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1 May 2014TrademarksRodrigo Sérgio Bonan de Aguiar

New rules at the INPI

A trademark registered in Brazil that is considered ‘highly renowned’ is assured of special protection in all fields of activity. This concept was introduced by Article 125 of Law No. 9,279 of May 14, 1996—the Industrial Property Law (IPL).

Previously, special protection was assured to well-known marks under Article 67 of Law No. 5,772 of December 21, 1971—the now-revoked Industrial Property Code (CPI).

For 25 years, Brazil had a single administrative procedure that allowed the abstract declaration of well-known status to a mark by way of special registration. Recognition was direct, by way of an autonomous petition filed before the Brazilian National Institute of Industrial Property (INPI). The requirements included awareness of the mark by the public at large, outside the specific market sector. This petition was not pegged to any other administrative proceedings and, once well-known status was recognised, this status remained in effect for the validity term of the basic registration, and was extendable for equal and successive periods.

The concepts of well-known and highly-renowned trademarks must not be confused with well-known marks provided for in Article 6bis (I) of the Paris Convention and introduced into Brazilian ordinary legislation by Article 126 of the IPL.

The first two reflect recognition by the public regardless of market sector, but always pegged to a registration granted by the INPI, and no mark that was the object of a pending application could be considered. The second, taken from the Paris Convention text, guarantees the owner extraterritorial protection, provided that it is used to certify identical or similar products, even if there is no registration in the country where protection is sought.

"it is inconceivable that various petitions are still pending analysis—and have been for more than a decade—and no decision has been made."

It took the INPI eight years to regulate Article 125 of the IPL. In the meantime, proceedings brought under the prior law aimed at obtaining a declaration of well-known status (IPC, Article 67) were definitively shelved (IPL, Article 233). And since the INPI did not regulate the new legal concept (IPL, Article 125), mark owners were unable to seek their lawful rights administratively.

New resolution

Resolution No. 110 was finally issued in 2004, determining, among other procedures, that the declaration of highly-renowned status could not result from autonomous proceedings but only by operation of an incidental recognition, as a defence matter, by filing an opposition (IPL, Article 158) or lodging an administrative nullity proceeding (IPL, Article 168).

Successive resolutions were introduced by the INPI with the aim of regulating the procedure, which was always the target of criticism by users of the system.

On August 20, 2013, Resolution No. 107 was published in the Revista da Propriedade Industrial, INPI’s Official Gazette, designed to establish the form of applying the provision laid down in Article 125 of the IPL, in light of the “need to improve the model for recognising the highly-renowned status of a mark”, considering the “principle of efficiency that, among others, should govern public administration”.

From then on, it became feasible to file autonomous proceedings prior to the application of special protection, at any time during the validity of the registration, by way of a specific petition supported by evidence that the mark was recognised by a broad section of the public at large. It was also recommended that a “nationwide mark image survey” take place to assess the degree of distinctiveness and exclusivity of the sign. After ten years, a new petition could be filed, meeting the same requirements, unless new regulations had been introduced by the INPI.

Although published on August 20, 2013, this resolution came into effect only on March 11, 2014 (Ordinance No. 27). It also amended the official fee table for the services provided by the INPI. The cost of a petition for highly-renowned status was fixed at R$37,575 ($16,700) if the petition was by email, and R$41,330 ($18,400) if it was on paper. Previously, the maximum amount was R$3,840 ($1,700).

Accordingly, companies owning registrations in Brazil may finally petition for a declaration of highly-renowned status for their marks, with the expectation that the INPI will analyse the petitions with greater efficiency in view of the improved model already implemented, but at a much higher cost.

A death blow to legal principles

Brazil will host the FIFA World Cup of 2014 and, besides preparations in the fields of telecommunications, infrastructure, transport and stadiums, the trademarks in FIFA’s Official Symbols list were duly considered and then annotated in the INPI’s records as being highly renowned for the purposes of special protection prescribed in Article 125 of the IPL, as expressly provided for in Law No. 12,663 of June 5, 2012.

