 Well, thank you for coming. I'll pass the floor over to Director General Francis Gurry to talk to you about the international trademark and design system in 2011. Neil Wilson, the director of our functional support division, is also with us today for the brands and design sector. OK, thanks, Emma. Ladies and gentlemen, a very good morning to you all. So we moved away last time we met. We were speaking about technology, really. And here we're moving to brands and designs. Brands and designs are also extremely important parts of the innovation ecosystem, if you like. Brands are the principal means of establishing reputation and to distinguish products, and indeed enterprises, in the market. And designs, of course, are a very important means of ensuring product differentiation, especially in areas where the technological possibilities have been exhausted. It's mainly the appearance that makes the difference between products. Our two systems here are not as comprehensive as our system in the case of patents, the patent cooperation treaty. So the first system that I'll speak about is our Madrid system for the international registration of marks. It has 85 member states. So if you compare it to the patent cooperation treaty, the latter has 145. But it is in the process of expansion still. And marks are considered to be quite a good indicator of economic activity and economic health because they concern new products and new enterprises. And what we see is that in 2011, there was continued growth, especially over the first part of the year, a slight stabilizing of the growth toward in the latter quarter, the last quarter of the year. But overall, an increase of 6.5%. So it's a fairly good reflection, I think, of the economic condition of 2011. Increase, but a slight slowdown in the rate of increase towards the end of the year. As far as who is doing what in this system is concerned, we see that in Europe, it requires just a little bit of explanation. In Europe, it used to be the case once that each member of the European Union had its own trademark system. They established a European community mark that is valid for the whole of the European Union. And so you have parallel systems of the individual national marks plus the community mark. And what we see is that the national filings from Europe have had a tendency to decrease slightly. But the regional filing from Europe has increased quite considerably. So in terms of our top applicants, you'll find it in the press release that the European Union is the leading applicant for our Madrid system, followed by Germany, United States, France, Switzerland, Italy. It's in table one in the press release. Compared to the areas of the area of technology, China and Japan have a more muted performance. China, you'll see, is the seventh largest filer. And Japan is the 10th largest filer. That's largely a result, in the case of Japan, of the relative newness of their participation in this system. And I think that we will see a much expanded use of the system by Japan in the coming years. In the case of China, it may be noted also that it is the top designated country. You'll find that in table two. So when you file an international application for trademark protection, you designate the countries in which you would like it to be valid. And China is, as you might see, perceived to be the most desirable market. The one in which the most number of applicants seek designations or protection, followed by the European Union, the United States, interestingly, the Russian Federation. OK, let me move to the Hague system for industrial designs. It's a much smaller system. It's in the process, we hope, of expansion. And by the way, on expansion possibilities, if I can just revert to the Madrid system for trademarks for one moment, we are expecting, we are hoping that the Philippines, India, and possibly, Colombia will come into the system this year. There may be others, but at least those we are hoping will join the system. In the case of Madrid. Francis, you didn't tell us if your organization is monitoring how much abuse is happening on trademarks? The systems are establishing the right or obtaining the right. But are you monitoring where the rights are abused? No, because the member states have not conferred that role upon us. I see. And who has that role? Well, I think it's done bilaterally. So there's no international oversight? There is no international agency that has the task of collecting intelligence on the extent of alleged abuse of trademark rights. So going back to designs, we are hoping to see an expansion in this system, and we know that it is being carefully considered by China, Japan, the Republic of Korea, and the United States of America. But at the moment, it remains a much smaller system. And what we can note simply is that there was an increase in activity of about 5.7%. And interestingly, the most applicants came from Germany, followed by Switzerland. But I would just simply note the last thing that I would say, that the United States of America, let me rephrase that, US applicants are the third largest filers, even though they're not party to the system. How does that happen? Will they file through subsidiaries who are incorporated and have their principal place of business in a member state? For example, Japan. Sorry? Which one does not? The US, it's number three. If you look at table four, the third address, if you like, of the applicant is the US. But they're not party to the system. But you also see