Alcohol wars in Ecuador

In relation to case law, the authors have been active in representing parties whose cases constitute new developments in intellectual property (IP) precedents applicable in the country.

Trademark protection

Polish company Polmos Siedlce, producer of Chopin vodka, protected internationally by trademarks Chopin and Chopin + Design, applied for registration of its marks in Ecuador.

During examination, the trademarks director rejected the registration for both marks in August 2009, citing article 136(e) of the Andean Decision which bars from registration trademarks that: “consist of a sign that is capable of affecting the identity or prestige of (...) persons other than the applicant (...), particularly in regard to a given name, family name, signature, title, nickname, pseudonym, image, portrait, or caricature, where no consent has been obtained from that person or, if deceased, the declared heirs of that person”.

The director of trademarks concluded that it is necessary to file a letter of consent from Frédéric Chopin’s heirs, as not doing so would affect the identity and prestige of “one of the most important composers and pianists of history”. Polmos Siedlce appealed to the IP Committee.

Bermeo & Bermeo represented Polmos Siedlce and stated, among other arguments, that if the law is carefully read, only marks that affect the identity or prestige of a living person are barred from registration, that Chopin died more than 160 years ago and there are no heirs.

Furthermore, it was argued that Chopin has registrations all over the world, even in Poland where Chopin was born and where his identity and prestige should be most protected. At the national level, we argued that there are more than 120 registrations of marks containing names of famous persons, and that not even the names of local personalities and heroes such as Bolivar or Sucre were rejected for registration, because the correct standards were applied.

The trademarks director had repeatedly considered that the identities of these personalities were not affected. The committee accepted the appeal and granted registration to both trademarks, Chopin and Chopin + Design, which separately comprise the name and likeness of Frédéric Chopin.

The committee stated that regardless of the bar against registration in the above-mentioned article, the trademark is both capable of being distinctive for the goods it intends to protect, and not within any bar of registration, because it does not affect third party rights because the word referring to Frédéric Chopin is in the public domain, as he died more than 160 years ago.

This decision sets a new precedent in Ecuador and for the bar against registrations of names and likenesses. Although we believe that the committee reached the correct conclusion, it refrained from analysing whether Chopin’s name or likeness was affected by a registration to protect alcoholic beverages, whether the same standard was applied when registering the other 120 names, or any of our other arguments.

In any case, for the first time it was declared that a name and likeness can be in the public domain if the person has died a certain amount of time beforehand. Though the decision sets a strong precedent for similar cases, it leaves a few open questions, such as when a dead person’s name migrates into the public domain, or what would happen if the person has heirs.

As the decision did not cover all the different aspects, trademark applications containing names, likenesses, images, pseudonyms, signatures, portraits or caricatures of third parties might still be rejected, depending on the details of each case.

Subject matter jurisdiction

Peru and Chile have a long-standing dispute in which they claim, with certain differences, that their respective country should be the sole producer of the grape brandy, pisco. This battle for ownership of the appellation of origin also involves a discussion in regards to the process of fabrication, quality and flavour of the aguardiente.

The legal battle was brought to the Ecuadorian Trademark Office when the government of Peru challenged the trademark Pisco Sotaqui belonging to Compañia Pisquera de Chile SA, represented by Bermeo & Bermeo.

Peru started a cancellation action on absolute grounds against trademark registration Pisco Sotaqui. The mark belongs to one of Chile’s major pisco producers. The cancellation was based on the appellation of origin the Republic of Peru obtained in 1990, in Peru. The cancellation was brought through an extraordinary action for review before the committee in September 2006.

The Republic of Peru claimed that the appellation of origin Pisco is protected and well-known in several countries and that according to Andean Decision 344, valid at the time of registration, there was a bar against registration for trademarks that copy or imitate a national or foreign geographical indication and are likely to cause confusion.

Peru submitted documents dated from 1998 to 2004 in several countries such as Colombia, Bolivia, Venezuela, Panama, Guatemala, Ecuador and others which prove the existence of the protection, as well as local (Peruvian) documents in relation to the use of Pisco in that country.

The claim was quickly dismissed for lack of jurisdiction by the committee based on an administrative law that states that three years after an administrative act is issued, the act may be challenged only in jurisdictional courts and not administratively.

The registration for Pisco Sotaqui was granted in 1994 and the cancellation was initiated 12 years later in 2006. Peru appealed the dismissal stating that international treaties pre-empt local laws, and that Andean Decision 486 states that the competent authority is the IP Office and provides new bars against registration of appellations of origin, citing the Constitution, which states that the different government bodies and agencies need to cooperate to protect constitutional rights.

Compañia Pisquera de Chile responded to the appeal asserting that the case was wrongly filed because the IP Committee did not have subject matter jurisdiction to hear an extraordinary review 12 years after the act that granted the registration. On the merits, the response was based on the wrong application of the valid law, Decision 486 came into effect only in 2000, and Pisco Sotaqui was granted in 1994. Therefore the mark was correctly granted per the valid law at the time.

Furthermore, the Peruvian appellation of origin was registered in Ecuador only in 1998, according to the documents provided by Peru. Finally, after five years of litigation, the committee decided the appeal and affirmed its previous decision. A new analysis of subject matter jurisdiction was made.

The committee summarised that the Andean Decision awards jurisdiction to the competent authority, and local law states that the competent authority is the committee, but it is bound by the administrative regulations which state that a cancellation action in such grounds can be filed only three years after the issuance of the act, thereby dismissing the cancellation action on grounds of lack of jurisdiction.

This is a long-lasting dispute between Peru and Chile, and we are now waiting for a reaction from Peru. Meanwhile, plenty of time and resources have been spent in a groundless suit which was incorrectly filed six years ago. There have been developments on the issues regarding the grape brandy pisco of Peru and Chile, but we do not see a clear solution in the near future.