High Moral Damages Awarded in Typosquatting Decisions

In the past few months, Brazilian civil courts have issued a number of decisions against serial typosquatters. The damages awards in the most recent cases have been relatively high and it is hoped they that will serve as important precedents for mark owners.

Ernesto Aldo Marchand, a Brazilian individual, and a company called Tri-Continental registered a series of domain names that featured misspellings of the trademarks and official domain names of a number of Brazilian financial institutions. Some of these financial institutions commenced legal action with the civil courts of the State of São Paulo.

In one case, which has not been published on privacy grounds, the Thirty-Eighth Civil Court of the State of São Paulo decided to grant an unprecedented award of R1 million (approximately $350,000) for moral damages as a result of Marchand’s and Tri-Continental’s registration and use of the domain names ‘wwwbradesco.com.br’ and ‘wwwbcn.com.br’. The court held that they were confusingly similar to (i) the famous marks of Bradesco and Banco BCN SA (both part of the Bradesco Financial Group), and (ii) the domain names of their official websites (‘bradesco.com.br’ and ‘bcn.com.br’). It also noted that the fact that the disputed domain names redirected internet users to pornographic and gambling sites was damaging to the reputation of Bradesco’s and BCN’s famous marks.

Marchand and Tri-Continental are set to appeal the decision.

The Sixteenth Civil Court of the State of São Paulo has also recently issued a decision against Marchand and Tri-Continental (Case 000.03.034631-2). The court held that their registration and use of ‘www.itau.com.br’ and ‘wwwitau.com’ infringed the rights of well-known financial group Itaú. The registrations, said the court, were confusingly similar to Itaú’s famous ITAÚ mark and the domain name (‘itau.com.br’) of its official website. As with the Bradesco Case, the court held that the disputed domain names were likely to damage the reputation of Itaú’s mark as they were linked to porn and gambling sites. It awarded damages, which included moral damages, of R60,000 (approximately $20,000) to Itaú.

It is likely that Marchand and Tri-Continental will appeal.

The award of significant damages in these cases is welcomed, particularly as there are no domain name dispute resolution provisions covering the ‘.com.br’ country-code second-level domain. They also reflect the fact that courts are now more likely to award moral damages in cases where the reputation of a famous mark has been adversely affected.

For discussion of another Brazilian case highlighting the move towards awarding moral damages, see Louis Vuitton Bags Economic and Moral Damages Award.