by Felipe Dannemann Lundgren
August 23, 2017
In relation to the prior user right, or the right of precedence, foreseen in article 129, § 1 of the Brazilian IP Law (LPI), the main discussion is related to the moment when this right might be argued.
Recently, the Superior Court of Justice held that such right might be argued at any moment, including in the course of a nullity court action¹, as long as the statute of limitation term foreseen in the law is respected.²
The Brazilian Patent and Trademark Office (BPTO), on its turn, defended that the right of precedence could be argued by the prior user of the trademark in good faith only before the grant of the trademark registration.
In the concrete case analyzed by the Superior Court of Justice, the subject of the controversy was the possibility of cancellation of the registration for trademark “PADRÃO GRAFIA”, duly granted in favor of the company Seriprint Indústria e Comércio de Etiquetas Ltda. ME, on the basis of the prior use of the same trademark by the company Padrão Grafia Industrial e Comercial Ltda. in the Brazilian territory.
It is known that Brazil adopts a first-to-file system in the trademark field, in which the property and exclusive rights over a trademark are acquired with its registration at the BPTO. In other words, the one that first files the trademark at the BPTO is the one who acquires priority rights over the sign.
Thus, the rule is that the ownership over a trademark is acquired by means of the
registration and first filing at the BPTO (article 129 of the Brazilian IP Law).³
Paragraph first of this article, however, establishes that if some conditions are met, the prior user of a trademark in good faith has a right of precedence over the registration of the trademark at the BPTO.4
Clearly, this legal provision brings an exception to the first-to-file system adopted in Brazil. It may be considered as a “last chance” for the prior user of a trademark in good faith to obtain protection and, consequently, exclusivity over the sign in the Brazilian territory.
As an exception to the rule, therefore, the BPTO traditionally applied this legal provision in a restrictive way, accepting claims based on a prior user right only in the course of opposition proceedings against trademark applications and before the effective grant of the trademark registration to a third party. In other words, after the grant of the registration, for example in the course of an administrative nullity request, the BPTO rejected claims based on the prior use of a trademark, under the argument that after the grant of the trademark registration, except in cases of blatant bad faith, the provisions of § 1 of article 129 of the Brazilian IP Law could no longer be applied.
Even though the application of this more restrictive approach could lead to some situations of apparent unfairness and give rise to controversies, it is undeniable that the understanding of the BPTO was based on solid technical arguments.
The Superior Court of Justice, however, adopting a more flexible interpretation of the law, and prioritizing the principle of “access to justice” foreseen in article 5, item XXXV of the Brazilian Federal Constitution, held that the cases of application of this legal provision are broader, being possible to argue the right of precedence over an identical or similar trademark even in nullity court actions, within a term of five years after the grant of the registration.
In the judgment of Special Appeal No.1.464.975-PR, the Superior Court of Justice adopted the view that “it is possible to judicially determine the nullity of a trademark based on the right of precedence (art. 129, § 1 of the Brazilian IP Law)”, highlighting that “the IP law expressly protects the one that had been regularly using the trademark which was filed by the third party, safeguarding its right of precedence to the registration, as long as some conditions are observed”.
Without a doubt, the understanding of the Superior Court of Justice benefits the real “creator” of the trademark, the one that effectively developed the sign and invested in its use and construction of goodwill around the name.
On the other hand, the more flexible application of § 1 of article 129 of the Brazilian IP Law creates more legal uncertainty, as a trademark registration will only be consolidated, i.e. will only become immune to possible prior user rights of third parties, after five years from the date of grant of the registration by the BTO. Depending on the time it takes for the prosecution of the trademark application at the BPTO, this term might become excessively long.
Consequently, the importance of adequately collecting and storing documents proving use of a trademark in Brazilian territory will increase, as this might be a key evidence in case of dispute with a third party alleging prior use of the sign in Brazil.
1 Special Appeal No.1.464.975-PR (2014/0160468-6), Reporting Judge Hon. Nancy Andrighi. Judgment date: December 1, 2016.
2 Law No. 9.279/96 (Brazilian IP Law). Art. 174 – The limitation for bringing an action for declaring the nullity of a registration is 5 (five) years counted from the date of registration.
3 Art. 129 – The property in a mark is acquired by a validly granted registration, in accordance with the provisions of this law, the owner being guaranteed exclusive use thereof throughout the national territory, without prejudice to the provisions of articles 147 and 148 with respect to collective and certification marks.
4 Art. 129 – §1 – Any person who in good faith at the date of priority or of the application was using an identical or similar mark for at least 6 (six) months in the country, to distinguish or certify a product or service that is identical, similar or akin, will have preferential right to registration.