Protection of trade dress of shoe store chain upheld in Brazil

In a unanimous decision, the 1st Panel of the Court of Appeals of the State of Goiás upheld, in part, a decision of the 4th Civil Court of the City of Goiânia, which held that a copy of the trade dress of a shoe store chain should be considered an act of unfair competition prohibited by Industrial Property Law No. 9279/96.

This decision, which may be subject to further appeal to the Supreme Court and or the Superior Court of Justice, is important as a precedent in the field of unfair competition in Brazil, since it is not concerned with the use of a similar label or package of a product but rather with the imitation of the architectural lay out and the form of presentation of products in an outlet.

The Plaintiff and Appellee on the case, Calipso Bay Arrendamento de Marcas Ltda, is the owner of the Brazilian wellknown mark "Mr. Cat" duly registered in Brazil for shoes, and operates nationally through the system of franchising.

The first Defendant and Appellant Calçados Pina Ltda owns a registration for the mark "Mr. Foot", also for shoes, which is licensed to the second Defendant, Vipi Modas Ltda, which operates a shoe store in the city of Goiânia, the Capital of the State of Goiás.

The Plaintiff was disturbed by the similar architectural conception of the stores and form of presentation of the shoes to the public, which are sold in cotton bags of a certain design, and displayed in vertical wooden compartments of a determined shape inside the stores.

The decision of the Civil Court of Goiânia, which was maintained by the State Court of Appeals, held that the concept of unfair competition is broad enough to encompass all the acts of a competitor who, by fraudulent means, aims to divert consumers of a third party, and should not be limited to the use of phonetically similar marks. Therefore, the adoption of a similar architectural design and/or other elements related to the display of products in a store which are likely to cause confusion should also be prohibited.

Another relevant aspect is that the reporter judge concluded for the existence of unfair competition, even though the marks "Mr.Foot" and "Mr. Cat" were considered sufficiently different to coexist. The existence of different marks is always cited by defendants in cases involving trade dress as a determinant factor which should preclude any likelihood of confusion, and this argument has been favored in some decisions in the past.

The Court of Appeals only reversed part of the decision of the Civil Court, so as to exclude the first Defendant from the permanent injunction, since the stores where actually owned by Vipi Modas Ltda.

The protection of distinct features of the architecture of a store and of particular forms of display and disposition of products is of utmost importance nowadays, considering the wide adoption of the franchise system, which relies on the concept of a common identity to convey a sense of uniform quality, and the sharing of the same core values across the units.