Madrid Protocol and CTM - a link to the future Geneva, October 7, 2004 Good afternoon ladies and gentlemen. Welcome to this Conference. It is a pleasure to have you here with us today at WIPO. I should also like to welcome to the podium the speakers who will intervene in the first part of our program: Erik Nooteboom, from the European Commission, Detlef Schennen, from the Office for Harmonization in the Internal Market, and Denis Cohen from the International Bureau. We are celebrating today the establishment of the link between the Madrid Protocol and the European Community Trade Mark. A link which came into effect last Friday, but which fulfills a long-term vision, the vision of those who already some 20 years ago imagined how the international trademark system should evolve. A link which was finally forged over the last several years by the hard work of many individuals who, on behalf of their governments and organizations made extensive preparations for this day. And a link which, I am sure will make the Madrid Protocol even stronger and more attractive to trademark owners and practitioners, within and outside the European Community. But, let us briefly recall how this link has become possible and is today a reality. Ernesto Rubio Assistant Director General, WIPO

towards a global registration system for trademarks Madrid - CTM link Madrid Agreement of 1891 Madrid Protocol of 1989 The establishment of the link is clearly one of the consequences of the adoption of the Madrid Protocol of 1989 and is a very important step in the process of achieving a truly global and integrated system for the registration of trademarks, a system that now includes regional as well as national components. Let us recall that when the Protocol was adopted in 1989, the Madrid Agreement had already been in existence for almost 100 years. It was widely used by trademark owners from its member States, as is the case today. However, important markets were outside the reach of this Agreement because of its limited membership. And membership in the Agreement was limited because some of its features were not acceptable to several non-members. In a world in which national and regional markets had already begun to intergrate, it was apparent that a similarly integrated global registration system for marks was needed. There were attempts in this respect in the early 1970s with the adoption of the Trademark Registration Treaty (TRT), a treaty completely separate from the Madrid system. But this attempt failed and the TRT was finally discontinued. So a different strategy was developed during the 1980s. Instead of having a completely separate treaty, the proposal was made to adopt a treaty along-side the Madrid Agreement. A Protocol that would be very similar to the Agreement itself, but would contain new features considered necessary to attract non-members. A treaty that would not replace the Agreement but would exist in parallel to it and to which both members and non-members of the Agreement could become party. A treaty that would not prevent the countries party to the Madrid Agreement to continue to apply among themselves, through a safeguard clause, all the provisions of that older treaty which they considered to be satisfactory to them.

Membership (77) Madrid System Madrid Agreement - 56 Madrid Protocol - 66 Madrid System In the ten years since the entry into force of the Madrid Protocol, the Madrid System has expanded to embrace 77 Contracting Parties., The chart shows how membership in the Agreement and in the Protocol has evolved during this period. Members bound only by the Protocol are represented in the upper part of each column; those bound only by the Agreement in the lower part; and those bound by both treaties in the middle. We see how, over the last ten years, membership in the Protocol has grown impressively, moving from only 5 members in 95 to 66 members today; and how, during this same period, membership in the Agreement has been shrinking. We believe that, within a few years time, all members of the Madrid system will have joined the Protocol.

Madrid Union (77 Members) Agreement only 11 Protocol only 21 Agreement and Protocol 45 (Including EC) Madrid System In this map we see how membership in the Madrid System is distributed today throughout the globe: [42] countries in Europe, [19] in Asia, 12 in Africa and 3 in the Americas. Altogether these countries account for more than half of the world population (3.1 billion people) (out of 6.1 billion). And their combined Gross Domestic Product represents about 2/3 of the world gross product. That is a very attractive market for those who are entitled to use this system. This confirms the success of the Madrid Protocol. A treaty which, in a relatively short period of time has allowed the Madrid System to expand, by attracting new member countries and establishing the first link with a major regional trademark system.

