From Clearance to Protection: Navigating “First-To-File” Trade Mark Systems 

My colleague Jarrod Lichtblau recently wrote an article stressing the importance of trade mark clearance searches, which only increases when you are operating a business in multiple jurisdictions. 

Businesses now frequently expand across borders, yet trade mark practices can be very different in each jurisdiction. As costs will be incurred for each jurisdiction you are seeking protection for, it is important to ensure that you are effectively allocating funds, taking into account the prospects of success. For these reasons, setting up a trade mark protection strategy from the start is becoming ever more important. 

A critical difference in trade mark systems internationally is the distinction between “first-to-use” and “first-to-file” trade mark systems. Understanding this distinction often directly impacts how, when, and where you should file for trade mark protection, and why trade mark clearance searches are essential from the outset. 

Key takeaways 

• Trade mark rights are jurisdiction-specific – there is no “global” protection system 

• The distinction between “first-to-use” and “first-to-file” trade mark systems may fundamentally affect the risks associated with your branding strategy 

• Manufacturing locations are often overlooked in terms of their importance and may need to be treated as priority filing jurisdictions, particularly when it concerns China 

• Clearance searches ensure that filing strategies are informed, targeted and effective  

“First-To-Use” vs “First-To-File” Trade Mark Systems 

At a high level, each jurisdiction’s trade mark system can fall into two broad categories: 

• In “first-to-use” jurisdictions (e.g. Australia), trade mark rights are generally derived from use of a trade mark in the course of trade. Even if a third party applies for the trade mark first in relation to the same or similar goods or services, the first user of a trade mark can seek to oppose or cancel these rights and can register its own rights by showing evidence of prior continuous use.  

• In “first-to-file” jurisdictions (e.g. China), rights are granted to the party who files the application first, regardless of prior use. While each jurisdiction has their own nuances, operating in a first-to-file jurisdiction without trade mark protection can have significant practical consequences. Simply said, this would risk a situation where a third party files first and obtains enforceable rights to your trade mark, even if they were not the first to use the brand in that jurisdiction.  

For businesses operating internationally, the above distinction is important to consider in your brand protection strategy, as trade mark rights are territorial. It is a common misunderstanding that use of a trade mark in one jurisdiction grants you some right to protect it in another, however, this is generally not how trade mark systems work. 

Trouble in China: Manufacturing Risks and Trade Mark Squatting 

A key practical consideration which is often overlooked by starting businesses is where your products are manufactured. China is a classic example of a strict “first-to-file” jurisdiction. If a third party (including a manufacturer, distributor or unrelated entity) files your trade mark in China before you do, they may obtain exclusive rights to that mark in China without your authorisation. As a result, you could be prevented from manufacturing goods bearing your own brand in that jurisdiction, and exporting such branded goods may also be disrupted. From this point, issues can escalate dramatically, if that third party does manufacture and export goods bearing ‘your’ trade mark internationally. Once this type of unwarranted situation has developed, it can be incredibly difficult to de-escalate. 

The existence of “first-to-file” trade mark systems has consequently given rise to well-known issues of copycats as well as trade mark squatting, where third parties register foreign brands that gain traction pre-emptively, sometimes with the intention of selling them back to the rightful owner. For businesses engaging overseas manufacturers, these issues are not merely theoretical, as both copycats and trade mark squatting are chronic commercial risks. 

Key Considerations for Trade Mark Filing Strategies 

Given the above, a trade mark filing strategy should be tailored to the jurisdictions that are relevant to each business’s current and future trade. For this reason it is best to discuss your intended growth with a qualified Trade Marks Attorney. A Trade Marks Attorney can set up a tailored trade mark strategy for you that not only takes your commercial interests into account, but also balances budget expectations, so that you can rest assured that your trade mark protection fits the needs of your business as best as possible while you focus on growth. 

If you intend to extend your operations internationally – including via sales, online platforms or offshore manufacturing – your Trade Marks Attorney can advise on whether you will encounter any “first-to-file” jurisdictions such as China, and offer guidance in deciding where it is most crucial to protect your trade mark during each stage of growth. In some cases, it may even be beneficial to apply for trade mark protection before entering into a certain market. Therefore, it is best to discuss filing strategy as soon as a trade mark is selected, rather than to wait for the commercial rollout of a new brand. 

Where Clearance Searches Fit In 

Now, applying for trade mark protection internationally can become an expensive exercise, and it may not always be in reach to apply for a trade mark in all your desired operative jurisdictions at once. It is often helpful in determining the best filing strategy to have a Trade Marks Attorney conduct trade mark clearance searches first.  

For example, use of a proposed trade mark may carry significant risks in some jurisdictions due to existing rights or a likely breach of local laws, and it may be advisable to review those risks first and consider more closely whether it is worthwhile taking such risks on board or adopting an alternative strategy before your business expands into that particular region. Where legal resources may be restricted during certain stages of growth, clearance search results may impact more than just your filing strategy but also affect your future expansion plans altogether. 

Particularly when considering expansion to “first-to-file” countries, trade mark clearance searches are incredibly valuable, as an existing right may have larger implications for your business in that country than in a “first-to-use” country, which may allow for a more subtle, long-term growth tactic.  

Moreover, effective trade mark clearance searches will put your Trade Marks Attorney directly in contact with trusted local experts, who often assist beyond the clearance search itself. For example, local experts often also advise on recommended filing scope, local goods or service specification requirements and particular local laws and regulations that may need to be taken into account when proceeding with a trade mark application in their region.  

Trade mark clearance searches are therefore about much more than ensuring a clear path forward for your trade mark application: they are also foundational to an effective global filing strategy.  

Final thoughts 

In an increasingly global marketplace, trade mark protection is as much about strategy and timing as it is about legal rights. Businesses that align early clearance searches with a proactive international filing approach are often better positioned in terms of risk management, and more likely to avoid potential costly disputes during a period of growth. To ensure you can build brands that can scale confidently across borders, MBIP can help. Please reach out via our book a meeting form or by calling our office on 07 3369 2226 to be put in contact with one of our skilled Trade Marks Attorneys.