LATIN AMERICA TRADEMARK STRATEGY SEMINAR – MAINLY CHILE AND ARGENTINA

By Raquel Flanzbaum

 

MERCOSUR

 

Introduction

Both, the Andean Community of Nations and Mercosur, arose as a result of a regional integration policy, which prevailed in the twentieth century in Latin America, and was carried out by the Latin American Integration Association (ALADI, after its acronym in Spanish), composed of all South American countries.

Whitin this framework, first, the Cartagena Agreement[1] was signed in 1969, which established the Andean Group (now the Andean Community), and then the Treaty of Asunción[2], in 1991, which established the Mercosur[3], composed of Argentina, Brazil, Paraguay and Uruguay as founder members. The associate member countries are Chile, Bolivia, Colombia, Ecuador, Peru, Suriname and Guyana.

With respect to Venezuela, initially it was an associate member; however, later on, in 2006, it wanted to join as a member. Although Argentina, Brazil and Uruguay soon accepted Venezuela as a member, Paraguay (which did not want Venezuela in) refused. As in 2012 Paraguay was suspended from the Mercosur (because their democratic President, Fernando Lugo, had been removed from office and this was considered as a contempt of democracy), then Venezuela could join as a full member.

What happened later on? In 2013, Mercosur lifted Paraguay’s suspension and nowadays all of the original countries (plus Venezuela) are full members, although Venezuela was suspended in 2017, until democracy is fully restored there.

In short, Mercosur is a customs union with common external tariffs. Technically speaking, it is neither a common market (free mobility of capital and labor) nor an economic union (coordination of economic policies).

With regard to industrial property regulations, although this economic bloc has a common standard, as we shall see below, it does not have the same characteristics and scope as Decision 486, regarding the Andean Community of Nations.

Therefore, as trademarks must be registered on a country-by-country basis, we will see now the most important characteristics of trademark registration in Argentina, Paraguay, Uruguay and Brazil.

 

Principles

First, as mentioned, the exclusive right granted by a trademark registration is limited to a specific country, this is the territoriality principle.

Secondly, all countries apply the attributive system, that is, the right is obtained from a registration and, finally, in all these countries the first-to-file system applies, that is, whoever applies first for a registration in a given Trademark Office has a better right to obtain it.

 

Frequently asked questions

How is the registration procedure?

It is similar in all these countries: there are formal and substantial stages, as well as publication for oppositions by third parties:

  1. a) Filing of an application with the local Trademark Office
  2. b) Examination of formal requirements
  3. c) Publication
  4. d) Pre-grant opposition system (except Brazil)
  5. e) Substantial examination
  6. f) Registration

Brazil is the only country in which there is a possibility of a post-grant opposition, although this name (post-grant) is not completely correct because an opposition can only be filed when the application has not yet matured into registration. Whenever a trademark registration has already been granted, some colleagues call the next stage “nullity” or “cancellation action”. Also, since the deadlines in this stage are short, some of them call it “post-grant opposition”.

After a trademark application is filed, it is published for opposition purposes. As from publication thereof, interested third parties have 60 days to file pre-grant oppositions. Within a period of 6-12 months, the filing of oppositions are published in the official gazette, and the applicant will have 60 days to file a response. Once trademark registration is granted, interested third parties (or the Brazilian PTO) have 6 months to initiate post-grant opposition proceedings, which must be answered by the trademark owner within 60 days. Decisions issued by the Brazilian PTO are final and can only be challenged in court.

How long does the trademark protection last?

In all countries, trademark protection lasts 10 years counted from the resolution granting date.

How long does it take to register a trademark?

Brazil: On average, 25 months, if no oppositions are filed. If there are oppositions, it may take several years.

Uruguay: Around 12 months, if no oppositions are filed; and if there are any, this term can be extended to 2 years.

Paraguay: If no oppositions are filed, the procedure can take from 18 to 24 months, and more if oppositions are filed.

Argentina: We will analyze my country separately because there have been some important changes in our trademark law that impact substantially on this subject.

Is there a use requirement to register a trademark?

In none of these countries prior use is a requirement to register a trademark.

When can a registered trademark be renewed?

Trademarks can be renewed indefinitely every 10 years. It is not necessary to declare or prove use to renew in Brazil, Uruguay and Paraguay. In Argentina, it is indeed necessary, and an affidavit must be submitted stating the goods or services that were used in connection with the trademark. These products or services may belong to any other class in which trademark renewal is sought. In fact, the trademark may have even been used as the name of an activity (trade name).

The renewal application can be filed within a term of 6 months prior to expiration date in Uruguay, of one year prior to expiration date in Paraguay and Brazil, and of two months in Argentina.

There is a grace period of 6 months to file the renewal application in Uruguay, Brazil and Paraguay; however, there is no grace period in Argentina.

What can be protected as a trademark?

In all countries except Brazil, any sign can be registered as a trademark, i.e. signs that can be perceived by the senses of sight, smell, hearing and touch.

However, in Brazil, only words, device or mixed (word+device) marks, colors, trade-dress and, in general three-dimensional signs can obtain trademark protection, this is, only signs which are visually perceptible. Therefore, signs perceptible by the sense of hearing and smell are not registrable. These signs are protected by the unfair competition law.

