Even though it has been in force for just over a year - practically 18 months -, the Madrid Protocol has been having positive impacts for both national and foreign applicants. However, it is clear that some considerations need to bemade.

Starting with the benefits, accession to the Protocol provided the national business community with an extremely useful mechanism for making their trademarks international at a much lower cost when compared with that resulting from registrations applied for individually in the countries of interest. In this context, the introduction of the co-ownership regime through one of the four Resolutions issued by the Brazilian Patent and Trademark Office – BPTO, within the scope of Madrid, should be highlighted. Although the Industrial Property Law - IPL did not prohibit co-ownership, it was only with the entry into force of the Protocol that it became feasible.

For a significant number of foreign applicants, to be able now to designate Brazil, instead of applying for protection of their trademarks at the BPTO, is to have our country included in a system that they had already been familiar with for decades and which proved to be effective and relatively simple with a view to obtaining protection for their trademarks. Many of these foreigners are traditional filers, users of the BPTO, therefore, while others have come to consider Brazil as a potential market, because of the ease that the Madrid system affords.

Even so, in everyday life, with practical issues emerging dynamically, and as procedural incidents arise, this new system has required constant learning both in advising national applicants seeking protection for their trademarks in other markets, as well as foreign filers that designate Brazil.

It should be noted that filers of national applications do not yet have access to the multiclass system, in contrast with those that can use this tool, if it is within the scope of Madrid. As a result, the formulation of an application for international registration is not an easy task for Brazilian enterpreneurs. First because the applicant will need to create a true assembly of basic cases – the same trademark in different classes - to then claim the goods and services of interest. Second because the description of goods and services to be claimed must be in line with the terms that the International Bureau adopts as standard. It is necessary to carry out research in advance in order to avoid inconsistencies being pointed out, and when they do occur, as a consequence, deadlines must be met, and fees paid.

There are also peculiarities to be observed by national applicants, depending on the countries of interest. Although it is possible to make prior inquiries to collect information about each country that is intended to designate, the rules are not always clear enough for those who do not operate in the trademark area. In short, even though the use of the Madrid system by the interested party itself is directly encouraged, such a route can prove problematic in practice, especially for those without experience in managing an international trademark portfolio.

For foreign applicants, there is an issue that can be an inflection point: with the partial granting of a designation in a multiclass regime, that is, the granting of the designation in some classes and the rejection in another or other classes, the granting of the registration in the allowed classes must await a ruling on the pending appeals. This is because the grant date is unique in all classes. It so happens that the appeals are being decided within 20 months, on average, which is a considerably long time. Thus, filers who await the registration of their trademark to be able to license it on a paid basis, for example, will not be able to do so until rulings are made on the pending appeals.

With respect to the granting of the trademark registration, the corresponding registration certificate will be issued by the BPTO, however it will not be forwarded to the International Bureau and will only be made available on the Office’s website for download by the attorney indicated in the records or the owner itself.

Article 135 of the IPL constitutes a separate chapter due to the great repercussions on the trademark portfolio if it is not observed when involving the assignment of a designation. In accordance with such provision, an assignment must comprise all registrations or applications of the same or similar trademarks that protect identical, similar or related goods or services under penalty of cancellation of the registrations or shelving of the applications that are not the subject matter of the assignment. Article 135, therefore, emphasises that the same or similar signs, belonging to different applicants or owners, to designate goods or services in the same or related market segment cannot coexist.

The major problem caused by this provision is that there are divergent positions within the BPTO regarding coexistence agreements that could resolve issues arising from the assignment of trademarks between parties that are not economically linked, because while some examiners defend the understanding that the agreements would be valid to remove conflict between trademarks, others understand that the potential conflict between trademarks would affect the market, thus becoming a matter of public interest that cannot be regulated by the parties.

Another issue that arises is the need for regulation of position marks by the BPTO, which would be extremely welcome, as there is no obstacle to their protection, since the IPL protects visually perceptible marks, which will allow applications that have been pending analysis for almost a decade, one of which relates to the famous red sole of Louboutin footwear, to be finally decided. With the considerable increase in applications designating Brazil, it is to be expected that there will also be a greater demand for protection of this type. In the absence of regulation, position marks face long periods of examination, which is incompatible with Brazil’s commitment to notify a refusal within 18 months.

In this regard, it should be added that on 13 April 2021, a Public Consultation was released by the BPTO for an expression of opinion by interested parties on the draft with a proposal of parameters for the examination of position marks. Such an initiative provides encouragement to those applicants who have been waiting for a ruling on their procedures for years.

Still about adjustments deemed necessary, the context of Brazil’s accession to the Protocol, in the opinion of many experts, could have been used to change the IPL, with a view to including a requirement to declare the use or intention to use a trademark at regular intervals.

The loss of this opportunity is even clearer when considering what Brazilian legislation determines regarding the examination of trademarks. Unlike many countries that are members of the Protocol, the IPL establishes that the BPTO examines trademarks also based on relative prohibitions, that is, previous marks belonging to third parties, and not just based on absolute reasons for concluding, for example, whether the trademark is descriptive or generic in relation to the goods or services that are intended to be identified, or misleading in any way.

Thus, the more trademarks are included on the BPTO’s database, without proof of regular use being required, the greater the likelihood that they will be identified as an obstacle to the registration of new trademarks when the substantive examination is carried out by the BPTO. This collection of unused trademarks forms what is conventionally called dead wood, that is, a true barrier of trademarks that have not been fulfilling their function, to protect new signs.

Finally, and as is well known, the main disadvantage perceived in the Madrid Protocol continues to be that the international application or the registration is subordinate to the basic application or registration, that is, the rejection, shelving of the application or the invalidity of the registration within a period of five years from the date of International Registration will lead to its cancellation.

This, in turn, will cause the entire protection strategy through an International Registration to fall apart. As a way of mitigating such a significant disadvantage, the owner will be able to take advantage of the International Registration date to, within three months of its cancellation, request individual registrations, that is, national registrations in the countries of interest. All of this at a much higher cost, in view of the need to hire attorneys in each.

Despite the expectation that accession to the Protocol would result in less bureaucracy and a consequent reduction of costs in the International Registration, with greater legal certainty for national companies, especially exporters and those that use e-commerce, facilitating the protection and defence of trademarks internationally, what has been seen so far is a BPTO that is indecisive in analysing the designated applications, treating national applications equally and solving cases pending analysis due to the simple lack of internal guidelines accompanied by a tiny number of international applications filed by Brazilian companies. Since October 2019, 191 applications have been taken to registration at WIPO by Brazilian companies, while so far Brazil has totalled 14.405 received designations, that is, extensions requested by foreigners.