Trademark Dilution in Brazil

Although the term "dilution" has never appeared in the Brazilian industrial property laws, it has been extensively used and applied in administrative decisions and court precedents to defend the rights of trademark owners.

Prior to the promulgation of any specific legislation regarding dilution-related provisions, a well-established doctrine in Brazil provides that in the event a given registered mark has lost its uniqueness by co-existing with other similar marks sharing the same formative elements, a junior mark that incorporates the diluted element cannot be prevented from achieving registration based solely on the senior diluted mark, unless the likelihood of confusion between the marks is striking. In this sense, the loss of uniqueness may entail more flexibility in examination of conflicts between the senior diluted mark and junior marks sharing the potentially conflicting element.

With enactment of Law 9,729 in 1996, marks possessing a singular characteristic or that have achieved a superior reputation may be eligible for stronger protection based on a series of different remedies.

Under Article 130, III, the registrant or the applicant of a mark is provided the right to protect the material integrity or the reputation of its mark. This provision, albeit not fully used in court precedents, introduces the concept of "antidilution" to the extent that trademark owners and applicants may rely on it to prevent any act by third parties that may dilute or affect the integrity or reputation of its mark.

Although likelihood of confusion remains the main test to decide trademark conflicts, especially at the Brazilian Trademark Office level, Law 9,279/96 sets forth under Article 124, XIX that the likelihood of association may also result in rejection of junior marks.

Another important development under Law 9,279/96 was the introduction of the notion of "presumption of bad faith." Article 124, XXIII prohibits the registration of marks: (1) imitating or reproducing a senior mark of which the applicant could obviously not fail to have knowledge in view of its activity, (2) in which the proprietor is established or domiciled in the national territory or in a country with which Brazil maintains an agreement or guarantees reciprocity of treatment, (3) if the mark is intended to distinguish a product or service that is identical, similar or akin, and (4) is likely to cause confusion or association with such third-party mark. This provision may prove powerful in resolving antidilution conflicts.

Furthermore, Law 9,729 expressly provides protection to well-known marks in the context of Article 6 bis of the Paris Convention, which are well-known but unregistered marks in Brazil that may be protected against piracy.

Under Article 125 of Law 9,279, marks registered in Brazil and considered famous will be guaranteed special protection in all fields of activity. When a given mark achieves a high reputation in Brazil, protection will be afforded against conflicting junior marks, even in relation to noncompeting goods or services. Also, the infringement of such marks may entail increased penalties.

The Brazilian resolution n.110/2004 approved procedures for application of Article 125 of the Brazilian Industrial Property Law 9279/96 (something that had been postponed by the Brazilian Patent and Trademark Office since 1996, when Law 9,279 was passed), which gives special protection to marks registered in Brazil and deemed to be of high repute and, therefore, with special protection in all fields of activity.

The importance of recognizing the high repute of a trademark lies not only in the possibility of its affording protection in all classes of products and services, including those in which the trademark owner is not active, but also on the criminal appeal provided for under Article 196, II of the BIPL, according to which the penalty for the crime of infringement of a trademark shall be increased by one third to one half of the value of the mark, if the altered, reproduced or imitated trademark is a high repute one.

As a last resource for protection, Article 195, III of Law 9,279 sets forth as an unfair competition violation the use of any fraudulent means to divert, for one’s own benefit or for a third party’s benefit, another’s clientele. This provision broadly provides protection in relation to any unfair acts that may result in undue economic advantage to the detriment of another undertaking.

This view shows that although not expressly designed as antidilution measures, there are legal provisions under the existing trademark law in Brazil that offer trademark owners strong remedies to prevent dilution of their marks’ uniqueness and reputation.