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32. Testimony, Joanna Shelton, Assistant Secretary of State for Trade Policy and Programs, before House Committee on the Judiciary, Subcommittee on Intellectual Property and Judicial Administration, on the Madrid Protocol (July 19, 1996)


Statement of Joanna R. Shelton

Deputy Assistant Secretary of State

Trade Policy and Programs

Before the

Subcommittee on Intellectual Property

And Judicial Administration

Committee on the Judiciary

United States House of Representatives


July 19, 1995




















Mr. Chairman and Members of the Subcommittee:


Thank you for giving me the opportunity to present the Administration's views on the "Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks"—commonly known as the Madrid Protocol.

The Administration appreciates the importance the American business community attaches to trademarks and the significant resources U.S. companies have devoted to strengthening public recognition of their marks and the prevention of their misappropriation. In the global marketplace, consumers have come to rely on trademarks as assurances of product quality, reliability and integrity. Indeed, a company's trademark has become one of its most important commercial assets.

We recognize too that our joining the Madrid Protocol would allow U.S. trademark owners to register their marks in countries party to the Madrid Protocol by filing a single application with the U.S. Patent and Trademark Offices, a simplified procedure which is a clear benefit to U.S. trademark owners.

Nevertheless, despite the benefits that might be derived from the Madrid Protocol, we continue to believe that it is not in the best interests of the United States to become party to the Protocol as it now stands. The problem rests not with the substance of its provisions—but rather the way in which the Madrid Protocol is currently structured.

Our concerns about the Madrid Protocol center on provisions concerning so-called "intergovernmental organizations." As explained below, these provisions would give unfair advantages to the member states of such organizations, which would undermine U.S. interests with respect to the Madrid Protocol and other aspects of international intellectual property protection, as well as our overall treaty practice.

By way of background, international agreements are traditionally concluded among states. Although the European Union (EU) is not a state, its member states have transferred to it some of their powers to conclude and implement international agreements. In the drafting of treaties and the operation of international organizations, the United States has looked for ways to accommodate European integration. As European integration proceeds and develops, however, the United States must be careful that those accommodations do not put the United States at a disadvantage.

Mr. Chairman, we do not object to states forming Regional Economic Integration Organizations (REIOs), such as the EU, nor have we ever concluded that participation by REIOs in international agreements is objectionable. Indeed, the United States generally has supported participation by REIOs, including the EU, in multilateral fora. Furthermore, we recognize that REIOs can be effective instruments for fostering economic integration and well-being. Nevertheless, their participation in international agreements must be carefully monitored.

I will now briefly describe those areas of the Protocol where we have objections.


Our principal objections to the Madrid Protocol are:

  1. that it allows an "intergovernmental organization" to have an additional vote separate and independent from its member states;
  2. that it allows an "intergovernmental organization" to be counted independently toward the number of entities required to bring the protocol into force despite the fact that its member states also may be counted;
  3. that it grants voting rights to "intergovernmental organizations" without requiring an unambiguous declaration of competence; and
  4. that it grants rights to "intergovernmental organizations" without clearly defining them.

EU Voting


From the debate over competence emerged the EU contention that "shared competency" required the EU to have its own vote separate and independent from that of its member states.

The issue of competent authority is inextricably linked to the issue of voting. Mr. Chariman, the U.S. has long opposed granting a vote to REIOs separate and independent from their member states, and our policy is not to become party to agreements where concurrent voting by REIOs and their member states is allowed. In these cases, the U.S. has viewed such voting as an unwarranted expansion of rights under the agreement which may well work to the detriment of U.S. interests. If its member states were to cede competent authority to the EU on the substance of the Madrid Protocol we would have no problem with the EU voting the position of the fifteen member states of the European Communities. However, we cannot accept a situation where an assertion of "shared competency" would suggest that the EU is entitled to a separate sixteenth vote exclusive of an in addition to those of its member states.

