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Recent Decisions of Brazilian Patent and Trademark Office involving Application of Article 124, item XXIII, of Industrial Property Law

by Ana Lúcia de Sousa Borda

June 30, 2005

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Under Article 124 of the Brazilian Industrial Property Law, marks may not be registered that reproduce, in part or fully, a trademark that is protected for similar goods or services. The purpose of the law is to avoid situations where the new mark may be confused with the trademark already registered.

More specifically, subsection XXIII of Article 124 states that it is not possible to register as a trademark any sign that reproduces, fully or in parta trademark that the interested party as a result of his activity, alleges he was not aware of and that moreover, is designed to identify an identical or similar product or service.

The above provision is an innovative device if compared to other provisions dealing with the prohibition of the registration of trademarks. It was introduced into the legal system by means of Law no. 9,279/96 Industrial Property Law (IPL), that is the law that among other purposes, regulates the registration of industrial and commercial trademarks.

Trading Off of Well Known Marks

Its application in practice has served as a very important instrument to curb the usurpation of known trademarks and, consequently, the practice of unfair competition. As an example, it is possible to cite recent decisions that resulted in the rejection of applications for registration nos. 811898806 and 811988821 for the "AZZARUS" and "ASARO," trademarks, respectively.

Knowing that the blatant reproduction of well known trademarks would easily be perceived and quickly rejected, the apphcants in bad faith, masked their true intentions. Based upon the trademarks they sought to imitate, they introduced modifications by substituting some elements or adding others. This "disguise " is clearly seen when the "AZZARUS" and "ASARO" trademarks are compared to "AZZARO," well known in the fragrance business.

The rejection of trademarks such as "AZZARUS" and "ASARO" based upon the known "AZZARO" brand through the application of article 124, item XXIII, of the IPL defeats the argument commonly used in the past by applicants in bad faith. In their defense, they alleged they were not aware of the trademark that in truth, they wanted to usurp. The similarity of the supposedly new trademark with the imitated or reproduced one was purportedly the result of an amazing coincidence.

Others acting in bad faith have had no better luck in registering "DIVANI & DIVANI," "CAESARS PALACE," "BACACHARI," "OVOTHERM" and "THEMAGIC TOUCH" trademarks, to cite just a few examples. By virtue of the provisions of article 124 item XXIII of the IPL, whoever applies for the registration of such names is deliberately misappropriating a mark of whose origin he was fully aware. Thus, the foregoing section establishes a legal presumption that the applicants were aware of such marks.

Also citing the "ASARO" case, the Brazilian Patent and Trademark Office recognized the appropriateness of the arguments put forth by the owner of the "AZZARO" trademark, noting in its opinion that the ASARO trademark "(… ) is similar to the ‘AZZARO’ brand’s, which is notably wellknown in its field of activity, denoting unfair competition. As a result of its activities, the opposed party could not fail to be aware of the existence of the trademark registered by the opponent."

Increases in Penalties

In faca legislators acted correctly by presuming that players in a given segment are aware of the existence of marks enjoying reputation in such areas. By dealing with Crimes Against Industrial Property, legislators went further increasing imprisonment sentences from one third to one half if the trademark that was reproduced or imitated was well known. Thus, the impact of the tale commented in this article is vasa not only on the administrative but also in the judicial sphere (civil and/or criminal).

Well known trademarks are those that have achieved a high degree of reputation in their specific sector. Nevertheless, it is presumed they are well known in their field. This concept must be clear in order to avoid confusion with the concept of highly reputed (famous) marks, whose protection extends to all fields of activity. Highly reputed trademarks enjoy an enlarged protection as compared to wellknown trademarks.

The protection of well known trademarks in their sectors assured by the device in question vacates, in the same proportion, possible arguments that bad faith applicants may make in their defense. This instrument is, thus, a valuable tool for combating usurpation attempts by unfair competitors. Its regular application since the enactment of the current Brazilian Industrial Property Law has already established solid jurisprudence that serves as yet another element to curb unfair competition.

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Ana Lúcia de Sousa Borda

Partner, Lawyer, Industrial Property Agent

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