37 III. INTERNATIONAL TREATIES –AMOVEMENT TOWARDS HARMONIZATION OF TRADEMARK LAWS III.1. NEED FOR UNIFORMITY The ever-increasing importance and proliferation of trademarks in international and domestic commerce is remarkable in its own way and should not be overshadowed by the current discussions concerning patents and copyrights. Most obvious is the impact of electronic commerce and the growth of the Internet as a selling medium, a forum that transcends national boundaries and bears no physical location on “Main Street.” The reputation of a product or service travels rapidly in today’s commercial marketplace, and can reach foreign markets long before the trademark owner has actually begun marketing its products and conducting business. 67 ’ Trademarks have become even more fundamental in our commercial lives due to the primary changes taking place in the intensely competitive international markets in consumer goods. When compared to the market that existed a few decades ago, today’s consumer demands variety) quality, and constant novelty. To meet these demands, businesses tailor their products to smaller and increasingly heterogeneous, niche markets. Consequently, the incentive exists to search for the least expensive location to manufacture the product that will enable the business to compete in global markets. In this fluid environment, the trademark originator’s intent to expand beyond its original market should be presumed. 67 Roger Schechter, The Case For Limited Extraterritorial Reach of the Lanham Act, 37 VA. J. INT’L L 619,628 (1997).
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37
III. INTERNATIONAL TREATIES – A MOVEMENT TOWARDS
HARMONIZATION OF TRADEMARK LAWS
III.1. NEED FOR UNIFORMITY
The ever-increasing importance and proliferation of trademarks in
international and domestic commerce is remarkable in its own way and should not
be overshadowed by the current discussions concerning patents and copyrights.
Most obvious is the impact of electronic commerce and the growth of the Internet
as a selling medium, a forum that transcends national boundaries and bears no
physical location on “Main Street.” The reputation of a product or service travels
rapidly in today’s commercial marketplace, and can reach foreign markets long
before the trademark owner has actually begun marketing its products and
conducting business.67’
Trademarks have become even more fundamental in our commercial
lives due to the primary changes taking place in the intensely competitive
international markets in consumer goods. When compared to the market that
existed a few decades ago, today’s consumer demands variety) quality, and
constant novelty. To meet these demands, businesses tailor their products to
smaller and increasingly heterogeneous, niche markets. Consequently, the
incentive exists to search for the least expensive location to manufacture the
product that will enable the business to compete in global markets. In this fluid
environment, the trademark originator’s intent to expand beyond its original
market should be presumed.
67 Roger Schechter, The Case For Limited Extraterritorial Reach of the Lanham Act, 37 VA. J.
INT’L L 619,628 (1997).
38
Significant changes in the production and marketing of consumer goods
have occurred since the 1970s. Formerly, companies seldom revamped their
product lines. The difference today is startling. Take, for example, two heavily
advertised products, sneakers and automobiles, and consider how several models
were available twenty-five years ago for each. The likely answer is only a handful.
Today, in comparison, Nike introduces new sneaker models every six weeks.
Peruse any Sunday newspaper supplement and one finds hundreds of models of
automobiles for sale68.
This new world of international trademarks has created intense demands
on trademark owners. When models proliferate and product lines are constantly
being revamped, relentless pressure is imposed on a company to create a constant
flow of new trademarks. Once a trademark is created and the availability of the
trademark determined, the trademark must be registered and maintained in several
jurisdictions simultaneously. The figures are revealing. The number of trademark
registrations worldwide in 1967 was 400,000; by 1992, registrations totaled
1,200,000, a three-fold increase. It is expected that this number will increase even
more sharply in the years to come69.’ For these reasons, it is obvious that
trademark owners need speed, certainty, and efficiency in seeking and
maintaining their rights internationally.
Reliable, stable, and efficiently structured trademark system benefits
consumer and business interests alike. Trademarks serve the interests of
consumers because they reduce search costs and allow buyers to make rational
68 Jeff Madrick, Computers: Waiting for Revolution, 45 N.Y. REV. 5, 32 (March 26,1998).
69 Arpad Bogsch, Trademarks in 2017: Their Creation and Protection, 82 TM REP. 880,881
(1992).