Madrid Protocol and regional systems Madrid - CTM link Madrid Protocol Article 14(1)(b) European Community Trademark African Industrial Property Organization (OAPI) At the time when the Madrid Protocol was being negotiated in the late 1980s, the Community Trade Mark did not yet exist. But it was already under negotiation, and the desire to create a link between the Community Trade Mark and the international system was strong. At the time, another regional system for trademarks was already in existence in Africa in the context of the “Organisation Africaine de la Propriete Intellectuelle” (OAPI). So the drafters of the Madrid Protocol considered it important to include provisions that would allow for any intergovernmental organization that met certain criteria to become party to that treaty; a possibility that the Madrid Agreement, which only allows for the accession by States, did not envisage. The relevant provision is Article 14(1)(b) of the Protocol, which allows for the accession of any intergovernmental organization if at least one of its Member States is a party to the Paris Convention and if the organization has a regional office for the purposes of registering marks with effect in the territory of the organization. Which is clearly the case of the European Community.

Madrid Protocol in operation since 1996 Madrid - CTM link December 1, 1995 - entry into force China, Spain, Sweden and the United Kingdom April 1996 - beginning of operations (also in April 1996 - the Community Trade Mark comes into operation) On December 1, 1995, the Madrid Protocol came into force among four countries, China, Spain, Sweden and the United Kingdom. It became operational on April 1, 1996. By sheer coincidence, this date also marked the coming into operation of the Community Trade Mark. Nevertheless, it would take another 8 and a half years before the two systems became effectively linked to one another.

Madrid Protocol - CTM building a link (1996-2004) Madrid System Legal questions to be addressed language regime seniority claims opting back Consultations and informal meetings Amendments to the Madrid Regulations (2003) In order for the link between the CTM and the international system to be established, certain measures had to be adopted by the European Community and by the Madrid Union. A number of legal questions were addressed, including questions related to the language regime, to seniority claims under the Community Trade Mark and to the operation of the so called “opting back” procedure. My colleagues, the speakers here on the podium, explain the solutions that were found. I would simply like to say that the issues were analysed in depth in the course of numerous consultations and informal meetings involving all interested parties. It is my belief that this greatly facilitated the formal steps that had to be taken by the EC and the Madrid Union in preparation for the accession of the EC to the Madrid Protocol. The proposals for the amendments to the Madrid Common Regulations that were prepared by the International Bureau of WIPO were submitted to and approved by the Madrid Union Assembly in 2003 in this very room.

Madrid Protocol - CTM building a link (1996-2004) WIPO - OHIM preparatory work (2003 - 2004) coordination on procedures forms information notices electronic communication Instrument of accession by EC Accession into effect - October 1, 2004 Madrid System When in the course of 2003 the political decision to join the Madrid Protocol was taken by the European Community, the International Bureau of WIPO immediately began working closely with OHIM to ensure that everything would be ready on time and that the link would work smoothly. Several meetings were held, in Geneva and Alicante, to coordinate procedures, prepare forms, agree on information notices for users, and prepare for electronic communication between the two Offices. The European Community deposited its instrument of accession to the Madrid Protocol towards the middle of this year. As noted by the Director General, it was a truly historic event for WIPO. It was the first time that an intergovernmental organization became a Contracting Party to a treaty administered by this Organization. Finally, last Friday, October 1, the accession by the European Community came into effect and the link has been fully operational since that day.

Madrid Protocol - CTM the link established Madrid System Designation of the EC in international applications originating in any Protocol country (including EC Member States) indication of a second language seniority possibility of opting-back in case the designation of the EC drops OHIM as Office of origin As of October 1, 2004, Madrid applicants can designate the European Community in their international applications and base an international application on a Community Trade Mark application or registration. Soon my colleagues will comment in more detail on how these procedures work in practice. However, the question on everyone’s mind at the moment is: Now that the link is here, to what extent will it be used? We do not have a definitive answer to this question, and it is certainly too early to make informed projections in this respect. However, when we consider the possible impact of the link on the operation of the Madrid System, there are some elements that may be taken into account.

