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The Madrid System Basic features and recent developments

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1 The Madrid System Basic features and recent developments
Introduction; I’m very pleased to be here for this first seminar after Israel has deposited their accession instruments with WIPO. For this presentaiton I will talk about the objectives and concept, the legal framework and geographical scope, the basic features of the Madrid Protocol, the latest developments and statiscs, and benefits for stakeholders. Debbie Ronning Director, Legal and Promotion Division July 13-15, 2010 Israel

2 The Madrid System for the International Registration of Marks
Simple, Flexible, Time and Cost-Effective Option (video)

3 Objectives A simple, low-cost and effective system to facilitate trademark protection in export markets through: one central filing and registration procedure producing effects in one or more territories bound by the system one central procedure to maintain and manage an international registration with effects in all territories concerned When I talk about the Madrid System I will refer to the Protocol if I don’t specify otherwise. Since the repeal of the Safeguard clause in 2009, the Madrid Protocol is the system in the driver’s seat now. There are currently only 3 Contracting Parties that are only member of the Agreement, and those are Algeria, Kasaksthan and Tajikistan. The Madrid Agreement will only apply for a member state of the Agreement when designating one or more of these 3 countries. The objectives may be summarized to be like this:Swift, efficient, reliable, user-friendly and cost-effective I will talk only on the Madrid Protocol since this is now the treaty that applies also for Contracting Parties members of both the Agreement and the Protocol since the repeal of the safeguard clause in 2008.

4 Legal Framework I Madrid Agreement (1891) latest revised in 1979
Madrid Protocol (1989) latest revised in 2007 Common Regulations as in force from September 1, 2009 Administrative Instructions as in force from January 1, 2008 Law and Regulations of each Contracting Party See at

5 Legal Framework II Under the Madrid system Treaties and Regulations
providing the basic principles and mechanism of the system; governing the formal conditions for an international registration Domestic Law and Regulations of a Contracting Party governing the substantive conditions for granting the protection in each relevant territory

6 Madrid Union The Madrid System is an international system for filing and registering of trademark applications. Currently there are now 85 Contracting Parties – counting Israel who will be effectively member from September 1, 2010. As the map shows, there is still room for the expansion of the geographical scope of the Madrid System. More countries in Africa, South-America and Asia will need to be members in order for this Madrid System to be a truly global system. 3 Agreement only 29 Protocol only (including EU) 53 Agreement and Protocol 85 Members

7 Geographical Scope II 82 MEMBERS PARTY TO THE PROTOCOL Albania, Antigua and Barbuda, Armenia, Australia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Bhutan, Bosnia & Herzegovina, Botswana, Bulgaria, China, Croatia, Cuba, Cyprus, Czech Republic, Democratic People’s Republic of Korea, Denmark, Estonia, Egypt, European Union, Finland, France, Georgia, Ghana, Germany, Greece, Hungary, Iceland, Iran, Ireland, Israel, Italy, Japan, Kenya, Kyrgyzstan, Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Luxembourg, Madagascar, Moldova, Monaco, Mongolia, Montenegro, Morocco, Mozambique, Namibia, Netherlands (+Netherlands Antilles), Norway, Oman, Poland, Portugal, Republic of Korea, Romania, Russian Federation, San Marino, San Tome and Principe, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, Spain, Sudan, Swaziland, Sweden, Switzerland, Syrian Arab Republic, the former Yugoslav Republic of Macedonia, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekistan, Viet Nam, Zambia underlined = Agreement also 3 MEMBERS PARTY TO THE AGREEMENT ONLY Algeria, Kazakhstan and Tajikistan

8 Concept I: Many Routes or One Route
National Registration National Protection Madrid Route When you /or your client is thinking of filing for trademark protection abroad, you need to think of what strategy you want to have for filing of trademark protection abroad. You need to know for which countries you want protection; then you need to think of how to achieve that. Here you’ll see two options; one route or many routes. there is also a possibility of combining these two routes – if you want protection in countries both members and non-members of the Madrid System. You can either go to every single one of the countries you want protection in or you can go the Madrid Route; by filing one single international application to WIPO and you may end of with a bundle of rights deriving from only one application. Your strategy might involve a combination, depending on what your market is and whether those countries are members or not. The OHIM is not a competitor, these two systems complement each other- International Application National Application National Registration International Registration = Bundle of National Applications /Registrations

