Trademark Treaties and International Trade Rashid Nikzad* Industry Canada (Draft)
Abstract The objective of this paper is to analyze the impact of joining the Madrid System on the number of trademark applications and the level of international trade of signatory countries. The Madrid System is an international treaty that allows a trademark owner to seek registration in any of the countries that have joined the Madrid System by filing a single application. The analysis of the number of trademark applications of selected countries suggests that the share of foreign applications via the Madrid System to total foreign applications increases to a limiting percentage three to five years after joining the Madrid System and then remains relatively stable. The paper also finds that joining the Madrid System has a positive impact on the imports of signatory countries.
Keywords: Trademark; Madrid System; Intellectual Property; International Trade;
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Disclaimer: The views expressed in this paper are those of the author and not of Industry Canada and/or Government of Canada. The author would like to thank Elias Collette for his help in finalizing this paper.
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1. Introduction A trademark is a word, a symbol, a design (or a combination of these features), used to distinguish the goods or services of one person or organization from those of others in the marketplace. Trademarks come to represent not only actual goods and services, but the reputation of the producer. As such, they are considered valuable intellectual property (IP) rights1. A trademark, once registered, can be protected more easily through legal proceedings from misuse and imitation. Trademark laws and protection exist in almost all countries. However, national regimes usually differ in terms of the scope of protection, the role of the Trademarks Office in assessing rights, fees, and many other details. The primary benefit of trademarks is the creation of firm and product identity. This is especially important for small businesses to establish a reputation, identity, and goodwill. Trademarks also protect consumers from confusion in searching products and services in the marketplace and protect the creator of trademark from other harms such as false association of the mark. In this sense, trademarks could also be a mechanism for price discrimination, meaning that different prices can be set for similar goods (Rafiquzzaman and Ghosh, 2001). The objective of this paper is to analyze the impact of joining international trademark treaties on the number of trademark applications and economic variables. For this purpose, the paper concentrates on joining the Madrid System and its impacts on the number of trademark applications and the level of international trade of signatory countries. The Madrid System is an international treaty that allows a trademark owner to seek registration in any of the countries that have joined the Madrid System by filing a single application. The paper finds that joining the Madrid System has a positive impact on the imports of signatory countries.
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The next section introduces the Madrid System and potential advantages and disadvantages of joining this treaty. Section 3 discusses the global trends of trademark applications and the impact of joining the Madrid System. Section 4 presents an empirical model to assess the impact of joining the Madrid System on imports of countries. Section 5 presents the empirical findings of this model. Section 6 concludes.
2. The Madrid System There are many international treaties with provisions on trademarks. Examples of these treaties include: the Paris Convention; North American Free Trade Agreement (NAFTA) for the United States, Canada and Mexico; Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) by the World Trade Organisation (WTO); Nice Agreement; Trademark Law Treaty (TLT); Singapore Treaty; and Madrid System2. This section explains the Madrid System in more details. The Madrid System for the international registration of marks (the Madrid System) was established in 1891 and functions under the Madrid Agreement (1891) and Madrid Protocol (1989). The International Bureau of the World Intellectual Property Organization (WIPO) administers the international registration system.
2.1. Madrid Agreement The Madrid Agreement3 is the original international system for facilitating the registration of trademarks in multiple jurisdictions around the world. The Madrid Agreement offers trademark owners the possibility to have their trademark protected in several countries by simply filing one application directly with their own national or regional trademark office. An international mark so registered is equivalent to an application or a registration of the same mark
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registered directly in each of the countries designated by the applicant. The Madrid Agreement also simplifies the subsequent management of the mark since it is possible to record subsequent changes or to renew the registration through a single procedural step. It should be noted that registration through the Madrid System does not create an “international” registration; rather it creates a bundle of national rights, able to be administered centrally.
