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Legal Matters-Going International: The Importance of Trademarks
SALESFORCE & COMMUNICATIONS: Seminar Delivers Key to Success

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Legal Matters:
Going International: The Importance of Trademarks
by Robert Brouillette

Last month Jeff Babener explained the importance of trademarks in your home market. This article will quickly explain why you need to properly select and protect your trademarks internationally and why you should consider doing this now rather than at the time of entry in each market.

Acquiring Trademark Rights
Trademark rights are generally acquired on a country-by-country basis. Even if you have built significant awareness of your brands in the United States, this is far from enough to guarantee that you can benefit from equivalent protection in other countries.

In the United States, Canada and a few other countries, trademark rights are created by actual use in commerce or by filing an intent-to-use application followed by actual use. You cannot complete the registration process unless you have actually begun use of your trademark in commerce. A U.S. registration merely confirms and extends the rights acquired by use. However, in most other jurisdictions of the world, rights are created by the actual registration. Prior use or prior knowledge of a trademark in the country in which you are seeking protection is mostly irrelevant, with the exception of “famous” marks such as Coca-Cola, Perrier, McDonald’s and IBM. The first entity to actually use the trademark in one of these countries therefore does not acquire any rights unless it is also the first to register it. Indeed, it is possible for anyone to file an application to register a trademark, even that of a competitor! Provided the mark is available and otherwise registrable, such person will obtain a registration that can thereafter be used to prevent anyone else from using it in that market. It is therefore very important to register your marks in a new country before you actually start doing business there. This will allow you to sell your products there without running the risk of being accused of trademark infringement. In some countries (for example, China), a trademark registration may be required in order to prove you have the right to sell your products bearing the trademark.

Selection of Trademarks
Just because you succeeded in registering your trademark in the United States does not mean that you will succeed in all other countries where you apply to register your trademark.

As in the United States, most jurisdictions do not allow descriptive or misdescriptive words or confusingly similar marks to be registered. This being said, the interpretation of “confusingly similar” can be very different (even surprisingly so) in Europe and Asia than how the U.S. Patent and Trademark Office (USPTO) will find. Also, in many countries, acronyms and numbers are not registrable.

International Classification System
In order to facilitate the classification of trademarks in different categories of wares and services, the World Intellectual Property Organization (WIPO) administers a classification system comprising 45 classes that is now used in most countries (Canada being an exception). For example, clothing and footwear are in Class 25, while sporting goods are in Class 28. Cosmetics are in Class 3, drugs and vitamins are in Class 5, foods are in Classes 29 to 31, while beverages are in Classes 32 and 33. As a general rule, one application (and therefore one fee) needs to be filed per class per trademark per country, although some jurisdictions allow for 2 to 3 classes to be included in a single application. Refer to the WIPO site for more information on the classification system:
www.wipo.int/classifications/fulltext/nice8/enmain.htm.

International Filing Systems
Generally, you have to file a separate application to register each trademark in each individual country in which you wish to do business; there are two international filing systems that facilitate this process. The first is the Community Trade Mark (CTM) system (25 countries; see http://oami.eu.int/en/mark). The Community Trade Mark system offers trademark owners a unified system of protection throughout the European Union (EU) with the filing of a single application. If successful, this one application results in a CTM registration that is recognized in all countries of the EU. The other is the International Trade Mark Registration pursuant to the Madrid Protocol (61 countries; see http://www.uspto.gov/web/trademarks/Madrid/ madridfaqs.htm#q1). The trademark owner can use the Madrid Protocol to seek protection in any of the member countries by filing one application in one language and designating as many member countries as it chooses. The international registration is like a “bundle” of national registrations. The mark is examined in each country designated and, if it is not rejected in a country, that country becomes part of the international registration.