9 Concept II: Go National or International ?
Many Offices for filing Many application forms Many languages Many currencies Many registrations Many renewals Many modifications Foreign attorney needed from filing One Office for filing One single application form One language (E/F/S) One currency (CHF) One international registration One renewal One modification Foreign attorney first needed in case of refusal

10 Basic features An international application may be based on one or more applications or registrations The Contracting Party may elect for 12/18 months refusal period The Office of a Contracting Party may receive individual fees for designations Central attack In case an international registration is cancelled because the basic has been cancelled, the holder may transform his right into a national/regional applications Fees for designation is transferred from WIPO to the Office An international application may be based on one or more applications or registrations. The applicant’s entitlement to file decides where his basic application or registration should be and where his Office of Origin is. Entitlement to file means Having a real and effective industrial or commercial establishment, Being domicile, Or having the nationality. The international application and the national basic will regard the same person, same trademark and the same goods and services (or less) The Contracting Party may elect for 12/18 months refusal period, and an even longer period in case of opposition. The Office of a Contracting Party may receive individual fees for designations. Central attack- is not new with the Protocol, nor is it really a part of the Protocol or the Agreement. There is a 5 year dependency between the international registration and the basic application/registration, counted from the date of the international registration (central attack). The central attack is simply said a possiblity for a third party - within the dependency period - to attack a basic. If the basic dies, the consequence is that the international registration dies..The risk of losing your basic may be somewhat greater since you can base your international application also on an application (where the Agreement only accepts basic registrations). Because of this, the Protocol introduced transformation. In case an international registration is cancelled because the basic has been cancelled, the holder may transform his right into a national/regional application. This feature softens the possible impact of such central attack. This way, the holder may keep his rights through transforming them into national applications while keeping the date of international registration or even his priority date. After 5 years, the international registration and the basic mark are independent, which means that whatever happens to the basic after these 5 years, will have no impact on the international registration. Fees for designation is transferred from WIPO to the designated Office. In the last 10 years, WIPO has transferred more than 800 million CHF to the members of the Madrid System (based on revenue of fees collected in the system).

11 Advantages One international application based on one or several basic applications/registrations One language – English, French or Spanish One set of fees (CHF) to one Office One registration number and one renewal date The registration can be further extended geographically All subsequent changes to the international registration may be recorded and have affect by one single procedure Offices do not need to examine for formal requirements One international application based on one or several basic applications/registrations One language – English, French or Spanish One set of fees (CHF) to one Office, either to the International Bureau or to a national office, if Office has opted to receive such payment One registration number and one renewal date, one certificate. The registration can be further extended geographically. This is the beuaty of the system, as it allows to start small and grow at your own pace. You can start by designating 2-3 contracting parties, then you can later expand the protection by subsequently designating more contracting parties as your business grows more successfull, as you expand to new markets or the Madrid System will have more member states. All subsequent changes to the international registration may be recorded and have affect by one single procedure. This can be changes like change in name/address of the holder, partial or total change in ownership, limitation of goods/services, etc. All this makes it easier for companies to seek protection amongst these 84 Contracting Parties. The main advantages for trademark owners consist of the simplicity of the international registration system and the financial savings made when obtaining and maintaining the protection of their marks abroad. Offices do not need to examine for formal requirements, as formalities and classification (list of goods/services and Vienna (figurative elements) have been completed by WIPO, so they can go straight to their examination of substance.

12 International Filing and Registration Flow
Certify and forward the application to the IB OFFICE OF ORIGIN APPLICANT Formal examination; registration; publication (Gazette); Certificate; Notification to all designated CPs Entitlement Basic mark Form EN INTERNATIONAL BUREAU Substantive examination under domestic law, within 12/18 months An applicant files an international application through his Office of origin, which will certify that the international application correspond with the basic application/registration; that they regard the same holder, same trademark and that the list of goods/services in the international application is the same or less than the basic. The Office of Origin wil then forward the application to the IB. The IB will conduct the formal examination, register the mark and publish it in the Gazette, and send a certificate to the holder or his representative. The registration is however empty at this stage. In the international application the applicant has designated some Contracting Parties; for example Norway (my home country), Germany and the USA. The IB will send notification to these designated contracting parties. And now the international registration enters into a national phase. These designated contracting parties will then conduct their substantive examination in accordance with their national legislation. The scope of the International registration is determined by the result of this substantive examination. The applicant will either receive a refusal or a statement of grant of protection which will be mandatory by January 1, 2011. OFFICE OFFICE OFFICE Protection = effect of a local registration Refusal

