International trademark filings plummeted in 2009 but trends should be reversed as the global economy regains strength with signs already showing in 2010, World Intellectual Property Organization’s Director General Francis Gurry said today.

Trademark filings are a leading indicator of the state of the global economy and the declining trend in filings started in 2007, just before the crisis hit, Gurry said during a press conference today.

WIPO administers the Madrid System for the International Registration of Marks (Madrid system). The overall drop in filings under the Madrid system of 16 percent this year is “very significant,” Gurry said. The most dramatic drops among the filing countries were: 32.2 percent for Italy, 29 percent for Spain, 22.9 percent for Germany, 16.5 percent for France, 14.3 percent for China, 13.1 percent for the US, and 10.3 percent for the Russian Federation.

Gurry said he expects a “modest” increase in 2010. January and February numbers for registrations show an estimated average of two percent increase compared to the same months in 2009, he said.

For 2009, some countries’ registration showed substantial increase, such as South Korea (+39.9 percent), Singapore (+20.5 percent), Croatia (+17.5 percent), and Japan (+2.7 percent), said Gurry.

The Madrid system includes 84 members at present. India may be on track to joining the system in 2010, Gurry said, while Mexico might be joining in 2012. Brazil is interested but awaiting action by its Parliament, and Colombia also is moving on it, which is notable, he said, because the Union does not include Latin America up to now.

The negative numbers showed by European Union countries might be a little misleading as there is a shift in use of the trademark system for European users who are increasingly going for a regional registration rather than a national protection, according to Gurry. Subsequently, European Union registration increased by 3.1 percent.

The top countries designated for trademark protection in 2009 were, in order: China, the Russian Federation, the United States, Switzerland, the European Union, and Japan. Gurry said those are the countries where companies are most interested in doing business, and are seeking protection for their products.

The interest in China is not so much the infringement threat, according to Gurry, but the fact that China represents a massive market, and companies may face a lot of competitors. In China, there were some 800,000 domestic trademark filings, and some 1,300 international filings at WIPO, Gurry said.

Among the most listed classes of goods and services in international trademark registrations are computer hardware and software, office functions, advertising and business management, scientific, industrial or technological engineers and computer specialists.

Overall, there were 515,562 active international registrations in the international trademark register belonging to 169,939 rights holders, mostly small and medium-sized enterprises, according to the WIPO press release.

The drop in registrations in 2009 and the consequent financial shortcomings for WIPO were compensated by measures designed to contain expenditures, and the financial year 2009 still showed a surplus of CHF25 million, said the Director General, without specifying which measures were taken.

IP Rights Compliance: “Immaturity” of International Community

There is not really an international legislative framework to enforce compliance, said Gurry, adding that international organisations, such as WIPO, are providing education for consumers and companies to understand intellectual property issues.

At the plurilateral level, discussions are ongoing on the Anti-Counterfeiting Trade Agreement (ACTA), but there is no multilateral mechanism for enforcement, he said.

ACTA, being negotiated by the United States, the European Commission and other countries, has been viewed as secretive and restricting civil liberties, and has met reluctance from different stakeholders. The European Parliament recently opposed controversial provisions such as personal searches at European borders (IPW, Trademark/Geographical Indications, 10 March 2010).

The European Union established a European Observatory on Counterfeiting and Piracy last year, mainly to “improve the quality of information and statistics related to counterfeiting and piracy on the Internal Market on the EU,” according to Observatory webpage. Gurry said the EU could serve as a basis for an international facility in the future.

The main reason why there is no international compliance mechanism “reflects the relative immaturity of the international community” and an insufficient level of trust between countries, Gurry said. Complaints about compliance are seen as “insensitive” and compliance discussions are always “fairly acrimonious.”

Another reason is that a compliance mechanism would touch on each member country’s legal system and civil procedure and many countries are very reluctant to touch national civil procedure.

William New contributed to this report.