    [Senate Treaty Document 106-41]
    [From the U.S. Government Publishing Office]

    106th Congress                                              Treaty Doc.
                                     SENATE
     2d Session                                                      106-41
    _______________________________________________________________________

        PROTOCOL RELATING TO MADRID AGREEMENT CONCERNING INTERNATIONAL
                             REGISTRATION OF MARKS

                                   __________

                                    MESSAGE

                                      from

                       THE PRESIDENT OF THE UNITED STATES

                                  transmitting

    PROTOCOL RELATING TO THE MADRID AGREEMENT CONCERNING THE INTERNATIONAL
      REGISTRATION OF MARKS ADOPTED AT MADRID JUNE 27, 1989, ENTERED INTO
    FORCE ON DECEMBER 1, 1995. ALSO TRANSMITTED A FEBRUARY 2, 2000, LETTER
      FROM THE COUNCIL OF THE EUROPEAN UNION REGARDING VOTING WITHIN THE
                    ASSEMBLY ESTABLISHED UNDER THE PROTOCOL

    September 5, 2000.--The Protocol was read the first time, and together
      with the accompanying papers, referred to the Committee on Foreign
         Relations and ordered to be printed for the use of the Senate

                                    _______

                        U.S. GOVERNMENT PRINTING OFFICE
    79-118                      WASHINGTON : 2000

                             LETTER OF TRANSMITTAL

                                  ----------

                                    The White House, September 5, 2000.
    To the Senate of the United States:
        I transmit herewith, for the advice and consent of the
    Senate to accession, the Protocol Relating to the Madrid
    Agreement Concerning the International Registration of Marks
    adopted at Madrid June 27, 1989, which entered into force
    December 1, 1995. Also transmitted for the information of the
    Senate are the report of the Department of State with respect
    to the Protocol and a February 2, 2000, letter from the Council
    of the European Union regarding voting within the Assembly
    established under the Protocol.
        The Protocol will offer several major advantages to U.S.
    trademark owners. First, registration of trademarks
    internationally will be possible without obtaining a local
    agent and without filing an application in each Contracting
    Party. If the United States accedes to the Protocol, the
    Protocol will provide a trademark registration filing system
    that will permit a U.S. trademark owner to file for
    registration in any number of Contracting Parties by filing a
    single standardized application in English, and with a single
    payment in dollars, at the United States Patent and Trademark
    Office (PTO). The PTO will forward the application to the
    International Bureau of the World Intellectual Property
    Organization (respectively, the ``International Bureau'' and
    ``WIPO''), which administers the Protocol. Second, under the
    Protocol, renewal of a trademark registration in each
    Contracting Party may be made by filing a single request with a
    single payment. These two advantages should make access to
    international protection of trademarks more readily available
    to both large and small U.S. businesses.
        Third, the Protocol will facilitate the recording
    internationally of a change of ownership of a mark with a
    single filing. United States businesses experience difficulties
    effecting valid assignments of their marks internationally due
    to burdensome administrative requirements for recordation of an
    assignment in many countries. These difficulties can hinder the
    normal transfer of business assets. The Protocol will permit
    the holder of an international registration to record the
    assignment of a trademark in all designated Contracting Parties
    upon the filing of a single request with the International
    Bureau, accompanied by a single payment. To carry out the
    provisions of the Protocol, identical implementing legislation,
    which is supported by my Administration, was passed by the
    House of Representatives and introduced in the Senate.
        Accession to the Protocol is in the best interests of the
    United States. Therefore, I recommend the Senate give early and
    favorable consideration to the Protocol and give its advice and
    consent to accession, subject to the declarations described in
    the accompanying report of the Department of State.

                                                    William J. Clinton.
                              LETTER OF SUBMITTAL

                                  ----------

                                           Department of State,
                                             Washington, July 11, 2000.
    The President,
    The White House.
        The President: I have the honor hereby to submit to you,
    with a view to its transmittal to the Senate for advice and
    consent to accession, the Protocol Relating to the Madrid
    Agreement Concerning the International Registration of Marks
    (``Protocol''), adopted at Madrid June 27, 1989, which entered
    into force December 1, 1995. Also enclosed for the information
    of the Senate is a February 2, 2000, letter from the Council of
    the European Union regarding voting within the Assembly
    established under the Protocol.
        The Protocol traces its genesis to the Madrid Agreement
    Concerning the International Registration of Marks (1891),
    revised at Brussels (1900), Washington (1911), The Hague
    (1925), London (1934), Nice (1957) and Stockholm (1967), and
    amended in 1979 (``Madrid Agreement''), which established an
    international trademark registration system that is
    administered by the International Bureau of the World
    Intellectual Property Organization (respectively,
    ``International Bureau'' and ``WIPO''). As of May 10, 2000,
    fifty-two countries are Contracting Parties to the Madrid
    Agreement. The United States is not a Contracting Party to the
    Madrid Agreement.
        Between 1986 and 1989, the International Bureau convened
    meetings of governmental experts to develop an international
    trademark registration system that could gain wide acceptance.
    These experts conceived of a protocol based upon the Madrid
    Agreement, but with certain changes to attract a broader
    adherence. On June 27, 1989, at a Diplomatic Conference held in
    Madrid, the States party to the Madrid Agreement concluded a
    Protocol, which was signed by 27 of the 29 States then party to
    the Madrid Agreement. The Protocol establishes an international
    trademark registration system that is independent of, but in
    many respects similar to, that of the Madrid Agreement.
        Acceding to the Protocol offers significant advantages to
    U.S. trademark owners. Registering a trademark internationally
    will be possible without obtaining a local agent and incurring
    attendant costs. Registration can be accomplished by filing a
    single standardized application in English, with a single
    payment, in dollars, at the United States Patent and Trademark
    Office (``PTO''). Cost savings to U.S. trademark owners are
    expected to be substantial.