13 Effects of the International Registration
Can be compared to a domestic application with protection as from the date of the international registration Can be compared to a domestic registration in the absence of refusal

14 Benefits for Trademark Owners
Simple A single set of simple formalities A single filing Office Low registration fees no need to pay foreign agents for filings no need to pay translation of the paperwork into several languages Effective A single international application produces the same legal effect in many countries A fixed dead line for confirmation or refusal the legal effect in each country concerned When talking about the benefits of the Madrid System, especially two word comes to mind; simple and efficient.

15 Benefits for the IP Offices
No need to carry out formalities examination, and other services provided by the International Bureau (Gazette, Database ROMARIN etc.) Income relevant to number of designations to the country There are also benefits for the IP Offices; the Madrid System offers a simpler system, as there is a no need to carry out formalities examination of substance. How much money the Madrid System will generate for the country concerned, will depend on the number o designations to that country.

16 Benefits for the Government
Positive Effect on Economic Growth Empowers SMEs Promotes economic growth, by contributing to the opening of new markets and assisting in the development of exports Creates a more favorable climate for foreign investment in the internal market Advantages for the Government’s Finance Generates revenue

17 The Madrid System in Trademarks World
Some 965,000 trademark applications were filed worldwide by non-residents in 2007 of which Some 370,000 are through the designation under the Madrid system (38%) Just to give you an idea of the size of the Madrid System.

18 International Registrations in Force as of December 31, 2009
515,562 the total number of registrations in force, equivalent to over 5.6 million active national/regional registrations 169,939 trademark holders

19 35,925 International Registrations
General Profile 2009 35,925 International Registrations Average Number of Designations 7.4 Average Number of Classes 2.6 Average Fee CHF 3,408 All Fees 57%< 5,000 CHF

20 Top Filer CPs in 2009 Origin No. Filing Share Growth Germany 4,793
13.6% -22.9% EU 3,710 10.5% 3.1% France 3,523 10.0% -16.5% USA 3,201 9.1% -13.1% Switzerland 2,671 7.6% -7.4% Benelux 1,968 5.6% -26.2% Italy 1,872 5.3% -32.2% China 1,358 3.9% -14.3% Japan 1,312 3.7% 2.7% Russian Fed. 1,068 3.0% -10.3% Regarding the contents of the international applications, we know the classes most often used are classes 9, 35, 42, 5 and 25. Class 9 covers e.g. computer hardware, software and other electrical apparatus – in 2009: 7935 appl. Class 35 covers services for office functions, advertising and business management – in 2009: 6798 appl. Class 42 covers services offered by e.g scientific, industrial or technological engineers and computer specialists - in 2009: 5337 appl. Class 5 includes mainly pharmaceuticals and other preparations for medical purposes – in 2009: 4553 appl. Class 25 covers clothing, footwear and headgear in 2009: 4482 appl.

21 Top Designated CPs in 2009

22 International Registrations and Subsequent Designations -1996 - 2009
With a growing number of members, the use of the system has been in constant increase over the last few years. This graph shows how filings have evolved since the Madrid Protocol came into operation in 1996. Global figures for filings moved from 18,000 in 1996 to almost 30,000 (29,474) in 2004. This growth was particularly significant between 2003 and 2004, where the number of applications received by WIPO increased by more than 23%. In relation to the number of filings in the Madrid system, the filings dropped last year by 15% due to the global crises. However, for the first 6 months of 2010 we are experiencing an increase of almost 10% compared to 2009.

23 Information Products & Services
Various legal texts, guide and notices WIPO Gazette of International Marks Fee Calculator: on-line costing service Madrid Simulator: on-line filing guide tool ROMARIN: on-line search database free access at Here’s a list of products and services that you can access free of charge at the website below.