Besides the immediate declaration of high renown for its marks, FIFA was given an exemption from paying any official fees relating to the procedures in the ambit of the INPI until December 31, 2014.

This is obviously unconstitutional because it violates the principle of equality enshrined in Article 5 of the Federal Constitution.

If Resolution No. 107 had not already dealt a death blow to the principles of legality, purpose, juridical security and public interest, as well as efficiency that implies reasonable process duration, what is now seen with the sanctioning of the World Cup Law is a fresh violation of the Federal Constitution in that it assures FIFA privileges that other mark owners—Brazilian or foreign—do not enjoy before the INPI.

Admittedly, the federal Attorney General filed a Direct Action of Unconstitutionality, but it did not touch upon the core issue of breach of the principle of equality. The action was brought against specific articles relating to the liability of the government in the field of finance, among others, and is pending judgment by the Supreme Court of Brazil.

In all petitions for a declaration of highly-renowned status, the INPI should apply the regulations issued for this purpose, without exception. This is the duty of public authorities, and inertia or omission is barred from the exercise thereof. In other words, it is inconceivable that various petitions are still pending analysis—and have been for more than a decade—and no decision has been made.

Court precedents

Free access to the judiciary is one of the principles enshrined in the Federal Constitution (Article 5, XXXV), so there is no need for a prior petition at the administrative level.

Yet for a period of eight years, from 1996 to 2004, the inertia of the administration in regulating the administrative process for recognising marks as being highly renowned led to owners finding themselves unable to adopt any judicial measure against third parties infringing upon their rights.

Consequently, various companies brought suits seeking to obtain a general and abstract declaration that their marks enjoyed high prestige among the population of Brazil so as to assure the special protection given highly-renowned marks.

The initial outcome of these lawsuits was highly favourable to the trademark owners, but the INPI, reviewing its position, filed actions for relief from judgment, prescribed in Article 485 of the Code of Civil Procedure, brought before the Federal Regional Court for the second region, in Rio de Janeiro, which culminated in judgments in favour of the INPI.

There is an exception: the emblematic case of the ‘Goodyear’ mark, in which we were the lawyers for the US company. The peculiarity lies in the fact that this mark had been declared well-known based on the revoked Industrial Property Code (1971) and was fully valid when the new Industrial Property Law was sanctioned (1996). Yet the inertia and leniency of the INPI in regulating Article 125 led the owner of the mark to file a declaratory action in the Federal Courts owing to the absence of a rule authorising a petition before the INPI.

The action was granted in 2002 and the INPI duly made an annotation in the trademark system, for five years. The company questioned the term and the form of annotation, and the proceedings are currently pending judgment by the Superior Court of Justice. Yet the fact is that the ‘Goodyear’ mark is the only one that enjoys the highly-renowned status recognised and declared as such by the Brazilian judiciary.

In 2013, the Superior Court of Justice served a decision in the Absolut case that the analysis of a mark’s condition that might lead to a declaration of highly-renowned status should be made by the INPI, and “even in the case of inertia by the public administration, the judiciary cannot remedy this omission and decide on the merits of an administrative proceeding, but only determine that the proceeding be concluded within a reasonable timeframe”.

In conclusion, it can be asserted that when the INPI improves its method of analysing and judging autonomous petitions for the declaration of highly-renowned status, it will be more efficient in meeting the requests of the owners. The judiciary will then be left to control the ministerial acts passed by the INPI, which should be subject to the technical parameters established in the IPL and in the current Resolution No. 107. Consequently, filing an action to seek the declaration of a highly-renowned mark will not be admitted without a prior pronouncement from the INPI.

Rodrigo Sérgio Bonan de Aguiar is a senior partner at Luiz Leonardos Advogados. He can be contacted at: rbonan@llip.com

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