39
purchasing and repurchasing decisions with speed and assurance.70” Just as
important, a strong trademark system creates incentives for firms to create and
market products of desirable qualities, particularly when these qualities are not
observable before purchase. Indeed, the products that we buy today are embedded
with more and more intangible information that is largely unobservable to the
human eye. In this commercial environment trademarks operate as convenient
symbolic shorthand that provides this information to consumers in the most
efficient manner. For example, a washing machine might include software that
controls the correct temperature, or a microwave may apply technology to
regulate the length of time a certain vegetable is cooked. These intangible and
unobservable features account for an ever greater value of products71.
70 William Landes& Richard Posner, Trademark Law: An Economic Perspective, 30 Ji. &
ECON.265 (1987). Trademarks help to solve the problem of consumer ignorance about the quality
of a product. When quality is opaque not apparent on the goods themselves, the consumer can use
the trademark as a signal of quality. In this way, trademarks reduce the costs to consumers of
searching for a product with specific qualities.
71Ibid.(citing Frances Cairncross, The Death Of Distance How The Communications Revolution
Will Change Our Lives (1997) ).
40
III.2. INTERNATIONAL AGREEMENTS RELATING TO TRADEMARK LAWS
III.2.a. Paris Convention for the Protection of Industrial
Property- The Beginnings of the International Trademark
System72
The Paris Convention for the Protection of Industrial Property is the
principal international treaty governing patents, trademarks, and unfair
competition. Concluded in 1883, the Paris Convention resulted in the first
international effort to standardize and simplify the protection of intellectual
property rights in Member States. This Treaty has been subsequently amended
several times, the last amendment occur ring in Stockholm in 196773.
Significantly, the Treaty drafted at the Paris Convention has the greatest number
of Member States of any treaty dealing with intellectual property rights, and is
administered by WIPO.
The Paris Convention is primarily concerned with harmonization of
substantive trademark law and is premised on the fundamental principle that
Member States are not allowed to discriminate between their nationals and
nationals of other Member States74. Thus, nationals of Member States enjoy the
same rights, advantages, and protections as nationals in every other Member State
72Paris Convention for the Protection of Industrial Property, opened for signature Mar. 20, 1883, as
amended at Stockholm, July 14, 1967, 21 U.S.T. 1630, 828 U.N.T.S. 305 [hereinafter Paris
Convention].
73Originally enacted in 1883, the Paris Convention has been revised six times: Brussels (1900);
Washington (1911); The Hague (1925); London (1934); Lisbon (1958); Stockholm (1967).
74 Art. 2., Paris Convention.
41
of the Paris Convention. The consistency in trademark law among Member States
is accomplished by the provisions of the Paris Convention that provide for
conditions associated with the filing and registration of trademarks which are
determined by national laws75.
One important innovation of the Paris Convention is the right of priority.
Once a trademark application has been filed in a Member State, the applicant has
a period of six months in which to file corresponding applications in other
Member States without losing any rights76. In effect, the subsequent filings are
given a priority date of the first filing, and serves to protect the applicant against
third parties after the first filing but before subsequent convention filings77.
Another key provision of the Paris Convention concerns the protection of
“well known” marks78. Under Article 6bis, the Paris Convention confers
protection for “well known” marks, whether registered or not79. This provision
requires Member States to either refuse to register, cancel the registration, or to
prohibit the use of a mark, that is likely to create confusion “of a mark considered
by the competent authority of the country of registration or use to be well known
75Art.6(1). Paris Convention.
76 Art.4B,C(1). Paris Convention.
77 Stephen P. Ladas, Patents, Trademarks, and Related Rights: National and International
Protection 1196-97 (1975).
78 Clark W. Lackert, Famous Marks: Dilution From an International Perspective, in Annual
Advanced Seminar On Trademark Law 1997, at 87 (PLI Patents, Copyright, Trademarks, and
Literary Prop. Course Handbook Series No. 176, 1997); Frederick W. Mostert, Well-Known and
Famous Marks: Is Harmony Possible in the Global Village?, 89 TM REP. 103,107-08 (1996).
79Art. 6bis(1), Paris Convention.
42
in that country ....80„ Article 6bis entitles a national of Member State to protect
against exploitation of the famous mark on identical or similar goods. For
example, Coca-Cola could bring an action against the use or registration of a
trademark in a Member State as long as the “Coke” trademark was famous in that
state, and even if the “Coke” trademark was not registered in its country of origin.