2.2. Madrid Protocol The Madrid Protocol was introduced in 1989 to address various perceived shortcomings of the Madrid Agreement and to improve its usefulness to trademark owners. As of December 2012, the Madrid Protocol had 88 members and the Madrid Agreement 56 members4. All members of the Agreement are also parties to the Protocol except Algeria. Table 1 presents a list of selected countries and the year they joined the Madrid System. These countries include the top trademark filers, all G8 countries, and selected industrialized countries. Among the top trademark filers, Brazil, Canada, India and Mexico have not joined the System yet. Note that Mexico will be a member in 2013.
2.3. Expected benefits of joining the Madrid System The expected benefits from membership of the Madrid System relate to the cost savings and efficiency from harmonization. This is true from the perspective of both IP Offices and trademark owners. The expected benefits can be summarized as follows:
Ease of filing and simple formalities: one application in one language and with payment of fees in a single currency to gain protection of a mark in many countries;
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Easier maintenance of international registrations due to centralised management of international registrations through WIPO;
No need to hire a local representative in designated countries;
Possibility of lower costs of protection because of the reasons mentioned above;
Faster resolution of some or all IP Office procedures for international registrations than for applications filed directly into the domestic system;
More certainty about the expected time for the outcome of procedures. Table 1 – List of the countries and the year joined the Madrid system No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Country Australia Brazil Canada China Finland France Germany India Italy Japan Mexico Netherlands Norway Republic of Korea Russian Federation Spain Sweden Switzerland Turkey United Kingdom United States
Year joined Madrid Agreement 1989 1892 1922 1894 1893 1976 1892 1892 -
Year joined Madrid Protocol 2001 1995 1996 1997 1996 2000 2000 (2013) 1998 1996 2003 1997 1995 1996 1995 1999 1995 2003 Source: WIPO5
Moreover, applicants are less likely to make mistakes in filing as procedures are more likely to be similar to those in their own countries. This results in less duplicative effort and an overall lower cost of processing.
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2.4. Concerns regarding the Madrid System One disadvantage of the Madrid System is that any refusal, withdrawal or cancellation of the basic application or basic registration within five years of the registration date of the international registration will lead to the refusal, withdrawal or cancellation of the international registration to the same extent. Other challenges include:
IP Offices may experience an increase in workload after implementation of the Madrid System;
Increased costs for IP Offices due to increased workload, implementing new systems and training, etc.6;
The Madrid System reduces costs of filing only for trademark owners who file in more than four jurisdictions;
Madrid System registrations may face a narrower scope for trademark if the country of origin provides a narrower scope than that could be obtained by filing applications directly with national trademark offices with a broader description. There are not many studies that evaluate these impacts empirically. Nagdev (2008) found
no evidence of these disparities in the United States after accession to the Madrid System. Bennett (2011) studied the impact of accession to the Madrid System in Republic of Korea, Mongolia, Singapore, Turkey and Viet Nam. She found that all countries in her study experienced an increase in both the number of applications through the System and the ratio of non-resident applications. There was also a general increase in the number of domestic applications seeking protection in other countries through the System. However, all IP Offices stated that revenue received under the System covered their operating costs. Also, in some countries (Mongolia, Viet Nam and Turkey) a significant increase in agents‟ work after
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accession to the Madrid System has resulted in additional revenue while others (Korea and Singapore) reported some decline in agents‟ revenue. Regarding these disadvantages of the Madrid System, there are cases where applying directly to a foreign IP Office may be preferred. These include situations where (Bennett, 2011):
the basic mark may fail to achieve registration, be vulnerable, or be susceptible to cancellation in the country of origin so that making the international registration vulnerable;
there is the possibility of a partial refusal since the Madrid System does not allow for division of an international registration;
registration in the country of origin would limit the scope of protection in other countries;
trademark owners may not be able to use the Madrid System effectively since significant trading partners are not members of the Madrid System;
protection is sought in only one or a few contracting parties. The next section examines the impact of joining the Madrid Protocol on the trademark
statistics of selected countries.
