brazil's super trademarks or the highly renowned - Daniel Advogados

BRAZIL’S SUPER TRADEMARK -THE NEW GUIDELINES TO SECUREHIGHLY RENOWNED TRADEMARK STATUS *Denis Allan Daniel **What is a highly renowned trademark? How can trademark owners evidence high renown and obtainspecial protection? What are the advantages of securing the highly renowned status? How have thecourts reacted to requests for the status? This paper hopes to clarify these questions.Brazil is a country of laws and lawyers. It follows the Roman Law tradition, where everything is regulated andthe volume of legislation that enters the books daily is mind-boggling. The Brazilian Constitution, for instance, isa monumental piece of work, the result of Herculean labors, and which in its latest version has two hundred andfifty articles. In contrast, the American Constitution has seven articles.In this tradition of prolific legislation, with over twenty thousand laws and decree-laws in force, it is all the moreironic that the Brazilian Patent and Trademark Office (PTO) took eight years to issue the guidelines on how toobtain the highly renowned status. This delay is in part explained by the fact that protection of famous markshas always been an extremely controversial issue in Brazil. To better understand and deal with the newguidelines for securing the highly renowned status it seems appropriate to briefly look back on the guidelinesthat existed for obtaining Declarations of Notoriety.In 1980, nine years after the enactment of the former 1971 Trademark Law, the PTO issued guidelines forsecuring a Declaration of Notoriety which would be the basis for entering famous marks on to the “separateRegister” referred to in the law. These guidelines stated that a trademark which received the Declaration ofNotoriety would be granted special protection in all classes of goods or services. The following are some of themarks that complied with the PTO requirements and succeeded in being recorded as marks that meritedDeclarations of Notoriety:© Denis Allan Daniel 2004**Senior Partner at Daniel Advogados – Rio de Janeiro and São Paulo, BrazilRio de Janeiro: Av. República do Chile, 230/6º floor - Centro - Rio de Janeiro/RJ - BrazilCEP 20031-170 Tel: (55 21) 2524-4212 Fax: (55 21) 2524-3344São Paulo: Rua Iguatemi, 192/73 Itaim Bibi - São Paulo/SP - BrazilCEP 01451-010 Tel/fax: (55 11) 3079-9107law@daniel-advogados.com.br g www.daniel-advogados.com.br

Subsequently to these guidelines, in 1994 the PTO issued Trademark Directives which provided helpful insightinto the subject involving the submission of information for the purpose of obtaining the Declaration. TheDirectives stated that, of all the information that could be submitted for this purpose, the most important andeffective would be the results of public opinion polls. Undoubtedly, opinion polls were at that time successfullyused by trademark owners to convince PTO Examiners that Declarations should be granted for extra protectionof their famous trademarks.With this background, we come to the 1996 Trademark Law which introduced the concept of the “supertrademark” or the highly renowned trademark. We also come to the eagerly awaited new guidelines, publishedon 3 February 2004, for securing this status.What is a Highly Renowned Trademark ?The current 1996 Law contains no definition. It merely states that a trademark which is registered in Brazil, andis considered highly renowned, shall be assured protection in all fields of activity, meaning in all classes ofgoods and services of the International Classification, adopted by Brazil. It must not be confused with a wellknowntrademark according to the provisions of Article 6bis of the Paris Convention. In this latter case, thetrademark must be well-known in its field of activity and does not merit protection in all fields of activity. Unlikethe highly renowned trademark which must be registered in Brazil, a well-known mark does not have to beregistered or pending in Brazil to deserve protection.In the absence of any definition in the law, the alternative is to rely on opinions, either by PTO officials or by thecourts, rendered during any specific proceedings involving requests for highly renowned status. The DAKOTAcase, more details of which will be reported further on, provides a definition that was rendered in 1999 by thethen Attorney-General of the PTO. He declared, in his opinion to the court, that the mark DAKOTA deservedthe highly renowned status in view of the evidence that was submitted. He specifically described highlyrenowned trademarks when he stated the following: “In principle, it cannot be denied that the markDAKOTA, as demonstrated by the plaintiff’s brief, has reached the appropriate degree of recognition, atthe national territorial level, as well as abroad. And, this being so, it shows that this mark goes beyondthe limits of a normal trademark, providing benefit to various consumers, in all social classes, not onlydue to its fame and reputation, but also presuppositions as to the quality of the product it identifies.Without doubt, the spirit of a highly renowned mark, even if still in the absence of guidelines, is toinclude, among other requirements, that it be a strong mark, known in all social strata and especially tobe a product of impeccable quality.”It would seem that if we are to be guided by the former Attorney-General’s opinion, a highly renownedtrademark could be defined as a trademark that has an extremely high degree of recognition amongstconsumers of all social classes, not only in Brazil but also abroad, due not only to its fame and reputation, butalso to the exceptional quality of the goods or services it identifies. The new guidelines which outline theevidence to be presented to show highly renowned status confirm this understanding.How can Trademark Owners Evidence High Renownand Obtain Special Protection?While the 1980 guidelines for filing a request for a Declaration of Notoriety stated that an application had to befiled requesting the PTO to officially declare that the mark was well-known and to issue a Declaration ofNotoriety, the new guidelines stipulate that a claim to highly renowned status can only be made incidentally,when filing opposition or administrative nullity proceedings. There is no other way in which such a claim can bemade. If the mark is regarded as being highly renowned, the PTO will sustain the opposition or theadministrative nullity proceedings and will reject the trademark application or declare null a registration,irrespective of other arguments that are submitted. If the mark is not regarded as highly renowned, the PTOshall reject the opposition or the administrative nullity proceedings and will allow the trademark application ormaintain the trademark registration, unless there are other grounds for impediment.When filing an opposition or administrative nullity proceeding, the applicant must submit evidence to show thatthe mark should be considered highly renowned. The following is the information that the guidelines state maybe submitted:2

