1. Start-ups could benefit from Madrid route of trademark filing: Survey

Start-ups could benefit from Madrid route of trademark filing: Survey

Report finds India Inc is showing ‘indifference’ to Madrid Protocol when it comes to trademark registration even as firms attribute the ‘lethargy’ to non-awareness of Madrid procedures, cost disadvan-tages, and non-interest in overseas operations

By: | Chennai | Published: April 6, 2016 2:07 AM

Start-up ventures with quality, innovative products could immensely benefit by going for international registration of their product trademarks through the Madrid route, as this move prevents similar or closely aligned products from being developed in overseas markets by the competitors.

According to a survey-cum-report, commissioned by the Department of Industrial Policy & Promotion (DIPP) and carried out by IIM-Bengaluru, the Madrid Protocol — as it is popularly known — would not only manage to get a gamut of IP rights over similar products, but also succeed in acquiring trademarks that are deceptively similar to brand name of the firms producing the original products in India.

It is likely that ‘similar products’ are imported by the mimicking overseas agencies to the Indian market at prices that under-cut the original Indian products. The advantage of Madrid route registrations is that it obviates such possibilities of perverse import competition, says the report.

The early brand presence of the original Indian product mark in overseas markets reduces the chance of competing trademarks being registered in such markets.

Prior to the Madrid registration scheme, many start-ups in India, that had to swiftly move to overseas

markets, had to avail the cumbersome ‘one-country-one filing route’ of the past.

A case in point is the Chennai-based drug company Caplin Point Labs, which commenced as a start-up in India and then branched off to Africa and Latin America to evolve into a million-dollar enterprise. Today start-ups from India like Caplin Point Labs will not have to wait for cumbersome trademark registration procedures, thanks to the Madrid Route, says the report.

The Madrid System makes it possible for a trademark-holder to apply for trademark registration in multiple countries by filing a single international application in one language and paying a single set of fees in one currency via a national or regional intellectual property office.

The report finds that India Inc is showing ‘indifference’ to Madrid Protocol when it comes to trademark

registration, even as the companies attribute the ‘lethargy’ to non-awareness of Madrid procedures, cost disadvantages, and non-interest in overseas operations.

The report further says among those companies who have gone for international registrations (11 in number), seven went for the Madrid route and the remaining took to the direct filing route. Majority of the companies (including those that have not gone for international registrations) attributed non-awareness of procedure (33%), costs (27%) and non-interest in overseas operations (16%) as the reasons for their indifference to the Madrid System.

Nearly 59% of the sampled companies had decisions on trademark registration taken by the top management, that is, the board and the CEOs. Nearly 65% of the sampled companies rated ‘product visibility’ to be a critical factor influencing trademark registrations, while 65% of the sample considered ‘brand loyalty’ to be the important factor driving registration of trademarks.

Interestingly, close to 73% of the surveyed companies considered ‘infringement’ to be the main reason for trademark protection. Only 53% of the sampled companies considered ‘corporate value impacts’ to be an important factor driving registration of trademarks. Indeed, few of the sampled companies considered trademark protection as contributing to ‘sales revenue’ or increased ‘willingness to pay’ for their products.

The surveyed companies also rated ‘recall value’ or ‘goodwill’ to be major factors governing their decisions on trademarks registration.

Madrid Protocol simplifies the process of trademark registration abroad by eliminating the need to file a separate application in each jurisdiction in which protection is sought. The system also facilitates managing the mark after registration, as it is possible to centrally request and record further changes or to renew the registration through a single procedural step.

The report argues that the marketing campaign for the Madrid System in India should be integrated to the national branding exercise initiated by the government of India through the ‘Make in India’ programme. To derive economies of scope from Indian national branding efforts, it is vital that the marketing campaign for the Madrid System companies be nested within the national branding campaign under way through the ‘Make in India’ programme.

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