CONAR as arbiter of a trademark dispute

In a recent decision by its Ethical Council’s Second Chamber, CONAR (National Council of Self-Regulation in Advertising) recognized that a dispute over ownership of a trademark is outside of its jurisdiction.

The decision was in response to Representation no. 200/04 brought before the Chamber by Polimport Comércio e Exportação Ltda. against Americanas.Com S/A.

The purpose of the action was to suspend publication of advertisements on the www.americanas.com web site referring to "AB SWING" exercise equipment manufactured by Toka Indústria e Comércio de Móveis Ltda. and resold by the e-commerce company. The complainant alleged that the "AB SWING" trademark belongs to a British company, from which it obtained an exclusive license to sell its products under this name in Brazil and, thus, the publicizing of third-party equipment with the same name constituted a violation of the trademark.

In its defense, Americanas.Com demonstrated it had taken all due precautions with the supplier of the equipment to ensure that the product did not infringe any third party rights (the supplier holds a license to use the trademark granted by a company that has an older trademark application for "AB SWING" Before the Brazilian Patent and Trademark Office-BPTO than does the U.K. company). Furthermore, it was proven that the complainant and the represented British company do not hold the rights to the trademark in Brazil and that, in truth, there is a lawsuit currently pending to decide upon the question of title. In this process, it was sustained that CONAR could not rule on a topic that was outside of its competence — that is, ownership of the rights to a trademark. Finally, it was demonstrated that the advertisements under examination were in compliance with all of the precepts of the Brazilian Self-Regulating Advertising Code and the Consumer Defense Code, noting also that the advertisements highlighted the name of the manufacturer of the product, among other relevant information provided.

In her vote, Counselor Mariângela Vassalo, who wrote the case opinion, accepted the thesis put forward by the defense, stating that "the complainant based his representation upon the expectation of obtaining the right to ownership of the ‘AB SWING’ trademark."

The position adopted by CONAR is irreproachable in view of the fact that the role of this organization is restricted to the examination of advertisements from the ethical point of view. In fact, the 5th article, XXIX paragraph of the Federal Constitution of 1988 establishes that a trademark is considered to be property and, thus, the power to constitute (or deconstitute) such a right depends upon legal provisions.

In Brazil, Law 5.648/70 designated this jurisdiction to the BPTO and, therefore, only this entity can grant trademark property rights or cancel titles granted outside the scope of the law, with the legality of its decisions subject to review by the courts.

CONAR is a private organization that was created spontaneously by associations of advertising agencies, communications outlets and advertisers whose purpose is the self-regulation of the advertising activity.

The Brazilian Self-Regulating Advertising Code is based upon ethical norms that are a mirror of the International Advertising Association’s (IAA) code as well as recommendations offered by domestic and international advertising congresses. The sanctions foreseen under the Brazilian code include simple warnings, recommendations for change to be made to advertisements, recommendations for cancelling advertisements or, in cases of disobedience, the publication of a communiqué in the main press outlets repudiating the advertisement.

Although CONAR has no power of coercion, there are very few cases of lack of compliance with its decisions. The processing of the complaints made to this entity is a quite informal, swift and low-cost procedure (when compared to a lawsuit through the courts).

Based upon all of the above qualities, CONAR certainly is an excellent alternative for resolving disputes involving advertisements. However, as has been clarified, the organization cannot make decisions about issues regarding the definition of ownership of a trademark, as in the case in question.

The defense of Americanas.Com was carried out by Dannemann, Siemsen Advogados. The participation of the firm before the CONAR is part not only of its work regarding trademarks and copyright cases but also complaints about advertising ethics in general and consumer rights.