Repeal of the safeguard clause

Repeal of the safeguard clause

In relation to an International Registration, the so called 'safeguard clause' in the Madrid Protocol provides that where the holder's country of origin is party to both the Madrid Protocol and Madrid Agreement, the provisions of the Agreement will govern the treatment of designations against that International Registration of member states which are also party to both treaties. With effect from 1 September 2008, the safeguard clause will be repealed and the Protocol will now govern the affected designations.

The repeal of the safeguard clause will automatically change any relevant designation currently governed by the Agreement to a designation under the Protocol. The Agreement will still apply to affected designations pending on 1 September 2008 (they are pending until recorded on the International Register). However, once recorded, the designation will automatically switch to a designation under the Protocol.

The repeal of this provision has limited impact in Australia as it is only party to the Protocol. Obviously, the main impact for Australian business will be in respect of holders of existing or proposed International Registrations which are based on national registrations in countries which are members of both treaties.

The repeal of the safeguard clause is good news for these businesses because it will result in a number of benefits including:

  1. In the event of cancellation of the basic registration during the five year dependency period, the holder of an affected International Registration will now enjoy the ability to transform affected designations into national rights;
  2. The Agreement requires an International Registration to be based on a registration whilst the Protocol allows it to be based on an application. Therefore, holders will be able to designate affected member states against an International Registration prior to registration of the basic mark;
  3. Under the Agreement the ‘cascade rule’ applies which determines the holder’s country of origin according to a hierarchy in the order of the location of the applicant’s effective establishment, then domicile and finally nationality. Under the Protocol there is no hierarchy and the holder can choose any country of origin provided it has a effective establishment, domicile or nationality in the relevant country; and
  4. Finally, it will allow the holder of an International Registration to deal with the International Bureau in relation to the affected designations rather than having to request amendments through the Trade Mark Office of the country of origin.