1. date of first use of the mark in Brazil;2. description of the consumer or market potential consumer of the products or services to which the mark isapplied;3. identification by means of an opinion poll, market survey or by any other applicable means the fraction ofthe consumers or potential consumers of the products or services to which the mark is applied thatimmediately and spontaneously identify the mark and associate it with the products or services to which it isapplied, essentially by reason of its tradition and favorable market perception;4. identification by means of an opinion poll, market survey or by any other applicable means the fraction ofconsumers from other market segments who immediately and spontaneously identify the mark with theproducts or services to which it is applied;5. identification by means of an opinion poll, market survey or by any other applicable means the fraction ofconsumers from other market segments who immediately and spontaneously identify the mark with theproducts or services to which it is applied, due to its tradition and rank in the marketplace;6. methods of commercialization of the goods/services identified by the mark in Brazil;7. geographical area of the actual sale of the products/services identified by the mark in Brazil and, possiblyabroad;8. time span of the actual use of the mark in the national market and, possibly, in the international market;9. methods of dissemination of the mark in Brazil and, possibly, abroad;10. time span of effective divulging of the mark in Brazil and, possibly, abroad;11. amount invested by the owner in publicity/advertisement of the mark in the Brazilian media during the lastthree (3) years;12. volume of sales of the product or the revenue accrued from the service during the last three (3) years and13. economic value of the mark in the company’s assets.Of all the information listed in the new guidelines, the securing of a public opinion poll or market survey shouldbe given top priority. Three suggested market surveys have appeared in the guidelines, a definite sign that theresults of these surveys will have a strong bearing on the individual opinions of the representatives of the PTOSpecial Committee that will examine and decide the matter. The fact that the PTO expressly declaredpreference in the past for market surveys to grant Declarations of Notoriety should lend strong support for thisview. Once a trademark receives official recognition that it is highly renowned, recordal to this effect will beentered in the Trademark Register for a term of five years.What are the Advantages in Securing the Highly Renowned Status ?The first advantage that comes to mind, at the administrative level, is that once a trademark is officially declaredto be highly renowned it will greatly facilitate the rejection of objectionable third party applications. This does notmean, however, that there is any guarantee that the PTO will automatically reject a third party application thatconflicts with the highly renowned trademark, once it is official recognized as such. At court high renown statuswould enhance the chances of securing injunctions, not to mention those of achieving success when the courtaction is examined on its merits, since the courts should certainly be more favorable to the plaintiff’s causewhen the basis for the action is a mark held by the PTO to be highly renowned. A further advantage is that theimprisonment sanctions foreseen for crimes against trademarks are increased by one third to one half if thealtered, reproduced or imitated trademark is highly renowned. A still further advantage is that once the highlyrenowned status of the mark is accepted under the guidelines, the PTO is required to inform FAPESP, theofficial agency responsible for the registration of domain names, for the purpose of rejecting any applications fordomain names that may conflict with the highly renowned mark. Finally, since the guidelines for securing thehighly renowned status indicate that information regarding the economic value of the trademark, in thecompany’s assets, should be submitted, this could cause an increase in the goodwill associated to thetrademark.3

