IP protocol puts India on the map

India’s adoption of the international protocol for trade marks will reassure the country’s potential investors

India acceded to the Madrid Protocol for the International Registration of Trademarks on 8 April 2013 and it came into force on 8 July. It is widely seen as a marker of economies that have arrived. 

For businesses, particularly firms considering investing in India, the protocol should have a significant impact. It will help to underpin a strong system of IP governance in India and is potentially one of the most significant developments in Indian trademark law.

One hoped-for result of the regime that the protocol sets out at national level is that the Indian trademarks registry will become faster. This is important because BRIC markets need to be attractive to long-term overseas investment to sustain growth and expansion. Their IP systems are key to this, as IP is critical to business innovation.

 New research by Reed Smith, conducted by the Economic Intelligence Unit, has revealed the significance of concerns around IP in emerging markets. The report, Troubled Waters: the Risks of International Commercial Disputes, shows that IP theft is one of the fastest-growing concerns for business leaders. Further, it finds that a growing number of executives expect to face an international commercial dispute within the next two years, with IP likely to be one of the main areas of dispute. This concern is identified particularly by businesses looking at emerging markets, such as India.

 So what difference will the protocol make? There are numerous advantages for Indian businesses and outside investors, from the cost-efficiency of paying one fee and using one trademark registration system for several countries, to only necessitating retaining local trademark counsel in countries where objections are rais-ed during prosecution. National treatment is a key advantage as each office must treat a protocol designation as if it were a national right. 

The protocol also speeds up prosecutions by limiting the time within which an office of a contracting party has to act once it has received a request for extension of an inter-national registration to the territory.

 With that said, there are also restrictions to the protocol when assessing what the overall benefit for a burgeoning economy, such as India’s, is likely to be. The protocol only allows an international registration to be owned or assigned to a person or entity who is a national, domiciled, or has an effective business presence in a member state of the protocol. This leads to obvious limitations on ownership and transfer of trademarks and, for some applicants, may impact on strategic decisions in filing programmes.

For the protocol to deliver what it promises, prospective investors in India should work closely with local counsel who have expertise and knowledge of the IP market to ensure effective protection and enforcement of their rights. Ultimately, the real breakthrough for India regarding inward investment will come by continuing to send strong messages (such as adopting the protocol) on the robust enforcement of rights for brand owners.