Managing major projects in a trademark portfolio: creation, assignments and renewals

As responsibility for a company’s trademark portfolio is frequently placed in the hands of a small number of specialists who work to their limits on day-to-day issues, major projects such as creation, assignment and renewal often generate additional work that exceeds in-house capabilities.

Creation

When new trademarks are created – either in-house or with the assistance of name creation agencies – apart from concluding agreements with such agencies, legal availability searches and application filing are the two major issues that arise.

Legal availability searches must be carried out in order to ensure that the marks created are available for registration and use. Where necessary, the searches should extend beyond the trademark registers to include other relevant databases (eg, company and domain name registers) and common law sources (eg, the Internet and social media).

This may be a good opportunity to work with external counsel who have the know-how and capacity to deal with such projects in the time available. They can also help to streamline the search process in order to establish an efficient, economical search strategy. As a general rule, such planning is easier if the involvement begins from an early stage. This makes it possible to plan timelines, search registers and consider options if the search results are negative. Early involvement also makes it possible to jointly seek the most cost-effective approach for each project (eg, searching more important registers first in order to eliminate candidates with high legal risks at an early stage and save considerable funds that would otherwise be spent on unnecessary searches).

Trademarks must also be filed in order to be protected. While filing too early may incur unnecessary costs, leaving trademark filing too late may result in a loss of priority and the possible registration of identical or similar marks by third parties. Timelines must be decided on carefully. Filing priority claims at the right time is one of the keys to successful prosecution.

Local representation will be necessary to file and prosecute national trademarks in many countries. A more international trademark portfolio automatically entails the involvement of a number of external law firms. Supranational marks – such as EU, Benelux, African Intellectual Property Organisation and African Regional Intellectual Property Organisation marks, and international registrations with the World Intellectual Property Organisation (WIPO) – will play a significant role in any international trademark portfolio. With an increasing number of signatories to the Madrid Protocol, international registrations under the Madrid system are becoming ever more important as a major means of saving time and money.

If coordination with all external law firms is dealt with in-house, this may put a strain on staff and time. External counsel can take over some of the responsibility for this coordination. Providing proper instructions to and continuously monitoring and managing external agents are essential to a filing project in order to secure comprehensive, timely and cost-effective protection of trademarks.

Those responsible for coordinating applications and prosecutions must choose national representatives carefully. Recommendations may be sought from colleagues in other trademark departments or law firms. Conducting regular assessments of the work done by national representatives is an essential part of the effective and successful handling of filing projects and the long-term general management of trademark portfolios.

Due to the large volume of work usually involved in the trademark filing associated with naming projects, invoicing is an issue, as a large number of invoices for relatively small amounts may be received from various firms during the prosecution process. These also need monitoring in order to ensure compliance with previously agreed budgets and avoid inadvertent double payments. In this regard, one possible solution – where there is a positive history of cooperation and a long-term arrangement with the firms is sought – is to enter into agreements with the representatives. This could provide both invoicing transparency and cost certainty.

The work carried out by law firms in the countries concerned should also be closely monitored. It is crucial to know and communicate the current status and strategic value of the names involved to national representatives. This is the only way to avoid costly prosecutions of names that are no longer required and to prevent losing rights to names that have unexpectedly become important again to colleagues in marketing. Proper valuation of existing trademark registrations requires considerable internal communication and consolidation of resources within the trademark owner’s organisation; this is often not an easy task, but trademark owners generally see valuation as one of their own key competences, for which outsourcing is not considered.

Apart from the geographic extent of protection, it must also be decided whether registrations should be filed in the name of one company (eg, a corporate parent or an IP holding company) or various owners, including national subsidiaries. Several considerations – such as the effective overall handling of the trademark portfolio and tax implications – may play a key role in such decisions.

Assignments and name changes

This leads to the next major trademark projects that can arise – assignments and name changes. Whether it is the establishment of a new legal personality, a name change or other internal changes, assignment to another company within a corporate group or the sale or purchase of companies, trademarks or portfolios, such projects can easily become both time consuming and costly. Frequently, assignments must be recorded in national registers worldwide and the local requirements must be met in every single case.

Some recordal systems are simple and straightforward – especially those of supranational organisations such as WIPO and the EU Intellectual Property Office, under which the recordal of the assignments can easily be applied for directly by in-house staff or external attorneys. On the other hand, numerous other countries require various administrative steps for assignments to be recorded, including:

• signed, notarised and legalised assignment or name change documents;
• powers of attorney, including with an apostille;
• evidence of the proprietor’s identity or proper authorisation of the signatories; and
• translations of various documents.

In many cases, the recordal process may be complicated by previously unrecorded changes of name, ownership or address. Certain offices require that changes be recorded for all trademarks in the owner’s name.

Apart from the broad range of official and attorneys’ fees charged in various countries, these different requirements cause costs to vary significantly from country to country; trademark owners should therefore closely monitor these expenses in order to avoid cost overruns. Ideally, a price guarantee should be obtained from the agent instructed to carry out the assignment recordal process in each country, thus making it possible to calculate the costs of the entire project with a relatively small margin of error – although uncertainties such as changes to the legal framework, official fee increases and exchange rate fluctuations should also be taken into account.

These various official requirements can involve a substantial amount of paperwork. Shifting this administrative burden from the in-house team to an external firm tasked with coordinating assignment recordals can lead to substantial time savings and avoid unforeseen additional attorneys’ fees. The costs can therefore remain stable while in-house resources are freed up.

