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Overall Improvements Brought by the Law

by José Antonio B. L. Faria Correa

June 01, 2007

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Legal and administrative decisions handed down in the ten years since Law 9279/96 was enacted demonstrate that most of the changes pertaining to trademarks brought by this legislation were successful. This has aligned Brazil with protection parameters established by international rules and has made the country a pioneer in some aspects.

Among these innovations, the following are especially noteworthy: (a) the set of rules for combating undue appropriation of unregistered trademarks, which was designed to thwart the phenomenon of trademark piracy, a serious problem affecting the majority of countries and a source of great concern for the Brazilian government; (b) measures for simplifying procedures, with immediate publication of applications, for opposition purposes, and elimination of appeals against the granting of third-party applications; (c) tighter discipline of registration restrictions; (d) more refined treatment of the consequences of disuse (forfeiture); and (e) suspension of rules restricting trademark licensing.

Regarding item (a), it proved beneficial to incorporate the rule of Article 6 bis of the Paris Convention for the Protection of Industrial Property into domestic law, and the Brazilian Patent Trademark Office (BPTO) has been applying this rule provided that factual conditions are present. This pioneering move surpasses even the minimum standards established by TRIPS, Article 124, Subparagraph XXIII, which prohibits registration of a sign that the applicant must have knowledge of given his activity in the area. This particularly innovative restriction gives much more room to combat fraud, since it is not linked to the more subjective canons of Article 6 bis, whose application depends on the weight of evidence proving highly renowned status in the given market segment.

Regarding item (b), the prompt publication of applications, without prior examination, provides greater security for third parties, who are immediately informed about trademark applications that could affect their projects. The elimination of appeals against granting of third-party applications expedites the applications, despite the fact that, in practice, this acceleration has been offset by delayed examination of applications by the BPTO due to the agency’s colossal backlog.

Regarding item (c), the law brought about numerous advances, such as elaboration of restrictions on unauthorized registration of civil names, explicitly including patronymic names, and unauthorized registration of a commercial name’s characteristic elements. It clarifies that such restriction applies in cases where no authorization has been issued, and also introduces the risk of association as grounds for prohibiting registration of an identical or similar trademark.

Regarding item (d), extension of the grace period for using a registered trademark not only enriches the set of measures against undue appropriation of trademarks, but also favors business planning by offering more time for preparing the market launch of a sign, when necessary. Additionally, the law modernizes treatment of the matter by no longer allowing the BPTO to initiate use investigation proceedings, thus reflecting the understanding of lawmakers that this is a matter of strictly private interest.

Finally, the current Law dismantled the entire distorted system of restrictions in the 1971 Code, allowing businesses full sign use licensing. This activity is thus treated as a normal business transaction, where the parties may set use and price conditions provided they comply with tax law and other applicable Brazilian laws. Licensing came to receive appropriate treatment, after formerly being discouraged by rigid, unreasonable rules – like the prohibition against making royalties payment transfers abroad for the use of foreign-owned trademarks registered without any claim for priority.

Two issues could have been addressed more effectively. The first concerns highly renowned marks: although upholding broader protection is commendable given these marks’ greater capacity as instruments for building a client base, the law’s failure to consider application conditions left room for legal suits seeking abstract statement of highly renowned status. Under Regulatory Act 110/95, the BPTO establishes procedural rules for claiming this type of protection, but assessment of the practical effects of these guidelines at this time would be premature.

The second issue concerns advertising slogans, which Industrial Property Law treated with dismal inadequacy by expressly prohibiting their registration in a provision with confusing wording. Although the provisions for slogan registration device under the 1971 Code led to significant procedural difficulties, the new Law’s simplistic solution of extinguishing it leaves the legal discipline of one of the most important tools for attracting clients on shaky ground.

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José Antonio B. L. Faria Correa

Advogado, Agente da Propriedade Industrial

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