Prior Use versus Registration

In the United States, a common law country ownership of intellectual property rights is established by prior use – whoever can establish first use is typically considered the rightful owner. In many code law countries, however, ownership is established by registration rather than by prior use – the first to register a trademark or other property right is considered the rightful owner. For example, a trademark in Jordan belongs to whoever registers it first in Jordan. Thus you can find McDonald‘s restaurants, Microsoft software and Safeway groceries all legally belonging to a Jordanian. After a lengthy court battle that went to the Spanish Supreme Court, Nike lost its right to use the Nike brand name for sports apparel in Spain. Cide sport of Spain had been using Nike for sports apparel since 1932 and sued to block Nike (US) sportswear sales. Since Cide sport does not sell shoes under the Nike label, Nike (US) will be able to continue selling its brand of sports shoes in Spain. A company that believes it can always establish ownerships in another country by proving it used the trademark or brand name first is wrong and risks the loss of these assets.

Besides the first to register issue, companies may encounter other problems with registering. China has improved intellectual property rights protection substantially and generally recognizes first to invent. However a Chinese company can capture the patent for a product invented elsewhere; it needs only to reverse –engineer or reproduce the product from published specifications and register it in China before the original inventor. Latvia and Lithuania permit duplicate registration of trademark and brand names. A cosmetics maker registered Nivea and Niveja cosmetics brands in the former Soviet Union in 1986 and again in Latvia in 1992 but a Latvian firm had registered and had been selling a skin cream called Niveja since 1964. Neither the Soviet nor the Latvian authorities notified either. Applicants are responsible for informing themselves about similar trademarks that are already registered. The case is being taken to the Supreme Court of Latvia. It is best to protect intellectual property rights through registration. Several international conventions provides for simultaneous registrations in member counties.

International Conventions:

Many countries participate in international convention designed for mutual recognition and protection of intellectual property rights. There are three major international conventions:

1) The Paris Convention for the Protection of industrial Property, commonly referred to as the Paris convention, includes the United States and 100 other countries.
2) The Inter-American Convention includes most of the Latin American nations and the United States.
3) The Madrid Arrangement, which establishment the Bureau for International Registration of Trademark, includes 26 European countries.

In addition, the World Intellectual Property Organization (WIPO) of the United Nations is responsible for the promotion of the promotion of intellectual property and for the administration of the various multilateral treaties through cooperation among its member states. Furthermore two multi-country patent arrangements have streamlined patent procedures in Europe. The first, the Patent Cooperation Treaty (PCT) , facilitates the process for application for patents among its member countries. It provides comprehensive coverage in that single application filed in the United States supplies the interested party with an international search report on other patents to help evaluate whether or not to seek protection in each of the countries cooperating under the PCT. The second, the European Patent Convention, (EPC) established a regional patent system following any nationality to file a single international application for a European patent. Companies have a choice between relying on national systems when they want to protect a trademark or patent in just a few member countries and applying for protection in all 15 member6 states. Trademark protection is valid for 10 years and is renewable however if the mark is not used within five year, protection is forfeited. Once the patent or trademark is approved it has the same effect as a national patent or trademark in each individual country designated in the application.