24 Comparison Agreement vs Protocol
Madrid Agreement Madrid Protocol Basic registration French Entitlement – strict 12 months refusal limit Complementary fee Country of origin No transformation Basic application/registration French/English/Spanish Entitlement – more flexible 12/18 months refusal limit + Individual fee Office of origin Transformation Entitlement: Stricter order in MA than in MP; in MA – where applicant has a real and effective industrial or commercial establishment; if not – has domicile; if not – national. In MP – the option of the applicant. Refusal time; 12 inMA and 12/18 in MP or even longer if oppositions. Country of origin in MA. IN MP . Office of Origin because intergovernmental organizations can be members (OHIM). If the basic falls within the 5 years dependency period, then the international registration will also be cancelled. That was it for the MA. In MP however, because the chance that there might be more ceasings of effect due to the fact that the basic can be a application, the MP introduced transformation. This means that if the international registration falls, the holder has the option of transforming his right into national applications in the designated contracting parties. He will have to pay national fees, but he will keep the right s intact. Easier replacement in MA than art 4 bis in MP?

25 Today and tomorrow There is a strong focus on promoting better use of the Madrid System Customer-service policy Further automation of the procedures under the Madrid System Madrid Filing Assistant Madrid Portfolio Manager Madrid Electronic Alert System Monthly newsletter regarding the Madrid System There is a strong focus on promoting better use of the Madrid System to current and potential new Contracting Parties. The International Bureau is implementing a customer service policy to promote better services, not only to applicants and right holders, but also to Offices. Involves telephone information lines, more efficient handling and information services. Further automation of the procedures under the Madrid System for the International Registration of Marks is among the key priorities of the International Bureau. There are IT developments that within the next 2-3 years will enhance efficiency and better use of the system. The IT Projects are the Madrid Filing Assistant which is a forthcoming electronic tool that will give access to a database of indications of goods and services that are acceptable for the International Bureau and would assist in the filing of international applications under the Madrid system. The Filing Assistant will be launched in the near future, and will reduce the chance of receiving irregularities letters due to classification of goods /services. The Madrid Portfolio Manager gives the holder and his representative access to all of their relevant international registrations. The Madrid Electronic Alert System gives users when they subscribe the latest information. Monthly newsletter regarding the Madrid System – legal section has sent out 3 monthly newsletters, giving information on latest development, amendments to the Common Regulations.

26 Future Development of the Protocol
Working Group on the Legal Development of the Madrid System for the International Registration of Marks Mandatory Statements of Grant of Protection from 01/2011 Ongoing discussion on how the Madrid Protocol would look like in the future to be able to accommodate the needs of the users Proposal on the deletion of the basic mark requirement Focus on simplifications for the benefits of applicants, holders, Offices and the International Bureau The Working Group on the Legal Development of the Madrid System for the International Registration of Marks is a permanent working group that meets 1-2 times a year at WIPO. There is an upcoming meeting in July which will be the 8th session. The WG has previously made fundamental changes to the legal structure of the Madrid system, such as the repeal of the safeguard clause and the introduction of mandatory statements of grant of protection, as from January 1, 2011. There is an ongoing discussion in the WG on how the Madrid Protocol would look like in the future to be able to accommodate the needs of the users. There is a proposal on the table which regard the deletion of the basic mark requirement.It has been on the agenda since meeting number 2, but it has not really been discussed in details yet, due to the fact that the WG has requested more information about the possible consequences of this proposal. Concerns raised by Offices and User Groups. Offices are concerned about the role of the national offices in a system with no basic mark, both as the Office of Origin and as a designated Office. Some user groups are concerned about the consequences of not having a central attack mechanism, as would be a natural consequence of not having a requirement of a basic mark. Other user groups are in favor just because there will be no more threat of central attack. Caution, Prudence and Premature are words repeated by some delegates. It’s important that we discuss how we want the system to be in the future; for the users, Contracting Parties, the offices and 3rd parties. We must keep in mind that the Protocol is more or less based on a system that is more than 100 years old; a different society in relation to trade and commerce, import & export and trading partners. The users of that day are different than the users of today, and the users needs are different. We must take into consideration what the future needs of the users might be and as best as possible try to accomodate that in order to have a simple, efficient, reliable, user-friendly and time- and cost-effective system. The focus in the Working Group now is simplification of the internal processes of the operations of the International Bureau on one side, while Offices cinsult their stakeholder and think of future elgal development of the system on the other side.

