Use of the Famous Name Ford by Association of Former Distributors is Held Legal

The second panel of the Court of Appeals for the Federal District held in a majority opinion published on April 30, 2003 that the use of the name and mark FORD by the Brazilian Association of FORD former distributors – ABEDIF is legal.

ABEDIF was created to defend the former-distributors from alleged acts and omissions of Ford Motor Company Brasil which may have caused damages to the former distributors.

Ford Motor Company Brasil and its parent company Ford Motor Company were not pleased by the unauthorized use of the name FORD and decided to initiate a court action claiming that the use of the name FORD by ABEDIF constituted a violation of their trademark and trade name rights over the name FORD protected by international agreements specially the Paris Convention, the Brazilian Constitution and the Industrial Property Law. The Ford Motor Companies were seeking the exclusion of the term FORD of the name of the association and both patrimonial and moral damages

The action was first granted in part by a Civil Court of the Federal District which ordered ABEDIF to exclude the term FORD but denied the request of damages and, as a result, both parties appealed to the Court of Appeals for the Federal District.

The Court of Appeals for the Federal Court held in a majority opinion that the ex-distributors have the right to identify themselves as "Ford former distributors" as a matter of fact and that this use in the context of the association was not commercial and, therefore, is out of the reach of the protection afforded by the law to the trade name and trademark FORD.

Judge Silvânio Barbosa dos Santos, in a concurring opinion, decided that the use of the name FORD alone is insufficient to sustain a claim for moral damages but that a civil action for recovery of moral damages may be filed in case the association tarnishes the reputation of the Plaintiff in a determined set of circumstances .

Judge Carmelita Brasil, in a dissenting opinion, held that the law grants special protection to highly famous trademarks such as FORD even in the absence of competition and that the use of the name by ABEDIF already tarnishes the mark as the association is actively engaged in showing that the mark is discredited in Brazil.

Moreover, the protection for the name FORD should also be based on personal rights which are absolute considering that FORD is the name of the famous founder of the Ford Motor Company.

The fight is still far from over as the Plaintiffs have filed on May 16, 2003 an appeal to reverse the majority opinion and appeals for the superior courts are also possible.