Coca-Cola could not, however, bring the action if the trademark was used on, or
registered for, washing machines.
In contrast, suppose that “Coke” is registered for dissimilar goods, or that
“Coke” is used on similar goods but happens not to be famous in that Member
State. Clearly, relief under Article 6bis is not available, but another provision of
the Paris Convention may have some pertinence. Article 10bis of Paris provides
that “the countries of the Union are bound to assure to nationals of such countries
effective protection against unfair competition81’’ and defines unfair competition
“as any act of competition contrary to honest practices in industrial or commercial
matters.82” The problem is that little consensus exists on what constitutes “unfair
competition” under the Treaty. Despite such limitations, the Paris Convention, in
protecting famous marks, and even those that are unregistered, illustrates further
the move toward the erosion of territoriality in trademark 1aw.
The Paris Convention embodies a number of Special Unions (known also
as Special Arrangements) concerning various forms of industrial property. These
Special Unions have in their own way further harmonized and integrated the
international system. In order to adhere to a Special Union under the Paris
80 Art. 6bis(1), Paris Convention.
81Art. 10 bis(1), Paris Convention.
82 Art. 10 bis(2), Paris Convention
43
Convention, a country must first be a member of the Paris Convention83’ The
Madrid Agreement Concerning the International Registration of Marks (“Madrid
Agreement”) is one such special arrangement. The Madrid Agreement was
completed at the Madrid Revision conference of the Paris Convention in 1890,
and later revised at Stockholm in 1967. The Madrid Agreement builds on
principles outlined at the Pans Convention by creating an international mechanism
for the registration of trademarks. Approximately thirty
Nations, the United States not being one of them, are party to the Madrid
Agreement.
The Paris Convention does not regulate the conditions for the filing and
registration of marks which are determined in each Contracting State by domestic
law. Consequently, no application for the registration of a mark filed by a national
of a Contracting State may be refused, nor may a registration be invalidated, on
the ground that filing, registration nor renewal has not been affected in the country
83 Other Arrangements concerning Trademarks include The Lisbon Agreement for the Protection
of Appellations of origin and Their International Registrations, Oct. 31, 1958, as last revised at
Stockholm, July 14, 1967, and mended 1979 (a multilateral treaty providing for an international
system of registration and protections of appellations of origin. The treaty was formed at the 1958
Lisbon Conference of the Revision of the Paris Convention. The United States is not a member);
The Madrid Arrangement for the Repression of False or Deceptive Indications of Source, July 14,
1967, 828 U.N.T.S. 389, 23 U.S.T. 1353 (First created at the Madrid Revision Conference of the
Paris Convention in 1890 and has been revised several times the latest revision being at Stockholm
in 1967. There are thirty members adhering to this arrangement. The United States in not a
member); Nice Arrangement Concerning the International Classification of Goods and Services
for the Purposes of the Registration of Marks, June 15, 1957,550 U.N.T.S. 45, as revised at
Stockholm, July 14, 1967 and at Geneva, May 13, 1977, in force Nov. 12, 1969.
44
of origin. The registration of a mark obtained in one Contracting State is
independent of its possible registration in any other country, including the country
of origin; consequently, the lapse or annulment of the registration of a mark in one
Contracting State will not affect the validity of the registration in other
Contracting States. Where a mark has been duly registered in the country of
origin, it must, on request, be accepted for filing and protected in its original form
in the other Contracting States. Nevertheless, registration may be refused in well-
defined cases, such as where the mark would infringe the acquired rights of third
parties; where it is devoid of distinctive character; where it is contrary to morality
or public order; or where it is of such a nature as to be liable to deceive the public.
If, in any Contracting State, the use of a registered mark is compulsory, the
registration cannot be canceled for non-use until after a reasonable period, and
then only if the owner cannot justify this inaction.
Each Contracting State must refuse registration and prohibit the use of
marks that constitute a reproduction, imitation or translation, liable to create
confusion, of a mark used for identical and similar goods and considered by the
competent authority of that State to be well known in that State and to already
belong to a person entitled to the benefits of the Convention. Each Contracting
State must likewise refuse registration and prohibit the use of marks that consist
of or contain, without authorization, armorial bearings, State emblems and official
signs and hallmarks of Contracting States, provided they have been communicated
through the International Bureau of WIPO. The same provisions apply to armorial
bearings, flags, other emblems, abbreviations and names of certain
intergovernmental organizations. Collective marks must be granted protection.