                                   background

        The United States has never belonged to an international
    trademark registration system, but has considered it in the
    past because of the trade advantages such a system would offer.
    Trademarks, representing the good will of a business and
    identifying its products and services, are among the most
    valuable assets of a business. In most countries other than the
    United States,trademark rights are obtained only by
    registration. One major obstacle to the international protection of
    trademarks is the difficulty and cost of obtaining and maintaining a
    registration in each and every country.
        In the late 1960s the United States considered joining the
    Madrid Agreement, but concluded that it contained provisions
    disadvantageous to U.S. trademark owners and was unworkable
    under existing U.S. law. Specifically, the following provisions
    of the Madrid Agreement were considered undesirable by the
    United States:
              (1) the requirement that the international
            application be based on an Office of origin
            registration (given the long pendency of applications
            in the United States at that time the requirement for
            use of a trademark prior to filing, this requirement
            would have required the U.S. trademark owner to wait
            beyond a reasonably prudent time before seeking
            registration internationally under the Madrid
            Agreement);
              (2) the provision called ``central attack,'' which
            results in the cancellation of the international
            registration in all Contracting Parties if the Office
            of origin registration is canceled in the first five
            years;
              (3) requirement that the application be in the French
            language;
              (4) the provision for a maximum 12-month period
            within which the Contracting Party could refuse to
            effect the international registration (at that time,
            the normal time period for completing the first
            examination of an application by the PTO was
            substantially more than 12 months; thus, the United
            States could not be sure that all refusals could be
            raised within the prescribed time period); and
              (5) the provision designating low filing and renewal
            fees for the national office, which were less than the
            comparable national fees in the United States.
        The Protocol establishes a separate international trademark
    registration system from, and contains significant
    modifications to, the Madrid Agreement. These modifications
    address and resolve the concerns that led the United States to
    reject accession to the Madrid Agreement. Thus, the Protocol
    provides:
              (1) under Article 2(1), an Office of origin
            application may be the basis of an international
            application;
              (2) if the basis of an international registration is
            extinguished during its first five years as set out in
            Article 6, then Article 9quinquies allows the
            registration to be converted into a national or
            regional application in a designated Contracting Party
            and retain its original effective filing date;
              (3) the working languages, as set forth in the Common
            Regulations under the Madrid Agreement Concerning the
            International Registration of Marks and the Protocol
            Relating to that Agreement (``Regulations'') are
            English and French; thus, for example Rule 6(1)(b)
            specifies that, ``[a]nyinternational application
    governed exclusively by the Protocol or governed by both the Agreement
    and the Protocol shall be in English or French according to what is
    prescribed by the Office of origin''; in accordance with Rule 6(3)(b),
    ``the recordal in the International Register and the publication in the
    Gazette of the international registration resulting therefrom . . .
    shall be in English and French''; Rule 6(4)(a) provides, in turn, that
    ``[t]he translations from English into French or from French into
    English . . . shall be made by the International bureau'';
              (4) under Article 5, a Contracting Party may have up
            to 18 months to refuse to effect an international
            registration, and, with appropriate notice, an
            additional 7 months from the beginning of the
            opposition period to notify the grounds for opposition
            (over the past few years, the average time to issue a
            refusal in the examination of a trademark application
            at the PTO, has been about 5 months); and
              (5) under Article 8, a Contracting Party may charge
            the equivalent of its national (or, in the case of an
            intergovernmental organization, regional) filing and
            renewal fees (renewals are for ten-year periods)
            diminished only by any savings resulting from the
            international procedure.
        As described in more detail below, the Protocol establishes
    an international procedure for the filing of trademark
    applications. Adherence will not require the United States to
    adopt any changes to its substantive trademark laws.
    Legislation has been introduced, and has already been passed by
    the House of Representatives, to implement the changes in
    procedure needed to fulfill the obligations of the Protocol.

                              the protocol process

        In the event that the United States accedes to the Protocol
    and Congress passes the necessary implementing legislation, the
    Protocol would operate in the United States as follows.
        The Protocol will provide a trademark registration filing
    system that will permit a U.S. trademark owner to file for
    registration in any number of Contracting Parties by filing a
    single standardized application, in English, with a single
    payment in dollars, at the PTO. Pursuant to Article 3, the PTO
    must review the international application and certify that it
    is identical to the underlying U.S. application or registration
    that is claimed as the basis for the international application.
    If the international application meets that test, the PTO must
    forward the international application to the International
    Bureau. After a formalities check, the International Bureau
    then registers the application as an international registration
    and forwards the data in the application to the Contracting
    Parties that applicant has selected. Thus, international
    registration may be obtained without obtaining a local agent
    and without filing a national or regional application with each
    Contracting Party. Equally important, under the Protocol,
    renewal of all the of the extensions of protection may be
    madeby filing a single request with a single payment under Article 7.

