease trading.

“It asked me to give up the trademark, withdraw sale of my clothes, withdraw any advertising and any websites, and sign that I will not in the future use a similar trademark to Katy Perry,” said Perry. “It really felt like I was being intimidated and bullied into signing everything away.”

While Fisher Adams Kelly would not comment, other trade mark lawyers said it was not surprising given that celebrities often go into the fashion business as part of their merchandising.

The designer’s only hope is to show proof that she was using the label before the singer became famous, which would mean she could continue trading, but may not be granted exclusive use.

“I’m not trying to become a singer. I’m not pretending to be her. This is my income. And it’s the livelihood of my contractors as well,” said Perry, vowing to fight for her business.

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Government grants

It is critical for businesses considering applying for an export grant to research the grants available to ensure that they are eligible, and that they can satisfy any specific requirements attached to receiving the grant. Businesses that do not undertake this research often find they have spent considerable time and money lodging applications, only for the application to fail or be substantially under the amount expected.

By understanding the requirements of the various export grants businesses will:

• Not waste time lodging applications where the business is not eligible to receive a grant.
• Ensure they have the required documentation to satisfy the criteria for receiving grants.
• Have a smoother processing of their application.
• Receive their grant quicker.

The Commonwealth and state governments provide export grants. Start with the websites of the Commonwealth and state governments, or contact your local Austrade office or the relevant state department responsible for export. Good sources of information are also available from the Australian Institute of Export or an export grants consultant.

The EMDG

The main export grant is the Export Market Development Grant (EMDG), administered by Austrade on behalf of the Commonwealth Government. This program provides grants to reimburse international marketing expenses for the promotion of Australian products. Eligible businesses are entitled to receive 50 percent reimbursement of eligible expenses above $10,000, with a maximum grant of $200,000 per annum.

Other export grants provided by various state governments are generally complementary to EMDG, providing comparatively limited financial support and are focused on a narrower band of businesses.

Businesses—sole traders, partnerships or incorporated entities, including associations and cooperatives—with an Australian business number (ABN) are eligible to receive EMDG support, excepting those with a turnover of more than $50 million and/or those which have previously received eight or more EMDGs.Generally, to be eligible receive EMDG, businesses must be the principal in the sale of Australian products. This means agents that market, but do not actually sell, Australian products to the overseas buyer are not eligible to receive EMDG.

First-time EMDG applicants must pass a grants entry test to ensure that the business has prospects of success in its export endeavours. It is advisable to discuss this requirement with Austrade or an export consultant if you are uncertain how this might impact on your ability to claim EMDG.

Businesses are able to claim two grants without having generated any export sales. Once the first two grants have been received, however, EMDG applicants are subject to an export performance test, which varies according to the number of grants received. In general, the grant amount would be reduced if the level of export sales does not exceed the amount required by the export performance test.

Eligible businesses must promote eligible products to receive EMDG. Eligible products are goods, services, intellectual property and know-how substantially of Australian origin. This includes Australian primary products that are mined, harvested, raised or fished within Australia, goods made mainly from Australian primary products—for example wine bottled in Australia from Australian grapes or wine bottled overseas using Australian bulk wine—and goods that are manufactured or assembled in Australia. It is the responsibility of the business applying for EMDG to prove this.

Additionally, goods made outside Australia where there is a significant net benefit derived by Australia from their sale outside Australia may be accepted as an eligible product. Austrade expect a substantial benefit to Australia from these products before accepting them as eligible, so it is advisable to seek professional advice when lodging an EMDG application in these circumstances.

Services provided to non-residents of Australia are generally accepted as eligible, except for those specifically excluded by the EMDG legislation, such as business migration. Eligible services include architects, engineers, management consulting, education, tourism and advertising, for example. Accountancy and legal services may be eligible depending upon the service provided.

Intellectual property, including software, and know-how that has been substantially developed from research or work done in Australia qualify as eligible products.

Only certain expenses are allowable for EMDG. Expenses must be for marketing the business’ eligible products internationally. Where an expense is for both marketing and non-marketing activities, the expense must be apportioned to claim only the international marketing component. Expenses related to marketing to New Zealand are not eligible.

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McCurry serves Indian-style cuisine. Owner AMSP Suppiah expressed surprise that the chain bothered to fight them: “There was nothing in common between us and them.”

McDonald’s lawyers forced them to operate as M Curry for several years as the case played out in court. “We decided to appeal because we felt we were right and the court of appeal agreed with us this week,” said Suppiah.

