Bills Digest No. 20  2000-01 Trade Marks Amendment (Madrid Protocol) Bill 2000


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details

Passage History

Trade Marks Amendment (Madrid Protocol) Bill 2000

Date Introduced: 28 June 2000

House: House of Representatives

Portfolio: Industry, Science and Resources

Commencement: On a date to be set by Proclamation, or at the latest, 12 months after Royal Assent.

Purpose

To amend the Trade Marks Act 1995 to give effect to the provisions of the Madrid Protocol which deal with the international registration of trade marks.

Background

Trade Marks Legislation

A trade mark is a word or symbol used to identify the trade source of goods or services. The use of a trade mark is important as an identifier of who is responsible for a product and its quality. Section 17 of the Trade Marks Act 1995 (Trade Marks Act) contains the following definition of a trade mark:

A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Trade marks may be registered with the Registrar of Trade Marks. The Trade Marks Act contains a flowchart explaining how a trade mark is registered.(1) If a trade mark is registered, the registered owner has exclusive rights to use the trade mark, to authorise other people to use the trade mark, and to obtain relief under the Trade Marks Act if the trade mark has been infringed.

The Constitution provides a plenary head of power under section 51(xviii) for the Commonwealth to make laws with respect to '...copyrights, patents of inventions and designs, and trade marks.' Although there is overlap within the several sectors of intellectual property, the sectors are covered by separate Acts of Parliament. For example, copyright matters are dealt with under the Copyright Act 1968 and patents under the Patents Act 1990. Statutory protection for trade marks is separate from that for designs (Designs Act 1906). The current Trade Marks Act is the product of a Working Party Review (1992) and lengthy public consultation.(2) The purpose of rewriting Australia's trade marks legislation in 1994 and 1995 was to streamline the working of the trade marks system, update the legislation in line with modern marketing practices, and bring Australia into line with international developments and obligations.(3) An attempt was also made to simplify the language as much as possible to make it easier for readers to understand the law. The Trade Marks Act contains the substantive provisions embodying the policy that underlies Australia's trade marks legislation. The procedural provisions which implement the legislative scheme are contained in the regulations.

Madrid Protocol

This Bill amends the Trade Marks Act to give effect to the provisions of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (the Protocol), a multilateral treaty administered by the World Intellectual Property Organization (WIPO).

The text of the Protocol was adopted at Madrid on 28 June 1989. The Protocol is the latest in a series of efforts since the 1890s to set up an effective and popular system for the international registration of trade marks. The Madrid Agreement Concerning the International Registration of Marks was signed at a diplomatic conference convened in Madrid on 14 April 1891. However the Agreement has failed to attract widespread membership and, in particular, has failed to attract certain major trading nations including the United States of America, United Kingdom and Japan. In an attempt to establish a more broadly based system for international registration of trade marks, and attract membership of major trading nations, WIPO organised a series of discussions during 1985 and 1986 directed at devising a fresh system for the international registration of trade marks. The result of this initiative was the Madrid Protocol, the text of which was concluded at a diplomatic conference in Madrid on 28 June 1989.(4) The Protocol is a convention which parallels the Madrid Agreement but is independent of that Agreement.

Until recently the response in Australia to this initiative seems to have been unenthusiastic.(5) According to one commentator this is unfortunate for two reasons. First, because the Protocol is an attempt to set up a reasonably straightforward and cost-effective system for the international registration of trade marks. Secondly, and more importantly, because the present initiative shows every promise of being successful in achieving one of its principal objectives, that is, of attracting a significantly wider membership, including several of the major trading nations which previously remained aloof from the international registration system existing under the Madrid Agreement.(6)