from the press release that Procter and Gamble Gillette, amongst others, are big filers. How? Because they use their subsidiaries who are resident in a contracting party to file. So it's a good reason why we hope we will see the US amongst others come into the system. You don't get to break them, do I set them? We do, yeah, I think so, don't we? I've got some information on that. It's the last paragraph, yeah. Page three, halfway down the page. Packaging for cosmetics and food stuff, mattress, containers, plastic bottles, clocks and watches. Now just quick, about the US, do you think that the US company had already US using subsidiaries in Switzerland to file a client? Yes, since they can't file from the US because the US is not a party. OK, for example, top PMG, yeah, exactly, exactly, yeah. And so a Swiss company can not protect the United States under the US? Through the system, exactly, exactly. How do they do it? They would file nationally. They would file a, yeah, as a foreign applicant, file in the US, yeah. So PMG application is counted under the US, not in Switzerland? Well, it's actually counted, it depends on what you're counting. So if you're counting, if you look at table, I'll give you two different tables. If you look at table three, it's counted under Switzerland. If that is indeed where it's coming from. If you look at table four, it's counted by, you know, under the US. The applicant is the back-law in the US. That's right. But, yeah, it's confusing, but it's just an indication that the system is considered to be desirable, you know, even though... Can you explain where you need to file and need to file in two locations or in one? One, you file from a contracting party to file with us, actually. So what we're really talking about is entitlement to file. So you have to establish your entitlement to file. And normally you would do that, in a normal way, is by being a national of a contracting party. But since corporations, you know, you assess their, quote, nationality, unquote, by their principal place of business or place of incorporation, that means a subsidiary will be considered to be eligible. It is incorporated in the country that is contracting value. To tell you the truth, I don't understand the point in the table for the United States. Who is filing what there? This gives me, Neil, correct me if I'm wrong, this gives you an indication of the applications that have been filed that really come from U.S. entities. Even though they have been filed through, for example, Switzerland. Yeah, yeah, yeah. So you're preaching there? Yeah, yeah. So effectively those United States numbers are Procter and Gamble. And Procter and Gamble has a real and effective commercial establishment in Switzerland which is part of the system. Even though the address of the applicant is in the United States. So they have called it there? No, they have a real and effective commercial establishment in Switzerland. That's on the basis of that, that they are entitled to file. So how do you avoid that with counting the numbers? Well, you single count because the first table, Table 3, tells you the contracting party from which it's originating, if you like. And the second one tells you the address of the applicant. You know, think of tax systems and real and effective presence in a tax system. You know, just because the parent company is ultimately based in the U.S. doesn't mean you can't tax the activity locally if there's a real and effective establishment which is something somewhat similar to the permanent establishment concept of the tax treaties. Happens also, yes. Not to the contracting party of what happened in the United States. That's right. We are hoping that this may change in the next two years. Any questions on the trademarks? Question? Good question. But Francis, the fact that China is the most desirable and most resonating party... Yes. Does that reflect, also, fears that... Well, it could. I mean, I think the first reflection is why do you file in a country? You file because you have activities there and you want your mark to be protected there. So that's, I think, the first and obvious reason before looking for more complicated explanations. But if you don't file in a country, of course, then you're not protected there, are you? So you are open to someone else using the mark and you have no means of recourse against them. So a second reason would be your fear of the illicit within inverted commas because it's not illegal, actually, the use of the mark. Well, it's not illegal if you haven't registered there and it's not a famous mark. Well, famous marks are protected under the Paris Convention, well-known marks, but the appreciation of what constitutes a well-known mark is national. And, Bob, you might apply the same reasoning to every other country that's designated. Sure. Yeah. There's a systemic question again. When do you... I mean, you put the European Union... Yeah. ...for the Madrid system. Yes. Then you put the individual... Yes, exactly. So... So is that double-counting? No. No, the European Union is for the community mark and a community mark is valid in all of the countries of the Union. It's a single title for the whole territory of the Union. But, of course, that comes on top of historical systems that existed at the national level and that still continue to exist that give you a mark for the territory of the particular member of the European Union. So, Germany here is a mark that is valid only in Germany, whereas the European Union mark covers the whole territory of the Union. And why we see... We see the EU system is relatively new. 2004. 