CY - IE - GR - EE - LT - LV - PT 0% Madrid filings January-September 2004 Madrid System Firstly, the fact that many trademark owners are already familiar with both the international system and the Community Trade Mark system, especially owners from the European Community member States. Today, the vast majority of Madrid applications originate in those States; they account for some 70 per cent of the total number of applications filed under the Madrid system. This can be seen clearly in this graph indicated in blue (these are figures of applications for the first nine months of this year (21,300). It is my understanding that trademark owners from the combined Member States of the European Community are also the largest filers of CTM applications (65 per cent). It is possible that the link may be extensively used by nationals from European Community member States. It is also possible that Swiss applicants, who are the fifth largest filers of international applications under the Madrid system, may wish to make extensive use of the link to designate the EC. And what can we say about applicants from the United States of America? With regard to international applications in general, it is interesting to note that in less than one year since its accession to the Madrid Protocol, the United States of America is already the sixth biggest filing country under the international system, accounting for almost 6% of all applications filed in the first nine months of this year - and the potential further growth remains high. With regard to the filing of international applications in which the EC is designated, it is interesting to note that, in the past, approximately 20% of all CTM applications filed directly with OHIM were filed by trademark owners from the US. Will there be a shift? While this question has been - and continues to be -discussed by practitioners in many an educational program on filing strategies, no final conclusions has been drawn [and many factors have been cited - including, in particular, the degree of specificity that might be required in the indication of goods and services and whether such specificity, if required, was of concern in all cases.] Only time and the analysis of actual filing figures will tell. CY - IE - GR - EE - LT - LV - PT 0%

Designations by designated CP first half 2004 Madrid System When considering the future, it may be relevant to look at designations currently being made under the Madrid system. Here are figures for designations by designated Contracting Party in the first half of 2004. Please, note that the member States of the European Community are shown in blue. We see that after Switzerland and the Russian Federation, the countries having received the largest number of designations under the Madrid system during this period, were several European Community countries, including Germany, France, Italy, the Benelux, Poland, Spain and Austria. Each was designated in some 30-35% of all international registrations recorded during that period. We therefore observe that, despite the existence of the Community Trade Mark, individual countries in the European Community continue to be among those mostly designated in international registrations. The CTM has not replaced the Madrid system for obtaining registration in those countries. The two systems have co-existed from the very beginning of the CTM, with applicants choosing solutions which best suited their businesses and strategic options. What will happen now that the link exists, remains to be seen. However, it is likely that the European Community will also become an attractive designation in Madrid Protocol applications. [Switzerland, with 4,800 designations; which means that it was designated in some 40% of registrations recorded during this period]. [The United States of America received during this period some 2,300 designations. This means that it was designated in some 20% of international registrations.] D Z K P A Z K G T M S M C U T J M N C Y K E M Z S D A G S L S Z L S Z M D E F R I T B X P L E S A T C N G B C Z H U J P N O U A R O S K T R P T S I H R B G S E U S A U D K G R L V L T Y U F I E E C H B Y S G K R I E L I M K M C B A M A M D I S K Z E G G E V N A L A M U Z R U A N B T L R I R S Y N A

International Register January-September 2004 Madrid System Registrations 17,544 (+6.77%) Subsequent designations 7,445 (+16.56%) Renewals 5,731 (+15.61%) The accession by the European Community certainly will have an impact on the overall volume of operations of the Madrid System, which in the first part of this year entered a new phase of significant growth after a period of two years of relative stagnation. Here are some figures concerning international registrations, subsequent designations and renewals for the first nine months of 2004. During this period, we had almost 7% increase in the number of registrations recorded in the International Register as compared to the same period last year. We also had significant increases concerning subsequent designations (16%) and renewals (more than 15%). This growth seems to be related to a general improvement in the global economy and to the recent accession to the Madrid Protocol by the United States of America. We believe that with the accession now by the European Community this growth will continue, perhaps at an accelerated rate.