 

Trademarks in an alphabet other than Latin

In Uruguay, trademarks which are written in alphabets other than Latin are not required to state their translation into Spanish. Further, no search for antecedents is performed in the Uruguayan Trademark Office[4] (since the meaning is not known, the applicant is not even required to mention it).

In Paraguay, trademarks in different alphabets must be filed as figurative marks, and a translation made by a Paraguayan Certified Translator must be filed as well. An official search for antecedents is performed, but the criterion regarding this search is not uniform and may vary from case to case.

In Brazil, all signs written with alphabets other than Portuguese, for example Japanese, are considered figurative marks, and there is no obligation to state the meaning (in fact it is not possible to include this information in the form). A search for antecedents as a figurative mark is performed.

In Argentina, with respect to foreign-language trademarks, case-law has always mentioned that, in the first place, words in a foreign language (considering the Latin alphabet) are considered fancy marks because the public in general does not have the obligation to understand their meaning; this of course, as long as they are not already known by consumers (for example, very simple words in English, such as OK, LOVE, etc.).

If the sign to be registered is written in an alphabet different from the Latin alphabet, for example the Japanese language, then the marks are considered figurative. The meaning of these signs can be indicated in the form as an observation. If this is done, the Argentine Trademark Office must perform a search for antecedents. If not, the sign will be considered figurative.

So let’s go to the common standard, the Trademark Protocol of Mercosur, which has very little in common.

Trademark Protocol of Mercosur – Prior Use – Article 8

As mentioned, there is a common standard in the Mercosur, the so-called Protocol of Harmonization of Rules on Intellectual Property in the area of Trademarks, Indications of Origin and Denominations of Origin, dating from 1995, with the purpose of a legislative harmonization of the states parties.

Paraguay ratified the Trademark Protocol in 1996 and Uruguay in 2000, while Argentina and Brazil have not yet done so. Venezuela, at the time of officially entering Mercosur, in 2012, became a part directly.

Therefore, the Trademark Protocol of Mercosur should govern in three countries: Paraguay, Uruguay and Venezuela. However, this is not quite like that:

Venezuela has never taken into account this treaty and has done nothing to adapt it to its domestic legislation. It seems that the issue of Mercosur and the Protocol of Trademarks has been forgotten by the pertinent authorities, considering the domestic political issues the country is currently facing.

What happens in Uruguay and Paraguay then? Does the Protocol apply, specifically regarding use?

Let’s take a look at Article 8:

Whoever first files an application has priority to obtain registration thereof (first-to-file system), unless the right is claimed by a third party in good faith, who has used the trademark publicly and peacefully in any party state for a minimum term of six months, provided that a trademark application is filed at the time of filing an opposition.

So we should say that previous use in Uruguay and/or in Paraguay benefits the owner if these requirements are met.

However, matters are not that simple:

In Uruguay, section 24 of the Trademark Law No. 17,011[5] (which is older than the Protocol) establishes that a previous user can file an opposition provided that he has used the sign in a peaceful, public and uninterrupted way for at least one year.

What prevails then in Uruguay? The Trademark Protocol (6 months, two countries) or domestic law (1 year, only Uruguay)?

The domestic legislation would prevail because it was issued after the Protocol.

There are no cases within the Uruguayan Trademark Office where article 8 of the Protocol of Mercosur has prevailed over section 24 of the Uruguayan Trademark Law.

In other words, the most conservative position is to sustain that previous use must have taken place for at least one year in Uruguay.

In Paraguay, article 8 of the Protocol is applicable.

Therefore, use for 6 months in Uruguay and/or in Paraguay is useful to validly oppose a trademark registration in Paraguay.

Trademark Protocol of Mercosur – Use of a trademark During the Life of the Registration – Article 16, Paragraph 2

Now, let’s analyze another article of the Protocol of Mercosur, which is very important as well since it addresses cancellation actions due to non-use. It is article 16 paragraph 2:

The use of a trademark in any of the States Parties (Uruguay and Paraguay) shall constitute sufficient grounds to avoid cancellation of the registration requested in any of said countries, as long as use has taken place within a term of 5 years prior to the date in which the cancellation action was brought. The request for cancellation will not proceed before the term of five years as from registration date.

How does this work in Uruguay?

Until 2014, there was not any use requirement and, therefore, it was not possible to submit Cancellation Actions due to non-use.

In 2014, the Trademark Law was amended by law No. 19,149, and the mandatory use requirement was included. Now trademarks can canceled due to non-use in Uruguay, effective January 1, 2019. This means that use in Uruguay is no longer optional.

As this amendment is “post-Protocol”, and bearing in mind that treaties in Uruguay are as important as domestic laws, it can be concluded that article 16 has been repealed by this amendment.

In Paraguay, a much broader system is set forth:

Regulatory Executive Order 22,365/98 of Law 1,294/98[6] states that the use of a trademark in any country of the world is sufficient for the purpose of evidencing use in Paraguay in order to repel cancellation actions for non-use in Paraguay; therefore, it would not be necessary for the use to take place in Paraguay, in Uruguay, or even in another Mercosur country, but in any country in the world.

The spirit of the Paraguayan legislation is to provide protection for foreign trademarks, well-known or not, against trademark piracy, considering that Paraguay is frequently used as a transit country for this kind of products.