3. Trademarks statistics and trends Figure 1 presents the trademark statistics of selected IP Offices. The number of trademark applications filed worldwide doubled from around 2 million in 1995 to 4.2 million in 2011. China has been the main contributor to this growth. The top filers include China, the United States, India, and Republic of Korea7. Asia became the largest receiver of filings in 2009 and the recipient of 44% of worldwide applications in 2011. More than half of all trademark filing activity happened at the offices of middle- and low-income countries. China has consistently
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occupied the top position for trademark filing activity in recent years, accounting for 23% of all trademark filing activity worldwide (WIPO, 2012). However, the ratio of resident to non-resident filings varies considerably among IP Offices. While the larger portion of trademark applications in Norway, Switzerland, and Canada consist of foreign applications, countries like China and India mainly include resident applications8. Figure 1. Trademark applications by IP Office – Selected countries
Source: WIPO IP Statistics
Trademark applicants who seek international protection can file an application directly with the relevant national or regional IP Offices, or through the Madrid System. Around half of all non-resident applications filed globally since 2004 used the Madrid System. This ratio is even higher for the Madrid System members. In 2011, trademark applicants through the Madrid 7
System designated an average of nearly seven Madrid members per registration, with the majority (56%) of these applicants choosing to designate between one and four Madrid members (WIPO, 2012). An observation from Figure 1 (Bottom-Left) is that after joining the Madrid Protocol9, the ratio of foreign applications via the Madrid Protocol to total foreign applications of all countries increased to a limiting percentage within a few years (usually 3-5 years) and then remained stable around this limiting percentage. This limiting percentage is around 30% for the United States and Republic of Korea; 50% for Australia, the United Kingdom, and Japan; and 78% for the Scandinavian countries. Another observation from Figure 1 (Top-Right) is that generally there was not a lot of variation in the ratio of foreign to total trademark applications after joining the Madrid Protocol.
The exceptions were Finland, Sweden, and the United
Kingdom, where this ratio decreased. Figure 2 presents the number of trademark applications by the country of origin. China, the United States, Germany, and France are the top origins of trademark applications globally10. However, when correcting for class counts and regional applications11,12, Germany ranked first in 2011 in terms of worldwide trademarks activity, followed by China, the United States, and France. It is worth noting that while the bulk of applications originating from Germany, the United States, and France were filed abroad, most applications originating from other middleand low-income countries, including China, were filed domestically13. Also, as Figure 2 (TopRight) shows, the share of filings abroad to total filings of all countries has been increasing in recent years14. This suggests that trademark owners have increasingly been looking for international protection in recent years. Countries use the Madrid System to various degrees to file trademark applications internationally after joining the Madrid Protocol (Figure 2, Bottom-
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Left). However, we still observe the same pattern that the ratio of applications using the Madrid System reaches a limiting point for all countries after an initial spike in the use of the System. Figure 2. Trademark applications by country of origin – Selected countries
Source: WIPO IP Statistics
4. Impact of the Madrid System on International Trade Countries enter bilateral and multilateral IP agreements to facilitate and strengthen their IP protection. One assumption is that joining these agreements promotes international trade. However, the extent and significance of this effect is not clear (Smith, 1999). There are only a few empirical studies in this area and their results are mixed. For example, while Ferrantio (1993) finds only a weak relationship between joining IP rights treaties and trade, Maskus and 9