It is generally recommended to record changes of name or ownership when they occur, as many jurisdictions raise objections to new applications or renewals in the name of a different owner. It can also be difficult to enforce trademark rights that are not registered in the owner’s name, while further assignments and name changes can become difficult if previous changes have not been recorded. Providing the previously required evidence of the assignment is often more costly than recordal of the assignment would have been at the time.

For this reason, recordal frequently occurs at the time of actual assignment. This is the simplest way to deal with the matter and removes uncertainty as to available options in case of infringement; the trademark owner is clearly listed in the register and can accordingly enforce its rights against third parties.

If the assignment is not immediately recorded due to financial reasons, it is recommended to link recordal to renewal of the mark. Most trademarks must be renewed every 10 years and it is decided at each renewal whether the mark is still required (eg, because it is still actively used or use is about to commence). However, there may be some marks that are subject to the use requirement and were registered for particular projects, but were never considered as back-ups; such marks are often unpopular with other product managers. In such cases, the owner may decide not to renew the mark in order to save costs and declutter the portfolio. In essence, only marks that are still relevant to the business should be renewed; assignment recordal linked to renewal will thus ensure that only relevant marks are recorded. Within 10 years – in the course of renewing the portfolio – the assignment of all marks will thus be recorded. However, this situation is not ideal and should be considered only if financial constraints necessitate a low-cost approach to assignments.

Renewals

Renewals themselves can also easily turn into major annual projects. Most trademark departments do not deal with each renewal at the time that it falls due; this approach would create too much correspondence and lead to too many due dates falling throughout the course of the year, causing much room for confusion and potential errors.

Instead, renewals are often handled on a regular – usually annual – basis, thus creating a recurring project that can be quite large. Again, there are national agents to instruct or direct payments to be made. In some cases, original registration certificates must be returned to the relevant national registry in order for the renewal to be recorded on the certificate. Moreover, authorisations and declarations must be signed, specifications of goods and services must be checked and classifications must be changed where necessary, among other things. All of these tasks can add up quickly, making annual portfolio renewal a time-consuming endeavour.

In such cases, specialist external counsel can assist trademark departments in two ways. First, they can undertake all necessary renewal work and in ideal cases simply report to the client once the renewal has been effected. In addition, such firms regularly handle the portfolios of multiple clients and accordingly instruct colleagues in various countries to renew the marks of several clients at once; this increases the volume of marks to be renewed and allows external counsel to negotiate competitive rates with local law firms.

External counsel can thus be immensely helpful for in-house teams managing large portfolios alongside other projects.

Conclusion

Trademark clearance, assignment and name change recordals and renewals are only some of the issues that can be dealt with by specialist external counsel; watches for and oppositions to new applications are also frequently requested, among other things. Trademark application watching creates opportunities similar to those offered by renewals; law firms frequently watch numerous marks for multiple clients, allowing them to negotiate economical rates based on volume of work which are then passed on to clients. Dealing with a multitude of watch notices in order to filter out relevant applications and report these to the client along with recommended courses of action is a further advantage of using external counsel, freeing up in-house teams’ time for other areas of trademark management.

Whether outsourcing is a viable alternative depends on many issues. While some projects can be dealt with in-house (especially in larger trademark departments), there are good reasons to outsource some or all of the work. As the number and scale of such projects can fluctuate dramatically, outsourcing particular projects to specialised law firms can prove especially useful. Numerous tasks relating to trademark portfolios – including creation, legal availability searches, renewals, assignments, portfolio management, data storage, litigation, opposition and cancellation proceedings – can be outsourced on a case-by-case basis. This approach allows in-house trademark departments to concentrate on core responsibilities while relying on capable partners to deal with the aforementioned issues.

BEST Rechtsanwälte PartmbB

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Frankfurt am Main 65929

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Tel +49 69 8700 200 30

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Udo Pfleghar

Partner

[email protected]

Udo Pfleghar studied and trained in Melbourne, Australia and Regensburg, Germany. He joined the Office for Harmonisation in the Internal Market (now the EU Intellectual Property Office) in 1999, where he worked as a senior examiner, litigator and instructor. After heading the Boehringer Ingelheim domain and trademark group, in 2009 he joined BEST Rechtsanwälte as a partner. He deals with questions relating to trademark, design and domain law, as well as data protection issues. Mr Pfleghar is a lecturer in law at the University of Applied Sciences in Frankfurt am Main and a panellist for alternative dispute resolution and Uniform Domain Name Dispute Resolution Policy proceedings. He is a member of the European Communities Trademark Association Law Committee, MARQUES and other professional organisations.

Michael Best

Partner

[email protected]

Michael Best studied law in Mainz, Germany and Dijon, France. He first became involved in intellectual property as a scientific assistant at the University of Mainz in 1987 where he wrote a doctoral thesis on trademark and unfair competition law. He then worked at a large German auditing firm for two years before joining chemical and pharmaceutical company Hoechst AG. Dr Best is a founding partner of BEST Rechtsanwälte/Attorneys (1998) and has worked as counsel to clients worldwide in all aspects of trademark, unfair competition, copyright and domain matters for more than 25 years. Dr Best is a member of the International Trademark Association, the Pharmaceutical Trademarks Group and the German IP Association.