Regarding measures that have been taken and are currently taken in Paraguay to fight against piracy, we can find the Law No. 4,798/2012[7], enacted by the National Direction of Intellectual Property (DINAPI, as per its acronym in Spanish), which came into force in 2013, and within that framework, the General Direction of Enforcement (DGO, also as per its acronym in Spanish) was created. The DGO detects possible counterfeited merchandise in customs and, in case of suspicion, the DGO coordinates evaluation of the merchandise with the customs authorities, submits the pertinent complaint to the Prosecutor’s Office, and contacts the agent in charge of the trademark.

The Administrative Coordination of Customs Research (CAIA, as per its acronym in Spanish) and the DGO monitor trademarks almost exclusively, with only a few cases of other intellectual property rights, such as patents, designs and copyrights.

Paraguay has also the Customs Trademark Registry since 2010, and it is also the only country within the region that has prosecutors specialized in IP matters.

Thanks to all this, piracy has dropped to a certain degree, but this does not mean that it has been purged completely.

 

Other relevant regulations

To complete this quick normative scheme, both in Paraguay and in Uruguay, the Paris Convention[8] and the TRIPS Agreement[9] govern. Only in Uruguay, the Trademark Law Treaty (TLT), the Nice Agreement for the Classification of Products and Services, and the Vienna Classification for figurative elements are applicable. We have already seen that the Uruguayan trademark law is the No. 17,011, while the Paraguayan is the No. 1,294, both enacted in 1998.

Regarding Brazil, we saw that the Mercosur Trademark Protocol has not been ratified; however, the Paris Convention, the TRIPS Agreement, and the Nice International Classification of Goods and Services do apply there. The industrial property law is the No. 9,279[10], enacted in 1996.

And in Argentina, as in Brazil, the Mercosur Trademark Protocol has not been ratified. The Paris Convention, the TRIPS Agreement, and the International Classification of Goods and Services of Nice are indeed applicable. The national trademark law is the No. 22,362[11], enacted in 1980, which has been amended recently. Let’s now examine my country, Argentina:

 

New Law in Argentina – Important changes – New Opposition Resolution System

A big change in our trademark law has just taken place, initially by the Emergency Executive Order No. 27/2018, dated January 11, 2018, and later by Law No. 27,444[12], dated June 18, 2018, which confirms the provisions established in Executive Order No. 27/2018.

However, all these changes are being gradually implemented, so the Argentine Trademark Office[13] (hereinafter referred to as “INPI”) has just begun to issue resolutions in this regard:

We are talking about Resolution P-183/2018, dated July 20, 2018, which regulates the new procedure for administrative resolution of oppositions, in order to make it simpler and faster.

Among other changes, the possibility of partially canceling a trademark due to non-use was introduced, since before 2018, use of a trademark for any product or service (and even as the name of an activity or trade name) not related to the class in question was enough or useful in order to reject said cancellation action. So defensive trademarks were accepted. This is not like that anymore because now partial cancelation actions are allowed.

As this change is very recent (it became in force on September 18, 2018), no cases have been decided by the TMO yet.

Let’s see how the system is now:

If the applicant does not obtain the withdrawal of the opposition within 3 months, the INPI decides as follows:

  • First, the INPI notifies the opponent who has not withdrawn the opposition that, within a term of 15 days as from notification thereof, he must pay an official fee of ARS 8500 to keep the opposition alive. Failure to pay such amount shall result in the forfeiture of the opposition, which from that point forward would be called “attention writ”, and that the Office can take into account when deciding the case or not.
  • If the opponent pays that fee, he can also broaden the grounds of the opposition and offer evidence.
  • Within a term of 15 days after this, the INPI must serve the applicant with notice of the oppositions that have been kept alive, giving him 15 more days to file his/her brief and submit evidence in support thereof.
  • If any of the parties, among their allegations, requests cancellation of the other party’s trademark due to non-use, said request will not be decided by the INPI. This is for now, until the INPI issues a new resolution stating how to proceed, since the new law states that cancellations for non-use should also be solved by the Trademark Office, as an administrative procedure. That is, the INPI now decides if the signs are similar or not, and waits for the judge to resolve the issue of a cancellation due to non-use, if requested.
  • Once evidence has been filed, the INPI serves notice upon the parties who, within a term of 10 days as from notification may submit a closing statement or not.
  • At this point, and within such 10-day term, the parties may refer the case to mediation, arbitration or any other means of dispute resolution. If so, they must inform the INPI in writing, and a term of 30 days shall start for the parties to complete the mediation process.
  • If they reach an agreement within this period, they must inform the INPI and file the pertinent agreement.
  • If no agreement is reached, once this 30-day period expires, another 10-day period begins for the parties, if they wish, to submit their closing statements.
  • Then, the INPI shall issue a decision, which can be appealed directly before the Federal Court of Appeals. The appeal must be filed with the INPI, who must send the file to the Court within a term of 10 days as from the appeal filing date.
  • Once the decision is final, the INPI can grant or reject the application.

I wanted to tell you all this in detail because it has been implemented very recently and implies a BIG change in our system.

It is very difficult to forecast now the delay that procedures will have from now on, since we have just switched from the judicial resolution of oppositions to the administrative resolution, as you may see.

Let’s see now the well-known trademarks in our country.

 

Argentina – Protection of Well-Known trademarks

Now we will analyze section 24, paragraph (b) of our law which, precisely, is the paragraph that protects well-known trademarks in Argentina:

The trademarks are null and void when were registered … (b) by who, when applying for registration, knew or should have known that they belonged to a third party.