    1. Filing of an international application

        Pursuant to Article 2, where the owner of a U.S. trademark
    application or registration is a national of the United States,
    or is domiciled, or has a real and effective industrial or
    commercial establishment, in the United States (``U.S.
    trademark owner''), that U.S. trademark owner will be able to
    file with the PTO, which will be considered the Office of
    origin, an application for international registration along
    with a request that the international registration be effected
    in at least one Contracting Party other than the United States.
    (Pursuant to Article 3bis, the international registration may
    not be effected in the territory of the Contracting Party of
    the Office of origin. Thus, the trademark owner whose Office or
    origin is the United States could not obtain protection for its
    trademark in the United States through the Madrid Protocol
    system.)
        Pursuant to Article 3, the PTO must certify that the
    particulars in the international application correspond to
    those in the underlying U.S. application or registration and
    forward the international application to the International
    Bureau. Non-U.S. trademark owners may obtain protection in the
    United States by following the same procedure in their
    respective Offices of origin and, pursuant to Articles 3bis and
    3ter, specifying the United States as a Contracting Party in
    which they are seeking protection.

    2. Issuance of international registration

        The International Bureau must issue the international
    registration if all filing requirements are met, and, pursuant
    to Article 3(4), must publish the mark in its International
    Gazette, a periodic publication containing all relevant data
    recorded during the period concerning international
    registrations. Pursuant to Article 3ter, the International
    Bureau must forward the request for territorial extension of
    the international registration to the Contracting Parties
    specified, either at the time of filing or later, if the
    applicant requests a territorial extension of its international
    registration at some time after the international registration
    is effected.
        In accordance with Article 4 and 5, those Contracting
    Parties will consider the extension request pursuant to the
    their applicable legislation. Once the extension request is
    either approved through the examination process, or the
    applicable time periods set out in Article 5 pass without a
    refusal or a successful opposition, the extension of the
    international registration to a particular Contracting Party
    has legal effect.
        Pursuant to Article 6(i), registration of a mark at the
    International Bureau is effected for ten years, with the
    possibility of renewal under certain conditions discussed
    below. Pursuant to Article 4, the effect of such registration
    shall be the same as if the mark had been deposited directly
    with the Office of the particular Contracting Party to which
    the registration is extended.

    3. Request for extension of protection to the United States by the
            foreign holder of an international registration

        When the United States receives a request for extension of
    protection of a mark in an international registration, the PTO
    must examine the request in the same manner, and pursuant to
    the same requirements, as a regularly-filed U.S. application.
    When the examination of the extension request is concluded, and
    all of the formalities and/or refusals raised in the
    examination process are settled, the mark will be published for
    opposition.
        If the formalities and/or refusals are not settled between
    the applicant and the examiner, then the applicant may either
    abandon its application or institute an appeal to the Trademark
    Trial and Appeal Board, which is consistent with Article 5's
    provision that a holder shall have the same remedies in the
    event of a refusal as would be available if the mark had been
    directly deposited with the PTO. The Trademark Trial and Appeal
    Board must determine whether the application should be denied
    or should be published for opposition. The applicant can appeal
    its determination to the Court of Appeals for the Federal
    Circuit or ask for a trial de novo in a U.S. District Court. If
    no opposition is filed or is successful, the Director of the
    United States Patent and Trademark Office must issue a
    certificate of extension of protection, which will have the
    same effect and validity as a U.S. registration on the
    Principal Register, the official U.S. register of distinctive
    marks.
        The Protocol, pursuant to Article 5, requires the national
    or regional office considering an extension request to notify
    the International Bureau of all refusals, which would include
    examination refusals and the possibility of opposition, as well
    as the ground(s) for opposition, within specified time periods.
    Under Article 5, Contracting Parties that make appropriate
    declarations (discussed below) may have up to 18 months, from
    the date of notification of the extension of protection, to
    state the grounds for refusing an extension of protection from
    the international registration, and, with appropriate notice,
    an additional 7 months from the beginning of the opposition
    period to notify the grounds for opposition. Absent timely
    refusal, Article 5 requires the national or regional office
    (the PTO in the case of the United States) to extend protection
    to the international registration.
        The United States may require non-U.S. trademark owners
    seeking trademark protection in the United States under the
    Protocol to declare, at the time the extension of protection is
    requested, that they have a bona fide intention to use the mark
    in commerce. Rule 7(2) specifies that, ``[w]here a Contracting
    Party requires, as a Contracting Party designated under the
    Protocol, a declaration of intention to use the mark, it shall
    notify that requirement to the Director General. Where that
    Contracting Party requires the declaration to be signed by the
    applicant himself and to be made on a separate official form
    annexed to the international application, the notification
    shall contain a statement to that effectand shall specify the
    exact wording of the required declaration.''
        Rule 9, the rule that sets out the permissible requirements
    for an international application, provides in subsection
    9(6)(d) that ``[t]he international application shall also
    contain, where a designation concerns a Contracting Party that
    has made a notification under Rule 7(2), a declaration of
    intention to use the mark in the territory of that Contracting
    Party. . . .''
        Consistent with these rules, the Department of State would,
    at the time of deposit of the instrument of accession, have the
    United States notify the Director General of its intention to
    require, from the date of entry into force of the Protocol in
    the United States, a statement of bona fide intention to use a
    mark in commerce of all holders of international registrations
    requesting extensions of protection to the United States.