27 Future accessions Closing of the Madrid Agreement?
Algeria, Kazakhstan, Tajikistan – 3 remaining members South-America Colombia African countries Tunisia South-Africa ASEAN-countries members by 2015 Other India Regarding future accessions to the Madrid Protocol, we are promoting actively the Madrid System when we receive requests for support and invitations from Stakeholders. Priorities next year are closing the Madrid Agreement and actively promote accessions for the remaining 3 member States of the Agreement; namely Algeria, Kazakhstan and Tajikistan. Regarding accessions in South-America, Colombia is the country closest to accession. Other countries are slowly making progress. ASEAN-countries are promoting the Madrid System actively. There is an agreement that they will be members of the Protocol within Some countries might come earlier. Countries like Malaysia, Thailand and the Philippines are asking for support in promoting the Madrid system. Other: India Thank you for your attention

28 Thank you for your attention!

29 Date of the international registration
The international registration will bear the date on which the international application was received by the Office of origin The international application may use priority from basic application with the Office of origin If received by the IB after the period of two months, then the date of registration will be the date of receipt in the IB If late receipt resulted from an irregularity in a postal or delivery service, then the date of registration may still bear the date on which the international application was received or deemed to have been received by the Office of origin The international registration will bear the date on which the international application was received by the Office of origin The international application may use priority from basic application with the Office of origin If the international application is not received by the IB within the period of two months from the date on which it was received or demmed to have been received by the Office or origin, the international registration will instead bear the date on which the applicatoin was actually received by the IB. Unless late receipt resulted from an irregularity in a postal or delivery service, then the date of registration may still bear the date on which the international application was received or deemed to have been received by the Office of origin (Rule 5)

30 Irregularities – date in special cases
The date of international registration may be affected if any of the following important elements is missing from the international application: - indications allowing the identity of the applicant to be established and sufficent to contact him or his representative - designation of the Contracting Parties where protection is sought - a reproduction of the mark - the indication of the goods and services for which registration of the mark is sought The date of the international application which in many cases will be the date of the international registration, may in some cases be affected due to irregularities with the international application. The date of international registration may be affected if any of the following important elements is missing from the international application: - indications allowing the identity of the applicant to be established and sufficent to contact him or his representative - designation of the Contracting Parties where protection is sought - a reproduction of the mark - the indication of the goods and services for which registration of the mark is sought

31 Irregularities… cont. If the date on which the last missing element reached the IB is still within the two-months period, the international registration will bear the date on which the defective international application was originally received by the Office or origin Where any of these elements does not reach the IB until after the expiry of this two-month period, the international registration will bear the date on which that element has reached the IB If irregularity is not remedied within a three-months time limit, the applicaton will be considered abandoned If the date on which the last missing element reached the IB is still within the two-months period, the international registration will bear the date on which the defective international application was originally received by the Office or origin Where any of these elements does not reach the IB until after the expiry of this two-month period, the international registration will bear the date on which that element has reached the IB The remedying of any of these mentioned deficiencies is the responsibility of the Officof origin. The applicant will however have been informed of the irregularity, and may wish to contact the Officein order to ensure that the deficiency is rectified as speedily as possible. If it is not rectified within three months of the date on which the Office of origin was notified of the irregularity, the application will be considered abandoned.

32 Example An international application is filed with the Office of origin on May 1, and is received by the IB on June 1 The IB notices that no Contracting Party is designated On June 5, the IB notifies the Office of origin of the irregularity and invites it to reply within September 5 If the Office remedies the deficiency on or before July 1, the date of the international application will be May 1 An international application is filed with the Office of origin on May 1, and is received by the IB on June 1 The IB notices that no Contracting Party is designated On June 5, the IB notifies the Office of origin of the irregularity and invites it to reply within September 5 If the Office remedies the deficiency on or before July 1, the date of the international application will be May 1 If the Office remedies the deficiency after July 1 but on or before September 5, the date of the international registration will be the date on which the missing information was received by the IB