As at 19 July 2000, 47 countries had become party to the Madrid Protocol.(7) They include China (1 December 1995), Japan (14 March 2000), the United Kingdom (1 December 1995), Russian Federation (10 June 1997) and individual countries of the European Union. The United States of America was closely involved in the discussions of the Working Group responsible for finalising the Implementing Rules of the Protocol, but has not implemented the Protocol. In his Second Reading Speech, the Parliamentary Secretary to the Minister for Industry, Science and Resources, Hon Warren Entsch said that the United States recently announced its intention of proceeding to accession.(8)

The advantages to Australia of acceding to the Madrid Protocol were discussed by Mr Entsch in his Second Reading Speech. They include:

  • saving Australian business enterprises time and expense by providing a more streamlined system for registering and maintaining their trade marks internationally, and
  • enhancing Australia's image as a regional leader in intellectual property matters.

Objections which others have raised include the possible administrative burden to be borne by the Trade Marks Office if Australia accedes to the Protocol.(9) It is argued that Australia is likely to receive a greater volume of overseas trade mark applications as more countries accede to the Protocol. This in turn could significantly increase the time taken to examine applications and might delay domestic registrations. The Explanatory Memorandum notes that the implementation costs to the Trade Marks Office will be met from within current budgetary arrangements.(10) However the Trade Marks Office operates on a cost recovery basis and may be obliged to increase its fees to recover the costs of staff training in new practices and procedures as well as modifications to its computer system. According to the Explanatory Memorandum, these costs will be offset by the benefits to Australian trade mark owners of more streamlined procedures for international registration.(11)

Another objection has been raised by local agents who handle applications to register trade marks.(12) Some are concerned that there will be a decline in the number of overseas registration applications they are asked to handle. This is because applications will be channelled to this country through WIPO and not through a local agent. However it is argued that, once the Protocol is implemented and membership expands, the nature of the trade mark practitioner's work in relation to overseas filings, and in relation to proceedings before the Registrar and in the courts, will change. For this reason practitioners might not necessarily suffer a loss of business, though the pattern and nature of that work may change.

A third objection suggests that searching for trade marks under the international registration system will be difficult. The difficulty may arise because of the large volume of trade marks to be searched, because the broad statements of goods and services will make it hard to analyse search results, and because there will be no way of ascertaining a trade mark owner's intention to use the mark.(13)

None of these obstacles is insurmountable. It has been suggested that there are a number of possible consequences for this country if Australia does not accede to the Protocol, including:

  • becoming isolated and out of step with international developments in trade mark law and practice
  • being increasingly overlooked by overseas trade mark owners when they file international applications to register trade marks, and
  • burdening Australian trade mark owners with a more cumbersome and costly system when they wish for international protection of their trade marks.(14)

Australia's Treaty Making Process

In 1996 the Government introduced changes to Australia's treaty making processes. Principal among these was the requirement that all treaties be tabled in Parliament for at least 15 sitting days before binding action is taken.(15) This is to allow Parliamentary scrutiny of the treaty. The Government may, by ratifying a treaty, bind Australia at international law to the obligations under the treaty. The approval of Parliament is not required for this ratification. However Parliament has a central role in considering any legislation required to implement a treaty.

Consultation with State and Territory governments, industry and community groups is a necessary part of Australia's treaty making process. Where the impact of a proposed treaty is likely to be confined to identifiable groups, the Government is required by its 1996 Principles and Procedures to consult with those likely to be effected.

Once the Government decides to agree to a treaty, it considers whether specific implementing action is required; and if so, whether existing legislation (Federal or State) is adequate; and if not, whether the treaty should be implemented by legislation at the Commonwealth or State and Territory level. If new legislation is required to implement a treaty, the normal practice is to require it to be passed before the Government seeks Executive Council approval to enter the treaty. This is because the Government cannot presume that Parliament will pass the necessary legislation. Having the legislation passed before entering into the treaty removes the risk that Australia could find itself legally bound by an international obligation that it could not fulfil. In the case of this Bill, legislation is necessary to give effect to obligations under the Madrid Protocol. Commencement of the legislation is delayed by 12 months in order to coincide, as nearly as possible, with the entry into force of the Protocol in Australia.