Penubarti (1998) find a positive and strong relationship between the manufacturing exports of the OECD countries and the strength of patent rights in developing countries. Smith (1999) finds that US manufacturing exports response substantially to strengthening and harmonizing IP rights through multilateral agreements. Rafiquzzaman (2002) also finds a similar result for Canadian manufacturing exports where he concludes that Canadians tend to export more to countries that provide higher patent protection. Both Smith and Rafiquzzaman limit their studies to a cross-section analysis (years 1992 and 1990, respectively). Moreover, these studies focus only on patent protection as a measure of IP rights. There are very few empirical studies that examine the impact of trademark protection and treaties on economic variables. To address this issue, Nikzad et al. (2009) examined the impact of joining the Madrid Protocol on the exports of signatory countries. This paper examines the relationship between accession to the Madrid Protocol and international trade. The study differs and extends Nikzad et al. (2009) in four ways. First, more years and countries are added to the analysis. This extension is important since new players have been emerging in trademarks and international trade (e.g. China, Brazil, etc.). Second, the study adds more variables to the model to better control for the accession to the Madrid System. Third, the paper uses different techniques to deal with potential endogeneity and omitted variable problems that were of less concern in the previous study. Fourth, the paper studies the impact of joining the Madrid System on the imports of the countries. The study is based on a gravity model of trade to examine the relationship between joining the Madrid Protocol and imports. The rationale behind the model is as follows. Firms have an incentive to register their trademarks in foreign countries where they sell or intend to sell their products. Also, the main goal of joining a trademark treaty is to facilitate the registration
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process. Therefore, it can be assumed that the primary economic impact of joining a trademark treaty for a country will be on its international trade. In this context, Smith (1999) considers two opposite effects for IP rights on exports and calls them market expansion and market power effects. On one hand, strong national IP rights expand international markets available to exporters by ensuring exclusive rights to the technologies embodied in their exported goods (market expansion effect). In other words, strong IP rights in destination countries could increase exports to those countries. On the other hand, strong IP rights could reduce trade by ensuring a temporary monopoly over the protected technologies (market power effect). The reason is that firms that secure strong IP protection in foreign markets may restrict exports and increase their unit price by exercising their market power. Since the market power and market expansion effects have opposite impacts, the direction of the relationship between IP rights and international trade is unclear and should be determined by empirical studies. This section uses a modified gravity model to examine the relationship between joining the Madrid System and trade. According to the gravity model, exports (imports) from country j to country k are a function of the wealth and size of the exporting (importing) country and the wealth and size of the importing (exporting) country. Following Smith (1999), the model may also include factors that distort trade such as tariffs and IP right differences. Consistent with literature (Smith, 1999; Rafiquzzaman, 2002), GDP per capita is used as a measure for wealth and population as a measure for size. The model will then be as follows (Equation 1): X jkt (Q jt / N jt )1 ( N jt )2 (Qkt / N kt )3 ( N kt )4 ( D jk )5 ( Ajkt )6 ,
where X jkt is the import from country k to country j in year t, Q jt / N jt stands for the GDP per capita of the importing country, N jt is the population of the importing country, Qkt / N kt is the 11
GDP per capita of the exporting country, N kt is the population of the exporting country, D jk is the distance between the two countries, and A jt includes the distortionary factors that augment or reduce trade. The distortionary factors considered in this model are tariffs and trade zones. The trade zones are represented by a dummy variable and include NAFTA and the European Economic Area (EEA) plus Switzerland. This paper assumes that joining the Madrid Protocol is also a distortionary factor that could increase trade. The paper uses two approaches to show the impact of joining the Madrid Protocol on imports. In the first approach (Model 1), a year dummy (DMadrid) is defined for each country that takes zero if the country has not joined the Protocol yet and takes one after joining the Protocol. If the sign of this dummy variable is positive and statistically significant, it means that joining the Madrid Protocol has a positive impact on the imports of signatory countries. The second approach (Model 2) is based on the difference-in-difference estimator and better controls for omitted variables, unobserved factors, and potential endogeneity (Wooldridge, 2009). In this approach, a dummy variable indicates if a country is a party to the Madrid Protocol (DM) and a year dummy (TM) is defined with value one after 2004 when all selected counties are part of the Madrid Protocol and zero before this year. The interaction term between these two variables (DM*TM) shows the impact of joining the Madrid System on imports. A positive and statistically significant sign for the interaction term means that joining the Madrid System has a positive impact on trade between countries. Since GDP per capita and population are not stationary, the first difference of the logarithm of Equation (1) is used to deal with the stationarity of variables. In this case, the coefficients reflect elasticities. This leads to the following models to assess the impact of joining the Madrid Protocol on imports: Model 1: 12
