Two Brazilian Decisions Involving Trade Dress

Although Spoleto Franchising Ltda. v. Julietto Comércio Ltda.

This case involved the violation of the interior and exterior trade dress of a business.

Plaintiff Spoleto Franchising Ltad. ("Spoleto") is a fast-food Italian-style Brazilian restaurant chain that is experiencing great success based on a revolutionary new concept of preparation and servicing of food. This concept required the development of a characteristic interior design and décor layout. Spoleto quickly developed a chain restaurants through franchises in 14 states spanning more than 100 stores. Defendant Julietto Comercio Ltda. ("Julietto") opened a pasta restaurant copying the same concept and layout, utilizing a similar architecture and interior design to that of Spoleto. Julietto sustained that the concept was not new and the layout was essentially functional.

The 18th Civil Court in Recife ruled in favor of Spoleto. The judge granted a preliminary injunction, later confirmed by a March 25, 2003, permanent injunction, prohibiting Julietto from using any layout or interior design or décor similar to those of Spoleto’s establishments on grounds of unfair competition under Article 209 of the Brazilian Industrial Property Law No. 9279/96. A daily penalty fine of R$ 10,000.00 would be levied in case of violation of the injuction.

The court ruled that Julietto had based their success on Spoleto’s idea by copying their interior and exterior layout and design, thereby confusing consumers by the appearance of the restaurants. The judge upheld the notin that protection against acts of unfair competition extends to the visual features of a business as a whole, even if certain elements may be viewed as functional. Julietto’s appeal to the Court of Appeals of the State of Pernambuco is pending.

Calipso Bay Arrendamento de Marcas Ltda. v. VIPI Modas Ltda.

The Court of Appeals of the State of Goiás upheld the decision by the Civil Court of Goiânia that found the defendant guilty of unfair competition under the Brazilian Industrial Property Law by copying the plaintiff’s interior and exterior design and décor.

The plaintiff, Calipso Bay Arrendamento de Marcas Ltda. ("Calipso"), has a shoe store chain famous n Brazil, known under the registered mark MR CAT, and has developed a characteristic interior and exterior trade dress to identify its stores.

The defendant, VIPI Modas, Ltda. ("VIPI"), which was licensed to use the mark MR FOOT, owned by Calçados Pina Ltda. launched a competing shoe store whose interior and exterior design and décor were similar to those of MR CAT.

The Court of Appeal in Goiás found in favor of Calipso.

Despite its finding that the trademark MR CAT had not been infringed by MR FOOT, the court determined that VIPI had begun to use the same architectural design as Calipso and the same packaging and presentation of its shoes. The court held that the concept of unfair competition is sufficiently extensive to include all the acts of the competitor that are designed to fraudulently divert to it customers from the other party. One of the judges noted that VIPI replicated Calipso’s trade dress in a way likely to cause confusion, in spite of the fact the two companies’ trademarks are dissimilar.

VIPI still has the option of appeal to the Supreme Court.