Brazil: Highly Renowned Marks – Regulation Introduced By INPI Resolution No. 110/04

Before addressing highly renowned marks, in order to provide a context for the subject of this report, it is appropriate to quickly review what is set forth in Article 233 of Industrial Property Law (IPL) No. 9,279/96 – contained in the chapter on temporary provisions. Under this provision, applications for recognition of a mark’s renown were ultimately dismissed, whereas previously granted recognition prevailed until the term for the respective claim expired, independent of extension of the original registration.

Under the previous legislation, Law No. 5,772/71 (CPI), the mark considered to be renowned was ensured special protection in all classes, holding its own registration to prevent others from reproducing or imitating it, in full or in part, provided that confusion could arise as to the origin of the goods, merchandise or services, or disparagement of the reputation of the mark.

Under Article 67, recognition of a mark’s renown was granted when its holder filed a request in relation to a previously granted registration, provided that certain conditions were met. The main condition was widespread identification by a large percentage of the Brazilian population, which was established through market survey. Under this system, autonomous recognition was granted, meaning that the status of renown was recognized based on the registration and without a dispute having occurred.

The aforementioned IPL, in its Article 125, introduced the designation of highly renowned mark by determining that marks registered in Brazil that were considered highly renowned would be granted special protection in all classes. This is a felicitous change, since this term is more in line with the existing doctrine.

This new wording, however, left the interested parties, directly or indirectly, without administrative means to obtain this protection. The issue sparked considerable controversy, which was at least partially settled with the passing of Resolution No. 110/04. This resolution establishes the procedures for applying for the recognition of the high renown of a mark. In contrast to the former legislation, the new rules established a system at that time unprecedented in our trademark law: incidental recognition of high renown.

The INPI may determine incidental recognition of high renown in the records of opposition or administrative nullity proceedings. No other options are available to the party applying for the status of high renown before the INPI.

Even though the interested circles were in favor of a regulation, Resolution No. 110/04 has been widely criticized, many take the view that the interested party should be provided additional alternatives, most notably the autonomous recognition provided for in the previous legislation, as noted above. Critics of this system argue that the incidental claim for a mark’s recognition as highly renowned sets the stage for groundless oppositions or nullity proceedings designed merely to obtain high renowned status. It should be noted that not all trademark owners would take this course, and their marks would remain unprotected due to the lack of legal provisions for the INPI to grant autonomous (the holder’s filing for his own registration) or ex officio recognition. Some therefore consider the possibility of the INPI issuing highly renowned status at the request of the interested party for his own registration (autonomous recognition), and of its own authority. These are the main changes proposed in Resolution No. 60 of the ABPI (Brazilian Intellectual Property Association – abpi@abpi.org.br), submitted to the INPI in October of 2004.

Since the passing of the aforementioned Resolution, the INPI has issued highly renowned status to the marks "McDONALD’s," "HOLLYWOOD," "PIRELLI," "VISA," "KIBON," "MOÇA," "AYMORÉ," "3M," "CICA," "NATURA," "NINHO," and "FIAT."

The analysis of virtually all the opinions on which claims of high renown were based indicates the decisions have the following points in common:

1. evidence was provided that the mark was in use and protected in Brazil for a considerable period of time. In the large majority of cases, the mark was found to be in use in Brazil for at least some decades;

2. the nature of the goods or services designated by the mark was a determining factor in ascertaining the scope of the target public. In all the cases analyzed, use of the goods or services by a broad range of the population was considered an important factor in establishing it as highly renowned;

3. consumers immediately and spontaneously connected the goods or services with the mark claiming high renown;

4. the geographic scale of commercialization of the goods or services is unquestionably a major factor in assessing its renown;

5. heavy investments in marketing and advertising in Brazil were considered. In specific cases, such as in the case of the marks "McDonald’s" and "Pirelli," the owners’ spending on marketing and advertising internationally was taken into consideration as well;

6. substantial sales volume was reported for the goods and services designated by the mark. This volume, geographic scale, and an extensive target public, as noted above, attest to deep penetration of the mark in the domestic market.

Another factor noted in some of the opinions was the mark’s high degree of distinctiveness and singularity in relation to the goods or services covered. Although doctrine and previous court decisions value singularity, or the marks commercial identity, the fact is that marks initially lacking any considerable distinctiveness may acquire it as a result of their continued use.

Among the opinions analyzed, some stand out, namely those regarding the oppositions presented to the applications for trademarks "3EMES," "Aimoré," "Novo Ninho" and "Fyat-K," and the nullity request against the registration of trademark "VISA SEGURANÇA." Assessing the oppositions, the Special Commission approved them based solely on Article 125 of the Intellectual Property Law (IPL), recognizing as highly renowned, therefore, the marks "3M," "Aymoré," "Visa," "Ninho," and "Fiat."

Another opinion was grounded on the decision issued for two oppositions to the mark "Ki-Bona," the first based on the mark "Kibon" and the second based on, among others, registration for the mark "Q’boa." Both oppositions were partially approved: the opposition linked to the mark "Kibon" was supported by the renown of the sign, while "Q’boa," although not recognized as highly renowned, was considered an obstacle to the registration of "Ki-Bona."