log( X jkt ) c j mk t 1 log( Q jt / N jt ) 2 log( N jt ) 3 log( Qkt / N kt ) 4 log( N kt ) 5 log( D jk ) 6 log(1 tr jt ) 7TZonejk 8 DMadrid jt e jkt ,
Model 2:
log( X jkt ) c j mk t 1 log( Q jt / N jt ) 2 log( N jt ) 3 log( Qkt / N kt ) 4 log( N kt ) 5 log( D jk ) 6 log(1 tr jt ) 7TZonejk 8 DM j 9TM t 10DM j * TM t e jkt , where k, j: 1,…, 21 index countries, t: 1990,…, 2011 index the year, Δ represents the first difference of variables, trjt is the effective tariff of country j in year t, and TZone is one if both countries are in the same trade zone and zero otherwise. Exporter and importer dummies, c j and
mk , have been added to control for country specific unobserved effects, and the year dummy t to control for unobserved time effects. e jkt is the error term. The 21 countries selected for this study are presented in Table 1. Four of these countries are not members of the Madrid System and are used as control countries (Brazil, Canada, India, and Mexico). Eight countries were already part of the Madrid Agreement before joining the Protocol in 1990-2011 (China, France, Germany, Italy, Netherlands, Russian Federation, Spain, and Switzerland). Nine countries joined the Madrid Protocol in 1990-2011 without being already part of the Madrid Agreement (Australia, Finland, Japan, Norway, Republic of Korea, Sweden, Turkey, United Kingdom, and United States). The source of data for population and GDP per capita is the International Monetary Fund (IMF). The source of data for bilateral exports and imports between countries is the STAN database of the OECD. GDP per capita is in international PPP constant dollars, and imports in international constant dollars. Average effective tariffs have been obtained from the World Bank15. 13
6. Empirical results This section presents the empirical results of the model. Table 2 presents the descriptive statistics of the variables. Table 2- Descriptive statistics of variables Variable Imports Importer GDP per Capita Importer Population Exporter GDP per Capita Exporter Population Distance Tariff
Mean 17.1 5.2 17.8 5.2 17.8 8.4 0.1
Std. Dev. 1.7 0.8 1.5 0.8 1.5 1.0 0.1
Min 6.4 2.4 15.3 2.4 15.3 5.8 0.0
Max 22.0 6.2 21.0 6.2 21.0 9.8 0.6
Table 3 presents the estimation results. The first column presents the base gravity model without any impacts from the Madrid Protocol. The two other columns present the results of Model 1 and Model 2. Both Models 1 and 2 suggest that joining the Madrid Protocol has a positive and statistically significant impact on imports of member countries. To further explore the impact of joining the Protocol on different countries, Table 4 presents the results for different country groups. Group 1 includes larger industrialized countries that joined the Protocol in 1990-2011 and were not already a member of the Agreement (Australia, Japan, United Kingdom, and United States) plus the four non-System countries. Group 2 includes Groups 1 plus smaller industrialized countries that became a party to the Protocol in 1990-2011 without previously being a member to the Agreement (Finland, Norway, and Sweden). Group 3 includes only countries that were already part of the Agreement before joining the Protocol plus the four non-System countries. According to Table 4, even though joining the Protocol has a positive impact on the imports of all countries, the impact is more significant if the country is not already part of the Madrid System (i.e. the Madrid Agreement). 14
Table 3- Impact of joining the Madrid Protocol on imports ΔImports
Gravity model
Model 1
Model 2
ΔImporter GDP per Capita
2.601*** (0.141)
2.609*** (0.141)
2.649*** (0.144)
ΔImporter Population
0.434*** (0.173)
0.425*** (0.173)
0.383** (0.173)
ΔExporter GDP per Capita
0.222* (0.145)
0.221* (0.145)
0.220* (0.145)
ΔExporter Population
0.161 (0.177)
0.161 (0.178)
0.161 (0.177)
Distance
0.000 (0.002)
0.000 (0.002)
0.001 (0.002)
Tariff
-0.158* (0.099)
-0.179* (0.100)
-0.258** (0.108)
Common trade-zone
0.008* (0.004)
0.008** (0.004)
0.008** (0.004)
0.022** (0.009)
DMadrid DM
-0.063*** (0.018)
TM
-0.119*** (0.026)
DM*TM
0.052*** (0.015)
Constant
0.091*** (0.028)
0.074*** (0.029)
0.230*** (0.036)
8,425 8,425 8,425 Observations 0.2662 0.2667 0.2676 R-squared Significance levels: *** p<0.01, ** p<0.05, * p<0.1; Standard errors in parentheses; All variables are in logarithm. GDP per capita and population are first differenced. Estimations are bases on GLS regressions with robust variances for 21 countries in 1990-2011; All estimations include importer, exporter, and year dummies.