Which Marks to Register
In most cases, it is appropriate to register not only your house mark, which usually is a part of your corporate name (for example, Nabisco or Avon) but also trademarks that you use on your products (for example, Ritz, Oreo or Anew). At the very least, the trademarks associated with your most successful products should be protected. This is very important because many countries (France, for example) have Wild West-type laws (shoot first, ask questions later) that allow the owner of a registered mark to rather easily seize “infringing” products from the marketplace even before there is a full trial on the issue.

Conclusion
Because it is possible for anyone to secure international trademark rights without actual use, you should take care to register your marks in those countries in which you intend to have a significant presence, and in any event you should register your marks before shipping any products to such countries. It is highly recommended to file applications to register your marks before you engage in discussions with any potential local partner, franchisee or distributor. Indeed, if you do not register your mark prior to engaging in such discussions, you can count on someone else (very often one of your local distributors) doing so and then using the registration as greenmail against you. Worse still, one of your competitors could do so. Registering your trademark in a country prior to entering it will save you countless headaches.

Robert Brouillette is a lawyer, engineer and patent and trademark agent. A majority of his clients are entrepreneurs and a significant number of them operate direct selling companies. He has become a leading Canadian expert in the fields of direct sales and intellectual property. He can be reached at (514) 397-6900 or rb@brouillette.ca. His firm’s Web site is: www.brouillette.ca.

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SALESFORCE & COMMUNICATIONS
Seminar Delivers Key to Success

The Direct Selling Association has assembled a congregation of industry leaders and experts for the Salesforce & Communications Seminar to be held December 7 and 8 at the USA Today/Gannett Corporation Headquarters in McLean, Va. The goal of the seminar is to help direct selling companies improve the efficacy of their salesforce and communications teams.

Offering sessions ranging from the importance of consumer loyalty to motivating distributors to “play by the rules,” the Salesforce & Communications Seminar will take an exhaustive look into the industry’s best practices, as well as innovative methods of conveying company directives to the salesforce and media.

Amy Robinson, Director of Communications and Media Relations for the DSA, said, “The Salesforce & Communications Seminar features topics related to communicating with the many key audiences direct selling companies have— from the salesforce to the media and the general public.” In fact, on December 6, the DSA will present a special four-hour, hands-on Media Spokesperson Training session led by Vice President of Potomac Communications Group Leonard Greenberger, an expert in media relations. Whereas similar training might cost thousands of dollars elsewhere, it is offered through this seminar at no extra cost.

On Wednesday, December 7, the introductory general session will kick off the event with a review of the recent DSA-conducted consumer and seller focus groups held in St. Louis, Atlanta and Seattle, part of an Image Enhancement Program designed to increase awareness of, and receptivity to, direct selling. Greenberger, the focus group facilitator, will present the results of the focus groups, while Randall Oxford, Vice President of Corporate Communications for Mary Kay Inc., will reveal how to apply and benefit from what was learned.

Following the initial general session, seminar attendees will break into various concurrent workshops, including The Five P’s of Successful Prospecting & Recruiting Tools, Building Success from the Ground Up: Case Studies on Successful Communications Programs, and Facilitating Successful Relationships Between the Field & Company Employees.

The Five P’s will address successful tools and techniques for effective, cost-efficient recruiting and prospecting, and will be presented by Stuart Johnson, CEO and President of VideoPlus Inc., which owns Direct Selling News. Building Success from the Ground Up will present dos and don’ts for the implementation of successful communications programs.

Facilitating Successful Relationships will focus on the relationship between the field salesforce and the home-office employees, and the importance of that relationship to the success of any direct selling business. This session will feature Jan Gilmore, Business Consultant for Party Plan Solutions, JoDelle Landers, Executive Director for Global Communications/Mannatech, and Rick Loy, Senior Vice President, Field Operations for Advocare International LP.

Other workshops include Time to Go Outside?, How to Choose & Build an Effective Relationship with a PR Firm, Field Advisory Councils That Work, and Your Salesforce as Company & Community Ambassadors.

