[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.


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