Rights for prior users in good faith: the Brazilian Patent and Trademark Office – BPTO changes its understanding regarding prior user rights to a trademark registration

The Legal Opinion[1] with regulatory effects from the Specialised Federal Attorney General’s Office at the Brazilian Patent and Trademark Office – BPTO [National Institute of Industrial Property – INPI] was approved and published in Industrial Property Journal no. 2652, of 3 November 2021 which means that prior user rights to a trademark registration can be claimed by a prior user in good faith, pursuant to §1, of Article 129, of Law 9,279/1996 (Industrial Property Law – IPL)[2], at all stages of administrative proceedings, including administrative nullity procedure (PAN).

This provision represents an exception to the attributive principle of Trademark Law adopted by the IPL, in accordance with which industrial property rights are only acquired after a registration is granted, as set out in the heading of Article 129, of the IPL, ensuring owners of registered trademarks have exclusive use throughout the country.

The exception to this general rule is called prior user rights or the rights for prior users in good faith.

Until then, the BPTO’s position established in the Trademark Manual (3rd edition, 4th review, of 12 January 2021) was based on previous opinions of the Specialised Federal Attorney General’s Office which held that prior user rights could only be recognised until trademark registration was granted, that is, until the opposition stage to the application for registration.

The BPTO, therefore, did not allow these rights to be recognised in administrative nullity procedure, nor did it agree with the claim if it were made in a legal action.

In accordance with the previous system, in order to enforce prior user rights to the registration, the applicant should lodge an opposition to the application for registration filed by third parties with sufficient evidence to typify prior use in good faith (such as documents, invoices and other means of proof), in addition to filing the application for registration of its trademark.[3]

However, despite the understanding established by the BPTO, the IPL does not make any specific reference, nor does it limit the recognition of prior user rights to a certain stage in the administrative instance. Therefore, since there is no express limitation in law, interested parties can claim their rights at any time until the administrative route is exhausted or, even, before the Judiciary, in a lawsuit to declare the nullity of a trademark registration.

The Legal Opinion cites the collective work by the Dannemann Siemsen Institute with comments on Article 129 of the IPL:

The provision deals with the acquisition of rights to trademarks and confirms, as in the previous Codes, the attributive system as the way in which owners ensure the property right to the trademark. This means that, in Brazil, the right to exclusively use trademarks and the consequent prerogative of preventing third parties from using the same or similar signs in the midst of akin goods or services are acquired through a validly issued registration, and not through use, as happens in countries that adhere to the declarative system, such as the United States of America. Exclusivity to the trademark, therefore, as a rule, belongs to whoever first registers with the BPTO. On the other hand, mindful of the umbilical link between industrial property rights and the repressive principles of unfair competition, some exceptions to the general rule are instituted. Thus, although registrations are deemed to be a mandatory formality to obtain ownership of distinctive signs and its respective corollaries, the Law affords several tools for protecting trademarks owners that have not yet been registered with the competent body.[4]

Considering the ruling by the BPTO’s Presidency to grant regulatory effects to the Legal Opinion, the new regulation is already in force. This is because the provisions of the Trademark Manual were tacitly revoked, since the mentioned Legal Opinion now fully regulates the subject matter that was previously dealt with differently in the Manual[5], regardless of it being published or reviewed again.

The change in the institutional position of the Office, with the review of the previous procedure, is, from now on, in line with the case law of the Brazilian Superior Court of Justice (STJ) on the subject (for example, REsp 1,464,975-PR[6] and REsp 1,673,450-RJ[7]).

Since the end of 2016, the STJ had already settled its understanding to the effect of allowing for the possibility of prior user rights being recognised at any time, that is, even after the trademark registration has been granted by the BPTO, whether by the administrative route during nullity procedure (PAN), or through the judicial route with a nullity action, provided that the statute of limitations period set out in Article 174 of the IPL is respected[8].

Therefore, the change in the BPTO’s stance is welcome, as it puts the Office’s administrative proceedings in line with the IPL and with the case law of the STJ.

[1]  Legal Opinion no. 00043/2021/CGPI/PFE-INPI/PGF/AGU, drawn up by Federal Government Attorney Marco Fioravante Villela Di Iulio, Legal Coordinator-General of Property, of 22 September 2021. Available at: https://www.gov.br/inpi/pt-br/central-de-conteudo/noticias/copy_of_ComunicadosRPI2652.pdf.

[2] Verbatim: “Any person who in good faith on the priority or filing date was using an identical or similar trademark for at least 6 (six) months in the country, to distinguish or certify a product or service that is identical, similar or related, will have prior user rights to the registration”.

[3] V. item 2.4.3 of the BPTO’s Trademark Manual (3rd edition, 4th review, of 12 January 2021). Available at: https://manualdemarcas.inpi.gov.br/.

[4] IDS –Danneman Siemsen Institute for Legal and Technical Studies. Comentários à lei da propriedade industrial [Comments on the industrial property law]. 3rd edition. Rio de Janeiro: Renovar, 2013, pages 298-299.

[5] V. item 5.12.6 (Opposition based on §1 of Article 129 of the IPL).

[6] Special Appeal no. 1.464.975-PR (2014/0160468-6), Reporting Justice Nancy Andrighi, judgment date (unanimous): 01 December 2016. Entire contente available at: https://processo.stj.jus.br/processo/revista/documento/mediado/?componente=ITA&sequencial=1558771&num_registro=201401604686&data=20161214&peticao_numero=-1&formato=PDF. About the ruling, see the article published by lawyer Felipe Dannemann Lundgren, on 23 August 2017, available at: https://ids.org.br/stj-profere-importante-acordao-sobre-momento-para-arguicao-do-uso-anterior-de-marca/.

[7] Special Appeal no. 1.673.450-RJ (2017/0055508-4), Reporting Justice Nancy Andrighi, judgment date (unanimous): 19 September 2017. Entire content available at: https://processo.stj.jus.br/processo/revista/documento/mediado/?componente=ITA&sequencial=1636047&num_registro=201700555084&data=20170926&peticao_numero=-1&formato=PDF.

[8] Verbatim: “The limitation for bringing an action for declaring the nullity of a registration is 5 (five) years counted from the date of registration”.