Time to Go Outside? will address the issue of outsourcing public relations. Erica Burnette, Vice President of Marketing and Co-Founder of Our Own Image, will examine how companies should decide whether or not to utilize outside help and how to find the right PR firm while keeping budget restraints in mind.

Field Advisory Councils, presented by Angela Loehr Chrysler, Executive Vice President of National Companies Inc., and Terrel Transtrum, President of ServiceQuest, will consider the value of these councils for advising corporate executives on strategy, field support, programs and products, as well as recognizing field leaders and building long-term loyalty and retention.

Director of Academic Programs for CUTCO/ Vector Marketing Corp. Sarah Baker Andrus and Kim Drabik, Specialist in Industry Affairs for Alticor Inc., are slated to discuss a company’s field sellers’ impact on the company’s reputation. They will demonstrate effective training methods and ways to incorporate charitable giving and philanthropic activities.

The first day will wrap up with the Co- Marketing—Creating Innovative Marketing Partnerships Dinner session. More often than not, partnering with companies and organizations that feature complementary products or services is vital to increasing a company’s market share. One industry leader whose company has mastered the art of joining forces with other companies will share how these partnerships work and how to successfully create similar relationships.

The second day will launch with a general session titled Effective Tools & Training Techniques to Help Motivate the Field to Play by the Rules. A spirit of entrepreneurship is key to the success of any direct selling company. However, sometimes this can be taken too far, causing associates to abuse company logos, trademarks and other sacred identifiers. This session, led by Laura Beitler, Senior Attorney for Mary Kay Inc., will present methods several companies have employed to ensure their representatives understand and follow corporate rules regarding the creation of personal materials and how to deal with distributors who break these rules.

Concurrent workshops presented on Thursday include Understanding the Art of Recruiting, Twelve Media Myths That Could Be Killing Your PR Efforts, Catalog Smarts —Understanding the Keys to Creating an Effective Catalog, and Best Ideas in Communications.

Understanding the Art of Recruiting will showcase the validity of powerful salesforce recruiting and training. Bob Hipple, Vice President of iCentris, and Michael Lee, Director of Sales and Marketing for Daisy Blue Naturals, will address not only methods to effectively recruit and train a salesforce, but also how to teach the salesforce how to effectively recruit and train sellers themselves.

Gwen Moran of Entrepreneur Magazine will present Twelve Media Myths That Could Be Killing Your PR Efforts. Communications efforts are often hindered by following what is often presumed to be “PR 101.” A few of the myths Moran will address include directives such as “put a positive spin on everything” and “mention your company as many times as possible.”

Catalog Smarts is designed to establish tried-and-true industry standards for the design and layout of a successful direct selling catalog. These standards have been proven to increase the amount of information a consumer absorbs while sifting through the pages of a company’s catalog, and this session will feature leading direct selling companies that have mastered the art of successful catalog creation.

Manager of Communications for The Southwestern Company, Trey Campbell, and Director of Corporate Communications for The Longaberger Company, Bonny Fowler, will lead the Best Ideas in Communications session. They will join a panel of five company representatives to discuss successful communications methods involving not only the general public, but also how to effectively communicate with the company’s salesforce and the media.

“Anyone who is responsible for interacting with their stakeholders needs to attend this seminar,” Robinson said. “We have speakers from some of the top companies in our industry who will share what they’ve done right and where they could have done better. We’ll also hear from some media experts from outside the industry, as well as members of the media itself, including USA Today Editor Ken Paulson.”

Following the workshop sessions, Paulson will address the seminar assembly during a luncheon presentation. Finally, the seminar will close with a Swap ’n’ Share Reception and Book Signing Event, providing attendees the opportunity to gather materials produced by more than 20 direct selling companies. At the same time, select authors of salesforce and communications-relevant literature will be available to sell and autograph their books. In the preview material, attendees will find brief excerpts of each featured book to be reviewed prior to the signing event.

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