2004. They joined Madrid and it existed for a couple of years before that. So... There's no double-counting. So there's no double-counting. There's a different creatures. So, for example, even if a company gets the EU mark, it doesn't work anything in Germany. It does. It is. It covers Germany, but it also covers France and the other 26. It must be double-counting. No, because... If you applied for a European community mark, you would not bother to apply for a national mark because you're already covered. But you could apply for simply a mark in Germany. Why? Because you might be a chocolate shop in Versailles, or not Versailles, but it's a bit of a constant. And you may not be wanting to... You may not want the additional expense of the whole territory because you might be aiming only at a small local mark. Is this a low-level EU record number? It is a record number for Madrid, yes. Which is, you know, a positive sign for the world's economic situation. Very simple examples of designs. Most applied design. Kind of designs. Well, watch is a good example. You know, the watch face. You know, there are various... The way in which the watch joins the band, for example, there are lots of different... Examples of that are all designs in relation to that. You could also take cars. You know, the shape of a car. The shape of parts of cars. And for instance, mobile phones? Mobile phones, you can certainly have it, yes. Tablet computers? Well, yes, but you might have a problem with the criterion of registrability, which is originality. They have on various parts of it. In fact, we will have an exhibition of Steve Jobs' patents and designs later this year in April. It opens on March 29th. And you'll see lots of examples of designs in relation to the sort of elements you're talking about, computer equipment. But principally, it's external appearance. Yeah, that's it. It's external appearance. So, for instance, watch? Yes. A lot of their stuff is... Absolutely, absolutely. And do they file, they go first to the Swiss patent office? Under the Hague system, all the systems are different, but under the Hague system they come direct to us. Direct deposit, which is international in scope. And do they have to do it additionally in other countries or not? Is it sufficient if they go with you? It is for the contracting parties of this system, yes. But they have to look, so if there's an important country outside... There they have to go. That's right. And that's the interest in creating simplicity for users by expanding the system. Do you do something to expand? Yes, no we do. We actively promote the system and the advantages of the system. And as I said, very serious consideration has been given to joining by China, Japan, the Republic of Korea and the United States of America. The Hague systems. Amongst others. Japan, US, China, Republic of Korea. Korea? How many do you have? In the military you have 85, and in the Hague you have... 59. And the Europeans come there as single countries? Yes. And ASEAN countries are committed in principle to coming in by 2015. In 2015? Yes. So the next years we'll see a big expansion in the systems, both systems. So the low membership must reflect the industrial and hydrogen copy? The low membership reflects history and a particular system. You know, what happened in both cases, just very briefly. In the case of the Madrid system you had a system which was designed for the civil law approach to trademark registration. And that was changed in 1989 by something called the Madrid Protocol which has enabled the expansion of the system beyond essentially Europe. And in the case of the Hague, similar story, the change occurred in 1999, rather than 1989, which is enabling the expansion of the system that we are in that process. Why doesn't it happen overnight? Why don't they? Well, because it's not necessary, getting ledgers sort of time these days is extremely difficult, especially in election years and there are elections in 48 countries this year. Thank you. Sorry, I'm not quite clear. In a way, would Germany make so many applications outside the EU system? Individually. Individually. I'm assuming that these were from House of Representatives. Yes. Well, I think it reflects just the expectation of the territories in which you would expect to do business. Or you plan to do business. So they might say, well, we're going to do business in Germany and France and Switzerland. And they may feel that it's sufficient to have a German mark and a French mark and a Swiss mark rather than trying to have a community mark and a Swiss mark, you see. It's just where you are going to be operating. Because let's remember lots of local, lots of marks used, fairly used. Every local enterprise has a mark, but they don't necessarily need it for the whole territory of the European Union. In the European Union, you don't know that much more than that. Yes, but the possibility of a collision is increased if the territory is enlarged. So if you have a mark, then you're potentially in one territory that, let's say, Germany. Then the number of rights against which you might be potentially coming into collision is smaller than the number of rights in the whole territory of the European Union. So by going nationally, in a certain sense, you are reducing to some extent your vulnerability or increasing your possibility of getting the registration. I have a