Navigating Multinational Brand Protection


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Washington — For candy and snacks brands, consumer brand loyalty is the brass ring. Accordingly, when expanding a U.S.-based brand into foreign territories, owners must have a well-considered strategy to navigate international growth while protecting and increasing the good will and value of their trademarks.

A common myth is that a worldwide trademark registration is available. It is not. The unfortunately misnamed “International Registration” (part of the Madrid System) fuels this confusion. However, it does not actually grant protection of a trademark in any jurisdiction, much less worldwide. It is simply a procedural tool that allows applicants to file and manage trademarks through a centralized system. 

Lacking a worldwide registration option, brand owners are required to file trademark applications jurisdiction by jurisdiction. Due to budgetary and other reasons, filing in every country where a company conducts business might not be feasible. As such, countries of importance should be prioritized and the trademark filing strategy should be developed based on that hierarchy. 

The U.S. is a “first-to-use” country, meaning that the first person/entity to use a trademark with a product or service in U.S. commerce has priority over later users. However, first-to-use countries are the minority. Many jurisdictions, including China, the EU (with some exceptions), Mexico and others, operate on a “first-to-file” basis, meaning that the first person or company to file a trademark application in that jurisdiction has priority over other future adopters of that (or a confusingly similar) trademark in that country. 

In first-to-file jurisdictions, a trademark registrant can stop others from using a trademark in the country or geographic area of registration, including the established user of the trademark. Thus, “trademark pirates” often race to file applications for existing, well-known brands and then offer to sell them to the trademark owner for an exorbitant price. It is imperative for an international brand strategy to consider and prioritize first-to-file jurisdictions to get ahead of pirates and avoid having to purchase one’s own trademark rights, or worse, cede use of the trademark in a particular jurisdiction.

Most countries, including the U.S., categorize trademark applications by the Nice Classification system, an international classification of goods and services applied to the registration of trademarks. For example, Class 30 is for “staple foods,” which includes candy and most snack foods. However, China uses a subclassification system that groups trademark filings not only into Classes, but further into discrete Subclasses. Under China’s subclassification system, a trademark application must not only identify the Class of goods or services into which the application will be filed, but also the particular Subclass(es), and will only be protected in the Subclass(es) that are specified.

Moreover, the Chinese trademark system is incredibly (often frustratingly) literal, meaning that the trademark office does not, like most jurisdictions, look at related goods or services when considering whether confusion between trademarks is likely. China’s trademark office will only consider other trademarks for the identical goods/services in the identical Subclass. 

For instance, in China, “chocolate candy” is in Subclass 3004, but “chocolate sauce and chocolate mouse” are in Subclass 3001 and the trademark office would not object to identical trademark filings for these closely related goods in different Subclasses. But it would be hugely problematic for a brand selling chocolate candy to have a competitor using an identical trademark to sell chocolate sauce. 

Brands expanding to China must consider filing defensive registrations in all Classes if the budget exists, or at least in all Subclasses of the Class in which the application is filed. 

A final note on China: Madrid System applications are rarely recommended for expansion there because if one uses the System to expand a U.S. application into China, the trademark will not be included in related Subclasses. It will only be included in the exact Subclass for the identified good/service, leaving closely related goods or services to competitors or pirates.

Alternatives To Trademarks

Any international brand expansion strategy must also consider alternatives to trademark filings, such as copyright protection and, in some jurisdictions, industrial design registration. These alternatives to trademark registration give a brand owner additional defensive protection and supplementary avenues for enforcement.

In much of the EU, for example, it is possible to obtain an industrial design registration for a logo. In most cases there is no review process; it is automatic registration. This can be a nightmare for brand owners when a competitor or trademark pirate obtains a design registration for a brand’s logo. Accordingly, for brands that have logos, industrial design registration can be a powerful defensive tool.

Along with a thoughtful trademark filing strategy, when expanding internationally it is imperative to establish a robust monitoring and enforcement program. This should include a trademark watch service and monitoring program to identify infringing trademark applications, social media postings, unauthorized sales on ecommerce websites and grey market, or parallel import, goods. 

Grey market goods are authentic goods that are distributed outside of official distribution channels without the trademark holder’s approval, usually at a steep discount. Grey market items purchased from one country and sold in another might not meet the second country’s regulatory requirements. 

While these types of goods are detrimental to any brand, they can devastate a candy or snack company by exposing it to liability based on differing food ingredient laws, nutritional labeling regulations and other varying country-specific requirements. Differing regulations are why many multinational brands offer products specifically designed and priced for certain markets, with unique serial numbers and SKUs in different jurisdictions. When grey market goods violate the laws of the country in which they are sold, it frustrates those efforts. It is important to note that the import and sale of grey market goods is not actionable in all jurisdictions.

Companies with trademarks that apply to physical goods must also consider whether registration of their trademarks with the local Customs agency is warranted to try and prevent the import/export of counterfeit and, in some countries, grey market products. 

Having trademark counsel with a thorough understanding of foreign markets is vital for successful brand expansion and enforcement. While some of the critical considerations for international trademark expansion are outlined here, there are myriad other issues that must be addressed when expanding a brand into foreign territories, such as translation and transliteration concerns in countries where English is not the dominant language, counterfeiting, and import and export taxes, to name just a few. Additionally, every brand is unique and requires a tailored trademark filing and enforcement strategy.

Elizabeth Rest

Contributor Info: Elizabeth J. Rest is a trademark and copyright attorney with a passion for Advising Creativity. She is a principal and co-founder of Crown, LLP, an intellectual property law firm, where she provides counsel in domestic and international trademark selection, clearance, prosecution and enforcement. She can be reached at [email protected].