The EU and its member states have continued to press for an independent EU vote in numerous multilateral agreements. To have accepted this additional vote in the Madrid Protocol would, thus, also have established an unfavorable precedent, which would surely have been used by the EU to our disadvantage. In the field of intellectual property alone, the EU has proposed concurrent EU and member state voting in the negotiating texts of World Intellectual Property Organization (WIPO) agreements on Dispute Settlement and the Hague Agreement Concerning the International Deposit of Industrial Designs. During the negotiation of the Trademark Law Treaty, EU insistence on an independent vote forced negotiators to accept a compromise arrangement whereby all provisions relating to voting were dropped from the agreement—a development which greatly reduces the ability of the parties to the agreement to effect necessary revisions. In these instances, the EU has pointed to the Madrid Protocol as setting the precedent for concurrent voting by the EU and its member states. We expect that EU will continue to push its voting agenda in future negotiations as well.

Counting REIO Ratification Toward Bringing the Treaty into Force

A corollary of the EU voting issue is the provision of the Madrid Protocol that would permit a REIO and its member states to be counted separately toward bringing the Protocol into force. We have opposed this provision of the Protocol for the same reasons we have objected to concurrent voting by a REIO and its member states—that such a provision represents an unwarranted expansion of the powers of REIOs and their member states which has no basis in international law. Consequently, we cannot agree to any provision that would allow a REIO as well as its member states to count toward bringing an agreement into force.

Declaration of Competence

Another objection to the current text of the Madrid Protocol is the absence of a requirement for an unambiguous declaration of the allocation of competence as between the intergovernmental organization and its member states.

As party to an agreement, the United States has a legal and practical need to know which party has responsibility for implementing the particular obligations of an agreement. Consequently, before entering into an agreement, we regularly have requested from REIOs and their member states a clear statement as to allocation of competence.

The issue of competent authority arose in the Madrid Protocol when the EU and its member states were unwilling to provide a definitive statement as to where responsibility for the implementation of the Protocol resided. Rather, the EU and its member states attempted to introduce a new concept they characterized as "shared competence." Under this arrangement, the EU and its member states claimed to each have full, separate and independent responsibility for substantive trademark matters under the Madrid Protocol. This proposal, heretofore unknown in international law and practice, served to introduce uncertainty into the administration of the Madrid Protocol that we believe could work to the disadvantage of the United States.

Lack of Definition of Intergovernmental Organization

When states have transferred competence to negotiate and implement treaties to a supranational body, that body may be an appropriate treaty partner. On the other hand, a looser grouping of states—for example, one that is largely a political compact—would lack the legal and practical ability to honor commitments it made in a treaty. For this reason, when treaties permit supranational bodies to become parties. they typically define such bodies with precision. For example, the Vienna Convention for the Protection of the Ozone Layer defines those categories of organizations eligible to participate as organizations constituted by sovereign states, having competence in matters covered by the agreement, and having been duly authorized to become party to the agreement. The Madrid Protocol, however, contains no safeguards to address our concerns about "non-states."

USG Engagement on EU Voting

Because we are not party to the underlying treaty, the Madrid Agreement Concerning the International Registration of Marks, our role in negotiating the Protocol was limited. We nevertheless made known our views on EU voting to the World Intellectual Property Organization (WIPO) and to EU member states.

Since the Protocol was concluded, we have actively engaged the EU and WIPO member states on the issue of EU voting. Through a series of demarches to foreign governments we have explained our views and solicited their support for our position. Our view has garnered significant support among the countries of East Asia and Latin America, so much so that voting provisions were dropped from the recently-concluded Trademark Law Treaty in order to avoid granting the EU an extra vote. In addition, the issue has been shelved in the negotiations for the Hague Agreement Concerning the International Deposit of Industrial Designs.

Nevertheless, the EU continues to press for an extra vote, proposing to insert provisions to this effect in the WIPO Dispute Settlement treaty, for example.


Mr. Chairman, before becoming party to the Madrid Protocol or any other multilateral agreement we must be assured that we are going to have the ability to affect the implementation of the agreement consistent with its intent and in the best interests of the United States. The Madrid Protocol as it is currently constructed does not provide the safeguards we would need to effectively ensure that this would be the case. Accordingly, we must continue to oppose U.S. membership in the Madrid Protocol until the concerns outlined above are addressed.

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