The BPTO and Trademark Coexistence Agreements

For years the Brazilian Patent and Trademark Office (BPTO) was hostile to agreements between private parties designed to allow trademarks to coexist. However, after a large number of decisions rendered by the Brazilian federal courts, it has reviewed its position: It now views them as excluding conflict when analyzing cases, provided that the products or services in question are not identical.

As a result of this shift, in its Guidelines for Trademark Analysis, which the Office published in 1997 (Resolution No. 051/97), it included as a conflict analysis parameter the existence of an agreement on the part of the prior trademark owner, whose mark would otherwise be considered grounds for rejecting the application.

This change represented the adoption of a modern view of trade mark conflict, based on an a fortiori argument: If not even the owner of a prior trademark – who has the most to win or lose – believes there is a conflict, why should anyone else, including the registering Office, presume the contrary?

However, there are reportedly dissenting opinions within the Office and an internal proposal for resuming the prior practice. This proposal considers that if the risk of confusion or association between marks is a matter of public interest, due to its impact on the market, coexistence of signs is not a matter to be settled between the parties, and therefore the expressed will of the holder of prior rights is irrelevant.

The issue is currently the subject of internal debate in the BPTO, and no deadline has been set for its resolution. Until this is resolved, the Office’s first instance, according to information available, continues to consider coexistence agreements, subject to the requirement mentioned in the first paragraph of this article.

It is our view that reinstating the former practice would resuscitate an issue that has already been resolved, not only by precedents of the Brazilian courts, but by the global evolution of trademark discipline. It would therefore sound a blue note among the BPTO’s laudable measures toward aligning the country with more modern international practices.

As the Judiciary has determined on many occasions, for example in the cases CORBOM/CORBEL [Civil Appeal 105.997 /RJ, decision published in the Court Gazette dated 04.30.87, pp.7730] and ELF/ELFTEX [Civil Appeal 90.02.004290/RJ, decision published in the Court Gazette dated 02.11.92, pp.2096], the option for marks to coexist or not is a highly private matter: Trademarks are fundamentally instruments of competition aimed at protecting the clientele of a party that built it. As such, the owner himself is the most qualified to assess whether a sign interferes or not with his clientele. If confusion or association occurs, the owner will suffer the market’s natural sanction; his trademark and clientele may well erode.

In sum, if there is a coexistence agreement between the owner of a prior trademark and the holder of a subsequent application, the BPTO must not claim there is a conflict and deny an application. The matter moves into the market sphere. In our opinion, the trademark environment, in essence private, only becomes a public matter in certain circumstances – as in the case of counterfeiting and other fraud that may cause loss to consumers – which are not at all related to the coexistence of genuine trademarks settled between the parties involved. Perhaps the public slant of the trademark world has led to conceptual confusion and subsequent distortion of treatment of coexistence agreements.