For Indonesian companies entering international markets, a trademark is more than merely a business identity. It is a valuable asset that requires appropriate legal protection. Once a company begins marketing its products or services outside Indonesia, securing trademark protection in the relevant foreign jurisdictions becomes an important consideration that should be addressed at an early stage.
One question that frequently arises is whether a company should file its trademark directly in each target country or use the Madrid System.
The choice between direct national filing and the Madrid System should be determined based on several factors, including the number of target countries, expansion plans, the goods or services involved, budget considerations, and the company’s overall strategy for protecting and enforcing its trademark rights in each jurisdiction.
Two Main Routes for Protecting a Trademark Abroad
In general, Indonesian companies have two primary approaches to obtaining trademark protection overseas:
1. Filing a trademark application directly with the relevant trademark authority in each target country (national filing); or
2. Using the Madrid System to seek protection in multiple designated countries or territories.
Each approach has its own advantages and disadvantages.
Option One: Filing a Trademark Directly in the Target Country
Under the national filing route, a company files its trademark application directly with the intellectual property authority of the relevant target country.
For example, an Indonesian company that plans to market its products only in Singapore may file its trademark application directly in Singapore. Similarly, if the company’s expansion is limited to the United States, it may opt for a national filing in that jurisdiction.
Advantages of National Filing
One of the key advantages of national filing is that each application is independent. Accordingly, if an application encounters difficulties or is refused in one country, this generally does not directly affect applications filed in other countries.
National filing may also be a simpler option where a company’s business activities are focused on one particular country or a limited number of jurisdictions.
Other advantages include:
- Protection is obtained directly under the trademark laws of the relevant target country.
- Costs and procedures may be easier to assess when the company is targeting only one or a small number of countries.
- The trademark protection strategy can be tailored to the specific characteristics of the local market and legal framework.
- The company may more readily obtain local legal advice or recommendations regarding potential legal action against third parties using an identical or confusingly similar trademark in that jurisdiction.
- This route may be suitable for companies that do not yet have plans for large-scale international expansion.
Disadvantages of National Filing
The primary limitation of national filing is that each application provides protection only in the country in which it is filed and granted.
If a company subsequently expands into multiple countries, it will need to arrange trademark protection separately in each jurisdiction. This can increase the administrative burden and overall costs, particularly where each country has different procedures, requirements, languages, deadlines, and examination practices.
In addition, the company may need to engage local trademark attorneys or consultants in each country.
Option Two: Using the Madrid System
Another option is to use the Madrid System, an international trademark registration system administered by the World Intellectual Property Organization (WIPO).
Through this mechanism, a trademark owner may file a single international application and designate the countries or territories participating in the Madrid System in which protection is sought.
Before filing an international trademark application through the Madrid System, an applicant from Indonesia must first have a trademark application or registration filed or registered in Indonesia. This application or registration serves as the basis for the international application and is commonly referred to as the Basic Mark.
Accordingly, an applicant cannot file an international application through the Madrid System without first having a trademark application or registration in Indonesia that can serve as the Basic Mark. The existence of the Basic Mark is therefore an important element of the international filing process, particularly when seeking protection in the designated Madrid System member countries or territories.
For example, an Indonesian company may first establish its trademark application or registration in Indonesia and subsequently file an international application designating several target countries or territories, such as Singapore, Malaysia, Japan, Australia, the European Union, and the United States of America, subject to the applicable requirements.
It is important to understand that the Madrid System does not mean that a company obtains a single trademark right that automatically applies worldwide.
Each designated country or territory retains the authority to examine the application under its own trademark laws. In other words, the Madrid System provides a centralized mechanism for requesting trademark protection, while the decision as to whether protection will be granted in each jurisdiction remains subject to the laws and examination procedures of that jurisdiction.
Advantages of the Madrid System
The Madrid System can be particularly attractive, and may offer greater cost and administrative efficiency, for companies planning to expand into multiple international markets.
Its advantages include:
- Greater practicality for multi-country expansion, as a single international application can be used to seek protection in multiple designated countries or territories.
- More centralized administration, including the management of an international trademark portfolio.
- Centralized recording of changes, such as changes to the trademark owner’s name or address, as well as renewals of international registrations, through the Madrid System in accordance with the applicable procedures.
- Potential cost and administrative efficiencies in certain circumstances compared with filing separate applications in each country.
- More structured portfolio management, allowing a company to build and manage its international trademark portfolio more efficiently.
- Flexibility to add additional Madrid System member countries or territories in the future through the mechanism known as subsequent designation.
For companies that have identified several international markets from the outset, this centralized administrative structure can be an important consideration.
Key Risk to Consider: The Relationship with the Basic Mark in Indonesia
For Indonesian companies considering the Madrid System, an important aspect to understand is the relationship between the international registration and the Basic Mark that forms the basis of the international application.
During the initial period following the international registration, there is a degree of dependency between the international registration and the underlying trademark application or registration.
If the Basic Mark encounters an issue that has an impact during this period, the international registration may be subject to certain consequences. In practice, this is commonly referred to as a central attack.
For this reason, companies should not view the Madrid System simply as a “shortcut” to obtaining trademark protection in multiple countries.
Before filing an international application, a company should ensure that:
- The trademark has a strong position in Indonesia.
- The trademark identity to be used internationally has been properly determined.
- The list of goods and/or services has been appropriately drafted.
- The selected Nice Classification classes correspond to the company’s business activities and protection strategy.
- There are no significant substantive issues affecting the trademark.
- Trademark searches have been conducted in the intended target countries.
