27 September 2018TrademarksRodrigo Bonan

Protecting marks around the globe

Industrial property rights provide a legal entitlement for their holders and licensees to manufacture, to identify and to place their products on the market. They are the result of effort in research, development, marketing and obtaining legal protection which is in force for a certain period.

Does the scope of this right extend beyond the territorial boundaries of the jurisdiction where the protection is obtained? Should the holders be concerned with the free movement of their goods in other countries? How are the principles of exhaustion of rights applied in South America?

Exhaustion of rights

The phenomenon of parallel imports occurs when the marketing of a genuine product is made by third parties who are not part of the exclusive distribution chain and in a territory not covered by the legal protection. South American countries have adopted different positions.

The TRIPS Agreement (1994) reserves member states the freedom to determine the scope of the exhaustion of IP rights.

In Brazil, the Industrial Property Law (Law no 9,279/96) adopts the national exhaustion system for patents (article 43, IV) and for trademarks (article 132, III).

In other jurisdictions, such as in the EU, the regional exhaustion system is adopted.

Under the international exhaustion system, all World Trade Organization (WTO) member countries that have not expressly chosen in their domestic legislation are covered by the reservation provided for in the TRIPS Agreement.

Accordingly, as soon as the holder or its licensee sells its product for the first time in any of the WTO member countries, then exhaustion or depletion of the right (first sale doctrine) is characterised.


In Brazil, the Federal Constitution (1988) protects industrial property and consumer rights to foster investment, production and commercialisation of goods in the national territory. The Industrial Property Law (1996) ensures the attainment and enforcement of these rights and the application thereof is examined by the courts.

Upon examining the Centrum case (Special Appeal—REsp 609.047-SP) in 2009, the Superior Court of Justice (STJ) found that the parallel imports of original goods without the consent of the mark owner in Brazil did not violate rights, nor could it be construed as an act of unfair competition.

This same guideline was adopted by the Supreme Court in hearing the Canon v Reprosystem case
(ARE 660270-SP), when it admitted the possibility
of parallel imports on the basis of opening competition between authentic products of different origins.

However, this understanding has been mitigated in light of the application of the “principle of legality” when related to the import without the consent of the holder of genuine products, whether they are used or not.

Indeed, in the Konica Minolta v Ativa case (REsp 1,207,952-AM), the STJ was more objective in applying the law by recognising, in 2011, that “lawful parallel imports are contracts entered into by the mark owner abroad, or by whoever has the consent to commercialise the product”.

In this precedent, the repackaging of products was not admitted without being subject to the control and to the standards adopted by the trademark owner—who also sells the product on the market. Otherwise, it would be tantamount to allowing unequivocal confusion caused to consumers who, when purchasing the product carrying the mark, expect to obtain a product that meets the standard of quality and reliability they associate to that mark. According to the decision, sure knowledge of the origin of the product is essential to consumers, who have a specific protection law in Brazil (Consumer Defense Code, Law no 8,078/90).

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