Globalization has significantly affected trademark portfolio practice in recent years. U.S.-based companies now sell and promote their products or services online throughout much of the world via online commerce and social media. Trademark owners must therefore now secure registration in many more countries to ensure their brands are adequately protected in all countries in which they exploit or are likely to exploit their marks. Generally, a trademark registration has no extraterritorial effect. That means its effectiveness stops at the border of the country where it was granted. There are various treaties and systems in place that enable a trademark applicant to register a trademark in a number of countries through a single registration, as opposed to filing a separate application in each one. For example, a European Union Trade Mark (EUTM) registration, obtained through the European Union Intellectual Property Office (EUIPO), covers all member states of the European Union. A common misconception, there is no “global trademark,” and to obtain complete “worldwide protection,” it would be necessary to proceed separately or regionally in each of the nearly 200 jurisdictions where it is currently possible to register trademarks. Thus, trademark protection around the world largely remains a patchwork system of national laws and trademark registries.
By way of background, trademark rights in the United States are based on actual trademark use. Using a trademark without registering it can actually give a company rights to a name in the United States, and allow the brand owner to defend the trademark against junior users. The same is not true for most of the developed world, where trademark rights are actually based on the registration, i.e., the “first to file” rule. In these countries, registration is required in order to claim and enforce trademark ownership. This means that brand owners with an eye for international expansion may consider filing applications outside the United States to secure their rights in key strategic countries (or jurisdictions) before launching a new product or service. This is because even if the company is using the trademark, but did not file for foreign trademark registrations early enough, a third party can lawfully own the trademark in a particular country. This can disrupt the manufacture, shipment or distribution of a company’s products in or from the country, or allow an opportunistic trademark registrant to hold the trademark “hostage” and extort a high purchase price from the true brand owner. Put simply, registration in foreign countries prevents others from doing so, and from keeping the trademark owner out of the market.
