Brazil: Protection Of Trademark Regardless Of Registration In Brazil

The Special Federal Attorney´s Office, along with Brazil´s Patent and Trademark Office (PTO), recently drew up an Opinion (No 0002-2015-AGU/PGF/PFE/INPI/COOPI-LBC-1.0) on the practical application of clause XXIII of article 124 of the Industrial Property Law (local acronym LPI) No 9279/96.

Article 124, XXIII, of the Industrial Property Law (LPI), bans the registration as a trademark of a product or service that reproduces or imitates, wholly or partly, a trademark that the new applicant obviously could not have failed to know about due to its own activity, the holder of which is based or domiciled in Brazilian territory or in a country with which Brazil has an agreement or is guaranteed reciprocal treatment, when the trademark is obviously aimed at presenting a product or service that is identical, similar or alike, and could cause confusion or association with that unrelated trademark.

Despite the fact that the consultation from which the Opinion originated focused on answering the question of whether the holder of a trademark based or domiciled in a signatory country of the Paris Convention could make use of or bring about the application of article 124, XXIII, of the Industrial Property Law (LPI), for the protection of its priority trademark rights, as this Convention does not have a word for word correspondent provision, various other aspects and/or interpretations referring to this same provision ended up being faced, which makes the production of this present work important.

The first aspect of the Opinion we should highlight is the one which answers the question raised in the previous paragraph. According to the conclusion arrived in the Opinion, article 124, XXIII, of the Industrial Property Law (LPI), does apply to the holders of trademarks in signatory countries to the Paris Convention.

The reason why we fully agree with this is that, although the Paris Convention does not have a text or norm that corresponds exactly to that of article124, clause XXIII, of the Industrial Property Law (LPI), it does have provisions, principles or values that are inserted or even justify the existence of this provision in Brazilian law.

This is the case, for example, with the principle of the suppression of unfair competition, that is expressly provisioned for in the Paris Convention and which does not cease to be guidance for its very existence in Brazilian law, in article 124, clause XXIII, of the Industrial Property Law (LPI). In this sense, the Opinion did a good job on this matter by stressing the following: "The intention of art. 124, XXIII, of the Industrial Property Law (LPI) is the suppression of unfair competition". Furthermore, it added: "The suppression of unfair competition is an activity inherent to the protection of industrial property".

Another good point the Opinion raised, although it only confirmed what had already been enforced in the recent Trademark Manual of the Patent and Trademark Office - PTO (Resolution INPI/PR No 142/2014), is that the application of clause XXIII, of art. 124, of the Industrial Property Law (LPI), is not, in any way, related to the established laws covering a highly renowned trademark.

This means that the holder of a trademark registered abroad, for example, in a signatory country of the Paris Convention, could challenge a trademark that is conflicting, claimed or registered by a third party in Brazil and in this case it is not necessary to demonstrate its highly-renowned reputation in one or more locations, although obviously nothing could prevent it from doing so.

As a result, it is enough for the trademark, in the name of this third person, to imitate or reproduce, wholly or partly, the international trademark, to present itself as a product that is identical, similar or like this latter, and it is certain or probable that this third party could not be unaware of its existence due to its own commercial activity.

This position, which only confirms what is already stated in the PTO´s Trademark Manual, does not lose its importance as it would go against the office´s previous position in its administrative jurisprudence and some legal precedents, that demanded the evidence of a trademark with a highly-renowned reputation that served as a base for the corresponding means of challenging it for the application of article 124, clause XXIII, of the Industrial Protection Law (LPI).

A third worthwhile issue that is also raised in the Opinion is that it does not allow the rejection or withdrawal of article 124, XXIII, of LPI, in the case of Opposition or Administrative Nullity Process (PAN), should the previous registration/model be national.

It is worth highlighting that this guidance also contrasts with the PTO´s administrative jurisprudence, which used to reject the allegation of a violation of article 124, clause XXIII, of the Industrial Property Law (LPI), in cases of opposition or Administrative Nullity Process (PAN) when the applicant in these processes had already registered a trademark in Brazil. The previous understanding was that article 124, XXIII, of the Industrial Property Law (LPI) would not be applicable in these cases, bearing in mind the immediate application of clause XIX of the same legal provision of the LPI, that determines in overall terms, that trademarks should not be registered that reproduce or imitate pre-existing registered trademarks in an identical or similar market segment.

