Domain Name Or Trademark Registration And Earlier Rights. Which Shall Prevail?

In a decision published on March 3, 2017, the 4th Chamber of the Brazilian Superior Court of Justice provided the criteria to decide cases in which identical marks are registered by different owners as domain names and trademarks (Recurso Especial nº. 1466212).

Brazil's registry of domain names is fully independent from the National Institute of Industrial Property (INPI) and Brazilian Law follows the principle of "first to file" for both domain names and trademark registration. This inevitably raises the question of which one shall prevail when there is a conflict between parallel registrations of the same sign.

The dispute concerned the cosmetic brand PAIXÃO (meaning "passion" in Portuguese), previously registered with INPI and the matchmaking services website paixao.com.br. The plaintiffs, DM Indústria Farmacêutica Ltda. and Papyrus L.L.C., claimed trademark infringement and held that the website could not seek the registration of its prior trademark as a domain name. On the other hand, the defendants, Fundação de Amparo à Pesquisa do Estado de São Paulo – FAPESP and Plano de Serviços de Internet Ltda. – ME, claimed that the principle of specificity should apply, since the fields of activity were not the same.

The Superior Court considered in this case that a prior trademark registration could only prevent a third party from registering a domain name for the same sign if the brand was a well-known or highly reputed trademark, or if the domain name could result in consumer confusion or deception as to the origin of the goods or services. Bad faith, the possible dilution of the trademark, and parasitic misappropriation are also factors that can prevent a domain name from being registered by third parties.

In this case, the court held that no such confusion could arise, since PAIXÃO was not regarded by the public nor officially recognized by the trademark office as a highly reputed trademark. Moreover, and perhaps more importantly, the fields of activity of the litigating parties were considered different and the justices held that PAIXÃO was not a very distinctive sign, meaning that coexistence with similar brands was mandatory. Moreover, many other trademark registrations containing the word "paixão" coexist with the plaintiff's registration in other classes or areas of activities, without any likelihood of confusion or association with the earlier rights. Thus, the court ruled against the plaintiff, upholding the defendant's domain name.

The case sets a very important precedent, as it acknowledges the independency of both systems while providing the criteria for solving the inevitable conflicts that arise therefrom. In this sense, the court indicated that the principle of specificity and bad faith play key roles in adjudicating such disputes.

This article originally appeared on INTA Bulletin and is available here: http://www.inta.org/INTABulletin/Pages/Brazil_7210.aspx