How have the Courts Reacted to Requests for the Status ?Due to the reluctance of the PTO to decide on how it would deal with the issue of highly renowned trademarks,a few companies decided, prior to the existence of the guidelines that have now issued, to test the courts in thehope that they would succeed in obtaining what the PTO refused to grant. Four known decisions have beenrendered on these attempts and this is a summary of their status.The DAKOTA CaseThis can be considered the leading case and deserves more detailed comment. The DAKOTA trademark isregistered in Brazil for shoes and the owner, a well-known Brazilian shoe manufacturer, became frustratedbecause the PTO refused to grant the highly renowned status. To aggravate the problem, it was alleged thatcompetitors were attempting to register similar marks such as, for example, DACOTA for goods other thanshoes and the PTO was refusing to reject these applications. This was adversely affecting the company’sbusiness. The company opted for instituting court proceedings and submitted, as evidence of fame andreputation of the mark DAKOTA, the following: a) profiles of the eight industrial units that the company ownsin several different locations in the States of Rio Grande do Sul and Ceará; b) sales figures showing thatannual sales increased from nine million US dollars in 1988 to two hundred and thirty million US dollars in 1997;c) extensive advertising material, including the cost for investment in marketing in leading magazines with overa million readers for each edition of these magazines; d) sales invoices showing sales of DAKOTA shoes,throughout Brazil and in Japan, the Czech Republic, Ecuador, Saudi Arabia, Uruguay, Bolivia, Paraguay andthe Margarita Islands; e) voluminous material showing declarations from consumers, businessmen, classentities and authorities attesting to the knowledge, prestige, fame and reputation of the mark DAKOTA; f)clippings taken from publications in newspapers and magazines providing information on the company and onthe DAKOTA mark. The plaintiff’s petition to the court requested that, in view of the evidence submitted, thecase be referred to the PTO for its reply and that the action be sustained. In a short reply, based on an opinionrendered by the Attorney General’s office, the PTO agreed that the mark DAKOTA was indeed highly renownedand deserved the special protection in all fields of activity. The court rendered its favorable decision which theFederal Court in Rio de Janeiro confirmed on 7 November 2000.The GOODYEAR CaseIn this case, The Goodyear Tire & Rubber Company filed a court action requesting that the mark GOODYEARbe held highly renowned. Evidence submitted by the plaintiff was accepted and a decision was rendered on 2December 2002 conferring the highly renowned status to the mark. The case is now awaiting the necessaryconfirmation of the decision by a higher court.The LYCRA CaseThe court rejected the request for the highly renowned status for the mark LYCRA, owned by E.I. Du Pont deNemours and Company, on the grounds that the framers of the current Trademark Law opted to give the highlyrenowned trademark a different treatment from the one given to well-known marks, as referred to in the former1971 Law and therefore revoked the “separate Register” for well-known marks provided for in said former Law.A decision was rendered on 4 June 2003 which is now under appeal.The BIC CaseThe court decision in the preliminary injunction filed in this case made a distinction between well-known marksunder the 1971 Trademark Law and the highly renowned mark under the current 1996 Law. The injunction wasdismissed on 4 June 2003 and the plaintiff filed an interlocutory appeal. The Federal Court of appeal, in itsdecision dated 30 June 2003, declared that there was no indication that third parties were attempting to registermarks that might conflict with the mark BIC, a fact that removes imminent risk of difficult or impossiblereparation, these being the basic pre-requisites for granting an injunction. This case will now proceed to a finaldecision on its merits.These four inconsistent reactions of the courts relating to substantially the same pleas, are an indication of howdifficult it is to predict how Brazilian courts will react to any IP issues. On the specific issue of protection of wellknownmarks, the changes in the Trademark Law, coupled with the difficulty in having the courts understand thedifferent concepts of famous marks, are additional factors that contribute to prevent a more consistent ruling bythe courts on the matter concerning requests for highly renowned trademark status.4

ConclusionThe importance of the new guidelines issued by the Brazilian PTO should not be underestimated. Practitionershave long waited for them and efforts to secure the highly renowned status for a registered trademark should begiven careful consideration since the advantages in doing so are more than evident. It is expected that manydoubts will be raised regarding the practical implementation of the guidelines and much will depend on thecriteria adopted by the PTO’s Special Committee in deciding the specific cases as they are presented. Of allthe information suggested in the PTO guidelines to support the argument that a trademark should be grantedthe highly renowned status, public opinion polls or market surveys should appear at the top of the list. It shouldbe remembered that requests for highly renowned status can only be made when oppositions or administrativenullity proceedings are filed and therefore no time should be lost in assembling the information that is called forin the guidelines. Since this can be time consuming and the need to oppose third party applications can arise atany moment, time is of the essence. The inconsistent outcome of the court actions filed to secure the highlyrenowned status would seem to lead to the conclusion that litigation should only be considered as a last resort ifthe PTO rejects requests at the administrative level. There is no denying that the guidelines represent a stepforward in the protection of what could be termed Brazil’s “super trademark” and should be welcomed by all whopractice before the PTO and by all proprietors of famous registered trademarks in Brazil.5