When you choose a name for a little storefront business, all you have to worry about is whether the name will resonate with customers and whether any similar business nearby uses the same name. But expanding across the nation or around the world requires an extensive trademark search to make sure no other company has priority rights to your trade name. Under the Madrid Protocol, which became effective in the United States on November 2, 2003, that process became more complicated.
Karen Artz Ash, partner and chair of the intellectual property department at Katten Muchin Zavis Rosenman, explains that, until last November, it wasn't possible to make a filing in the United States that would protect your trademark in other countries. You'd have to do a trademark search in each country, combing through its records to see whether any other company had the rights to your name, and then apply for trademark protection.
Now you can file for trademark protection in the United States and designate up to 50 member countries in which you also want protection. These include most European countries, plus China, Cuba, Iceland, Japan, Turkey and some African countries. (Note that Canada and Mexico have not joined the Madrid Protocol, and neither have the countries in Central and South America.)
The downside is that companies in member countries can do the same thing. By one simple filing, a country overseas can garner trademark protection in the United States for the trade name you're using.
"It used to be that you'd first do a preliminary search," Ash says, "then a broader, common-law search" to find out what companies have used the name or similar trademarks and for what products or services, and whether any company that has let its registration slip still has common-law rights to it in certain states. Ash adds, "It was a fairly straightforward process."
Now, even if you only want to do business in the States, you should check the U.S. Patent and Trademark Office (USPTO), state databases, common-law uses, and the international registry of the World Intellectual Property Organization (WIPO) for filings from outside the United States that haven't yet been recorded domestically. Ash notes that companies have two to four months after filing to list the countries where they want protection, and that the WIPO certification process may delay for another two months the information reaching the USPTO registry.
Accordingly, Ash advises business owners to hire an experienced trademark attorney to do a preliminary search on an intent-to-use basis, then a follow-up after three to six months. If no major problems turn up, you can do a complete search, including common-law uses. Otherwise, your registration might be cancelled, or you might face a costly dispute over use of the trademark.
All this costs around $2,000, and it nets you trademark protection in all member countries. It's a big expense for a small company, but far less expensive than a legal battle with some company overseas-or having to start all over with a new trade name.
Jane Easter Bahls is a writer in Rock Island, Illinois, specializing in business and legal topics.
This story appears in the April 2004 issue of Entrepreneur. Subscribe »
