Brazil: Digest Of Principles

Last Updated: 11 February 2016
Article by Rodrigo Borges Carneiro

On November 13, 2014, the Brazilian Superior Court of Justice published a digest of principles based on rulings of this court in trademark and industrial property cases.

Under Brazilian law, courts are not bound by such principles, but they are commonly used and cited nonetheless by both lawyers and judges from state and federal courts in motions and decisions.

In relation to trademarks the digest encompass among others the following principles:

The highly renowned trademark (Article 125 of the Industrial Property Law-LPI) is an exception the principle of specificity and has special protection in all fields of activity, if previously registered in Brazil and so declared by the INPI – Institute National Industrial Property.

This clarifies the position that there is a need of a previous declaration by the INPI for a mark to be considered a highly reputed mark. The whole process of declaration is now regulated by Resolution 107/2013 of the INPI which has modified the previous procedure and no longer requires that the declaration be request only incidentally as part of an opposition or administrative cancellation procedure. The request is now object of a separate proceeding.

The well-known mark (Article 126 of the IPL -.. Law No. 9,279 / 96) is an exception to the principle of territoriality and enjoys special protection in its market segment regardless of registration in Brazil.

This is in line with the protection afforded by the Paris Convention and article 126 of our Industrial Property Law. It should be noted that the TRIPS agreement also in force in Brazil grants special protection for well-known marks in relation to goods or services which are not similar to those in respect of which a mark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

The current highly renowned brand concept provided in art. 125 of the IPL is analogous the old concept of notorious marks referred to in art. 67 of the repealed Property Code Industrial - Law no. 5,772 / 71.

This just clarifies matters of terminology and some confusion which in older cases existed as to the scope of protection of highly reputed marks. As the current Industrial Property Law has now almost 20 years this is of minor practical consequence.

Weak or evocative brands, consisting of common or generic expressions, do not have the exclusive attribute can live with other similar marks.

In our opinion this principle is not technically accurate as even weak or evocative brands deserve some degree of exclusivity and under some circumstances such as the duration of use can even acquire secondary meaning which would give them a broader protection.

The exclusive right to use the mark is normally limited by the principle of specialty, ie the class for which it was granted registration.

Again we find that this is not technically accurate as the division in classes is merely an administrative tool and conflicts can exist in respect of products and services in different classes.

Likelihood of confusion is sufficient for the protection of a trademark, evidence of actual confusion by consumers is not necessary.

Although evidence of actual confusion can help (particularly in obtaining an injunction) both the doctrine and the jurisprudence are unanimous in determining that it is not a condition and that the mere likelihood of confusion is sufficient.

To obtain the special protection of highly renown mark in all branches activity, (art. 125 of LPI) an administrative procedure before the INPI is necessary. The INPI and not the courts should be responsible for determining if a brand has met the requirements to be declared of high repute.

Some trademark owners tried to bypass the INPI and request the declaration of highly reputed mark directed in court and after some discussions the courts agreed that a previous administrative procedure before the INPI was necessary. This situation is now potentially solved by the fact that the current regulation for obtaining the declaration of highly reputed mark (Resolution 107/2013) no longer conditions the procedure to be incidental to an opposition or administrative cancellation action and thus trademark owners can now request the declaration in a separate and dedicated procedure before the Brazilian Trademark Office. The question is just that if the examination of these requests is delayed by the backlog of the INPI trademark owners may be compelled to file court actions to ask the courts to force the INPI to issue a decision on the pending requests.

The statute of limitations to obtain damages in a trademark infringement action is of 5 years. The initial term for calculating the statute of limitation for court actions aiming to obtain damages derived from trademark infringement arises from the violation but the term is extended in cases of permanent or continuing violations.

The statute of limitations to obtain damages in cases of trademark infringements is of 5 years. The calculation of the term begins with the violation (not with the knowledge of the violation by the trademark owner) but if the infringement continues (for example new products are manufacture or sold every day) the period of calculation of damages will be extended as each new product will be considered a new violation. The owner of the trademark may be barred from obtain damages for the goods sold more than 5 years before the filing of the court action but will still be able to obtain indemnification for the products which were sold from 5 years before the filing until the date of the decision.

In order to set aside the exclusive rights derived from a trademark registration it is necessary to file a cancellation action before Federal Courts and the INPI has to join the court action as it is the entity responsible for examining and granting the exclusive rights.

The registration of a trademark confers to its owner exclusive rights to use the mark in commercial activity in the national territory. In case of a grant of registration which has not obeyed the legal requirements it is necessary to discuss the matter and obtain a decision from the Federal Court revoking the grant. The INPI has to be part of the action as it is the entity responsible for examining and granting the registration. However it is always possible to discuss the scope of protection granted by the registration and if the use is an infringement without the need to cancel the registration in Federal Court. This discussion can take place in a reply to an infringement action in State Court.

The declaration of forfeiture of a trademark registration produces legal effects from the decision (ex nunc), and not retroactively (ex tunc).

This clarifies the situation regarding potential infringements which occurred during the validity of the trademark. According to this principle the owner of the trademark can claim damages in relation to the use which has occurred until the decision of the forfeiture action.

The failure to meet the standards of the products and services of the licensed brand demonstrates its misuse and authorizes the request of injunctions to prevent the use.

This is particularly important in franchising disputes where the franchisee has a contract in force but is not following the rules of the business and the franchisor has a duty to protect the interests of the whole chain which can be affected by the poor rendition of the services.

To characterize a trademark infringement following parameters of analyzes should be used : (i) the marks must be assessed successively, so as to verify that the memory left by one influence on memory left by another; (ii) the marks should be evaluated based on their similarities rather than on their differences; and (iii) the marks are to be compared by the overall impression and not by details.

These are classic rules of trademark infringement analysis long recommended by the doctrine and accepted by the INPI which were also accepted by the Superior Court of Justice.

In Brazil a declarative system of trademark protection prevails and thus the one who first made use of the mark should have priority and the registration with the competent body (INPI) is a mere presumption which is perfected with the use.

In fact here the court was not in line with the current legal system which grants ownership of a mark based on registration at the INPI. The current Industrial Property Law however, recognizing the need to mitigate this system in special circumstances has introduced a limited right of precedence to obtain a registration for the third party which can demonstrate prior use in good faith of an identical or similar mark for the same or relatedservices. The majority of the court decisions so far have concluded that this right of precedence to obtain a registration has to be asserted during the opposition period of the application of the mark which was first filed by a party other than the prior user.

It is important to note that as the courts are not bound by the digest, practitioners will still have the ability to argue around the principles when necessary.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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