question on table 1 and table 2. Since table 1's total is around 42,000, table 2 is 10 times smaller than that. Does that mean that each application could designate several countries? Yes, that's exactly the answer. It does indeed. So it's multiple variations? That's why you use the international system to get coverage over more than one country. But on the table 1, so each company filed the application to the landfall or to a national... Well, that system is... I'm sorry, it's different. I mean, let's see here. Each system is different. So of our three systems, in the PCT, you file an international application through a national office. But it doesn't have a national office. But it is always an international application. It's just the place of filing as it tends to be. It is usually a national office. In the case of the Madrid system, you have to have a national application or registration to start. And then you build your international application on the basis of your national application or registration. And in the case of the Hague system, you have to have a national application to get the rate to us. Without going through the national office. Without going through the national office. Thank you. Is that one stop shop or the members of the company have to pick the countries that they want from them? They have to pick the countries. They only pay more for more countries. That's right. That's how much can it cost on average for one trademark and numbers which I'm not putting good at, but nonetheless. The basic fee is around 600 francs for an international application. If it's in colour, it's around 900. And then individual designation fees are expressed according to the requirements of the individual countries. And these are normally based upon an amount per class of goods and services. How much is that roughly? A ballpark. Usually a ballpark around 100 to 150 Swiss francs per class. And I think that an average fee is around two and a half thousand to three thousand Swiss francs where there are maybe three or four designations on average and three or four classes. Is that a one on fee or an average? So it establishes a period of protection of 10 years for the international registration and that's renewable an infinite number of times in 10 years after that. That's Madrid. Can I make one addition to what Neil has said? One way of understanding it is that the system is basically cost recovery for the office. We charge, as Neil said, 600, but 900 for colour. Why more for colour? Particularly more work is required. It's a historical explanation. Technical publication. Technical publication, yes. But at the national level it's more for each class because you're searching in the classes usually for conflicts. So more work is required by the office. So this is just a wiper fee of two and a half to three thousand? No, no, no. That's the basic fee for 600 or 900. In addition to individual fees for each country where protection is required and I'd like to also say that the individual fee paid for each designation under Madrid can't exceed the national final fee. And why is it that you don't make an application for the whole bunch of countries that do pertain to the Madrid system? Why has it been established individually? It looks so complicated. Well, again, you would apply when you intend to have operations. So... But in a globalized world at some point you will have operations everywhere? Well, that's the case for if you look at, for example, pharmaceutical companies they apply everywhere as a generalization. They tend to... It depends on if you are a luxury good if you're a watcher you would probably only be applying in those countries where there is a significant market for purchasing the goods. Or here the manufacturing capacity exists against you. And when somebody is using my brand illegally like the Chinese then I can sue only in Chinese courts. If the use is confined to the territory of China if the allegedly illegal use is confined to the territory of China. If it is an enterprise that originates in China or whatever other country and the use extends beyond that country you can sue in whatever the allegedly infringing use is taking place. In a country that where I can also... So if it's imported into a country you can sue there. For example. Because I know that I'm pretty far from trading. Yes, it's interesting isn't it? Yeah. Grown consumer market actually. What sort of what sort of things are they I don't know the answer to that. So the tables included in this press release are also included in our statistics which we'll find on our website. And there you're able to dynamically establish tables that are specific to the Russian Federation for example where you can get accounts on the types of classes of goods and services that the Russian Federation applicants are filing internationally in. Similarly you can look to see the classes that the Russian Federation is being designated in. So there you can get a better sense of what products are being sought after for protection of the amount that takes place. The example you get earlier could be say Swatch Russia making applications in Russia. A subsidiary say there's a subsidiary here. If there is a subsidiary it's a job not with Swatch even not with Swatch. You just took really the worst this time. I knew that would get to me. Swiss made. Made with auto parts. Yeah it could be but you might expect it to be a Russian enterprise too. What do we know? You can find out. Are we good? Thank you so much.