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Analysis of Wal-Mart and TrafFix Under Brazilian Law

by Elisabeth Siemsen do Amaral

May 01, 2005

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In the wake of the Wal-Mart Stores, Inc. v. Samara Brothers, Inc. and TrafFix Devices, Inc. v. Marketing Displays, Inc. U.S. Supreme Court decisions, which narrowed the scope of trade dress protection for product configuration, there was a concern over the impact of the development of U.S. trade dress case law in Latin America.

In most Latin American countries, trademark ownership is acquired by registering at the Trademark Office. Jurisdictions in the region predominantly adopt the first to file system, with some exceptions. Moreover, the laws do not specifically regulate the protection of unregistered trade dress separate from the trademark registration.

Irrespective of trademark protection based on a registration, protection for unregistered packaging and product configurations may be obtained through the application of the laws against unfair competition.

The law in Brazil defines the crime of unfair competition as any fraudulent means or acts likely to mislead another competitor’s clientele. This rather broad proviso has been consistently applied by the Brazilian courts to prevent the copying or imitation of senior packaging likely to cause contusion with a junior product. lnstead of analyzing inherent distinctiveness or nonfunctionality, the courts tend to examine the packaging as a whole and test whether consumers are likely to be confused.

In order to qualify for protection in Brazil, the product design should be extensively uses in commerce within the country and should have attained, in the consumer’s mind, a degree of association with a particular source. The law protects the impact created by the entire design, and likelihood of confusion is determined by comparing the configurations as a whole, giving less significance to functional features.

As far as product configurations are concerned, the case law history is not extensive, but shows that the same principles that allow protection of packaging can prevent outright copying or blatant imitation of the identifying aspects of the source of a previously established product design.

In the Wal-Mart decision, the U.S. Supreme Court set aside the inherent distinctiveness principle and required the establishment of secondary meaning, Brazilian law does not recognize secondary meaning as a requirement. Yet, the degree of inherent distinctiveness of a design is important in determining the degree of protection – i.e., the more distinctive the design is, the higher the degree of protection it will receive. Generic features in a design barely receive any protection. However, a strong showing of secondary meaning may help persuade the court that a junior design is likely to confuse the clientele.

In the TrafFix case, the U.S. Supreme Court opined that the existence of alternative features should not dictate the limits of functionality, and ruled that the issue is not whether the particular product configuration is a competitive necessity. Brazilian courts have never so clearly addressed the definition of functional features or how they should be judged in the likelihood of confusion test. However, the courts have carved out a comparison of several necessary functional features. The trend has been to consider that the existence of technical alternatives should determine that a feature, albeit functional, is not necessary, and should be protectable to the extent that the consumers will be confused about the source of the products.

The general expectation is that the precedent ser by the U.S. Supreme Court should not play decisive or significant role in the review of trade dress cases under the rides against unfair competition, as the focus of the analysis is the overall likelihood of confusion of the design.

 

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Elisabeth Siemsen do Amaral

Agente da Propriedade Industrial

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