    4. Maintenance of an international registration and extensions of
            protection

        Pursuant to Article 3ter(2), an extension of protection to
    additional Contracting Parties may be requested at any time
    during the life of the international registration. Article 7
    provides that an international registration is renewable every
    ten years upon payment of the appropriate fee(s) to the
    International Bureau. Rule 31(2) of the Regulations specifies
    that, ``[t]he effective date of the renewal shall be the same
    for all designations contained in the international
    registration, irrespective of the date on which such
    designations were recorded in the International Register.''
        Additionally, for the extension of protection to remain in
    force in the United States, the proposed legislation to
    implement the Protocol requires the periodic filing of
    affidavits of continued use in commerce of the subject mark.
    Inasmuch as these affidavits are not considered to be part of
    the renewal process, they are not governed by the restrictions
    on renewal set out in the Protocol. Indeed, such affidavits of
    use have long been required by a few of the current Contracting
    Parties to the Madrid Agreement and, therefore, there was
    general agreement from the Committee of Experts that such
    affidavits fell outside of the restrictions of the Protocol and
    were allowed as a national practice.

    5. Cancellation or limitation of international registration

        If the national or regional application or registration
    forming the basis of an international registration is
    restricted, abandoned, cancelled, or has expired, pursuant to
    applicable law, and any of these effects occur as a result of
    an action commenced within five years of the date of
    international registration, then, pursuant to Article 6(3), the
    Office of origin must notify the International Bureau. It must,
    in turn, similarly cancel or limit the international
    registration. For example, if, during the five years after
    international registration, some goods or services have been
    deleted from the identification of goods or services in the
    national or regional application or registration that forms the
    basis for the international registration, then pursuant to
    Article 6(3), those same goods or servicesmust be deleted from
    the international registration and any extension requests that exist
    for the international registration. Similarly, if the national or
    regional application or registration that forms the basis for the
    international registration has been abandoned, cancelled or has
    expired, either during the five years after international registration
    or as a result of an action that commenced during the five-year period,
    then, pursuant to Articles 6(3) and 6(4), the International Bureau must
    cancel the international registration and each Contracting Party that
    has extended protection to that international registration must cancel
    the attendant extension of protection. Otherwise, if no such
    restriction, abandonment, cancellation or expiration occurs during the
    five years after international registration (or as the result of an
    action begun in the first five years after international registration),
    then, pursuant to Article 6(2), the international registration becomes
    independent of its underlying national or regional application or
    registration.
        However, if such a cancellation occurs, Article 9quinquies
    of the Protocol permits transformation of existing extensions
    of protection into national (or regional, in the case of
    intergovernmental organization Contracting Parties)
    applications in the Contracting Parties in which the
    international registration had been extended. The holder of the
    cancelled international registration may file, within three
    months of the cancellation of the international registration,
    national or regional applications for the same mark in relation
    to the cancelled goods or services in each Contracting Party
    that had extended protection to the international registration.
    Provided that the applicant complies with the applicable law,
    each application will obtain, as a filing date, the date of the
    international registration or, if the extension of protection
    was sought after international registration occurred, the date
    of the recordation of the extension of protection for that
    particular Contracting Party.

    6. Recordation of assignment or change of ownership

        Often, U.S. businesses experience difficulties effecting
    valid assignments of their marks internationally due to the
    burdensome administrative requirements for recordation of an
    assignment in many countries. These difficulties can hinder the
    normal transfer of business assets. Pursuant to Article 9,
    9bis, and 9ter, the Protocol permits the person in whose name
    an international registration stands to record the assignment
    of its trademark in all designated Contracting Parties by
    making a single payment and filing one document, provided that
    the new holder is entitled to file international applications
    under the Protocol.

    7. Protocol system not exclusive of national and regional trademark
            registration systems

        Use of the procedures established by the Protocol is
    optional for applicants. Applicants may continue to file
    individual trademark applications in each Contracting Party in
    which they seek trademark protection. In the event that they
    also file an international registration,Article 4bis deems the
    international registration to replace the national or regional
    registration, under certain conditions, but without prejudice to the
    rights acquired under the national or regional registration.
    Furthermore, the Protocol in no way diminishes the right of priority
    and national treatment that applicants are accorded under the Paris
    Convention for the Protection of Industrial Property (1883), as revised
    and amended.