This article was meant to be a remedy for trademark piracy, and it was inspired by the following famous case:

The case is known as LA VACA QUE RIE and here the French company Fromageries Bel Societé Anonyme, owner of the French trademark LA VACHE QUI RIT, sued for cancellation of the trademark LA VACA QUE RIE, which had been granted to distinguish cheese in favor of Mr. Enrique Ivaldi, an Argentine citizen. The French company proved that it was one of the most important firms in this field, with very well-known products in both the country of origin and abroad, and obtained the first registration in France on January 23, 1924: LA VACHE QUI RIT, for cheeses.

The French firm requested its trademark in Argentina in 1952, and Mr. Ivaldi filed an opposition against such trademark application grounding the same with, obviously, an exact copy of the original trademark from France.

The ruling of the Court of Appeals expressed, with some irony, that if Mr. Ivaldi’s allegations were correct, that is, he came up with the same drawing and the same wording (in Spanish, not in French), we would be in presence of a coincidence which would be considered as a “miracle” and this, of course, could not happen.

The case reached the Supreme Court of Justice, where the ruling of the Court of Appeals was confirmed and, therefore, Mr. Ivaldi’s registration was cancelled, while the genuine one, belonging to Fromageries, was granted.

I have brought, in case you want to read it, the Supreme Court resolution (case entitled Fromageries Bel Societé Anonyme v. Ivaldi, Enrique on cancellation of a trademark registration, dated July 23, 1962).

Certainly, this section 24 is inclusive of (i) cases where people know that the mark does not belong to them and still register them in their name, without necessarily being well-known trademarks, and (ii) cases of appropriation of well-known trademarks.

That is, this section 24 of the law is broader than article 6bis of the Paris Convention which, as you know, protects well-known marks.

Case law in our country has extended this article to famous or renowned marks, where, obviously, there is bad faith on the person who registers it in another class not related to the goods and/or services distinguished by the renowned mark. A clear example of this was the cancellation action against the mark CHRISTIAN DIOR owned by an Argentine company -MAMPAR SA-, covering bath screens in class 11, when the real holder of CHRISTIAN DIOR had no Argentine trademark registration whatsoever.

I have brought this court decision in case you are interested in reading it: case No. 3956 Christian Dior v. Mampar SA, Chamber I, dated May 23, 1986. This ruling was confirmed by the National Supreme Court of Justice.

Also, well-known marks have great protection when they are ground for oppositions against the registration of an application:

Courts stated that a more rigorous criterion should be applied in the comparison when the opponent is the owner of a well-known mark, or even of great dissemination.

There are many cases in this regard, so I name only one: Carsonik SRL v. Sony Kabushiki Kaisha on Cease of Opposition to Trademark Registration, Chamber II, dated September 14, 1979, where the registration of the CARSONIK application was rejected for the existence of the prior SONY trademark registration (before, in another case, PLAY-SONIK had also been for the same reason).

And, finally, well-known trademarks are also protected by Examiners at the Trademark Office. They file office actions based on article 6bis of the Paris Convention whenever there is an attempt of registration of a trademark identical or almost identical to a well-known one, even in a different class.

This happened in the BRAHMA case, a well-known beer in Argentina, when a third party (a Colombian company) attempted to register the same mark, BRAHMA, to cover shoes, and the Trademark Office rejected the application because the Examiner considered that BRAHMA for shoes diluted BRAHMA, the well-known trademark, for beers.

The Colombian company (Stanton & Cía SA) brought an action against the Trademark Office, but the Court confirmed the decision taken by the administrative authority and, therefore, the rejection was confirmed. The name and details of the case are the following: STANTON & Cía SA v. INPI LL2002-E209, CNACCF March 21, 2002.

As you can see, protection of this special type of trademarks is wide in Argentina.

There are many examples of usurpation of foreign marks that enjoy major prestige in our country.

One of the first cases was CADILLAC, the well-known automotive brand. In such case, the Court stated that the defendant had a clear endeavor to cause an unfair confusion for his own unlawful benefit (quotation from Cadillac Motor Car Co. V. Giannini H, PyM 1913-701). Or the case of the well-known trademark for STANDARD, of the American oil company STANDARD OIL, founded by David Rockefeller in the 19th century, which was the most important oil company in the world until the beginning of the 20th century (the case is entitled Humble Oil Refining Co. v. Standard SRL dated May 11, 1966, LL 123-419), where the Court considered that the address of the plaintiff is not relevant, because good faith should govern international trade and borders do not matter here, since it is not admissible for someone to appropriate something that does not belong to him/her. Or the case of the famous Japanese brand YKK for lightning closures (the citation is Case No. 5614, Yoshida Kogyo Kabushiki v. Oshiro IND and COM SRL Chamber I of July 29, 1977); in which it was resolved that a mark which is a copy of another one registered abroad cannot be registered by a third party in Argentina, because the prestige of others is important and deserves protection, no matter where the owner is domiciled. I have brought the Court of Appeals’ ruling (which, as it is very old, it was taken from a photocopy and certain portions of the same are not available for translation).

In short, either it is a very characteristic mark or well-known abroad, so that the coincidence can only be explained on the basis of bad faith, or if the mark is not known, the link between the registrant (not entitled to registration) and the real owner should be proved. For example, if he is a businessman in the same field, or both persons are relatives, or if the person worked in the company and then files for registration of the mark in his own name, or someone who was or wanted to be the owner’s distributor (quotes cause No. 8660 Bayer AG v. Caleba SCA, Chamber II dated April 22, 1980, and case No. 2335, Meijome SRL v. Kerlakian, Pedro, dated April 21, 1967). It depends on the specific case.

