1 November 2013Jurisdiction reportsRodrigo Cooper

Chilean Trademark Law and Piracy

Although Chile became a member of the Paris Convention in 1991 and subsequently formally established a legal prohibition to register famous and notorious trademarks created and registered abroad by others, our competent courts had ruled against trademark piracy well before 1991.

This appears as a contradiction because in addition to the lack of an explicit legal provision against piracy, Chilean trademark law does not have any provisions on the lack of use of a trademark. Indeed, the lack of use of a registered trademark has no effect at all and may not be used as the basis for a cancellation action.

In other words, a trademark may be registered forever, provided it is renewed every 10 years, and nobody can challenge it even if it has never been actually used. The absence of trademark use requirements favour trademark piracy because a local registration may indefinitely block a legitimate trademark owner from introducing his products or services to Chile, finding that a pirate anticipated him by registering the trademark in his name.

Today, both the courts and local statutory law strongly protect foreign trademarks in agreement with the Free Trade treaties implemented in the 1980s.

However, first the Chilean Supreme Court of Justice, and then the National Institute of Industrial Property (INAPI), started upholding oppositions or accepting cancellation actions concerning well-known foreign trademarks applied-for or registered by third parties in Chile. This development began in the mid-1980s, first as an exception and consistently afterwards.

It is remarkable to note how legal precedents and trademark law have developed this strong stance against piracy.

At the beginning, the Supreme Court ruled against trademark piracy of famous trademarks in very clear-cut cases, when it was obvious that the applicant, or registered owner, acted in bad faith, the local application was not a mere coincidence and the application was identical and protecting the same goods or services. Hence, at the beginning, the Supreme Court required that the stolen trademark should be identical, or almost identical, to the foreign famous trademark, and the latter should have been previously registered abroad for the same goods or services.

As there was not express legal provision protecting famous foreign trademarks, the Supreme Court based its decisions on general rules on bad faith and general consumer interests.

One of the most relevant examples of the strong position of the Supreme Court was the final ruling ordering the cancellation of a registration for the ‘Calvin Klein’ trademark in Class 25, titled to a Chilean company. The court ruled that it was beyond any doubt that the applicant, when filing the application that resulted in the challenged registration, acted in bad faith and also knew that Calvin Klein was a famous designer and, in consequence, violated principles of commercial good faith and the prohibition to register names without their owner’s authorisation.

The most relevant facts of this case were that the original registration was more than 20 years old, and in accordance with all principles and rules of law, the right to initiate a cancellation action had expired a long time ago in view of the statute of limitations. General legal principles establish that 10 years is the longest term to initiate a cancellation action against a juridical act. Furthermore, but without mentioning it, the court applied the law retroactively, as the decision was based on the Paris Convention, which establishes that no time limit shall be set for requesting the cancellation or the prohibition of the use of marks registered or used in bad faith.

The defendant argued that Chile became party to the convention only in 1991 and that it could not be applied retroactively. The Supreme Court, without expressly addressing this defence, ordered the cancellation of the old registration.

After their first rulings, both the INAPI and the courts, including the Free Competition courts, have followed the same path while also developing more flexible rules in the last 20 years and cancelling many local registrations. Today, both the courts and local statutory law strongly protect foreign trademarks in agreement with the Free Trade treaties implemented in the 1980s. This is very favourable to foreign trademarks; our courts and laws currently demand less weighty evidence to prove that a trademark is famous abroad and have also extended the scope of protection to related or ‘connected’ classes. As a result, it is now easy for foreign entities to protect their IP rights in Chile.

Rodrigo Cooper is a senior partner at Cooper & Cia and a professor of IP law at the Universidad de Chile. He can be contacted at: rcooper@cooper.cl

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