CAT Owner Wins Landmark Trade Dress Case

In a landmark ruling in Calipso Bay Arrendamento de Marcas Ltda v VIPI Modas Ltda (Case 65558-9/188), the Court of Appeals of the State of Goiás has confirmed a decision by the Civil Court of Goiânia that the defendant’s use of the plaintiff’s trade dress constitutes ‘unfair competition’ as defined and prohibited by the Industrial Property Law. The appellate court’s decision is particularly important for the franchise business in Brazil, which relies heavily on uniformity.

Calipso Bay is the registered owner of the well-known Brazilian trademark MR CAT in relation to shoes, and is the franchisor of a number of franchises throughout the country. Calçados Pina Ltda owns the registered mark MR FOOT also in relation to shoes, which is licensed to VIPI Modas. When VIPI began using the same architectural design as Calipso Bay’s for its two stores and the same packaging and presentation of its MR FOOT shoes, Calipso Bay commenced proceedings for violation of its industrial property rights.

Both the court of first instance and the Goiás Court of Appeals found VIPI guilty of unfair competition under the Industrial Property Law despite the fact that Cailpso Bay’s MR CAT mark had not been infringed. The courts held that the concept of unfair competition is broad enough to encompass all the acts of a competitor which aim to fraudulently divert consumers from one party to another. One appellate court judge, Vítor Barboza Lenza, also noted that VIPI’s copying of Calipso Bay’s trade dress was likely to cause consumer confusion despite the fact that the two companies’ trademarks (MR CAT and MR FOOT) are sufficiently different.

VIPI may yet appeal to the Supreme Court.