Argentina: ALL BLACKS case –New Zealand Rugby Football Union v. Ceballos, Anibal German on Nullity of Trademark– Damages:

Finally, I will just mention a very interesting case that reached the Argentine Supreme Court of Justice. The ruling is dated April 3, 2001, and the case is entitled New Zealand Rugby Football Union v. Ceballos, Anibal German on Nullity of Trademark – Damages:

In this case, the nullity of the mark ALL BLACKS was decided. The trademark was registered by Mr. Cevallos to cover sportswear and, even when the ten-year term for the nullity action to be brought had already expired, the ALL BLACKS rugby team did not register the ALL BLACKS sign as a mark in Argentina.

However, New Zealand Rugby Football Union Inc. -an entity which gathers all New Zealand’s rugby clubs- proved the great knowledge of this name and the wide spread of rugby in Argentina.

The decision was based on section 27 of the Trademark Law, which expressly states that the name or sign used to designate an activity, whether for profit or otherwise, shall constitute property for the purposes of this Law.

The defendant, therefore, could not ignore that the sign was well-known, and clearly intended to take advantage of the ALL BLACKS’ goodwill, in order to commercialize sportswear in Argentina. Therefore, the Court concluded that ALL BLACKS was a mere copy, registered in bad faith, and applied the general principles of civil law, especially the Civil Code, section 953, admitting the claim filed by the ALL BLACKS team.

The text of said section (today replaced by section 279 of the Civil and Commercial Code), expressly states:

The purpose of legal acts must be things that are in commerce, or those that for a special reason had not been prohibited to be subject to any legal act, or acts that are not impossible, unlawful, contrary to good customs or prohibited by law, or that oppose freedom of actions or conscience, or that are detrimental to the rights of a third party. Legal acts that are not in accordance with this provision are null as if they had no purpose whatsoever.

In short, what I want to convey to you with this case, which I consider highly representative of the defense that our courts have always made of the real owners of trademarks, is that it does not matter if the trademark has been registered or not, and it does not even matter whether the sign has been used.

In accordance with our courts, what really matters is to punish acts of unfair competition by any means, not only because we have adopted the Paris Convention, but also because we have domestic legal provisions, as the Civil and Commercial Code, which are applicable.

I recommend reading this court decision, which I have also brought.

Argentina – Nullity Actions

The judicial declaration of invalidation of a trademark extinguishes the right to registration thereof and, pursuant section 24 of the law, there are three cases in which invalidation may proceed.

One case is generic, for all trademark registrations that are not in accordance with the provisions of the law; and the other two cases are more specific, one against speculative marks and the other one against acts of piracy:

Article 24. Trademarks are null and void which were registered:

  1. in contravention of the provisions of this Law;
  2. by those who, when applying for registration, knew or should have known that they belonged to a third party;
  3. for the sale thereof, by those regularly engaged in the registration of trademarks for the said purpose.

Paragraph (a) is regarding trademarks that for one reason or another should not have been registered, but they were. Three groups of reasons can be distinguished: defects (i) in the applicant, (ii) in the sign itself and (iii) in the granting procedure. We will briefly see below some examples of each of these groups:

Defects (in Spanish, “vicios”) in the applicant: whoever applies for a trademark registration must be of legal age and must have a legitimate interest. For example, when a trademark is applied for by a child, or by individuals lacking legal capacity to trade. These nullities are considered relative, since they can be corrected over time, such as when the child becomes of legal age, or if the person’s lack of capacity to trade ceases.

Defects in the sign: there are issues that time cannot fix, such as whenever the sign cannot be registered because it is not considered a trademark. For example, when the sign does not distinguish goods, but merely describes them, although we must clarify that signs that in principle do not designate a product but are the product themselves, after an intense use thereof, may become distinctive. This is the secondary meaning that, although there are not many cases, some have been detected in our country. The simplest example is the GUÍA DE LA INDUSTRIA trademark (in English, INDUSTRY GUIDE), precisely the name of an industry guide that, as it achieved great popularity due to its intense use, it could be registered as a trademark.

Defects in the granting procedure: these are cases where the necessary steps have not been taken to legally obtain a valid registration and, if they infringe the third parties’ rights, the nullity will be absolute. For example, if there are defects in publication of an application and third parties cannot clearly appreciate the sign. A trademark granted in this way can lead to nullity if that third party proves that the procedure was not carried out because of defects in the publication. Or for example when the affidavit of use filed upon a trademark renewal is false and, therefore, the renewal should not have been granted because the trademark was –in fact- not used.

Paragraph I is regarding trademarks that are registered to be sold (and not to be used in the market), which are null and void.

We will now review the Brazilian system.

Brazil –Prior Use– Use during the life of the registration

The Brazilian trademark law[14] includes the possibility that a person who has been using a trademark in the country in good faith for at least 6 months prior to a third party’s local application (or priority date) has better rights to register it as long as (i) it is an identical or very similar sign to the one applied for, and (ii) applicant has filed an opposition against it within the legal term established to do so (60 days from publication date). The prior user has to file an application as well.