Following the win, Suppiah replaced the missing ‘c’.

Suppiah’s wife Kanageswary says victory has come at a cost, however: “For eight years our business has been in limbo because no one wants to invest in a company facing litigation, and so we have not been able to make any improvements to the restaurant. Hopefully, we can move on now.”

Their lawyer, Sri Dev Nair, expects McDonald’s to fight back: “The case has shown that McDonald’s want to control the monopoly over the use of the prefix ‘Mc’ and it has a lot of money to be able to do this, so many small restaurants just give in to them. We expect them to challenge the ruling and we will be prepared to face them in [federal] court.”

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Exporters who have done well in Australia will often believe that their domestic campaign will work just as well overseas. But international markets are markedly different and exporters need to be aware of certain purchasing triggers and cultural factors before beginning their international assault.

“Many SMEs think if they are successful domestically, they will be successful internationally, but they need to work on the target market, that is, culture, language, branding, pricing, competitive positioning, product life cycle, climate conditions and local marketing regulations,” says Mohammad Khan, Australia Post’s international business development manager (NSW/ACT). “One key factor for succeeding in a new market is understanding the local requirements and marketing it to the right audience.”

The fundamental difference between SMEs and multinationals is that SMEs generally seek a market that already exists because it is expensive to create and educate a market from scratch. Therefore, the existence of competitors is actually a good sign, because it means there is a market for your product; you just have to be wary of where your business might position itself in that competitive environment.

“Essentially SMEs are market takers rather than market makers,” says Nick Scott, lecturer in international business at the University of Western Sydney. “Foreign consumers are very different from Australian consumers in where they see value, so you have to look at your product and what triggers their purchasing behaviour.”

Language and culture
Exporters should tailor their marketing campaign to accommodate language and cultural differences that may affect the acceptability of marketing material. The first thing you should check is whether your brand or business name has any unexpected connotations, which may occur even in English-speaking countries due to local slang.

Also be aware that in non-English-speaking countries, or in countries where there is more than one official language, the law may require that any information about your product or service, including your brand name, be in the local language/s, even if English is widely spoken and understood.

“If your market is in a foreign language, there’s no alternative but to find some partner or agency that can localise the message,” Scott advises. “Language is not just literal translation, it’s the tone and the references.”

He recommends exporters keep advertising visual to prevent lost nuance and mistranslation in spoken and written languages, and avoid trying to translate humour. “Humour is something that seldom crosses borders. Americans are irony-deficient; they don’t get the self-deprecating humour of Australians. What the Swedes find side-splitting, we don’t get and so forth,” he says. “Humour just doesn’t translate.”

In countries where religion dominates culture, you need to consider the style of advertising you might employ; for example, Boost Juice found they had to replace the midriff of the ‘Boost girl’ on their store design in some countries. Countries with a sophisticated media environment will often have an advertising code of conduct you can follow to avoid controversy.

For countries where marketing isn’t as well developed, Scott says exporters may have to rethink their campaign. “Promotion usually has to be expressed in simpler terms and sometimes the media you’d expect in Australia aren’t there, for example, print advertising would be largely distributed in urban areas and may be affected by illiteracy,” he notes. “On the other hand, studies have shown that in developing countries, consumers haven’t yet been bombarded by advertising and tend to be a lot more believing of it.”

Market preferences may also play a role in your presentation. Elements such as colour scheme, and the kinds of models you choose to represent your product or service may affect the way potential customers perceive your offering. However, this is more applicable to marketing consumer products rather than promoting business-to-business, says Scott: “There’s a big distinction between consumer products and industrial products where you don’t have to worry about the cultural acceptability of the product and its promotion.”

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The jump in green trade marks and patents reveals that industry is adapting to, and finding new ways to combat, the challenges of climate change, noted Carr.

“Patent registrations for solar and clean coal technology applications from Australian and overseas innovators have risen by 15 percent and 50 percent respectively over the past five years,” he said. “Combined with the huge jump in green trade marks in the energy sector, these figures clearly show that innovators are tackling climate change head-on.”

He added that innovation and new technologies will play a crucial role in meeting the climate change challenge, and that IP protection would drive the economy: “The IP system allows Australia to benefit from investment in green technologies by protecting that investment, and licensing the technology to other countries.”

World IP Day was on April 26.

For more information on protecting intellectual property, visit IP Australia at www.ipaustralia.gov.au

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