These preparatory steps are important because errors in determining the trademark identity or the scope of goods and/or services at the outset may have consequences when protection is subsequently extended across multiple jurisdictions.
National Filing or the Madrid System: Which is More Efficient?
The answer depends largely on the company’s business strategy.
If the Company is Targeting Only One Country
For example, if an Indonesian company plans to expand only into Singapore, a direct national filing may be an option worth considering.
Similarly, if the company is targeting only the United States, the Madrid System is not necessarily the most economical option simply because it provides a mechanism for international filing.
The company should compare the relevant costs, procedures, local representation requirements, potential refusal risks, and its overall trademark protection and enforcement strategy in the target jurisdiction.
If the Company is Targeting Multiple Countries
The situation is different when a company has plans to expand into several countries.
For example, suppose a company plans to enter Singapore, Malaysia, Japan, Australia, the European Union, and the United States of America.
In such circumstances, the Madrid System may be a more attractive alternative because it allows the company to manage requests for protection across multiple jurisdictions through a more centralized mechanism.
Furthermore, if the company anticipates adding additional target countries in the future, the subsequent designation mechanism can provide flexibility to extend the scope of protection to additional Madrid System members.
A Brief Comparison
| Aspect | National Filing | Madrid System |
| Filing | Separate application in each country | One international application designating countries/territories |
| Administration | Managed separately | More centralized |
| Suitable for | One or a limited number of countries | Multiple countries and ongoing international expansion |
| Adding countries | New application required in the relevant country | Additional Madrid members may be added through subsequent designation |
| Cross-jurisdictional risk | Applications generally stand independently | Dependency on the Basic Mark during the initial period |
| Local strategy | Highly flexible | Local laws and practices must still be considered |
When is National Filing More Suitable?
Direct national filing may be more appropriate where:
- the company has only one target country;
- international expansion remains limited;
- the company wishes to tailor its trademark strategy specifically to the laws and market conditions of the target jurisdiction;
- the company wishes to keep the risks associated with trademark protection in different countries separate; or
- after a comprehensive assessment, direct national filing is found to be more efficient from both a cost and strategic perspective.
Nevertheless, the decision should always take into account the applicable trademark laws and practices in the target country.
When is the Madrid System More Attractive?
The Madrid System may be more attractive where:
- the company has expansion plans covering multiple countries;
- its international expansion strategy is relatively well established;
- the trademark is expected to be used consistently across different jurisdictions;
- the company wishes to manage its trademark portfolio centrally;
- the company anticipates adding further target countries in the future; or
- the company wishes to simplify the administration of its international trademark portfolio.
The greater the number of countries forming part of a company’s expansion strategy, the more important it becomes to treat trademark protection as part of the company’s long-term business strategy rather than merely as an administrative formality.
Other Considerations
One common mistake is to choose a filing route based solely on the initial filing cost.
In practice, companies should consider the total costs and risks throughout the trademark’s lifecycle, including:
- trademark search costs;
- filing fees;
- examination costs and costs associated with responding to objections;
- costs of responding to refusals;
- potential opposition or dispute-related costs;
- maintenance and renewal costs;
- costs associated with recording changes to trademark information;
- costs of enforcing trademark rights in the event of infringement; and
- legal counsel or trademark consultant fees.
By taking this broader approach, a company can assess whether a particular filing route is genuinely more efficient, rather than simply less expensive at the initial filing stage.
The Importance of Conducting a Trademark Search Before International Expansion
Before taking a trademark into foreign markets, one of the key steps a company should consider is conducting a trademark search in its target countries.
This is important because a trademark that can be safely used or registered in Indonesia may not necessarily be registrable or freely usable in another jurisdiction.
Each country has its own legal system, trademark databases, examination practices, and market characteristics. A trademark that has already been registered or used by another party in a target country may create risks of refusal, opposition, or trademark disputes.
Accordingly, a trademark search should ideally be conducted before the company incurs significant costs for branding, production, marketing, and market entry in the target country.
Consider the Expansion Strategy and Applicable Deadlines
Companies planning to extend their trademark protection internationally should also pay close attention to applicable deadlines and requirements, including where the company intends to claim priority based on its first trademark filing.
Timing is important because decisions regarding the jurisdictions in which protection will be sought should ideally be made before the company begins significant commercial activities in those markets.
In other words, trademark protection should form part of the company’s market-entry and expansion planning, rather than being addressed only after the products have already entered the market.
Conclusion
Both direct national filing and the Madrid System have their respective advantages and disadvantages.
If a company conducts business solely in Indonesia, national trademark registration in Indonesia will generally be the primary step. If the company is targeting only one or two foreign countries, direct national filing may be a viable option and should be compared carefully with the Madrid System based on the company’s specific circumstances.
Conversely, where a company has plans to expand into multiple countries and wishes to build a global trademark portfolio that can be managed through a more centralized system, the Madrid System may be a more attractive alternative.
Most importantly, companies should not choose the Madrid System merely because it offers the apparent convenience of “one application for multiple countries.” Each designated country or territory continues to apply its own laws and examination procedures, and trademark protection will only be obtained to the extent that protection is granted by the relevant jurisdiction.
Before selecting a filing route, therefore, a company should assess its expansion plans, target jurisdictions, relevant Nice Classification classes and specifications of goods and/or services, trademark search results, costs, and legal risks in each jurisdiction.
Ultimately, an effective trademark protection strategy is one that aligns with the company’s broader business objectives. The clearer a company’s international expansion plans are, the more important it becomes to establish a structured, cross-border trademark protection strategy from the outset.