In the large majority of cases analyzed, the Special Commission ruled that the marks in question were highly renowned, concluding that the fame and reputation established by the mark "make it economically attractive," and for this reason deserving of greater protection, meaning special protection in all classes of goods and services.

Although the decisions addressed herein may still be challenged, the analysis of the opinions issued by the INPI expose the criteria to have a mark recognized as highly renowned.

From these decisions it can be deduced that current law and Resolution No. 110/04 handle high renown marks in a manner quite different from that of Law No. 5,772/71. Under current regulation, high renown may be granted, and immediately thereafter give cause to reject an application or cancel a registration that has already been issued, regardless of whether any of the legal grounds for rejecting registration are applicable.

The fact that highly renowned status – recall, alone – may justify and has justified, as seen, the dismissal of marks considered to be conflicting is the consequence of a fundamental principle, which offers protection to high renowned marks by repressing unjustified profiting or parasitic use.

As previously noted herein, former legislation conditioned special protection for renowned marks on the possibility of confusion arising as to the origin of the goods or services. The current system renders this condition irrelevant. However, it would be premature to conclude that the absence of this condition in the current law necessarily renders highly renowned marks more powerful than renowned marks. Both are characterized by magnified potential for confusion or association; otherwise, they would not be highly renowned or renowned.

Nevertheless, one noteworthy aspect of protection of highly renowned marks is the more intense effort with which attempted parasitic use is combated, which shields highly renowned marks from much feared dilution. This is made perfectly clear, for example, in the decision denying the application of the trademark "FYAT-K" in class 05 (pharmaceutical preparations) based on the high renown status issued for the mark "FIAT."

The previous legislation called for an extremely high degree of recognition of the mark by domestic consumers, so that renowned status was restricted to a very limited number of marks. Despite this rigorousness, the mark holder was not required to provide further proof in the future, since the status could be extended indefinitely provided the initial registration were extended. This system did not take into consideration the possibility that after being declared famous, a mark’s standing could change with the passing of time.

Under the current system, highly renowned status is granted for five years. What follows is of critical importance: that a market evaluation is essential for extension of the status as highly renowned, if desired. Therefore, assessment of high renown considers a mark’s current identification, so that the past has relative value and the future is not guaranteed. The past is said to have relative value in light of the fact that one of the criteria for ascertaining a mark’s renown is its history and tradition.

This treatment is unquestionably much more consistent with the harsh reality of a market that does not tolerate inertia. Although the decisions handed down to date support the conclusion that high renown is attributed to marks with a substantial degree of consumer identification, the fact is that the ambitious holder dedicated to maintaining highly renowned status as an additional factor for enhancing his mark’s value must assume an arduous task: to provide evidence periodically that his mark continues to warrant recognition as highly renowned. This presupposes investments and effort in many areas, not only marketing and advertising. In summary, high renown does not ensure the holder lasting legal security.

Additionally, the new system allows those whose applications were denied or registrations cancelled following declaration of highly renowned status to challenge this decision. First and foremost, the interested party must provide evidence that there was insufficient proof of the mark’s high renown, or that it no longer exists.

Once the status of high renown is granted, the INPI will register this in the trademark system, where it will be held for five years. The high renown status is most certainly an element that adds value to a mark recognized as such. As a result, the mark’s holder will more easily be able to provide evidence in any administrative or legal proceeding where he must defend his mark against violations. In this respect, note that high renown, once declared, does not exempt the holder from submitting, whenever necessary, new oppositions or requests for administrative nullity. This is precisely due to the system’s incidental character. High renown is examined any time a new trademark dispute arises. However, the holder will not be subject to the specific payment set forth in Resolution No. 110/04, nor called to resubmit the evidence already filed in the documents of the initial recognition. The Resolution stipulates that new evidence must be submitted only if required by the INPI.

Another advantage of highly renowned status is that it extends the imprisonment sanctions provided for in IPL Article 196, Item II. Under this provision, imprisonment for crimes against marks is increased between one-third and one-half if "the mark altered, reproduced or imitated is well-known, highly renowned, certification or collective."

Finally, under Resolution No. 001/98 of the Brazilian Internet Steering Committee, FAPESP (responsible for domain registration) shall prohibit the registration of domain names that reproduce high renowned marks.

Despite the criticism of this new system, the fact is that recognition, both autonomous and ex officio, even if addressed in future legislation, should follow similar parameters as those adopted for incidental recognition; otherwise, distortions may arise to the benefit of some parties, and consequently in detriment of others. In any event, the highly anticipated regulation of IPL Article 125, instituted by Resolution No. 110/04, affords a large number of potential title-holders the possibility of obtaining highly renowned status according to clear criteria that are more appropriate in current market conditions.

Note of the author: On December 13, 2005 Resolution no. 121/05 was published in the Industrial Property Journal. This Resolution expressly revokes Resolution no. 110/04 and was enacted on December 13, 2005 as well. Apart from providing a definition for high renowned marks and determining that the President of the BPTO will decide on administrative nullity requests and on appeals based on high renown, no further significant changes have been introduced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.