On May 21, 2013 Division 1 of the Federal Court of Appeals for Civil and Commercial Matters reversed a decision of the lower court and upheld the refusal, based on section 3, subsection c), of the Argentine Trademark Law (No. 22,362), of the trademark application “PAISAJE DE TUPUNGATO”, filed under Serial No. 2,341,668 for “wine made with grapes originating from the Tupungato region” in International Class 33 (“Finca Flichman v. Instituto Nacional de la Propiedad Industrial”).

Finca Flichman had applied for the registration of the plain word mark “PAISAJE DE TUPUNGATO” on April 11, 2002. According to section 54, subsection b) of Decree No. 57/2004 which regulates law 25,163 on the protection of geographical indications for wines and wine-based alcoholic beverages (spirits), the Argentine PTO (or INPI, after its acronym in Spanish for “Instituto Nacional de la Propiedad Industrial”, or “National Institute for Industrial Property”) must report to the National Institute of Viticulture (INV, for “Instituto Nacional de Vitivinicultura”) all trademark applications filed in International Class 33 so the INV can, in turn, inform the INPI about the existence of any anticipation which might block the registration. The INV pointed out that “Tupungato” was already recognized as a geographical indication, so the trademark applied for could not be registered in view of section 3, subsection c), of the Trademark Law, which bars the registration as a trademark of national or foreign appellations of origin.

In light of this, the INPI rejected the trademark application based on the following reasons: a) section 3, subsection c), of the Trademark Law mentioned above; b) Articles 22 and 23 of the TRIPs Agreement ratified by law No. 24,425 which protect geographical indications for wines; and c) Law 25,163 on the protection of geographical indications for wines and wine-based alcoholic beverages (spirits), also mentioned above. Flichman appealed the rejection at the administrative level and thereafter filed an appeal before the Federal courts.

The lower Court reversed the decision issued by the Trademark Office arguing that the INV had authorized the appellant to use of the geographical indication “Tupungato”, so that there was no risk of misleading consumers, as Flichman meant to use the mark in connection with a wine produced with grapes from the Tupungato region. The judge dismissed the reasons argued by INPI and held that section 3, subsection c), of the Argentine Trademark Law was not applicable here. The INPI appealed such decision on the grounds, among other reasons, that it was arbitrary because when the court considered that the corresponding provision was not applicable, it failed to rule that said provision was unconstitutional.

In turn, the Court of Appeals reversed the lower court’s decision and upheld the administrative rejection of the trademark application, analyzing the legal basis for protecting the appellations of origin or geographical indications since the enactment of Trademark Law No. 22,362 in 1981 up to the present.

The Court of Appeals pointed out that geographical names can be registered as trademarks provided they were compatible with trademark law and the Fair Trade Act. Furthermore, it held that the TRIPs Agreement did not substitute the prohibition of section 3, subsection c), of the trademark law, but rather increased the protection of geographical indications and entrusted the member countries with the right to regulate such protection domestically. The Court also mentioned that in compliance with the minimum standards of protection, law No. 25,163 had been passed on October 6, 1999 with its regulatory Decree No. 57/2004, which bars the registration of source indications if the name has already been registered as a trademark and its owner has not authorized the registration as a geographical indication.

On this legal basis the Court of Appeals considered that: a) Flichman had not registered “TUPUNGATO” as a trademark before the TRIPs Agreement had been ratified and before law No. 25,163 had been enacted; b) there were four trademark applications containing “TUPUNGATO” and only one was rejected, so that said precedent was not relevant; and c) Flichman obtained the right to use the geographical indication “Tupungato”. The Court concluded that Flichman has indeed the right to use “Tupungato” as a geographical indication but not as an IP right. This difference was significant inasmuch as the trademark owner has a legal right which is independent from the right derived from law No. 25,163 and exempt from the supervision that can put an end to the right of use of a geographical indication.

Furthermore, the Court of Appeals stated that the right in the trademark (or the negative right conferred by the registration) to prevent an infringement thereof does not apply to geographical indications when a third party uses said indications and is duly entitled to do so. For these reasons the Court held that it was not appropriate to grant trademark protection in a sign containing a geographical indication, and therefore confirmed the rejection of the application on the basis of section 3, subsection c), of the Argentine Trademark Law. The Court nevertheless went on to emphasize that the plaintiff obviously was entitled to use “Tupungato” as a geographical indication.

This decision, however, seems to have missed two points. The first is that ownership of a trademark registration does not exempt its owner from the obligation to comply with all regulatory provisions. The second is that the right in a registration which contains a previously existing geographical indication confers to its owner the right to prevent third parties from using or registering a confusingly similar trademark, provided that the grounds for confusion do not lie on the use of the same geographical indication by two different parties.