Well-known and famous marks: Brazil

Domestic and international laws create a powerful network of protection in Brazil

A recent decision has affirmed the principle that famous marks which receive recognition as highly reputed marks following the BPTO procedure deserve protection in all fields of activity, regardless of the possibility of confusion.

Famous marks currently enjoy two main systems of protection in Brazil. First, unregistered trademarks are protected against infringement in the same or a related field of activity under the concept of ‘well-known’ marks prescribed by Article 6bis of the Paris Convention, which was fully adopted in Brazil through Decree 635/1992.

In addition, Section 126 of the Industrial Property Law (9279/1996) expressly affords protection to well-known trademarks, making specific reference to the Paris Convention. The protection of well-known marks is independent of any prior filing or grant of registration for a given mark in Brazil. In addition, the law expands on the Paris Convention in order to grant protection expressly to service marks.

Brazil is a member of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights. Article 16.3 expands the scope of protection of wellknown marks beyond a ‘similar field of activities’ to include goods or services which are dissimilar to those in respect of which a trademark is registered, provided that the use of the trademark in relation to those goods or services would indicate a connection between the goods or services and the owner of the registered trademark, and the interests of the owner of the registered trademark are likely to be damaged by such use.

However, in order to seek protection of such a mark, the mark owner must prove that it filed an application for the mark in Brazil within 60 days of filing of the administrative opposition, nullity action or court action. Without such evidence, the procedures will not be acknowledged by the Brazilian Patent and Trademark Office (BPTO) or the courts (Section 158(2) of the Industrial Property Law).

Any procedure to enforce the rights awarded to the owner of a well-known trademark registration must contain evidence of such reputation, preferably in Brazil, although evidence of use abroad in a manner that would clearly show that the unauthorized local applicant or registrant could not deny having knowledge of the mark is also useful. The nature of such evidence will vary according to the nature of the trademark and of the products or services which it identifies. However, in general, the most useful types of evidence include figures relating to Brazilian and worldwide sales of products or offerings of services featuring the mark; figures relating to advertising expenditure; actual samples of advertisements and articles where the mark is prominently shown; certificates of registration of the mark in other countries; and annual reports of the trademark owner where the mark features prominently.

However, regardless of the Paris Convention provisions, the Industrial Property Law also expressly bans from registration any mark "that imitates or reproduces, in whole or in part, a mark of which the applicant could obviously not fail to have knowledge in view of its activity, and whose proprietor is established or domiciled in the national territory or in a country with which Brazil maintains an agreement or guarantees reciprocity of treatment, if the mark is intended to distinguish a product or service that is identical, similar or akin and is likely to cause confusion or association with such third-party mark" (Section 124(XXIII)). This section significantly expands the protection awarded to well-known marks as it protects not only identical products and services, but also similar ones or even those that could be associated with the well-known mark.

The second level of protection for wellknown marks is the special protection afforded to ‘highly reputed’ marks. This protection is set down in Section 125 of the Industrial Property Law, which determines that "marks registered in Brazil and considered to be of high reputation will be guaranteed special protection in all fields of activity". This section makes it clear that such broad protection is afforded only to registered trademarks, this being the first prerequisite. This provision is an evolution of the prior law’s provision regarding ‘notorious’ marks. Notorious mark protection applied only to registered marks, but notorious mark status could be sought and awarded through a separate administrative procedure before the BPTO.

Regarding ‘highly reputed’ marks, when the current law was enacted there was doubt as to how such protection would be sought. The BPTO then issued Resolution 110/04, later superseded by Resolution 121/05, which provides that such protection may be sought only by filing of an administrative objection (either an opposition or an administrative nullity action). The declaration of highly reputed mark status would be incidental to the proceeding and, if obtained, would remain valid for five years. This is the current rule, although many parties have tried to seek such a declaration by means of court actions, which despite being initially successful, is no longer an effective method to obtain such status.

