Brazil’s accession to the Madrid Protocol has included several important changes to the country’s trademark system, such as simplifying the registration of trademarks, reducing costs, and implementing procedures that were not previously possible through the Brazilian Patent and Trademark Office (BPTO). Among these changes is the long-awaited possibility of co-ownership of trademarks.
Co-ownership was already a reality for patents, software, Industrial design and copyright and will became a possibility for trademarks as of September 15, 2020. This important change will affect both those who are dealing with trademarks through the Madrid Protocol as well as those who opt for the national path.
Under the BPTO’s Resolution 245/2019, co-ownership will be a possibility for new filings as well as for trademarks that were filed or granted prior to the Resolution becoming effective. In both cases, a provision of the Brazilian Law requiring that the Applicant or the Owner (or in this case, co-applicants and co-owners ) must be engaged directly or indirectly in a commercial activity compatible with the claimed products or services will still apply.
For new marks, co-ownership will be a possibility upon filing, and for marks that had already been filed with a single owner, co-ownership will only be possible through an assignment. There will also be an option for partial assignment, which means that the original owner may assign only part of its specification of products/ services to the co-ownership agreement and retain sole ownership on the remaining part of the specification through a divisional request.
However, the possibility of partial assignments tends to be very limited, as the provision of the Brazilian Law that determines that assignments must include all identical or similar marks for identical or similar products or services, under the penalty of extinction of the non-assigned marks, is still valid. So, special care should be taken when partially assigning rights and, in case of an assignment seeking the change of single ownership to a co-ownership, all marks that could be considered as identical or similar must be transferred to the exact same set of co-owners or co-applicants.
Non-Use and Rejections
The co-ownership option will also affect several other procedures, such as non-use cancellation requests or rejection decisions based on relative grounds.
Regarding non-use requests, even if only one co-owner provides evidence of use, the registration will be kept in force to all co-owners. However, in cases where lack of use is attributed to legitimate reasons, all co-owners will have to justify why they haven’t used the mark within the critical period (even if the petition is filed by only one of the owners).
Regarding rejections on relative grounds, if a mark is filed in co-ownership, this will not prevent the BPTO examiners from rejecting it based on a previously identical case in the name of one of the co-owners.
The BPTO has made clear that it considers co-owners as a “new entity”, distinct from the separate individuals or companies that joined for the co-ownership. For this reason, to avoid rejection decisions, all identical or similar marks must be in the name of the same set of co-owners, and auditing the ownership of your existing marks when filing fresh versions with co-ownership will be of key importance. Co-ownership will also remain prohibited for collective marks.
It is also important to point out that in situations where the co-owners will hold different proportions of rights in the co-owned marks (e.g. 60% / 40%; 70 % / 30%) a contract will be necessary, as the BPTO will not record this proportionality nor be held responsible for it.