45
Significance of the Right of Priority
The right of priority, sometimes referred to as the “Convention priority
right, “Paris Convention priority right,” or “Union priority right,” is found in
Article 4. It provides that an applicant eligible for Convention benefits, who files a
first regular patent or trademark application in any of the countries of the Union,
can then file subsequent applications in other countries of the Union for a defined
period of time which subsequent applications will have an effective filing date as
of the first filed application.
For patents and utility models, the defined period is one year. For
industrial designs and trademarks, the defined period is six months. The duration
of the priority periods are designed to take into account the conflicting interests of
the applicant on one hand and of third parties on the other. The practical effect of
the priority right described in Article 4B is that second and subsequently filed
applications filed in a Union country within the priority period are treated as if
filed on the date the first application was filed.
The priority right is important, in the context of both patents and
trademark applications, in that all applications filed within the priority right period
will have priority over any intervening application for the same or closely similar
invention or mark that may have been filed in that country by some third party.
So, if a national of a Paris Convention nation files a first trademark application in
country A, and nine months later files a second application for the same mark in
country B, but meanwhile some five months after the first application a second
applicant files an application for the same or very similar mark for the same or
similar goods in country B, the first applicant will have priority over the second
46
applicant in country B because the application in country B by the first applicant,
although second in time in that country, will be treated as if filed at the time of
that applicant’s first application in country A.
The priority right is additionally important in the context of patent
applications because it preserves the novelty of the invention within the countries
of the Union notwithstanding any publication, exhibition or other act capable of
destroying novelty of the invention during the priority period. So, for example, an
applicant eligible for Convention benefits can file a first patent application in
country A, and thereafter request early publication from the patent office of that
country, describe the invention in an industry journal, exhibit the invention in a
trade show, and/or offer to sell or use publicly the invention, all during the one
year priority period following the filing of a first application, and still file before
the end of that first year period parallel patent applications in countries B, C and
D of the Union, without losing eligibility for patent protection in these countries
notwithstanding that countries B, C and D are all countries whose patent laws
insist on absolute novelty of invention without the benefit of a grace period.
This Convention priority right allows the applicant desiring protection is
several countries of the Union the advantage and convenience of not having to file
multiple applications simultaneously in all Union countries in which protection is
desired without risking that others, particularly imitators in the case of marks, will
file on the same or similar invention or mark between the time a first application
is filed and a subsequent application is made in a Union country during the
priority period, and also without risking loss of novelty due to publication or some
other act capable of defeating novelty that may occur in this interim.
47
The priority right is only applicable with respect to a “first” application for
a given invention or mark. The priority period does not begin to run again in the
case of a subsequently filed application for patent on an invention that
incorporates in part the invention for which a patent application was previously
filed, or for a mark that resembles or incorporates in part a mark previously
applied for. An applicant is not permitted to elongate the priority period in this
manner, but rather is obliged to file all applications for the same or related
inventions and marks in the Union member countries within the applicable
priority period in order to obtain the benefits of the Convention priority right.
The right of priority may be invoked by a successor in title and the
subsequent applications must concern the same invention or mark, but the
category of protection applied for need not be identical in each case. As such a
subsequent utility model application can claim priority based upon a first patent
application, and vise versa, so long as the subject matter of the two applications
are the same. Although rights of priority are limited to the same invention or
mark, multiple priorities and partial priorities may be claimed with reference to
first filed patent applications, and priorities may even be combined from first
applications filed in different member countries.
A first application must be “duly filed”, meaning comprising elements
sufficient to obtain a filing date in accordance with the applicable national law.
Provisional applications, and applications filed under multinational treaties,
including PCT and EU patent applications, can qualify as a “first” application for
purposes of the Union priority right. The fate of the first filed application has no
impact on the priority right. Withdrawal, rejection or abandonment of the “first”
48
correctly filed application cannot destroy or alter in any way the right of priority
of subsequently filed eligible patent and trademark applications.