                        the assembly of the madrid union

        Article 1 of the Madrid Agreement provides that the
    countries party to the Agreement ``constitute a Special Union
    for the International registration of marks.'' Article 1 of the
    Protocol provides that the Contracting Parties to the Protocol
    ``shall be members of the same Union of which countries party
    to the Madrid (Stockholm) Agreement are members.'' Article 10
    of the Protocol provides, in turn, that the Contracting Parties
    to the Protocol are members of the same Assembly as are the
    Contracting Parties to the Madrid Agreement. Article 10(3)(a)
    provides that only Contracting Parties to the Madrid Protocol
    have the right to vote on matters concerning only the Protocol
    (and, of course, only Contracting Parties to the Madrid
    Agreement may vote on matters concerning only the Madrid
    Agreement).
        Articles 10 and 13 establish the functions of the Assembly.
    Under Article 10(2), these are: dealing with all matters
    concerning implementation of the Protocol; giving directions to
    the International Bureau concerning preparation for revision
    conferences; adopting and modifying provisions of the
    Regulations; and performing such other functions as are
    appropriate under the Protocol.
        In addition, as is a common practice in multilateral
    intellectual property treaties that include provisions for an
    assembly to facilitate treaty implementation, certain
    provisions of the Treaty may be amended by a super-majority of
    the Assembly, without the need for a revision conference (see,
    e.g., Paris Convention for the Protection of Industrial
    Property of March 20, 1883, as revised and amended (Stockholm,
    July 14, 1967) (Article 17); Patent Cooperation Treaty of June
    19, 1970, as amended and modified (Article 61); Strasbourg
    Agreement Concerning the International Patent Classification of
    March 24, 1971, as amended (Article 11); Berne Convention for
    the Protection of Literary and Artistic Works Paris Act of July
    24, 1971, as amended (Article 26); and Budapest Treaty on the
    International Recognition of the Deposit of Microorganisms for
    the Purposes of Patent Procedure of April 28, 1977, as amended
    (Article 14)). Under Article 13(1), proposals for the amendment
    of Articles 10 (Assembly), 11 (International Bureau), 12
    (Finances), and 13 (Amendment of Certain Articles of the
    Protocol) may be initiated by a Contracting Party or by the
    Director General of WIPO.
        According to Article 13(2), adoption of any amendment to
    Article 11, 12, or 13 requires a three-fourths majority of the
    votes cast at the Assembly at which it is addressed. In
    addition, under Article 13(2), any amendment to Article 10 or
    Article 13(2) itself, requires a four-fifths majority of the
    votes cast at the Assembly.
        In each case, in accordance with Article 13(3), amendments
    adopted by the requisite super-majority of the Assembly enter
    into force for all Contracting Parties to the Protocol one
    month after written notifications of acceptance, effected in
    accordance with their respective constitutional processes, have
    been received by the Director General from three-fourths of
    those States and intergovernmental organizations that, at the
    time the amendment was adopted, were members of the Assembly
    and had the right to vote on the amendment. The large size of
    the super-majorities and the requirement that notifications of
    acceptance be effected in accordance with constitutional
    processes combine to provide substantial assurance that the
    amendment process will be used sparingly and in a manner that
    will not disserve U.S. interests.
        From the perspective of the United States, the most
    controversial aspect of the Protocol has been the voting
    provision contained in Article 10(3)(a), which provides that
    ``[e]ach Contracting Party shall have one vote in the
    Assembly.'' Since, in accordance with Article 14, not only
    States but also intergovernmental organizations may become
    Contracting Parties, this provision has the effect of allowing
    an intergovernmental organization (such as the European
    Community (``EC'')) to have an additional vote separate and
    independent from that of its member States if it were to become
    a Contracting Party to the Protocol. The United States has
    consistently opposed such voting as an unwarranted expansion of
    the voting power of intergovernmental organizations and their
    member States--and a correspondingly unwarranted dilution of
    U.S. voting power.
        The United States harbored significant concerns that the
    Protocol would establish an unfavorable precedent and that
    comparable voting provisions would be adopted in other
    treaties, to the detriment of U.S. interests. In the aftermath
    of the negotiations that led to the Protocol, in the field of
    intellectual property alone, the European Union (``EU'')
    proposed concurrent voting for the EC and its Member States in
    the negotiating texts of numerous proposed treaties. During the
    negotiation of the Trademark Law Treaty, EU insistence on an
    independent vote forced negotiators to accept a compromise
    arrangement whereby all provisions relating to voting were
    dropped from the agreement--a development that significantly
    constrains the ability of the parties to effect necessary
    revisions.
        The United States was an observer, not a participant, in
    the negotiations leading to the Protocol. More than a decade
    has passed since that negotiation was concluded. Throughout
    this period, the United States has forcefully and successfully
    opposed every attempt by the European Union to include
    comparable voting provisions in other treaties. Last year, in
    the context of negotiations for the Hague Agreement Concerning
    the International Deposit of Industrial Designs, the EU and its
    Member States did not press for an independent vote for
    intergovernmental organizations such as the EC. That marked a
    watershed because in prior years the EU had repeatedly
    described the Hague Agreement context as involving concurrent
    competenceanalogous to that in the Protocol and warranting
    analogous voting provisions. We are now satisfied that the United
    States opposition to such voting provisions has been heard and that the
    Protocol cannot be considered a paradigm for voting provisions in
    multilateral treaties.
        While certainly desirable, revising Article 10(3)(a) of the
    Protocol is not a feasible prospect at this juncture. However,
    the United States, the EC (which, like the United States, is
    not yet a Contracting Party to the Protocol), and its Member
    States have been able to reach an accommodation regarding the
    voting issue.
        At the request of the United States, the EC and its Member
    States have affirmed, in a February 2, 2000, letter from
    Margarida Figueiredo, Chairwoman of the Permanent
    Representatives Committee on behalf of the Council of the
    European Union, their commitment to a consensus-based decision
    process within the Assembly of the Madrid Union. They have also
    indicated that, in the event that a vote is called for, they
    will endeavor to conduct consultations with the United States
    and, where appropriate, with other like-minded participants.
    The February 2 letter also affirms that, where these
    consultations do not lead to a common position among the United
    States, the EC, and its Member States on the subject put to a
    vote, it is the intention of the EC and its Member States to
    use their voting rights in such a way as to ensure that the
    number of votes cast by the EC and its Member States does not
    exceed the number of the EC's Member States.
        Consensus-based decision making has long been used in the
    Assembly of the Madrid Union. Indeed, we understand that no
    issue has been put to a vote since the early 1970s.
    Accordingly, we have concluded that, although the unilateral
    statement of intent reflected in the Council of the European
    Union's February 2, 2000, letter is not an ideal resolution of
    the voting issue and is certainly not an acceptable model for
    future agreements, it does provide sufficient protection for
    U.S. interests in the unique context of the Protocol to allow
    me to recommend that the United States now become a Contracting
    Party.