7. Conclusion The Madrid Protocol is an international treaty that allows a trademark owner to seek registration in any of the countries that have joined the Madrid Protocol by filing a single application. This paper examines the impact of joining the Madrid Protocol on the number of trademark applications as well as on the level of imports. The analysis of the trademark 15
applications of selected countries suggests that the share of foreign applications via the Madrid System to total foreign applications IP Offices receive increases to a limiting percentage three to five years after joining the Madrid System and then remains relatively stable around this limiting percentage. This limiting percentage varies from 30% to 78% for different IP Offices. Moreover, the paper shows that joining the Madrid System has a positive impact on the imports of signatory countries. Table 4- Impact of joining the Madrid Protocol on imports – Country groups ΔImports
Group 1
Group 2
Group 3
ΔImporter GDP per Capita
3.028*** (0.340)
2.579*** (0.259)
2.721*** (0.225)
ΔImporter Population
-0.356 (0.252)
-0.150 (0.227)
0.301 (0.243)
ΔExporter GDP per Capita
0.562** (0.262)
0.542*** (0.197)
0.233 (0.203)
ΔExporter Population
-0.018 (0.342)
0.233 (0.279)
-0.047 (0.266)
Distance
-0.003 (0.004)
0.001 (0.003)
0.001 (0.004)
-0.304*** (0.123)
-0.364*** (0.119)
-0.284*** (0.109)
0.004 (0.009)
0.009* (0.006)
0.022*** (0.008)
DM
-0.130*** (0.028)
-0.132*** (0.027)
-0.142*** (0.028)
TM
-0.017 (0.021)
-0.062*** (0.022)
-0.069*** (0.020)
DM*TM
0.065*** (0.018)
0.067*** (0.017)
0.051*** (0.016)
Constant
0.217*** (0.046)
0.216*** (0.043)
0.239*** (0.050)
Tariff Common trade-zone
3,310 4,563 4,745 Observations 0.2165 0.2410 0.2338 R-squared Significance levels: *** p<0.01, ** p<0.05, * p<0.1; Standard errors in parentheses; All variables are in logarithm. GDP per capita and population are first differenced. Estimations are bases on GLS regressions with robust variances for 21 countries in 1990-2011; All estimations include importer, exporter, and year dummies.
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References Bennett, B. (2011) „Study on Accession to the Madrid System‟, World Intellectual Property Office. Ferrantino, M J. (1993) „The Effects of Intellectual Property Rights on International Trade and Investment‟, Weltwirstschaftliches Archiv, Vol. 129, pp.300-331. Maskus, K E and Penubarti, M. (1998) „How Trade-related are Intellectual Property Rights?‟, Journal of International Economics, Vol. 39, pp.227-248. Nagdev, A. (2008) „Statistical Analysis of the United States‟ Accession to the Madrid Protocol‟, Northwestern Journal of Technology and Intellectual Property, Vol. 6 No. 2, pp.210-227. Nikzad, R, Collette, E, Mascito, G and Neville M. (2009) „The Economic Impact of Joining the Madrid Protocol‟, Canadian Intellectual Property Office. Paper Presented at the 45th annual meeting of the Canadian Economics Association. June 2011. Ottawa, Canada. Rafiquzzaman, M and Ghosh S. (2001) „The Importance of Patents, Trade-marks and Copyright for Innovation and Economic Performance: Developing a Research Agenda for Canadian Policy‟, in Putnam, J. (Ed.), Intellectual Property and Innovation in the Knowledge–Based Economy, Industry Canada, Ottawa. Rafiquzzaman, M. (2002) „The Impact of Patent Rights on Intellectual Trade: Evidence from Canada‟, Canadian Journal of Economics, Vol. 35 No. 2, pp.307-330. Smith, P J. (1999) „Are Weak Patent rights a Barrier to U.S. Exports?‟, Journal of International Economics, Vol. 48, pp.151-177. WIPO, (2012) „World Intellectual Property Indicators‟, http://www.wipo.int/ipstats/en/wipi/. Wooldridge, J M. (2009) Introductory Econometrics: A Modern Approach, 4th ed., Mason, OH: SouthWestern.