33 Example … cont. If the Office remedies the deficiency after July 1, but on or before September 5, the date of the international registration will be the date on which the missing information was received by the IB If the Office does not remedy the irregularity on or before September 5, the international application will be considered abandoned The date of an international registration is not affected by any deficiencies other than those I have referred to If the Office remedies the deficiency after July 1, but on or before September 5, the date of the international registration will be the date on which the missing information was received by the IB If the Office does not remedy the irregularity on or before September 5, the international application will be considered abandoned The date of an international registration is not affected by any deficiencies other than those I have referred to - indications allowing the identity of the applicant to be established and sufficent to contact him or his representative - designation of the Contracting Parties where protection is sought - a reproduction of the mark - the indication of the goods and services for which registration of the mark is sought

34 Effects of the International Registration
The effects of the international registration extend to the Contracting Parties expressly designated by the applicant in the international application An international registration can be compared to a domestic application with protection as from the date of the international registration An international registration can be compared to a domestic registration in the absence of refusal The effects of the international registration extend to the Contracting Parties expressly designated by the applicant in the international application An international registration can be compared to a domestic application with protection as from the date of the international registration An international registration can be compared to a domestic registration in the absence of refusal

35 Statement of grant of protection
When all the procedures before the Office have been completed before the expiry of the refusal period, the Office can either send to the IB a notification of provisional refusal or a statement of grant of protection Rule 18ter entered into force on September 1, 2009 Mandatory statement of grant of protection from January 1, 2011 A statement of grant of protection may concern several international registrations and may take form of a list When all the procedures before the Office have been completed before the expiry of the refusal period, the Office can either send to the IB a notification of provisional refusal or a statement of grant of protection. My colleague Andre , will talk more in details on refusals. All the procedures… depends on the procedure and legislation in that Office. For example for Norway it will include the procedures before the Trademark Boards of Appeal. Other Offi Rule 18ter entered into force on Spetember 1, It reduces the disadvantages linked to what isknown as the princile of ”tacit acceptance”. Before – no news is good news”. From January 1,2011, the holder will via the iB be informed when he is granted protection. Mandatory statement of grant of protection from January 1, 2011 The statement of grant of protection will for many designated contracting parties replace the certificate. A statement of grant of protection may concern several international registrations and may take form of a list. It is up to the Office to decide.

36 Statement of grant… cont. (2)
The IB will convert such a list into individual communications that it transmits to the holders of the international registrations concerned No legal consequence if a statement of grant of protection has not been sent by an Office In the absence of the communication of a notification of provisional refusal within the time limit the Office has chosen (12/18 months), the mark is automatically protected in the Contracting Party concerned, for all the goods and services in question The IB will convert such a list into individual communications that it transmits to the holders of the international registrations concerned No legal consequence if a statement of grant of protection has not been sent by an Office In the absence of the communication of a notification of provisional refusal within the time limit the Office has chosen (12/18 months), the mark is automatically protected in the Contracting Party concerned, for all the goods and services in question

37 Statement of grant… cont. (3)
If the Office earlier has sent a provisional refusal, the Office has then two options: 1) An Office which has sent a notification of provisional refusal shall, once all procedures have been completed, send either - a statement to the effect that the provisional refusal is withdrawn and that protection of the mark is granted for all goods and services requested, or - a statement indicating the goods and services for which protection is granted Rule 18ter(2) If the Office has earlier sent a provisional refusal, the Office has then two options: 1) An Office which has sent a notification of provisional refusal shall, once all procedures have been completed, send either - a statement to the effect that the provisional refusal is withdrawn and that protection of the mark is granted for all goods and services requested, or - a statement indicating the goods and services for which protection is granted

38 Statement of grant… cont. (4)
2) the Office may send a statement to the IB confirming total refusal of the protection of the mark Where the Office has sent a statement to the IB either granting protection after provisional refusal or confirming total refusal, and where a further decision affects the protection of the mark, the Office shall, to the extent that it is aware of that decision, send to the IB a further statement indicating the goods and services for which the mark is protected 2) the Office may send a statement to the IB confirming total refusal of the protection of the mark Where the Office has sent a statement to the IB either granting protection after provisional refusal or confirming total refusal, and where a further decision affects the protection of the mark, the Office shall, to the extent that it is aware of that decision, send to the IB a further statement indicating the goods and services for which the mark is protected Such a situation may be for example if the holder or third party has gone to the courts or an administrative body, and the result is a decision affecting the protection of the mark. Example – a third party has gone to the courts and the result is a partial cancellation.


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