This is section 129, paragraph 1, which expressly reads as follows:

Whoever at the priority or application filing date has been using an identical or similar mark in the country – in good faith- for at least 6 (six) months to distinguish or certify an identical, similar or alike product or service shall have preferential right for registration.

Once registration is obtained, the owner must start using the trademark within 5 years as from registration granting date (no declaration of use must be submitted in this period). If the trademark has not been used, any third party with legitimate interest may bring a cancellation action for non-use and the trademark owner must submit evidence of use to keep the registration alive.

This is section 143, which expressly reads:

A registration shall be forfeited upon request by a person having a legitimate interest if, after 5 (five) years as from granting date, on the date of such request:

  • use of the mark has not been initiated in Brazil; or
  1. use of the mark has been interrupted for more than 5 (five) consecutive years, or if, in the same term, the mark has been used with a modification that entails alteration of its original distinctive character as set forth in the registration certificate.

Regarding use by an authorized third party, the Brazilian Trademark Office always requested that the express authorization be submitted, so that said use can be deemed valid or, for example, that the license agreement be also submitted (with no requirement of prior registration in the Brazilian TMO).

In July, 2018, a Technical Note BPTO/CPAPD No. 01/2018 was issued, by which major changes have been inserted:

1) The legitimate interest must be proved upon requesting the cancellation action.

2) The evidence of use must be related to the products or services covered by the registration.

2.1 Amount: The amount of evidence submitted does not matter.

2.2 Tolerance: If use has not started within the 5th year from registration date, cancellation can be avoided if the owner proves that he has taken measures to start use and such use begins immediately thereafter, even if it is out of the 5-year period.

2.3 Invoices: Invoices are accepted as evidence even if the trademark appears in the header only, or as the name of the company; that is, not associated with the products or services directly.

2.4 Additional evidence of use: Promotional items, gifts, media, etc. can be accepted if they refer to the products and services of the trademark in question.

2.5 Non-use – Criterion: Should there be justified reasons for non-use, these reasons must be taken into account, and the Brazilian TMO established that when these reasons last for (i) at least half of the period investigated, expiration will not be declared; (ii) less than half, then the owner must submit evidence of the measures taken to start use.

There is no need to pay maintenance fees during the life of the registration.

Brazil – Well-Known trademarks

Well-known trademarks in Brazil, according to the Paris Convention, article 6bis, are widely protected, even if they have not been registered.

The Trademark Office itself may, ex officio, reject an application that reproduces or imitates, in whole or in part, a well-known trademark (even unregistered).

This is section 126, which expressly reads as follows:

Marks that are well-known in their field of activity pursuant to Article 6bis (1) of the Paris Convention for Protection of Industrial Property enjoy special protection, regardless of whether they have been previously filed or registered in Brazil.

1 – The protection to which this article refers is also applicable to service marks.

2 – The Brazilian TMO may ex officio reject an application to register a mark that wholly or partially reproduces or imitates a well-known mark.

The trademark owner who files an opposition or brings a cancellation action against the imitator has 60 days as from the date in which he filed the opposition or brought the cancellation action to apply for the registration of the well-known trademark.

It is important to mention that in 2013 the Brazilian Trademark Office issued Resolution No. 107/2013, published on August 20, 2013, whereby a written acknowledgement of a famous trademark in that country can be obtained, without having to be connected to any procedure pending. Moreover, since the famous mark does not acknowledge classification issues, this declaration protects the owner in the 45 classes of the Nice Classification.

For the purposes of obtaining this acknowledgment, it would be necessary to prove the character of a famous brand. There are three main requirements:

  • Recognition of the trademark by a large portion of the population (submission of market surveys is recommended, among other tests);

(ii) Quality, reputation and prestige that the public associates with the trademark and the goods and services covered by it (research studies on the image of the brand in Brazil are recommended, among other tests);

(iii) Degree of uniqueness of the trademark, in such a way that it cannot coexist with other similar signs even in unrelated classes because this would dilute it.

In case of obtaining this acknowledgement in writing from the Trademark Office, it would be valid for 10 years and it can be submitted as an evidence in an opposition procedure or any other kind of actions, no matter the class involved, since a famous trademark is protected in all the 45 classes.

A trademark registration at least in one class is needed in Brazil to start this process and, up to date, there is no record of the Trademark Office rejecting such petitions. If a rejecting resolution is issued, then it can be appealed at the administrative stage and, after that, in the courts.

Let’s move forward to the Madrid Protocol[15] in Latin America.

THE MADRID PROTOCOL

México – Colombia – Cuba

Firstly, we have to mention two milestones as a real starting point for Latin America to enter the Madrid Protocol:

(i) The accession of the United States of America, which joined the Madrid Protocol in 2003 (bear in mind that Latin America represents approximately 22% of the foreign trade of this country); and

(ii) The adoption of Spanish as a working language, in 2004.

Secondly, it is important to consider two possible scenarios in a member country of the Madrid Protocol:

(i) That an international application is filed in the country of origin, and

(ii) That a person who applies for the international trademark in a given country or region, designates other member countries or regions for his trademark to be protected in those jurisdictions.

In this double scenario the numbers are conclusive:

In both Latin American countries that are part of this treaty, that is, Colombia (where the Madrid Protocol is in force since 2012) and Mexico (in force since 2013), the designations have been much higher, in comparison with the international applications filed in those countries:

For example, in Colombia, in 2016, there were 19 international applications (that is, Colombia as the Office of Origin), versus the 4,136 designations.