Main Provisions

This Bill inserts new Part 17A into the Trade Marks Act (item 14) to enable the Trade Marks Office to process international applications and registrations under the Madrid Protocol. The Governor-General may make regulations to give effect to the provisions of the Madrid Protocol. In particular, these regulations may deal with:

  • the procedure for handling applications for international registration of trade marks that are filed with the International Bureau of WIPO
  • the procedure for dealing with requests to extend the protection that results from international registration of trade marks to Australia
  • the protection given to protected international trade marks in Australia
  • the circumstances in which protection of an international registration ceases and the procedures to be followed when this happens
  • the cancellation of an international registration at Australia's request, and
  • the effect of cancelling an international registration.

Proposed subsection 198A(3) enables any regulations made to be inconsistent with the Principal Act and to prevail over the Act to the extent of the inconsistency. This 'Henry VIII clause' in effect allows the Executive to change the Act by regulation. The Explanatory Memorandum states this is to keep the Act clear and to avoid complexity.

The remaining amendments (items 1-13) insert notes to draw attention to the existence of protected international trade marks and their effects when regulations are being made.

Concluding Comments

This Bill contains a 'Henry VIII clause'. Henry VIII clauses have been variously defined. One definition is a provision which enables the empowering statute to be amended by delegated legislation.(16) The Queensland Legislative Assembly's Scrutiny of Legislation Committee adopted a definition that '[a] Henry VIII clause is a clause of an Act of Parliament which enables the Act to be expressly or impliedly amended by subordinate legislation or Executive action'.(17)

The Administrative Review Committee commented in 1992 that:

...Henry VIII provisions are defended on the basis that it would be impractical to return to Parliament with changes to the [empowering] Act that are relatively minor in nature. However, it is clearly inappropriate for a body subordinate to Parliament to amend or alter an Act of Parliament. This is particularly so when changes affect the essential elements of a scheme, alter the ambit of legislation, place restrictions on rights, or alter obligations.(18)

By contrast, the 1997 report of the Queensland Legislative Assembly's Scrutiny of Legislation Committee concluded that 'Henry VIII clauses' could be justified in limited circumstances. In the Committee's words, 'possibly justifiable'(19) uses might include facilitating immediate Executive action, facilitating the effective application of innovative legislation or facilitating transitional arrangements.(20)

The Senate Standing Committee for the Scrutiny of Bills looks at Bills that come before it and reports, among other things, on whether legislative power has been inappropriately delegated and whether the exercise of legislative power is subject to sufficient parliamentary scrutiny. The Scrutiny of Bills Committee's Alert Digest No. 10 of 2000 (dated 16 August 2000) commented on the Trade Marks Amendment (Madrid Protocol) Bill. On the question of the 'Henry VIII clause' it quoted the Explanatory Memorandum which 'justifies the adoption of this approach as intended "to retain the level of clarity presently achieved by the Act. Allowing the Governor-General to make regulations to implement the Madrid Protocol avoids adding an unnecessary level of complexity to the Act"'. The Scrutiny of Bills Committee observed:

Since its establishment, the Committee has consistently drawn attention to Henry VIII clauses. While the explanation put forward in the case of this bill may provide a justification for including these particular provisions, the Committee nevertheless remains concerned whenever subordinate legislation takes precedence over the primary regulation which creates it.

