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17 January 2018

How to surprise the market: The secret trademark application

Plans to introduce a new product or service are often kept secret for a number of reasons. The later one's competitors become aware of an entirely new product or service, the longer one will enjoy the benefit of being the natural leader in that newly created market. In addition, famous companies in particular try to generate hype by creating an aura of mystery and focusing the public's attention on the big upcoming launch.

But it's not all just for show. Once a large company reveals a new brand, hijackers may rush to register internet domain names or trademarks, hoping to receive a ransom in return. This is particularly troublesome with internet domain names, which for technical reasons can only be delegated once.

If you don't get, internet users may not find your new product or service as quickly as you wish. And if a certain trademark is grabbed and registered in a trademark register before you can do it yourself, especially in less developed jurisdictions, you will have to make a disproportionate investment to convince the authorities that the trademark was registered in bad faith and should be banished from the register.

Therefore, it is good practice to secure trademark priority by applying – at least in one's home jurisdiction – for a new trademark that incorporates the new brand as early as possible in its development. According to the Paris Convention, further trademark applications internationally can then enjoy the same priority, if filed within six months. However, trademark applications appear rather quickly in the public trademark databases, so everybody can see that the company applied for a specific trademark for specific goods or services.

Can a trademark application be filed secretly?
For design registrations, publication can be deferred for a certain period of time so that the design and its owner will remain secret. The owner can thereby secure priority for its design registration without informing its competitors about the new design before the time is right. Trademark law does not foresee a secret trademark application in such a way. But there is a practical way for companies to preserve secrecy relating to new trademarks: They can procure trademark applications through a trustee – maybe even in a different country – who will then appear as the applicant (and once registered, as the owner) of the trademark in the public registries and databases instead of the real applicant. The same applies to internet domain names.

In order to allow the trademark owner to easily take over and manage the "secret" trademark portfolio, the following needs to be considered before filing the application:

List of goods and services: if the trademark is used for goods and services that only a few companies provide in a country, even application by unknown applicants will quickly raise the attention of competitors. In order to avoid this, the goods and services of interest can be "hidden" in a much broader specification that might divert the notice of third parties. After the brand is publicly revealed, the goods and services that are not required can be deleted to avoid unwanted collisions and too high maintenance costs.

Filing strategy: it is easier to manage the portfolio in the future if the application is filed in the home country of the trademark owner in case an International Registration shall be based on this filing. Therefore, it is recommended to file the first application in another country only if it can be assigned to the trademark owner before the end of the Paris Convention priority.

Trustees and the trustors are advised to engage in a formal agreement securing their obligations once the trusteeship shall be released and the trademark shall be assigned to the trustor. Such an agreement is also useful in the event of trouble, for example, if the trustee receives objections from a trademark office or if the holder of an earlier trademark sends a demand letter or even initiates an opposition or cancellation action against a trademark application or registration or similar action in respect of a domain name.

Once the product or service has been launched and the brand has been publicly revealed, all the registrations for the trustee need to be transferred to the trustor. For a multitude of trademarks in several jurisdictions and domain names in several registries, this can be quite a complex, expensive and time-consuming task, as various formalities must be complied with for each trademark office and each domain registry. But that is the price of secrecy.

Further reading
Is trademark a celebrity's best friend?
Interview with the President of the Austrian Patent Office: "We offer a good deal"
How to obtain formal design protection for your catwalk designs and still keep them secret


Head of Trademark & Design Management

austria vienna