In Mexico, within a term of 5 years as from ratification of the Treaty, there were 374 international applications and 50,636 designations (the majority from American companies, and also from German applicants).

As an additional information, we can mention Cuba, where the Protocol entered into force in 1995: in 2014, 4 international applications were submitted, with Cuba being designated in 1,349 international applications.

Cuba is also part of the Madrid Agreement[16], in full force and effect on the island since 1989.

The Madrid Protocol – Issues to consider:

Multiclass system:

First of all, the multiclass system is not in force in Mexico. Therefore, if an international application covering more than one class designates Mexico, then this application will be automatically divided into one application per class. Each of these split applications will be subject to a separate examination in both, formal and substantial aspects.

In Colombia, this problem does not exist because the multiclass system is allowed.

Classification of goods and services:

Although Mexico is part of the Nice Agreement and therefore the Trademark Office applies the Nice Classification, corrections may be required in the classification of goods and services of international applications designating Mexico, because the Mexican Trademark Office has adopted very strict criteria in the analysis and, for example, if a product is not exactly classified in the latest edition of Nice, then it is possible that a provisional refusal might be issued, requiring clarification of the nature of the product or service in an attempt to fit it within the alphabetical list of the pertaining class.

In addition, the following is a very recent piece of news from Mexico, to be taken into account:

As of August 10, 2018, according to the last change of the Mexican Industrial Property Law, all the products or services of an application must be very specifically expressed, and the generic citation of the class title of the Nice International Classification is no longer acceptable.

This is so because a declaration of use must be filed upon the 3rd year of the registration, and for purposes the goods or services would have to be mentioned in detail.

Trademarks in foreign languages and alphabets

In Mexico, sometimes, when corrections must be made because there has been a clear translation error, the applicant is forced to go back to WIPO to make it.

In other words, this can end up in many delays which would, normally, in an application filed directly with the National Office, not occur.

It should also be taken into account that in Mexico the non-Latin alphabet is considered a figurative element, that is, as a figurative mark.

Until August 10, 2018 there was no option to state the Spanish translation of the mark. However, since August 10, it is imperative to include the translation or transliteration of the mark, even though they are still considered figurative marks. If the translation is not stated, the IMPI will issue a provisional refusal for omission of formal requirements.

In Colombia, trademarks in foreign languages which are possible to read, for example in English, are registered as requested. However, if the language has another alphabet, such as Japanese, Russian, Arabic, Greek, etc., protection is given only on the design of the drawings, without taking into account the meaning thereof. To be accepted as a word, the translation of the expression into Spanish must be provided.

Local lawyers: yes or no?

Another issue to be considered by foreign applicants designating Mexico is that it is key to hire local lawyers or agents with address in the country of the application since, in case the international registration (even without provisional refusals) is at some point challenged by a third party, it would be very difficult to notify the foreigner, considering that the procedure, by means of letters rogatory (which is extremely formal), is really very long. Otherwise, the procedure would result in more costs and delays.

In Colombia it is a little bit easier because non-resident applicants must designate a representative or agent within the country, so notifications become simpler.

18-month term:

This is not really an issue, but it it worth taking it into account as well:

When Colombia joined the Madrid Protocol, it made a reservation to extend the period of 18 months to report a refusal if it arises as a result of one or more oppositions. Mexico has not made such reservation to extend the 18-month period.

Finally both countries have chosen to receive individual fees for international applications designating those countries, and also in the renewal applications.

Finally, a curious fact:

Cuba and Japan have made the notification in accordance with Rule 34.3 (a) of the Common Regulations: payment of their respective individual fees will be split in two parts. Therefore, whenever either Cuba or Japan is designated, only the first part of the individual fee will be paid at the time of filing the international application. The second part of the individual fee shall be paid only if the local Office considers that the mark which is subject to international registration meets the requirements for granting protection. The date on which the second part must be paid, as well as the amount of the same, are notified to the owner of the international registration.

The Madrid Protocol – Perspectives in other countries

Now, what happens in Argentina and Brazil regarding the Madrid Protocol?

We have seen how in Argentina a major amendment to the trademark law has just been introduced, by which the resolution of oppositions in our country is modified.

Clearly, this has been a step of my country towards the adoption of the Madrid Protocol, as it will reduce delays in the procedure.

However, there is still a long way ahead, especially with regard to the Trademark Office, which should have more human resources and technicians to face this challenge.

With regard to Brazil, in November 2016, the Minister of Industry and Foreign Trade, Marcos Pereira, announced, within the framework of an official meeting with the Director General of WIPO, Francis Gurry, the intention of his country to join the Protocol.

However, Brazil must resolve many issues first, and then, it would be possible that accession will occur by the end of 2018, or perhaps in 2019.

For example, it is known that the Brazilian Trademark Office suffers from a chronic problem of delays in the granting of a trademark registration.

Nowadays, Examiners take 25 months on average to grant an application, as long as no oppositions are filed. The time to resolve a case with oppositions can take up to 4 years, while appeals can take between 7 and 8 years to be resolved.

The Brazilian Trademark Office has mentioned that the 18-month period set forth in the Protocol for substantive examination is an objective which will soon be achieved, but it is still missing.