III.2.b. TRIPS Agreement :-
III.2.b.(i). WTO and The TRIPS Agreement
The conclusion of the Agreement on Trade related Aspects of
Intellectual Property Rights (TRIPS)84 in 1994 presaged the advent of a global
epoch in trademark rights. The TRIPS Agreement not only provides substantive
standards for the eligibility and protection of trademarks, but also mandates that
“effective” enforcement procedures are available under national legal systems. It
does so by establishing a global network of “coordinate” national courts to
enforce the substantive trademark provisions of the Agreement.85 Without
replacing the national, territorially-based trademarks of Member States, TRIPS is
based on principles of territoriality requiring independent trademark applications
and actions for the enforcement of rights in each Member State of the World
Trade Organization (WTO).
84 Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations,
Marrakesh Agreement Establishing the World Trade Organization, signed at Marrakesh
(Morocco), April 15, 1994 [hereinafter WTO Agreement]; Annex IC, Agreement on Trade related
Aspects of Intellectual Property Rights [hereinafter TRIPS Agreement or TRIPS], reprinted in The
Results of the Uruguay Round of Multilateral Trade Negotiations—The Legal Texts, 1-19, 365-403
(GATT Secretariat, Geneva 1994).
85See Part II, Sect. 2 of the TRIPS Agreement. Article41 mandates WTO Members ensure that
“effective” procedures are available under domestic law.
49
Despite the fact that domestic trademark laws have been duly amended in
accordance with the TRIPS Agreement throughout the 151 Member States of the
World Trade Organization (WTO), multi-jurisdictional actions for trademark
infringement indicate that implementation of the TRIPS Agreement has not
rendered the law more certain, nor the outcome of litigation significantly more
predictable. The World Trade Organization (WTO) is the international
organization dealing with the rules of trade between nations. As of February 2005,
148 countries are Members of the WTO. In becoming Members of the WTO,
countries undertake to adhere to the 18 specific agreements annexed to the
Agreement establishing the WTO. They cannot choose to be party to some
agreements but not others (with the exception of a few “plurilateral” agreements
that are not obligatory).
Of these agreements, Trade-Related Aspects of Intellectual Property
Rights (TRIPS) is expected to have the greatest impact on the pharmaceutical
sector and access to medicines. The TRIPS Agreement has been in force since
1995 and is to date the most comprehensive multilateral agreement on intellectual
property. The TRIPS Agreement introduced global minimum standards for
protecting and enforcing nearly all forms of intellectual property rights (IPR),
including those for patents. International conventions prior to TRIPS did not
specify minimum standards for patents. At the time that negotiations began, over
40 countries in the world did not grant patent protection for pharmaceutical
products. The TRIPS Agreement now requires all WTO members, with few
exceptions, to adapt their laws to the minimum standards of IPR protection. In
50
addition, the TRIPS Agreement also introduced detailed obligations for the
enforcement of intellectual property rights.
However, TRIPS also contains provisions that allow a degree of flexibility
and sufficient room for countries to accommodate their own patent and
intellectual property systems and developmental needs. This means countries have
a certain amount of freedom in modifying their regulations and, various options
exist for them in formulating their national legislation to ensure a proper balance
between the goal of providing incentives for future inventions of new drugs and
the goal of affordable access to existing medicines.
Ideas and knowledge are an increasingly important part of trade. Most of
the value of new medicines and other high technology products lies in the amount
of invention, innovation, research, design and testing involved. Films, music
recordings, books, computer software and on-line services are bought and sold
because of the information and creativity they contain, not usually because of the
plastic, metal or paper used to make them. Several products that used to be traded
as low-technology goods or commodities now contain a higher proportion of
invention and design in their value – for example brand named clothing or new
varieties of plants.
Creators can be given the right to prevent others from using their
inventions, designs or other creations — and to use that right to negotiate payment
in return for others using them. These are “intellectual property rights”. They take
a number of forms. For example books, paintings and films come under copyright;
inventions can be patented; brand names and product logos can be registered as
51
trademarks; and so on. Governments and parliaments have given creators these
rights as and incentive to produce ideas that will benefit society as a whole.
The extent of protection and enforcement of these rights varied widely
around the world; and as intellectual property became more important in trade,
these differences became a source of tension in international economic relations.
New internationally-agreed trade rules for intellectual property rights were seen as
a way to introduce more order and predictability, and for disputes to be settled
more systematically.
