Within the general framework of a wide-ranging decree devised to curb bureaucracy and simplify administrative proceedings, on January 10, 2018 the Argentine government issued Emergency Decree No. 27/2018 (hereinafter the decree) which includes –among a myriad of chapters ranging from port authorities to public works bids and from works of art to the legal metric system– a number of provisions on trademarks, patents and designs. While these provisions are mainly directed to procedural issues, some of the changes introduced by the decree are quite drastic, and some also affect the substance of the IP rights involved. Here follows a summary of the main modifications affecting trademarks; this information is by needs very brief because, at the time of writing this article, several provisions still need to be implemented by more specific regulations.
Administrative resolution of trademark oppositions
The main change regarding trademarks is that the venerable and unique Argentine system of deciding oppositions in court, now nearly 120 years old, is set aside. Under the new system, applicant and opponent shall have three months counted as of the service of notice of the opposition to settle the issue, and if they fail to do so the Patent and Trademark Office (“PTO”) will decide whether the opposition is warranted or not (new section 16 of the Trademark Law); the PTO’s decision may be appealed before the Federal Court of Appeals (new section 17, second paragraph, of the Trademark Law).
This is expected to significantly shorten the registration process and compares favorably with the old system, where the parties had one year to reach an agreement and, failing this, the applicant had to complete pre-trial mediation proceedings and, if unsuccessful, sue the opponent to overcome the opposition. The specifics whereby the administrative process will run are yet to be determined by further administrative regulations, but the decree does indicate that this process must allow applicant and opponent to submit additional grounds as well as present evidence in support of their respective claims (new section 17, first paragraph, of the Trademark Law). During the transitory period, until the implementing regulations are issued, applicants may either resort to the old system, i.e. complete mediation and, if unsuccessful, file a lawsuit to have the opposition declared groundless, or allow the PTO to rule on the matter.
Since it is not known how long it will take until the implementing regulations will be in force and, especially, when will the necessary administrative staff be hired, trained and operative, it would be important to determine which option would be the most appropriate in each specific case. It is relevant to note that, in connection with opposition deadlines up to April 12, 2018, the PTO established that it will continue to submit to the Federal Courts the lawsuits filed in opposition cases. However, if the lawsuit is not filed or if the parties opt for the administrative proceeding, the oppositions will be decided according to the proceeding to be further determined by the PTO.
Refusal of a trademark application on grounds other than a third-party notice of opposition are to be appealed before the Federal courts (new section 21 of the Trademark Law).
Another substantial change is that under the new provisions it will be possible to request partial lapsing of a trademark registration (new section 26, third paragraph, of the Trademark Law). Under the old law, if a trademark was registered in several classes, or indeed in all, but was used only in connection with a single product or service, such use was enough to prevent lapsing of all registrations. To repel a non-use cancellation action, it will now be necessary for the trademark to be used in connection with the goods or services protected by the registration, or at least with similar or related goods or services. This will weaken, if not directly sound the death knell, of defensive registrations, i.e. those trademarks registered in classes with no relation to the goods or services on which the trademark is really used, a relatively extended practice which has given rise to numerous oppositions. This change is expected to reduce the number of such oppositions, as prospective opponents will probably be reluctant to jeopardize trademarks registered for goods or services for which they are not actually used.
“Midterm” declaration of use
The decree also provides that within the fifth and sixth anniversaries of the registration the owners shall have to file a sworn declaration on the use of the mark (new section 26, fourth paragraph, of the Trademark Law). The decree does not state the consequences for failing to submit this declaration, and we expect that this will be clarified by the implementing regulations.
No provision is made either as to whether the new requirements regarding use will be applied retroactively, that is, comprising a period of time before the new rules became effective. Case law dating back to 1984 decided that such retroactive application is not allowed (Federal Court of Appeals, Dec. 21, 1984, “Matarazzo v. DNPI”), and this should be the law now too.
The decree did not make any changes to trademark renewal, so that the old system remains in place: when applying for renewal, the applicant must file a sworn declaration stating whether the mark was used within five years prior to the expiration date at least in one of the classes or as a trade name, and set forth the products, goods or activities involved (article 20 of the Trademark Law). Accordingly, a limited use will suffice for renewal in different and indeed unrelated classes. This limited use, however, will not suffice to prevent partial lapsing requested by a third party having legitimate interest and this will be particularly relevant in cases where such third party is for example a trademark infringer or a trademark applicant against whom an opposition was filed on the strength of the registration at issue.
The trademark law allows for three grounds for invalidity: a registration granted against the provisions of the law; the deliberate registration of someone else’s mark; and the registration of trademarks for subsequent sale (art. 24 of the Trademark Law). Decree No. 27/2018 empowers the PTO to rule on the first grounds for invalidity and the resulting PTO’s decision may be appealed before the Federal Court of Appeals (new section 24, last paragraph, of the Trademark Law). The other two grounds continue to be decided by the Federal courts.
As mentioned above, the decree we have been discussing here is an emergency decree (its literal translation is a “decree of necessity and urgency”), a special order introduced by a constitutional amendment in 1994 (art. 99). This order is issued by the President, must then be submitted to Congress following a specific procedure, and has the force of a regular law unless and until it is repealed by both Houses of Congress. Even if repealed, this repeal has no retroactive effects, since all rights acquired while the decree was in force are kept (art. 24, Law No. 26,122). At the time of writing this article, the Argentine government is seeking congressional approval and drafting the regulations needed to implement the various changes introduced by decree No. 27/2018.
The most important issues that must be dealt with by these regulations are the administrative process for deciding trademark oppositions and the specialized staff to be hired and trained to manage this administrative process, as well as countless other issues that come up when the new rules are fine-tuned to apply to real cases. Moreover the decree vests broad powers in the Argentine PTO, mostly for regulating the administrative process but also for introducing new official fees or increasing the existing ones; this may draw special congressional scrutiny.