Therefore, the Opinion makes a timely ruling admitting the accumulation of violation to the clauses XIX and XXIII of article 124 of the Industrial Property Law (LPI), in cases of opposition and Administrative Nullity Process (PAN), even though the applicant in these processes has a priority trademark registration in Brazil.

A final position taken from the Opinion and which deserves more critical attention from us is one that defends a more restrictive interpretation of the expression "trademark that the applicant could evidently not not know about, due to its activity".

According to the Opinion, where there is a question over how much knowledge the holder of the conflicting trademark had about the previous trademark, in a concrete case, it should be considered that it had none.

Moreover, according to the Opinion, the challenging party would have the burden of proving, including through documentation, that the third party, the applicant of the conflicting trademark, had previous knowledge of its priority trademark.

In our first reading of the opinion, we disagreed with this guidance. Our preliminary understanding was that it seemed an over exaggeration to demand documentary evidence from the priority or model trademark holder that the third party, that claims an equal or similar trademark to its, for an equal or similar market segment, to show that it had knowledge of the original trademark.

Similarly, we do not see much sense in this interpretation that is always restrictive, involving the knowledge or lack of knowledge of the third party of the previous or original trademark. We believed that in the cases where the holder of the original or previous trademark did not have to prove that the third party, that applied for the conflicting trademark, had prior knowledge of the priority trademark, as it had never maintained any kind of relation, link or contact with this corporate entity or individual person which would naturally make this proof easier, as is well stated in the cases given as examples in the Opinion.

However, we later noted that, in the Opinion, the Attorney´s Office itself spots this practical difficulty by highlighting cases in which, bearing in mind the high degree of specialization of some business activities, there is no way the applicant (third party) for a trademark could not know about the trademarks on the market of its competitors.

The Opinion also cites the example of a third party which intends depositing the trademark in a very specific area, as is the case with jet engines, where it is unlikely that it did not know about its competitors´ trademarks, which would point to the application of clause XXIII of article 124, of the Industrial Property Law (LPI), in the case of reproduction or imitation of one of these trademarks. Therefore, in these cases, the Opinion indicates that it would not be necessary to prove prior knowledge of the trademark by the third party, by means of documentation (even because of the difficulty in producing it).

In these cases, the Attorney´s Office´s conclusion is that the holder of the priority trademark would only need to give an "explanation on the market segment of jet engines (number of companies that operate in the area, number of trademarks to identify the same products etc.)" to reach a conclusion on the obvious prior knowledge by the third party/applicant of its original trademark.

We believed there would be still other situations which would dispense with this requirement, defended in the Opinion and by some legal scholars in the area, that the holder of the model trademark should show, including by documentary proof, that the third party applicant for the conflicting trademark had knowledge of its previous trademark.

We now present some thoughts on trademarks that are completely fanciful or have a high degree of distinctiveness, i.e. arbitrary trademarks that convey nothing or are made up of words/signs that are not spoken or appear in the dictionary, such as Häagen-Daz (a trademark that is 100% fanciful).

In our view, in cases of reproduction or imitation by a third party of a priority trademark that is completely fanciful, like Häagen-Daz, directed at the same or similar segment of activity, leads or should lead to the inevitable conclusion that this third party had prior knowledge of the previous trademark.

We believe it is absolutely impossible or unlikely that this third party could have developed or created the very same fanciful or arbitrary trademark to identify commercial activities that are identical or analogous to the holder of the original trademark.

This explains our defense of the view that this constant restrictive position involving the knowledge or lack of knowledge of the third party of the previous or original trademark should be treated carefully or revised.

It is also worth highlighting that, in our understanding, when the lawmaker inserted the adverb "evidently" into article 124, clause XXIII, of the Industrial Property Law (LPI), it was with the intention of making it clear that, if the applicant for the more recent trademark acted in the same segment as the holder of the previous identical or similar trademark, it was because it (third party), evidently, knew this latter and not because it needed to make evident (prove) this prior knowledge in the concrete case, in line with the interpretation of the Opinion in this comment. However, this is our reading of the Attorney´s Office´s interpretation which, as we have already said, brings conclusions and guidance that are extremely relevant, enlightening and positive in relation to the application of clause XXIII, of article 124, of the Industrial Property Law.

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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