Investing in a new or existing enterprise in the United States can be an advantageous proposition. As the E-2 Investor is well aware, having a company with a physical presence in the United States can expose the business to opportunities from substantial revenue growth to increased global exposure. However, the business must not neglect protecting its identity and brand from being used by competitors. This article surveys the importance and process of effectively protecting your foreign businesses’ brand name in the United States.
When a foreign business or investor is planning to enter the U.S. marketplace, they need to understand and evaluate the potential legal and business barriers that exist prior to the company’s expansion into a new territory. It is prudent to consider these matters when initially determining a particular brand name, as the last thing a foreign business wants is to have to change or otherwise alter its established brand name when entering additional territories because it failed to adequately plan for foreign expansion.
In order to understand the local business marketplace, a company should generally conduct a comprehensive trademark search for their existing brand name(s) prior to applying for or expanding into a foreign territory, including conducting one for the U.S. A trademark search can illuminate any identical or confusingly similar marks that exist, which could bar the foreign brand’s expansion under a particular tradename. It is also prudent to search for any common misspellings or phonetic equivalents as well as ensuring that the translation of any foreign words also does not infringe on any existing marks.
International Trademark Protection For Business and Company Name
After determining the availability of a particular mark, the owner should generally first apply for trademark registration in their home country. A brand name is protected by a country’s local trademark law. There are two types of trademark protection legal systems: the “first-to-file” and the “first-to-use” systems.
Trademark Law – What is a “First Use” Trademark System? What is “Actual Use” Trademark System?
In a “first-to-file” system, such as in China and in France, the first entity to file for a trademark registration in a particular name acquires rights to the name for the goods or services listed in the registration. Conversely, in a “first-to-use” system, such as in the United States, trademark rights only exist when the individual actually utilizes the mark in commerce for the particular goods or services listed. In addition to an “actual use” application, American trademark law also permits an owner to file an “intent-to-use” application to essentially “reserve” a particular trademark they intend to use for specific goods or services. The applicant must then actually use the mark in commerce for these goods or services to perfect their trademark rights in the name.
International Trademark Filings and International Trademark Protection for Businesses and Investors
Once a company files for a trademark in their home country, it is advantageous to then file for protection of the same mark in the United States. Under Article 4 of The Paris Convention for the Protection of Industrial Property, the company can utilize the initial foreign filing date as the filing date for their subsequent U.S. trademark application as long as the applications are filed within six months of one another. This is extremely beneficial as it permits the foreign company to utilize an earlier filing date to preempt and potentially oppose a mark that was filed between the original foreign filing date and the later United States filing date.
A foreign company can potentially utilize the Madrid Protocol to submit one trademark application in any and/or all of the current signatory countries in which it desires protection. This treaty allows an international application based on the filing of an application instead of only permitting foreign registration of an already registered mark. Usage of the international filing system under the Madrid Protocol could potentially save the foreign company substantial funds. For instance, instead of hiring local counsel and filing a separate application in each country in which they desire protection, the business can utilize the Madrid Protocol system and file one application with as many of the treaty member countries as they desire. Currently, there are over 100 territories owned by the almost 100 signatory members, including the European Union (EU) and African Intellectual Property Organization (OAPI). As of August 6, 2018, here are all of the listed treaty members that can be designated in an international trademark application under the Madrid Protocol.
United States Company Acquires International Trademark Name Protection Through Madrid Protocol
An important consideration for a foreign applicant utilizing the Madrid Protocol is that the United States Patent and Trademark Office (U.S.P.T.O.) will refuse registration to any mark not eligible for registration under U.S. trademark law. The foreign application’s listed goods or services must also correspond with those under American law. These listings must be described with particularity, as opposed to the broad statements that many foreign jurisdictions permit. Additionally, a foreign applicant must have a “bona fide intent” to utilize the mark in commerce, which includes the “objective” showing of evidence of preparing for usage by the applicant. Some examples of this evidence include any business plans, correspondence with vendors, buyers, potential partners or other related business communications.
In conclusion, it is prudent for the E-2 investor to be familiar with the United States trademark legal system and to ensure adequate lead time to inspect any existing and potentially conflicting marks that may hinder an otherwise smooth international transaction. Once they identify whether any potential bars exist, the investor should utilize the established international filing systems to obtain cost efficient registrations in many countries with one application.
This article is not intended as legal advice, as an attorney specializing in the field should be consulted.
© 2022 Justin Jacobson Law, P.C. and Velez & Cipriano, PLLC