- Well-known cosmetics brand HUDA BEAUTY brings trade mark opposition against application for identical mark based on Paris Convention priority
- IP Office rejects application, taking it upon itself to review the online WIPO trade mark database with regard to the opponent's country of origin right, and to accept the online entry as evidence of such right
- Decision represents a relaxing of evidential requirements and demonstrates a proactiveness rarely seen from the IP Office
- Suggests willingness of authorities to protect big brands against parasitic trade mark applications
The Pitfalls of a First-to-File Trade Mark System
Ecuador's trade mark system is what is known as "first-to-file". This means that simply using a mark in Ecuador confers little to no rights. Moreover, the problems faced by brand owners in Ecuador having failed to secure registration of their trademark rights is compounded by the fact that the authorities have been slow to recognise even famous marks not yet used in Ecuador. The country is a signatory to the Paris Convention, but enforcing Article 6 bis has proved problematic in the extreme; even after overcoming the onerous evidential requirements of legalisation and translation, the threshold for well-known status almost always proved insurmountable.
It is also important to note that once a mark is on the register, there is a definite leaning towards presumption of validity and a registration is also a defence to infringement. (In fact, there are a significant number of Ecuadorian registrations that are arguably entirely descriptive, relating to erroneous examination dating back several years, but it is difficult to remove them from the register given such presumptions of validity. This creates significant problems advising clients, most notably regarding infringement.)
Therefore, when opportunists come along looking to register famous marks for which the client and brand owner holds no Ecuadorian or Andean registration, the alarm bells were traditionally ringing, particularly given that bad faith provisions are narrow in Ecuador; bad faith will not be made out unless it can be shown that there is or was a relationship between the entities, or that the applicant is in the habit of registering marks for financial gain.
A New Approach?
There are suggestions that the tide is turning towards the holders of famous marks and the big brands generally. Over the last two years or so we have seen more willingness from both the courts and the administrative authorities to act in anti-counterfeiting and infringement actions brought by the overseas owners of large brands. Also, in a recent case involving the cosmetics brand HUDA BEAUTY, the applicant, a Chinese entity, was trying to register a variation of the HUDA BEAUTY house mark, but essentially an identical mark. HUDA BEAUTY itself did not have any relevant local rights on which to base the opposition. However, in this instance it was able to base the opposition on a new application in Ecuador claiming convention priority from a Brazilian application. The case was considered to be sound; however the opposition decision itself was somewhat surprising.
Incorrectly failing to acknowledge the priority claim, the IP Office however proceeded to reject the opportunistic application on the basis of Article 6 quinquies of the Paris Convention. More importantly though, the IP Office took it upon itself to review the online WIPO trademark database with regard to the opponent's country of origin right, and to accept the online entry as evidence of such right. The approach of the IP Office is surprising given its willingness to override evidential requirements, and also its proactiveness. The decision should also be read alongside another recent case in which the IP Office accepted a notarial verification of a webpage as evidence of prior Andean rights rather than the physical legalised certificates of registration as typically demanded by the authorities ( Ecuadorian IP Office Accepts Notarial Verification Of A Webpage As Evidence Within An Andean Opposition).
Whether this decision is further evidence of an overall willingness to protect the larger brand owners is hard to say. However, it would not be surprising if it were, given the change in political direction within the country. Evidential requirements are often prohibitive to trademark enforcement in Ecuador, at a time when the country is seeing its doors opened to investors somewhat when compared to the previous government – recent agreements with the European Union and the IMF require that Ecuador is seen as more friendly to investors and outside interests, with the European Union agreement in particular providing for protection of around 100 EU geographical indications in Ecuador. The current president is also being seen as someone very much ready to embrace such a change of direction.
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