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1
http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr00555.html.
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More information about these treaties is available at http://www.wipo.int/treaties/en and Nikzad et al. (2009). http://www.wipo.int/madrid/en/legal_texts/trtdocs_wo015.html 4 http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/madrid_marks.pdf. 5 http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/madrid_marks.pdf. 6 Canadian Intellectual Property Office – Proposals for Comments Relating to Modernization of the Trade-marks Act: Cover Letter to Profession. http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr00676.html. 7 Top IP Offices in terms of receiving trademark applications in 2011 were as follows: China, United States, India, Republic of Korea, Brazil, Turkey, Japan, Mexico, France, Germany, Australia, Russian Federation, Canada, Spain, Italy, United Kingdom, Switzerland, Norway, Sweden, and Finland. 8 The ranking of IP Offices in terms of the share of foreign applications to total applications in 2011 was as follows: Norway, Switzerland, Canada, Russian Federation, Finland, Australia, Mexico, Sweden, Japan, United Kingdom, Brazil, United States, Republic of Korea, Italy, Germany, Turkey, India, Spain, China, France. 9 WIPO does not distinguish between applications via the Madrid Protocol and the Madrid Agreement and provides data for the Madrid System only. Therefore, it is not possible to distinguish between the applications through these two channels for the countries that are part of both treaties bases on WIPO data. For this purpose, this paper focuses only on the countries that are part of the Madrid Protocol. 10 The ranking of trademark applications (resident and abroad) in terms of the country of origin is as follows: China, United States, Germany, France, United Kingdom, Italy, Spain, Japan, India, Switzerland, Republic of Korea, Netherlands, Brazil, Turkey, Mexico, Sweden, Australia, Canada, Russian Federation, Finland, Norway. 11 Some offices have a single-class filing system, which requires applicants to file a separate application for each class in which the goods or services for which the mark is applied are classified (e.g. China, and Brazil), while other offices follow a multi-class filing system allowing one application for several classes (e.g. the United States, Japan, Korea, and many European offices). A single-class filing system can result in offices receiving much higher numbers of applications than those that allow multi-class applications. To account for this difference, WIPO sometimes present statistics on the basis of class counts rather than the number of trademark applications. However, Figures 1-3 are based on application counts not class counts (WIPO, 2012). 12 WIPO corrects the number of applications at regional offices by multiplying the numbers by the corresponding number of member countries. For example, an application filed with OHIM counts as 27 applications abroad by an applicant residing outside of the EU and 26 applications abroad for an applicant residing in an EU country. The ranking of countries in terms of worldwide trademark applications changes significantly after accounting for class counts and regional offices (i.e. equivalent application class count). 13 The numbers of applications abroad are likely to be lower than the actual numbers since some offices do not report detailed statistics pertaining to the origin of the applicant (WIPO, 2012). 14 The ranking of the share of applications abroad to total applications by the country of origin in 2011 was as follows: Switzerland, Germany, United Kingdom, Finland, Netherlands, Sweden, Italy, Spain, Norway, France, United States, Canada, Japan, Australia, Russian Federation, Republic of Korea, Turkey, Mexico, Brazil, China, India. 15 http://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS. 3
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