Article 8 of the Costa Rican Trademark Law establishes that a mark cannot be registered when it affects the rights of third parties, if the use of the mark can cause confusion among consumers because of being identical or similar to existing registered or pending marks, and protects the same goods and services, or protects different goods and services that can be related to those covered by the previously registered or pending trademark.
According to the Tribunal of Administrative Jurisdiction (TRA), the purpose of this article 8 is to regulate not only activity between private individuals, who want to protect their marks, but also the legal protection to the consumer who might get confused between two identical or similar signs, which makes obvious the public nature of the law. At the end, it seeks to avoid a trademark conflict.
It could be the case, and this is not uncommon, that two different enterprises use a similar or identical trademark to market different products or services. As long as the trademarks in question continue to perform their main function, namely to distinguish the goods or services for which they are used from those of competitors, there is no conflict and the marks can coexist. However, the problem arises when the business activity begins to overlap, causing that both marks protect similar or identical products, which results in imminent consumer confusion.
Previously, companies have recurred to execute trademark coexistence agreements, in which both parties recognize the right of the other to their respective mark and agree the terms on which they may exist together in the market. Or even letters of consent, in which the party owner of the registered mark provides consent for the identical or similar trademark may be used or registered as well. However, the TRA has resolved that “the waiver to the right of opposition made by the owner of a registered trademark through a coexistence agreement or a letter of consent, does not automatically cause the granting of the registration of the new trademark, since such renunciation must be evaluated according to public interest.” (Resolution No. 92-2013).
In a similar decision, the TRA said that a coexistence agreement “does not mean that the problem of likelihood of confusion is solved, because the similarity of the goods or services protected under similar, almost identical trademarks, causes the consumer misperception that the Trademark Law seeks to prevent, in reference to the functions that every trademark must have: a) indication of business origin, b) assurance of quality standard of the products, and c) advertising in a transparent manner; without possibility of existence of another identical or similar sign.” (Resolution No. 632-2013). In these two specific cases and according to the above mentioned arguments, the TRA invalidated the coexistence agreement signed by both parties filed in support of the application of the new trademark, considering that the coexistence of the trademarks would be against public interest.
The only option, according to the TRA, that permits the coexistence of two identical or very similar signs to protect similar or identical goods, would be the presence of a business relation between the owners of both trademarks. In this regard, the TRA states that it is necessary to provide evidence that proves beyond any doubt that there is indeed a business partnership or formal alliance between the two enterprises, making them part of the same corporate group.
Nevertheless, it is important to mention that the TRA recommends that the authorization or consent for the use of a trademark by a third party has to be made through a license agreement, according to article 35 of the Costa Rican Trademark Law, which would protect the rights of the consumers against unfair competition.