For this reason, the Committee draws Senators' attention to these provisions, as they may be considered to inappropriately delegate legislative powers, in breach of principle 1(a)(iv) of the Committee's terms of reference.(21)

The member for Mitchell, Mr Alan Cadman, expressed concern about the 'Henry VIII clause' in his Second Reading Speech on the Trade Marks Amendment (Madrid Protocol) Bill.(22)

In reply, the Parliamentary Secretary to the Minister for Industry, Science and Resources, Hon Warren Entsch, said:

...I would like to point out that the government proposes to put most of the detail of the Madrid protocol procedures into trademark regulations. The bill achieves this by inserting a broad regulation making power into the Trade Marks Act. The approach of having the regulations giving effect to the protocol is consistent with the approach that has been taken in the UK. By putting most of the detail in the regulations, any changes to the Madrid protocol procedures can be handled more flexibly and efficiently. Parliament always has the opportunity to disallow regulations if it believes that the subject matter exceeds permissible boundaries for the regulation.(23)

Endnotes

  1. Trade Marks Act 1995, 'Readers Guide, Appendix - Obtaining registration of a trade mark', p. vii.

  2. Working Party to Review the Trade Marks Legislation, Recommended changes to the Australian Trade Marks Legislation, AGPS, Canberra, 1992.

  3. In 1989 Hon Barry Jones, then Minister for Science, Customs and Small Business instructed the Australian Trade Marks Office to review the law with respect to: streamlining the working of the trade marks system so as to decrease costs; updating the legislation in line with modern marketing practices; and, bringing Australia into line with international developments and obligations, particularly in light of the Uruguay Round of the General Agreement on Tariffs and Trade. In July 1992 a working group of the Australian Trade Marks Office published its report. As a result of the work undertaken by the working party a draft bill was developed and released for public discussion and comment. The Trade Marks Act 1995 completely rewrote the Trade Marks Act 1994 which passed both Houses of Parliament but never commenced.

  4. The text of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol) is available on the WIPO website at http://www.wipo.int/eng/main.htm (9 August 2000).

  5. Steven, Trevor, 'The Madrid Protocol and its likely impact on trade mark owners and trade mark practitioners in Australia', Australian Intellectual Property Journal, v. 4, no. 1, February 1993, p. 48.

  6. ibid., p. 48.

  7. A list of States is on the WIPO website at http://www.wipo.int/eng/main.htm (9 August 2000).

  8. Hon Warren Entsch 'Second Reading Speech', Trade Marks Amendment (Madrid Protocol) Bill 2000, House of Representatives, Debates, 28 June 2000, p. 18400.

  9. Steven, Trevor, op cit, p. 55.

  10. Explanatory Memorandum, Trade Marks Amendment (Madrid Protocol) Bill 2000, p. 2.

  11. ibid., p. 2

  12. Steven, Trevor, op cit, p. 55.

  13. ibid., p. 55-56.

  14. ibid., p. 56.

  15. Review of treaty making processes Commonwealth of Australia, August 1999. Available as part of the Australia and International Treaty Making Information Kit at www.austlii.edu.au/au/other/dfat/reports/infokit.html .

  16. Denis Pearce and Stephen Argument, Delegated legislation in Australia, Second edition, Butterworths, 1999.

  17. Legislative Assembly of Queensland. Scrutiny of Legislation Committee, The Use of 'Henry VIII Clauses' in Queensland Legislation, January 1997, p. 56.

  18. Administrative Review Council, 'Rule Making by Commonwealth Agencies', Report no. 35, AGPS, Canberra, 1992, p. 18.

  19. Legislative Assembly of Queensland. Scrutiny of Legislation Committee, op. cit, p. 56.

  20. ibid., p. 56.

  21. Senate Standing Committee for the Scrutiny of Bills, Alert Digest, No. 10 of 2000, p. 36. The Scrutiny of Bills Committee made a similar observation in its Alert Digest No. 3 of 2000 (p. 10-11) when it reported on the Child Support Legislation Amendment Bill 2000. This bill provided that all matters relevant to the recognition and enforcement of international maintenance obligations would be contained in delegated legislation (regulations), and that regulations which may be inconsistent with the Act would prevail over it to the extent of any inconsistency.

  22. House of Representatives, Debates, 16 August 2000, p. 17509.

  23. ibid., p. 17511.

Contact Officer and Copyright Details

Rosemary Bell
18 August 2000
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 2000

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Published by the Department of the Parliamentary Library, 2000.

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