Tax, Metaverse, and Sustainability in Focus at INTA Annual Meeting—Plus Speeches by Tang and Vidal

“Trademark filings in the United States surged 27.5% in 2021, and there is now a backlog of 544,000 unexamined classes. First action pendency stands at about 7.8 months and disposal pendency at 12.8 months. ‘Please know, we are doing what we can to address that,’ said [USPTO Director Kathi Vidal].”

INTA - understanding of tax issues is increasingly important for trademark practitioners—and a new report by the International Trademark Association (INTA) focusing on the European Union, Switzerland and the United Kingdom aims to help them achieve that.

The “Report on the Taxation of Trademarks and Complementary Rights in Europe” was unveiled at the 144th INTA Annual Meeting Live+, which was held in Washington, D.C. and online from April 30 to May 3. There were more than 6,700 registrants from 130 countries.

Tax Considerations for Trademark Practitioners

The Report guides readers through the key tax considerations in the trademark cycle (creation/acquisition, exploitation and transfer) and also explains key tax-related terms.

In the section on exploitation and commercialization, the Report explains three popular models—the proprietor’s own use model, the license model and the principal model—and discusses tax implications, location considerations and valuation methods.

With brands increasingly at the center of corporate value, tax regulators are paying more attention to where IP rights are located and managed, explained Jeff Marowits, president, client services at Keystone Strategy and a member of INTA’s Research Advisory Council, Global Transactions and Tax Subcommittee: “Tax regimes are seeking to assess where firms generate profits and take a share of profits in a global economy.”

At present, however, he said trademark and tax professionals are not talking to each other enough. This means IP-owning businesses are missing out on opportunities to educate tax authorities about the business, with potentially damaging consequences: “Your tax position plays into your brand and could hit you there.”

The report focused on Europe due to the variety of tax regimes, said Marowits. It is part of a two-year education plan that will include reports on other regions and webinars on topics such as transfer pricing.

As the Report states: “The tax environment is constantly changing. For this reason, it is important to identify key emerging trends and expected legislative changes upfront, to be prepared.” Specific upcoming changes addressed are the OECD Digital Tax Project and the EU Anti-Tax Avoidance Directive.

In his presentation at the Opening Ceremonies, 2022 INTA President Zeeger Vink of MF Brands Group focused on the need to properly recognize trademark assets in accounting rules. On April 30, INTA’s Board of Directors adopted a resolution stating that “accounting standards should not require a blanket exclusion of trademark and complementary IP that are developed from recognition as assets on corporate balance sheets.” A Presidential Task Force on IP Reporting for Brands will further examine this topic.

Engines of IP Growth

In his speech at the Opening Ceremonies, World Intellectual Property Organization (WIPO) Director General Daren Tang said that innovation and creativity have driven increased use of WIPO’s systems. Record venture capital investment has decoupled the link between GDP and R&D, he added, with businesses shifting to digital technologies: these make up 6% of patents and ‘digital’ is among the top five words in trademark searches.

Tang said there are “a lot more engines of IP growth since 2010,” with increased filings in countries such as Brazil, India, Indonesia and Mexico: “More and more people are seeing IP as relevant. And more and more countries are seeing IP as important for growth.”

In response, WIPO is establishing a Strategy House as part of its Strategic Plan 2022-2026. Mr. Tang said it would adopt a “more customer-centered approach” and help to “change the narrative around IP.” In addition, as part of the Organization’s efforts to promote inclusion and diversity, WIPO Deputy Director General Lisa Jorgenson has been appointed as the Organization’s first IP & Gender Champion, responsible for encouraging female engagement in IP.

Vidal on Tackling Trademark Backlog

USPTO Director Kathi Vidal addressed the Meeting on May 3. She said that protecting brands is more important than it has ever been and added: “We [the Biden Administration] believe in strong IP rights—I want to make that very clear.”

Trademark filings in the United States surged 27.5% in 2021, and there is now a backlog of 544,000 unexamined classes. First action pendency stands at about 7.8 months and disposal pendency at 12.8 months. “Please know, we are doing what we can to address that,” said Vidal. She said the Offices has hired 32 trademark examiners to support the 335 it currently has and is deploying new technologies.

It is also expanding its resources dedicated to addressing bad actors, she said: “We are boosting the protection of our Register and addressing sophisticated and evolving criminal schemes remains a top priority of the USPTO.”

As part of its effort to promote inclusivity, the USPTO has launched the Council for Inclusive Innovation initiative, which is chaired by U.S. Secretary of Commerce Gina M. Raimondo, with Vidal as Vice-Chair.

Metaverse, NFTs and Sustainability

The Annual Meeting educational schedule was organized around seven tracks: Building a Better Society Through Brands; Complementary Rights, Regulatory Issues, and Brand Restrictions; Enforcement and Anticounterfeiting; Innovation and the Future of IP; Professional Development; The Business of Brands; and Regional Updates.

There was a focus this year on issues relating to the Metaverse, Blockchain, and non-fungible tokens (NFTs), with many sessions on these topics being packed out. Speakers discussed pending cases relating to NFTs and trademarks such as Nike v. StockX and Hermes v. Mason Rothschild.

Topics relating to sustainability were also popular, with sessions on implementing a green IP strategy and disposing of counterfeit goods in a sustainable way.

As part of its initiative to build a culture of sustainability, INTA encouraged registrants to offset their carbon footprint. It also offered the opportunity to donate to Ukraine Refugee Relief and hosted a reception for the INTA Foundation, which works to expand educational and professional development opportunities in IP for diverse, under-represented populations.

Next year’s INTA Annual Meeting will take place in Singapore from May 16 to May 20, with in-person and virtual options.

Image Source: Deposit Photos
Author: VadimVasenin
Image ID: 195224554 


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