                     functions of the international bureau

        Article 11 deals with the duties of the International
    Bureau of WIPO as they relate to the Protocol. The
    International Bureau maintains the International Register;
    makes preparations for the conferences of revision of the
    Protocol; is authorized to consult with intergovernmental and
    international non-governmental organizations concerning
    preparations for such conferences of revision; and carries out
    any other tasks assigned to it in relation to the Protocol.
    Pursuant to Article 11(2)(c), the Director General and his
    designees take part, without the right to vote, in discussions
    at any conferences of revision. As noted above, this Article
    can be amended by a three-fourths majority of the Madrid
    Assembly members that are Contracting Parties to the Protocol.

                                    finances

        Article 12 provides that, as far as Contracting Parties to
    the Protocol are concerned, the finances of the Union shall be
    governed by the same provisions as those inthe Madrid
    Agreement, except that the Protocol provides an alternative for the
    collection of national or regional fees rather than the complementary
    and supplementary fees (and the resulting fee-sharing arrangement) set
    out in the Agreement. As noted above, this Article, which concerns only
    the finances of the Union and its budget for administering the Madrid
    Agreement and the Protocol, can be amended by a three-fourths majority
    of the Madrid Assembly members that are Contracting Parties to the
    Protocol. (In contrast, Article 8, which concerns fees for
    international application and registration, cannot be amended by the
    Assembly.)
        The finances of the Madrid Union include a working capital
    fund (established by Article 12(6) of the Madrid Agreement,
    which applies to Contracting Parties to the Protocol by virtue
    of Article 12 of the Protocol). Article 12(6)(a) of the Madrid
    Agreement specifies that this fund shall be constituted by a
    single payment made by each country of the Union, and permits
    the Assembly to increase the fund if it becomes insufficient.
    However, Article 12(6)(d) further authorizes the Assembly to
    suspend the application of the payment provision, so long as
    the Assembly authorizes use of the reserve fund of the Union as
    a working capital fund. Such a suspension has, in fact, been in
    place for over 20 years. The working capital fund was
    constituted at the level of 2,000,000 Swiss francs in 1979 by a
    transfer of funds from the reserve fund of the Madrid Union.
    Accordingly, no payment into the working capital fund has been
    requested of any Contracting Party that has become a member of
    the Madrid Union since 1979. A senior WIPO official has advised
    that it is not now envisaged that any such payments would be
    required in the future pursuant to Article 12(6) of the Madrid
    Agreement or Article 12 of the Protocol.
        The PTO expects to incur some relatively modest initial
    costs (e.g., to modify forms and update computer programs) to
    enable it to process applications under the Protocol. However,
    every request for an extension of protection will be charged
    the same fee as is charged for a regular U.S. trademark
    application. That fee should cover the cost of processing the
    Protocol application. Moreover, the PTO already accepts
    electronic filing of applications over the Internet. Thus, much
    of the Protocol process (e.g., relaying international
    applications and requests for extensions to the International
    Bureau and reviewing similar requests for extensions of
    protection in the United States) could be run with a variation
    of the current electronic system.