Filing increases in selected countries first half 2004 Madrid System I would now like to offer a very brief synopsis by taking a quick look at the development of the use of the Madrid System in some selected countries and by categories of applicants. I have already mentioned how the US has become one of the biggest filing countries under Madrid in less than one year. Here are listed other countries where we have seen particularly dynamic growth in the first half of this year; - and a growth which was also significant in global figures. We see that in China and Australia, Madrid filings increased during this period (January-June 2004) by more than 130 per cent as compared to the same period last year. In Hungary and Japan, filings increased by around 70%. In Austria and the United Kingdom, they increased by almost 50% and in Turkey, by 40%. Among these countries are several which have joined the system relatively recently and where we believe there is still great potential for growth. In countries like the United Kingdom, Japan, Australia or Turkey, there was a relatively slow start in the use of the international system after accession; but now they appear to be picking up speed steadily.

Registrations by Category of Right-Holder by end of August 2004 Trademarks by Right-holder 1-2 marks 3-10 marks 11-100 marks 101-500 marks > 500 marks All 80.10% 16.30% 3.40% 0.19% 0.01% 100.00% 110,752 22,536 4,706 263 20 138,277 Number of right-holders Right-holders (138,277)  Madrid System 1-2 marks 31.49% 11-100 marks 26.94% 3-10 marks 24.80% 101-500 marks 11.35% > 500 marks 5.42% By the end of August of this year, there were more than 420,000 registrations in force on the International Register, belonging to more than 138,000 different trademark owners. Some of these are big companies such as Henkel, Sanofi, Unilever or Nestlé, holding portfolios of more than 500 international registrations each. But the large majority of users of the Madrid System are small or medium-sized enterprises, holding between one and 10 registrations each. I think the message here is very clear: the Madrid System is beneficial not only for large corporations, but also, first and foremost for small businesses, which, arguably, might not have the resources to obtain trademark registration in export markets through individual national filings. Registrations in force (422,035) 

Madrid Challenges Madrid System cope with growth while maintaining quality offer additional services further enlarge geographical scope expand use in all members keep legal framework up to date Madrid System Now, before concluding this presentation, I would like to briefly mention some challenges that the Madrid system will be facing in the immediate future. We know that Madrid registrations will continue to grow in the years to come and that the link most likely will enhance this trend. Our first challenge will be to handle the increasing volume of work while maintaining our traditional standards of quality. We are hard at work on that, exploring ways to increase productivity by re-examining our workflow and internal operating procedures and investigating what opportunities a greater use of information technology might provide. Secondly, we would like to continue to improve the services we provide to trademark owners and their representatives. In particular, we are examining what new services we could offer by making wider use of electronic communications and the Internet - services that would further enhance the inherent benefits of the Madrid system [e.g. centralized trademark portfolio management]. Thirdly, we are intent on enlarging the geographical scope of the system by attracting new members. The accession by the European Community will help us in this endevor. With the EC as a Contracting Party, the system has become even more attractive to potential new members in the Americas, in Asia in Africa. Fourthly, we believe that there is still room for a broader use of the Madrid system by trademark owners in a number of member countries. We will support all national efforts to promote such broader use, particularly with regard to those who are note yet aware of what benefits the Madrid system offers. Finally, we will continue to evaluate the legal framework of the Madrid System, in order to ensure that it evolves as required, adapting to new demands and changing conditions. Our plans for immediate action in this regard concern the so-called built-in agenda of the Madrid Protocol, i.e., the review of the refusal procedure and a possible review of the “safeguard clause” by the Madrid Union Assembly. We understand that Contracting Parties may wish to start considering these and other questions concerning the future legal development of the Madrid System as soon as possible. Consequently, we are planning to convene a first meeting of a working group sometime next year, possibly in June. The participation of interested parties in this exercise will be highly welcomed.

Final remarks Madrid - CTM link To conclude, I believe the accession of the European Community to the Madrid Protocol marks the beginning of a new era of the international trademark registration system; a system which began very modestly, back in 1891, with the registration of a few trademarks, and which has expanded and evolved over the past 100 years or so in response to the needs of its users. The accession by the European Community also crowns some 20 years of effort by dedicated colleagues and friends from the international trademark community, representing governements and user-groups alike, many of whom are no longer among us. Without mentioning anyone in particular, I want to take the opportunity to pay tribute to all of them, and to express, on behalf of the Director General, WIPO and the Madrid Union, our deep appreciation and gratitude for this truly major achievement. Thank you for your attention.