The WTO’s TRIPS Agreement is an attempt to narrow the gaps in the way
these rights are protected around the world, and to bring them under common
international rules. It establishes minimum levels of protection that each
government has to give to the intellectual property of fellow WTO members. In
doing so, it strikes a balance between the long term benefits and possible short
term costs to society. Society benefits in the long term when intellectual property
protection encourages creation and invention, especially when the period of
protection expires and the creations and inventions enter the public domain.
Governments are allowed to reduce any short term costs through various
exceptions, for example to tackle public health problems. And, when there are
trade disputes over intellectual property rights, the WTO’s dispute settlement
system is now available.
TRIPs covers five broad issues:
Application of basic principles of the trading system and other
international intellectual property agreements.
52
The provision of adequate standards and principles concerning the
availability, scope and use of trade-related intellectual property rights –
minimum standard
The provision of effective and appropriate means for the enforcement of
trade-related intellectual property rights, taking into account differences in
national legal systems – civil and administrative procedures.
The provision of effective and expeditious procedures for the multilateral
prevention and settlement of disputes between governments
Special transitional arrangements during the period when the new system
is being introduced.
III.2.b.(ii). Basic Principles of TRIPS
National Treatment
The TRIPS Agreement provides for national treatment86 .National
treatment means that Members are required to treat nationals of other countries
the same as their own nationals. In international treaties on intellectual property,
this principle of national treatment is already included in the Paris and Berne
Conventions. It is necessary to take into account that the former principle of
national treatment embodied in GATT only applied to the equal treatment of
imported goods and domestic products. As a result of the inclusion of national
treatment in the TRIPS Agreement, it has become clear that the principle now also
applies to intellectual property not subject to the Paris or Berne Conventions
(trade secrets, etc.), and the principle now also applies to the enforcement of
intellectual property rights.
86 Art. 3 (1) of TRIPS
53
Most-Favoured-Nation Treatment
The TRIPS Agreement provides for Most-Favoured-Nation
treatment.87Most-Favoured-Nation treatment was a basic assumption in GATT,
but it had not been applied to international treaties concerning intellectual
property. Therefore, the TRIPS Agreement is significant as the first international
treaty concerning intellectual property to apply Most-Favoured-Nation
treatment88. The difference between national treatment and Most-Favoured-Nation
treatment is that while national treatment requires that foreign nationals are treated
the same or better than domestic nationals, Most-Favoured-Nation treatment is the
principle that all foreign nationals must be treated equally. Consequently,
according to Most-Favoured-Nation treatment, if country A offers country B
certain benefits or privileges, it must automatically offer these to all other
countries. Therefore, a consequence of Most-Favoured-Nation treatment is that
the outcomes of bilateral agreements automatically extend to other countries as
well. It must be noted that the former principle of Most-Favoured-Nation
treatment embodied in GATT only applied to the equal treatment of imported
goods and domestic products.
87 Art. 4 of TRIPS.
88MahimaPuri, Anjali Varma, Indian Council for Research on International Economic Relations
(ICRIER) WORKING PAPER NO. 166, INTELLECTUAL PROPERTY CONVENTIONS AND
INDIAN LAW, 2005.
54
III.2.c. Trademark Law Treaty89:-
The Trademark Law Treaty (“TLT”) was adopted on October 27, 1994
and signed in Geneva on October 28, 1994 by thirty-nine member countries of
WIPO. The Treaty entered into force on August 1, 1996, three months after the
date on which the Treaty was ratified by a minimum of five countries. The Treaty
is now in effect in a number of countries.
The aim of the TLT is to standardize and streamline national and regional
trademark registration procedures. This is achieved through the simplification and
harmonization of certain features of those procedures, thus making trademark
applications and the administration of trademark registrations in multiple
jurisdictions less complex and more predictable. The great majority of the
provisions of the TLT concern the procedure before a trademark office which can
be divided into three main phases: application for registration; changes after
registration; and renewal. The rules concerning each phase are constructed so as to
clearly define the requirements for an application or a specific request.
As regard to the first phase – application for registration – the Contracting
Parties to the TLT may require, as a maximum, the following indications: a
request, the name and address and other indications concerning the applicant and
the representative; various indications concerning the mark, including a certain
number of representations of the mark; the goods and services for which
registration is sought classified in the relevant class of the International
Classification (established under the Nice Agreement Concerning the