                participation by intergovernmental organizations

        Article 1 of the Protocol provides that Contracting Parties
    to the Protocol may be either ``Contracting States'' or
    ``Contracting Organizations.'' Under Article 14, each
    Contracting State must be a party to the Paris Convention for
    the Protection of Industrial Property of March 20, 1883, as
    revised and amended. The same article authorizes an
    intergovernmental organization to become a Contracting Party to
    the Protocol if: (1) at least one of the member States of the
    organization is a party to the Paris Convention; and, (2) the
    organization has a regionalOffice for the purposes of
    registering marks with effect in the territory of the organization and
    that this regional Office is not operating as a common Office to
    replace one or more of the national Offices of its member States.
        Such conditions for an intergovernmental organization to
    become a Contracting Party are somewhat unusual in that they do
    not contain the traditional requirements that the organization
    be duly authorized to become a party and that it submit a
    declaration of its competency vis-a-vis its member States with
    respect to matters covered by the Protocol. Nevertheless, given
    the Article's requirement for a regional Office, coupled with
    actual experience under the Protocol to date, as described
    below, these conditions for intergovernmental organization
    participation in the Protocol appear to be an acceptable
    substitute to the more traditional standards.
        To date, no intergovernmental organization has yet become a
    party to the Protocol, and the only one that appears likely to
    do so in the near future is the EC. The EC has a trademark
    office, independent of that of its Member States, which
    processes requests under the EC's applicable trademark law.
    Thus, Member States of the EC and the EC itself each have
    separate competence to examine a trademark application
    according to the laws and regulations in its own legal system.
    This concurrent competence has been in place for some time in
    Europe, is well defined, and is not causing problems in the
    trademark area. The Protocol does not create or alter this
    system of competence for trademark registration in Europe. It
    merely facilitates that ability of U.S. trademark owners to
    obtain trademark protection under the systems of each
    Contracting Party. Accordingly, the United States would welcome
    the EC's participation in the Protocol.
        Since the Protocol's negotiation in 1989, moreover, there
    has been no prospect of any other intergovernmental
    organization membership that would pose concerns for the United
    States. With the benefit of this experience, we are satisfied
    that, given the Protocol's procedural nature and the fact that
    membership is open only to intergovernmental organizations that
    actually have a regional Office for the purposes of registering
    marks in effect in the territory of the organization, Article
    14's description of the conditions for an ``intergovernmental
    organization'' to become a Contracting Party need not preclude
    or delay our becoming a Contracting Party to the Protocol.
        In accordance with Article 14(4), the Protocol entered into
    force on December 1, 1995, three months after the requisite
    number of instruments of ratification had been deposited. The
    language of Article 14(4) would have permitted an
    intergovernmental organization and its member States to be
    counted separately toward bringing the Protocol into force, and
    thus was objectionable to the United States as an unwarranted
    expansion of the power of intergovernmental organizations and
    their member States without basis in international law. U.S.
    concerns about this language have been resolved satisfactorily
    because: (1) the Protocol entered into force solely on the
    basis of instruments deposited by States, without participation
    ofintergovernmental organizations; and (2) the language has not
    become a precedent and has not recurred in subsequently negotiated
    treaties.

              industry support for accession by the united states

        Accession by the United States to the Protocol has been
    endorsed in principle by the Section of Patent, Trademark and
    Copyright Law of the American Bar Association; the
    International Trademark Association; and the Trademark, Trade
    Identity and Unfair Competition Committee of the American
    Intellectual Property Law Association. These endorsements
    contain the caveat that the United States should accede to the
    Protocol only if non-U.S. trademark owners seeking trademark
    protection in the United States under the Protocol are required
    to declare, at the time the extension of protection is
    requested, that they have a bona fide intention to use the mark
    ``in commerce,'' as that term is defined in Section 45 of the
    Trademark Act, as amended, 15 U.S.C. 1127. As described above,
    the Protocol does not prohibit such a requirement by the United
    States, and the Regulations specifically contemplate it.
        Industry support for U.S. accession has increased as the
    number of Contracting Parties to the Protocol has grown, which
    has enhanced the economic benefits of U.S. participation--and
    has increased the disadvantages of non-participation. Japan's
    recent accession to the Protocol, in March 2000, is
    illustrative.
        Currently, the pendency from application filing to the
    registration of a trademark in Japan is several years. However,
    as a Contracting Party to the Protocol, Japan must process, and
    register, requests under the Protocol for extension of
    protection within the Protocol's strict time limits. As a
    result, those filers who cannot use the Protocol will be in the
    unfortunate position of waiting years for a registration in
    Japan, while applicants under the Protocol will receive
    consideration and registration within 18 months (barring the
    filing of an opposition).
        Comparable situations may arise regarding other Contracting
    Parties. U.S. industry is keenly aware of the increasing
    importance of the Protocol and has expressed concerns that U.S.
    trademark owners seeking international protection may be
    seriously, and increasingly, disadvantaged unless and until the
    United States becomes a Contracting Party.

                            implementing legislation

        To carry out the provisions of the Protocol, identical
    implementing legislation has been introduced in both the House
    of Representatives (where it has been passed) and the Senate.
    To ensure that our domestic laws conform with our expanded
    international obligations, the United States would not deposit
    its instrument of accession to the Protocol until enactment of
    all necessary implementing legislation and until after a period
    of time sufficient to allow the PTO to promulgate implementing
    regulations and to complete the necessary administrative
    changes.