As it is more extensive, this second level of protection requires a higher threshold of evidence. The BPTO requires the inclusion of several documents showing the high degree of the mark’s reputation in Brazil in all (or at least the majority of) areas of activity and states that the most important piece of evidence is unbiased research (by a reputed institute dedicated to research) showing the high level of recognition of the mark by different sectors of Brazilian society. Currently, around 50 marks have obtained the status of highly reputed mark.

In a decision published on November 17 2009, the Superior Court of Justice ruled on Special Appeal 951.583, which involved the conflict between famous mark VISA for credit cards and the mark VISA LATICÍNIOS for dairy products. The decision affirmed the principle that famous marks which receive recognition as highly reputed marks following the BPTO procedure deserve protection in all fields of activity, regardless of the possibility of confusion. In addition, the court held that marks which were considered notorious under the system of the previous Industrial Property Code were not automatically protected as highly reputed marks; rather, the status of a highly reputed mark would have to be obtained under the procedure established by the BPTO.

The system of seeking a declaration of highly reputed mark status has been criticized in view of the requirement that such protection be sought only incidentally in the course of filing of an administrative objection or a court action. In order to amend this situation, during 2009 Bill 4809 was introduced. Under consideration in the House of Representatives at the time of writing, it would re-establish the possibility of requesting a declaration of highly reputed mark status before the BPTO outside an actual dispute; if granted, the declaration would be valid for the remaining term of the trademark registration. Additional requests could be made upon renewal of registration and, if granted, would be valid for the term of the renewed registration. Any third party could request the cancellation of such a declaration once three years had passed since the grant.

Famous marks may also be protected under the theory of dilution in Brazil, although the Industrial Property Law does not expressly mention dilution as a cause of action. The basis for such an action is Article 130(III) of the Industrial Property Law, which gives the registrant of or applicant for a mark the right to protect the material integrity or reputation of its mark. This provision introduces the concept of antidilution to the extent that mark owners and applicants may rely on it to prevent any act by third parties that may dilute or affect the integrity or reputation of a mark.

The courts have considered this type of protection for well-known marks, particularly in the luxury goods sector. In a case involving the counterfeiting of LOUIS VUITTON products Justice Nancy Andrighi of the Superior Court of Justice highlighted that consumers of luxury goods agree to pay high prices due to the promise of exclusivity and quality, and that the flow of counterfeited products onto the market dilutes the value of the luxury product and affects sales of the original product.

The Superior Court of Justice granted an award for moral damages cumulatively with patrimonial damages based on the notion that sales of counterfeit products reflect badly on the reputation established by the mark on the market. The decision was also based on the interpretation of Section 209 of the Industrial Property Law, which allows the award of losses and damages in compensation for losses caused by acts that violate industrial property rights and acts of unfair competition which prejudice another party’s reputation or business.

Senate Bill 308/96 has been presented and is currently under consideration in order to expand protection against dilution and to limit situations of misappropriation of the reputation of marks which, although famous, have not yet attained the status of a highly reputed mark that is protected in all fields of activity. As presented, the bill will modify the current Industrial Property Law by adding a single paragraph to Section 124 to extend the prohibition of registration to cases where a junior mark intends to distinguish even non-related products or services if the holder of a prior registered mark can prove that the imitation constitutes unfair competition or damages its corporate image or reputation.

Further, Senate Bill 308/2006 categorizes as a new type of unfair competition offence (prohibited by Section 195 of the Industrial Property Law) the use or imitation of a mark or slogan of a third party with the objective of tarnishing the image of the company, product or service, even in the case of noncompeting companies, products or services, or the unjustifiable appropriation of the reputation, fame or corporate image of a trademark owner with the objective of deriving economic advantage in a market segment where the trademark is unprotected.

However, even in the absence of registration, owners of well-known marks should register those marks, at least in relation to the most relevant areas of activity, to prevent third parties from registering similar marks. In addition, they should not surrender the control and registration of their marks to local licensees or distributors, as this is a common cause of future disputes as to the local ownership of the mark. Finally, they should remain vigilant in order to avoid dilution of the mark and obtain preliminary injunctions in litigation as soon as possible to avoid allegations of negligence as a defence against a preliminary injunction request.