2 June 2016Trademarks

Eyes on the British Virgin Islands: a bright future for IP

Sun, sea and sandy beaches probably come to mind when you think of the British Virgin Islands (BVI). What about trademarks? Almost certainly not. The World Intellectual Property Organization doesn’t even list the Caribbean nation in its directory of countries, while trademark applications are handled by a unit of the Registry of Corporate Affairs, a business regulator.

Having said that, the BVI’s trademark system is becoming increasingly robust and modern. The new trademark legislation includes the ability to register collective, certification and service marks, as well as protect well-known marks.

“The overhaul has dramatically improved things, but there are teething pains, and some bugs to work out,” says Jamal Smith, founder of Thornton Smith, which provides legal and commercial services. “Everyone is tremendously happy with the new procedures; it took time to get familiar with them, but now everyone is happy.”

He says it is now easier and simpler to file trademark applications, as there is no need for a notarised power of attorney—all applicants need is an agreement with a trademark agent, which then files the application. With a power of attorney, the process can take longer and the lawyer wouldn’t complete the form itself.

“If you’re interested in registering a trademark, you first need to find an agent. The Association of Registered Trademark Agents is a great point to start,” Smith recommends. “You must use a registered agent; it is always a good thing to maintain a good rapport with them over time, as you will need to use them constantly.”

Assessing the reforms, Smith praises the change which allows parties to file applications in foreign scripts.

“We have a huge market in Asia because of our corporate dominance. A key feature is that you can register Chinese marks as well as other scripts (for example, Russian); you need a translation or transliteration. That is something quite unique,” he argues.

The biggest changes are to come, Smith adds, noting that electronic filing of trademarks will make things “ten times better than now”—applications still have to be filed in person with the Registry of Corporate Affairs. Physical registration of trademarks is common in the Caribbean, but because the software is already in place to register companies electronically in the BVI, it’s only a matter of time before the trademark system is migrated to the same software, Smith explains.

When applying for a trademark in the BVI, it’s important to ensure all the details are accurate in order to avoid paying extra costs. If there are any errors—even minor inaccuracies such as the wrong address in the original application—parties have to file an amendment. This extra process costs $100, half the price of registering a trademark in one class (it’s $100 for each additional class). This risk, Smith says, is “something in-house counsel need to be aware of”.

Good for business

Asked whether having a BVI trademark places a rights owner at a significant commercial advantage in the country, Smith presents the following scenario: “Let’s say you have a company—a US company—that wants to do business in China. In order to get into China you must have 50% ownership by a Chinese entity.

"If there are any errors—even minor inaccuracies such as the wrong address in the original application—parties have to file an amendment."

The route to doing that is normally establishing a BVI company for the reinvestment in China by a Chinese national, so there is normally a BVI element in any Chinese transaction. To counter the misuse of trademarks, it’s best to have your trademark registered in the BVI to pre-empt any BVI company registering a similar name and operating in China.

Second, he says, due to the large number of tourists visiting the Caribbean island every year (around 400,000, mainly from the US and EU), “you want to protect your brand to ensure it is not being destroyed or diluted when consumers are seeing and using it”.

Although piracy is typically a bigger IP threat than counterfeiting in the BVI, there are problems with people selling goods without a licence, Smith explains, adding that there are quite often concerns over parallel imports, ie, goods that are legal but not authorised for sale.

Smith says the IP knowledge of local companies is growing and that there is a “keen” sense of the available rights.

“This is being spurred on by giant battles that take place between local telecoms companies, which are owned by multinational corporations. They compete very strongly, so the idea of brand protection and IP enforcement is very evident because of that.

“Telecoms companies do have IP disputes among themselves, but they are normally settled. It’s rare to see disputes in court, as there is a telecoms regulator who will usually intervene before court action,” he says.

To help local knowledge improve further, Smith wants to remind parties that trademark protection means more than just registering rights.

“Registration is the first step, but proper protection means using the trademark in the BVI. I am trying to emphasise to trademark owners that they need to use it—for example through licensing agreements or merchandising agreements.

“The automotive industry is known for its exploitation of trademarks in this jurisdiction; it has strong dealership agreements with parent companies mandating how to exploit the trademarks here, and other industry areas need to understand that as well,” he argues.

While the understanding of IP has some way to go, it seems the future for IP is bright in the BVI.

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