                    declarations to accompany u.s. accession

        As noted above, the Protocol contemplates that Contracting
    Parties may make declarations with respect to certain Protocol
    articles. The Department of State recommends that U.S.
    accession to the Protocol be accompanied by three declarations,
    pursuant to Protocol Articles 5(2)(b), 5(2)(c), and 8(7)(a),
    respectively, as described below.
        The first declaration, authorized under Article 5(2)(b),
    permits the extension of the time period within which the
    United States must notify the International Bureau of its
    refusal to extend protection to an international registration.
    Article 5(2)(a) requires the PTO to notify its refusal to
    extend protection to a mark in an international registration,
    along with a statement of all grounds for the refusal, before
    the expiry of one year from the date on which the notification
    of the extension request was sent to the PTO by the
    International Bureau. Article 5(2)(b) provides, however, that
    the Article 5(2)(a) time limit of one year may be extended, by
    a Contracting Party's declaration, to 18 months. The PTO has
    ascertained that a declaration is necessary to ensure that
    sufficient time exists for the request for extension of
    protection to be examined in the PTO and, in the majority of
    cases, published for opposition.
        Accordingly, the Department of State recommends that the
    following declaration be included in the U.S. instrument of
    accession:

              Pursuant to Article 5(2)(b) of the Protocol, the
            United States declares that, for international
            registrations made under this Protocol, the time limit
            referred to in subparagraph (a) of Article 5(2) is
            replaced by 18 months.

        The second declaration, authorized under Article 5(2)(c),
    concerns the possibility of a refusal of protection with
    respect to any given international registration, as a result of
    third party opposition to the granting of protection. If a
    declaration is made under Article 5(2)(c), the PTO may notify
    the International Bureau, before the expiry of the 18-month
    time limit for refusal, of the possibility that an opposition
    may be filed beyond this time limit and a subsequent refusal
    may then be notified by the PTO to the International Bureau
    after the expiry of the 18-month time limit. However, Article
    5(2)(c) requires such a refusal to be notified within a time
    limit of not more than seven months from the date on which the
    opposition period begins. (If the opposition period expires
    before this seven-month time limit, the notification must be
    made within one month from the expiry of the opposition
    period.) The PTO has ascertained that a declaration is
    necessary to ensure that sufficient time exists for a mark that
    is the subject of a request for extension of protection to be
    published and for a third party to exercise its right to oppose
    and specify the grounds for opposition.
        Accordingly, the Department of State recommends that the
    following declaration be included in the U.S. instrument of
    accession:

              Pursuant to Article 5(2)(c) of the Protocol, the
            United States declares that, when a refusal of
            protection may result from an opposition to the
            granting of protection, such refusal may be notified to
            the International Bureau after the expiry of the 18-
            month time limit.

        The third declaration, authorized under Article 8(7)(a),
    concerns the fees to which the United States is entitled in
    connection with an extension of protection of an international
    registration. Article 8(1) of the Protocol permits the PTO,
    when it is the Office of origin, to fix and collect fees in
    connection with the filing of an international application or
    renewal of an international registration.
        Article 8(2) through (6) provides for a system of
    collection and distribution of the international fees for
    registration and renewal of a mark with the International
    Bureau according to a formula, which would divide revenues
    equitably among Contracting Parties. The Article 8(2) through
    (6) formula essentially reproduces the system of fees that
    exists in the Madrid Agreement so that a Contracting Party that
    elects to be a member of both the Agreement and the Protocol
    will be able to adopt the same fee arrangement for both.
    However, Article 8(7)(a) permits any Contracting Party to
    receive, instead, in connection with each international
    registration for which an extension of protection is requested,
    and in connection with the renewal of any such international
    registration, individual fees that do not exceed the national
    orregional application filing fee and registration renewal fee,
    respectively, in effect at the time of declaration.
        Article 8(7)(a) requires that, in arriving at the
    appropriate fee amounts, the national fee be diminished by the
    savings, if any, resulting from the international procedure.
    The PTO does not anticipate any savings as a result of the
    Protocol's international procedure. The PTO has ascertained
    that a declaration is necessary to ensure that the PTO receives
    sufficient fees to support the costs associated with its
    obligations under the Protocol.
        Accordingly, the Department of State recommends that the
    following declaration be included in the U.S. instrument of
    accession:

              Pursuant to Article 8(7)(a) of the Protocol, the
            United States declares that, in connection with each
            international registration in which it is mentioned
            under Article 3ter of the Protocol, and in connection
            with each renewal of any such international
            registration, the United States chooses to receive,
            instead of a share in revenue produced by the
            supplementary and complementary fees, an individual fee
            the amount of which shall be the current application or
            renewal fee that the United States Patent and Trademark
            Office charges at that time to a domestic applicant or
            registrant of such a mark.

                                   Conclusion

        The Protocol is of direct and immediate importance to the
    United States. It will facilitate the entry of U.S. industry
    into foreign markets by simplifying the acquisition of
    trademark protection abroad and reducing attendant costs. As
    described above, it will accomplish this by allowing a U.S.
    trademark owner to file for registration or renewal with any
    number of Contracting Parties through a single form filed with
    the PTO, accompanied by a single payment, and without the need
    to retain local agents or file individual applications in each
    Contracting Party in which protection is sought. The Department
    of Commerce and the Office of the United States Trade
    Representative join the Department of State in requesting that
    the Protocol Relating to the Madrid Agreement Concerning the
    International Registration of Marks be transmitted to the
    Senate for its advice and consent to accession as soon as
    possible, subject to the declarations previously described.
        Respectfully submitted,
                                                           Alan Larson.