First to file trade mark system

An earlier EKM article titled “Trading in China” by Amanda Wilson, provided information on how to protect Intellectual Property in China if you intend to carry on business in that country. In that article, reference was made to the “first to file” system. In this article, we set out more information about the “first to file” and “first to use” systems and the implications for trade mark owners.

All countries providing intellectual property protection for trade marks either adopt the “first to file” or “first to use” system.

In the “first to file” system, a party who is the first to file an application for a mark has superior rights over another party who may have been using an unregistered mark in the country prior to the filing of the application. This is unless the mark in question is a famous mark, for example, CHANEL, McDONALDS or DISNEY. This system is adopted by countries such as China, Indonesia, Japan, Korea and Taiwan.

The “first to file system” encourages earlier registration by providing greater certainty of protection of trade mark rights to the first person to file an application for registration. However, a downside of this system is that it allows rogue applicants to defeat the rights of the “true” trade mark owner by filing the trade mark application first.

By contrast, in the “first to use” system, the owner of the mark is the person who was the first to use the mark irrespective of whether the trade mark has been registered. Such unregistered rights accrue and are actionable at common law. Most countries throughout the world including Australia, United Kingdom, Canada, Malaysia, New Zealand, Singapore and USA follow the “first to use” system. Even though registration is not compulsory, it is in general, cheaper and easier to enforce registered trade mark rights as compared to relying alone on common law trade mark rights. Further, the scope of remedies available to a trade mark owner who has used its mark in a country adopting the “first to use” system are, in general wider if the mark is also registered.

If you are the owner of a trade mark in Australia and intend to expand your business internationally, it is important to be aware of the trade mark system operating in your countries of interest. For example, if your market is China or Japan, then it is imperative prior to conducting meetings or negotiating with third parties in those countries, that you file your trade mark application in the relevant country. This would prevent a third party from obtaining information about your mark and proceeding to file the application in your country of interest in order to block your activities or try to procure a payment from you for the transfer of the mark.

Further, even if you are not intending to sell your goods in the country that adopts the “first to file” system but are only manufacturing the goods in that country for export to Australia and other countries, you should still consider filing the application. This is because if the branding of your products is taking place in such a country as opposed to mere manufacture, then you are deemed to be using the mark in the relevant country. So, if another party has filed an application for an identical or substantially similar mark, the manufacture and export of goods bearing the registered trade mark will amount to an infringement of that registration. This would be the case even if you did not sell your goods in that country.

For further information please contact Ida at ida.pereira@ekmpatent.com