The Special Federal Attorney's Office and the Brazil Patent and Trademark Office (PTO) recently drew up Opinion 0002-2015-AGU/PGF/PFE/INPI/COOPI-LBC-1.0 on the practical application of Article 124(XXIII) of the Industrial Property Law (9279/96).

Article 124(XXIII) prohibits the registration of a trademark that reproduces or imitates, wholly or partially, another trademark that the new applicant must have been aware of due to its own activity if:

  • the holder is based or domiciled in Brazil or in a country with which Brazil has an agreement or guarantees reciprocal treatment; and
  • the trademark clearly intends to present a product or service that is identical or similar to the existing product or service, and could cause confusion or association with that unrelated trademark.

The opinion arose from a consultation regarding whether the holder of a trademark based or domiciled in a Paris Convention country could make use of or bring about the application of Article 124(XXIII) for the protection of its priority trademark rights, as the convention does contain an identical corresponding provision. However, the consulation ended up considering various other aspects and interpretations of the same provision.  

Application of Article 124(XXIII) to Paris Convention countries

According to the conclusion arrived in the opinion, Article 124(XXIII) applies to holders of trademarks in signatory countries to the Paris Convention. Although the Paris Convention does not include text corresponding exactly to Article 124(XXIII), it includes provisions, principles and values that are included and even justify this provision in Brazilian law. This is the case, for example, with the principle of the suppression of unfair competition, which is expressly included in the Paris Convention and which continues to apply based on its inclusion in Article 124(XXIII) of the Industrial Property Law.

In this sense, the opinion was correct to stress that the "intention of art. 124, XXIII, of the Industrial Property Law (LPI) is the suppression of unfair competition”. Further, it added that the: “suppression of unfair competition is an activity inherent to the protection of industrial property”.

Connection with well-known trademarks

Another valid point raised by the opinion – although it merely confirmed what had already been enforced in the recent PTO Trademark Manual (Resolution INPI/PR 142/2014) – is that the application of Article 124(XXIII) is in no way related to the established laws covering a well-known trademark. This means that, for example, the holder of a trademark registered abroad in a Paris Convention country could challenge a trademark that conflicts with a mark claimed or registered by a third party in Brazil without needing to demonstrate the reputation of the trademark (although it may do so if it wishes).

As a result, it is enough for the third-party's trademark to imitate or reproduce, wholly or partially, the international trademark in order to present itself as a product that is identical or similar to the latter, and for it to be certain or probable that the third party must have been aware of the other mark due to its own commercial activity.

This position, which confirms what is already stated in the PTO Trademark Manual, is important as it goes against the PTO''s previous position in its administrative jurisprudence and some legal precedent which demanded proof of a well-known trademark cited as the baiss for a challenge under Article 124(XXIII).

Opposition and nullity process

The opinion does not allow the rejection or withdrawal of Article 124(XXIII) in the case of an opposition or the administrative nullity process (PAN) should the previous registration or model be registered nationally. This guidance also contrasts with the PTO's administrative jurisprudence, which rejected any claim that Article 124(XXIII) had been violated in cases of opposition or PAN where the applicant has already registered a trademark in Brazil. The previous understanding was that Article 124(XXIII) did not apply in these cases, bearing in mind the immediate application of Article 124(XIX), which states that a trademark that reproduces or imitates a pre-existing registered trademark in an identical or similar market segment should not be registered.

Therefore, the opinion makes a timely ruling admitting the accumulation of violations to Articles 124(XIX) and 124(XXIII) in cases of opposition and PAN, even where the applicant has a priority trademark registration in Brazil.

Awareness of earlier trademark

The opinion defends a more restrictive interpretation of the term 'a trademark that the applicant must be aware of due to its activity'. According to the opinion, if it is unclear how much knowledge the holder of the conflicting trademark had regarding the previous trademark, it should be considered to have had no knowledge. Moreover, according to the opinion, the challenging party has the burden of proving, including through documentation, that the applicant for the conflicting trademark had previous knowledge of its priority trademark.

In a first reading of the opinion this appeared to be incorrect. Our preliminary understanding was that it seemed an overexaggeration to demand documentary evidence from the priority or model trademark holder that the third party had knowledge of the original trademark. Further, this interpretation is always restrictive as it made the situation much easier for parties which had never maintained any kind of relationship, link or contact with the corporate entity or individual.

However, on a second reading it became clear that the Attorney's Office itself had dealt with this practical difficulty by highlighting cases in which, bearing in mind the high degree of specialisation of some businesses, there is no way that the third-party applicant could be unaware of its competitors' trademarks on the market. The opinion also cites the example of a third party which intends to register a mark in a very narrow area (eg, jet engines), where it is unlikely that it would not know about its competitors' trademarks, which would point to the application of Article 124(XXIII) in the case of the reproduction or imitation of such mark.

Therefore, in these cases, the opinion indicates that it would be unnecessary to prove prior knowledge of the trademark by the third party by means of documentation. In such cases the Attorney's Office concludes that the holder of the priority trademark would need to give only 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)” in order for the PTO to reach a conclusion on the obvious prior knowledge by the third party. However, there are still likely to be other situations which would dispense with the requirement to produce documentary proof.

The next type of mark to be considered is those which are completely fanciful or have a high degree of distinctiveness – that is, arbitrary trademarks that convey nothing or are made up of words or signs that are not spoken or do not appear in the dictionary (eg, Häagen-Daz, which is 100% fanciful). Where a third party has reproduced or imitated a priority trademark that is completely fanciful and is directed at the same or a similar segment of the market, it is inevitable to conclude that the third party had prior knowledge of the previous trademark. It is impossible that the third party could have developed or created the same fanciful or arbitrary trademark to identify identical or similar commercial activities. For this reason, the restrictive position regarding the knowledge or lack of knowledge of the third party of the previous or original trademark should be treated carefully.

Further, when the legislature inserted the adverb 'evidently' into Article 124(XXIII), it appears to have been intended to make clear that if the applicant for the more recent trademark acted in the same market sector as the holder of the previous identical or similar trademark, it was because the third party evidently knew about the mark, and not because it needed to prove its prior knowledge in the case. This is our reading of the Attorney's Office's interpretation, which provides conclusions and guidance that are extremely relevant, enlightening and positive in relation to the application of Article 124(XXIII) of the Industrial Property Law.

Fábio Leme

This article first appeared in IAM. For further information please visit www.iam-media.com.