Another problem in Brazil is related to its own official language, which is Portuguese and, therefore, the Office is managed in this language. The translation into Portuguese of all official documents will probably be required, which obviously will imply higher costs for applicants designating Brazil in their international applications.

Finally, Brazil may decide to turn to the multiclass system, which is not currently in force.

The adhesion process is progressing and the bill –sent by the Executive Branch- is already in the hands of the congressmen.

According to what colleagues mention, Brazil’s accession to the Madrid Protocol could then occur in 2019.

It will be very important to observe the behavior of Brazil because, due to the importance of this country in the region, it can function as a kind of “expansive wave” or “key” that pushes its neighbors like Uruguay, Argentina, Paraguay and even Peru to join.

Another factor that can “push” this process is the signing of a free trade agreement between Mercosur and the European Union, but the truth is that the latest version of the Intellectual Property chapter is not yet known, and the official position of these countries regarding an eventual inclusion of the Protocol in the agreement is not known either.

Strategic Considerations

We have already analyzed the region, as a result of which we have seen that there is not a common pattern.

We have seen that the regulation of the use of the trademark is not quite clear in the Mercosur.

Everything leads us to consider that a search of anticipations (including unregistered trademarks) should be carried out, country by country, as a previous step before filing an application.

Conducting a preliminary search in Mexico and Colombia, if the decision is to protect the trademark in those countries through the Madrid Protocol, will depend on the budget and the importance of those markets for the client.

We must say that the WIPO database works quite well, so if Mexico or Colombia, or even Cuba, are not primary jurisdictions for the business, it would not be necessary to obtain assistance from local lawyers to conduct the search.

When using the Madrid Protocol route, it is advisable to describe goods or services in a specific and precise way, avoiding general phrases, titles or headings of the classes.

Obviously, as we commented about Mexico, it is always better to consult with the local lawyer, who knows the usual criteria of Examiners. This will avoid provisional refusals or formal office actions issued by the local Admission Department.

When conducting the search in a given country it will be important to be aware of the treatment given to marks written in other alphabets, for example the Japanese language, since it a search of the meaning of the words in Spanish or Portuguese, plus a search for device elements may be needed.

In addition, it is important to know whether the proposed sign is registrable or not, for example if it is against morality of that given country. A local lawyer would help in this analysis as well.

It will always be advisable to take advantage of the priority date granted by the Paris Convention, as this may serve to repel any action from a third party based on previous use of his non-registered trademark.

Therefore, it is convenient to first file the trademark in Japan, for example, and then use the priority deadline to go country by country in Latin America.

It is, therefore, not convenient to delay the filing beyond the Paris Convention deadline. In addition, we should not forget that it is better to wait until the opposition period is over in order to know whether the application will have oppositions, in order not to launch the product without first knowing this.

If the application did not receive oppositions, then there would be no problem in moving forward with the commercialization of the products or services.

As mentioned above, it is always advisable to hire a local lawyer, not only to conduct a preliminary search and analysis, but also to have a local address in case any further notifications are served.

Although some markets in Latin America seem to be small, such as Uruguay or Paraguay, it is better to try to obtain registration there, because those costs and fees will always be lower than the costs and fees of a legal action against an infringer, where it would be necessary to calculate not only attorneys’ fees but also the purchase price of the trademark to end the matter as quickly as possible.

Some numbers

Finally, the following are some numbers taken from a very prestigious trademark newspaper in Latin America, called MARCASUR (edition July/September, 2018):

  • The number of applications filed in Latin America increased in 2017, compared to the previous year: 6.13%
  • The largest increase in the number of applications in this period (2016-2017) occurred in Peru (26.7%), followed by Argentina (23.6%).
  • The biggest drop occurred in Cuba: 24.4% fewer applications compared to 2016.
  • The largest number of applications in 2017 was filed in Brazil (186,103), followed by Mexico (153,853), Argentina (87,801) and Chile (45,008).

These numbers, of course, are not just a coincidence. They are the result of increasingly more and more business opportunities in the region.

Hopefully this will mean more business for you and for us.

Thank you very much.

 

[1] Andean Subregional Integration Agreement – Signed on May 26, 1969

[2] Treaty establishing a Common Market between the Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay (Mercosur Free Trade Agreement)

[3] Southern Common Market

[4] Uruguayan Ministry of Industry, Energy and Mining – National Division for Industrial Property

[5] Law No. 17,011, of September 25, 1998, Establishing Provisions on Trademarks – Uruguay

[6] Law No. 1,294 on Trademarks (1998)

[7] Law creating the National Directorate of Intellectual Property (2012)

[8] Paris Convention for the Protection of Industrial Property, ratified by Argentina by Law No. 17,011 on November 10, 1966

[9] Agreement on Trade-Related Aspects of Intellectual Property Rights

[10] Law No. 9,279 of May 14, 1996 (Law on Industrial Property)

[11] Law on Trademarks and designations No. 22,362, dated December 26, 1980

[12] Law on simplification and abolishment of bureaucratization for the productive development of the Nation No. 27,444 dated June 18, 2018

[13] National Institute of Industrial Property (“INPI”, as per its acronym in Spanish)

[14] Law No. 9,279 dated May 14, 1996 (Law on Industrial Property)

[15] Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, concluded in 1989

[16] Madrid Agreement Concerning the International Registration of Marks

By | 2018-10-29T12:23:07+00:00 October 29th, 2018|Uncategorized|0 Comments