Brazil: A Broad Umbrella Of Protection

When the 'internet of things' (IoT) allows objects to be sensed and/or controlled remotely across existing network infrastructure, a completely new set of products and services focused on providing unique customer experience will emerge. As in any competitive market, original and innovative products or services—if successful—will attract unwanted attention from "copycats", and better understanding how these can be protected by trade dress can be hugely important.

Traditionally, trade dress applies to more readily recognisable objects, such as products or product packaging. This is in line with the fact that trade dress must be distinctive. Trade dress covers the overall commercial image ("look and feel") of a certain product, and this concept clearly extends to services. To receive protection the trade dress must be inherently distinctive, unless it has acquired secondary meaning, and serve as a designator of origin.

Over the years, the scope of trade dress protection has expanded, and given that the concept itself is rather open, it is possible that further applications have yet to be better addressed and understood. From its original definition, trade dress has already branched out to cover product shape/configuration, colour combination, external and interior building designs, and more recently website layouts.

This shows how the adaptability of trade dress as a means to preserve innovative ways of doing business makes it an incredibly interesting concept, especially for signs that do not fit the limits imposed by standard ways of protection, such as trademarks and designs.

Trade dress protection is considered a "Jack of all trades"—mostly in a positive way—given that it pervades different industrial property rights and can be used by rights owners to curb unfair competition acts. This applies even more so in first-to-file countries, such as Brazil, where the system for acquiring rights does not take into account the facts predating the trademark application's filing.

The enforcement of traditional IP rights can also be a hurdle due to the backlog of work at the Brazilian Patent and Trademark Office, as one would need to wait in order to secure a registration before taking action against infringers.

It is useful to note that trade dress is one of the few tools available for enforcing unregistered rights. In this regard, Law No. 9.279 (1996) provides that IP rights can be used to combat unfair competition. The law states that unfair competition is committed by whoever "uses fraudulent means to divert another person's clientele, for his own benefit or for the benefit of someone else".

There is no reason to believe that trade dress protection will be limited to the products and services available to customers today. New experiences that will be made available through the IoT could be protected under the large umbrella of trade dress and unfair competition rules. It is only natural that competition will intensify in the virtual world, where there is room to create unusual and memorable experiences with products or services, which are susceptible to being copied.

The Brazilian landscape

In Brazil, discussions concerning loT and its legal protection, specifically the interface with IP rights, are new. Judicial precedents are mostly related to the protection of the visual identity of a product, whether or not combined with registered rights. However, these precedents set interesting and rather important standards that could be applied to any case involving the infringement of trade dress in the virtual world.

In a lawsuit filed by brewery Duvel Moortgat against Cervio Comercio e Indústria de Bebidas based on infringement of the trade dress of the famous beer Duvel, a court for the first time based its decision on a set of objective criteria to establish infringement:

  • Degree of inherent distinctiveness of the infringed sign;
  • Degree of resemblance between the signs side-by-side;
  • Legitimacy and expertise of the infringer (the higher the awareness of the original product, the higher the responsibility for the infringement);
  • Assessment of the duration the signs coexisted for in the relevant market (quick enforcement actions are welcome);
  • Quality and nature of the products or services identified;
  • Public awareness and skills in the 'art'; and
  • Potential to make undue profits from the use of a similar design and/or risk of dilution of the brand or trade dress.

Even considering that some features of Duvel's product packaging and label were not eligible for exclusive protection, the way the features were adopted by Cervio did reproduce Duvel's trade dress and caused undue association, even to a highly skilled consumer. All the standards above were met in this case. The court ordered the defendant to adopt a different and distinctive trade dress for its beer. This was a pioneer decision based on the set of pre-established requirements.

On September 27, 2016, the 22nd Court of Appeals of Rio de Janeiro confirmed a lower court decision which had found trade dress infringement in the reproduction by Athletic Way Comércio of a line of exercise machines produced and commercialised by Technogym Equipamentos and Technogym.

According to the ruling, the same visual standards used in the original machines were adopted. Unfair competition with the owner of the original products was assessed along with the risk of confusion and undue association, not specifically among business managers in the exercise industry, who are highly skilled, but in parallel sectors such as hotels, resorts and clubs. Damages were issued for infringement.

In both cases, the plaintiffs established that they owned rights to a certain combination of elements that were unique, permanent and distinctive, deserving protection irrespective of any prior registered rights. The courts relied heavily on consumers' perspective.

The future

Brazilian courts are constantly asked to decide trade dress infringement cases and have established fair objective criteria to recognise protection. These criteria are flexible enough to be applied to different scenarios and may be relevant tools in deciding cases involving online infringement that goes beyond website pages.

Article published in WIPR Magazine.

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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