The Trademarks Law Review: Brazil

Overview

Brazilian law provides that all visually perceptible distinctive signs, not included in the legal prohibitions, can be registered as trademarks.

Based on this concept, registration of sound, olfactory, tactile or taste marks is not yet possible.

The National Institute of Industrial Property (INPI), which is the entity responsible for trademark registration, does not recognise secondary meaning and is the reason why only inherently distinctive trademarks are easily registered. Trademarks that have acquired distinctiveness over time may need to evidence this secondary meaning before courts to be granted a registration.

As of the date of this article, INPI accepts neither series marks nor the registration of isolated colours. Registration of colours and their names as trademarks is not acceptable by INPI, except when arranged or combined in an unusual and distinctive manner. Regarding the registration of position marks, INPI recently published a regulation that enables their registration, as detailed in Section VII.

As mentioned in Section IV, there are two routes for obtaining a Brazilian trademark registration: (1) by means of an application filed before INPI; or (2) via the Madrid Protocol (i.e., by means of an application filed before the World Intellectual Property Organization (WIPO) to obtain an international registration designating Brazil).

To challenge a final decision issued by INPI, it is necessary to file a lawsuit before the federal courts within five years counted from the date of publication of the corresponding decision.

Civil and criminal trademark infringement lawsuits must be filed before state courts.

Year in review

It is worth mentioning some relevant cases decided in Brazil concerning trademark matters in the past year.

The first panel of the Federal Court of Appeals of the Second Region decided that INPI cannot take more than one year to examine an administrative appeal (Lawsuit No. 5070442-67.2019.4.02.5101). Although this decision is not binding to other cases, it is indicative that the Brazilian judiciary is continuously setting more stringent criteria to guarantee the reasonable duration of the proceedings before INPI.

The 11th panel of the Federal Court of Appeals of the Third Region maintained the registration of the trademark 'botox'. The court decided that the term does not indicate botulinic toxin and, as a result, it would be capable of individualising a specific product within its segment of activity (Lawsuit No. 0000616-76.2006.4.03.6100).

The Court of Appeals of the State of São Paulo decided that there is no unfair competition as a result of the similarities between Vigor's and Danone's trade dress. The court ruled that the size, relevance and notoriety of both parties' trademarks, as well as the distinct visual identity between the lids of the pots, would result in lawful competition. The judge understood that the court expert's report had enough elements to conclude that the design of the Greek yoghurt packaging lost its distinctiveness, given that it is reproduced by other companies in the sector, therefore preventing requested exclusive protection (Lawsuit No. 1114879-72.2015.8.26.0100).

The third panel of the Superior Court of Justice decided that moral damages due to trade dress violation does not require proof of damages (REsp No. 1,831,519).

The third panel of the Superior Court of Justice recognised that the inclusion of a registered trademark on a product is not sufficient to avoid a finding of unfair competition in case of trade dress infringement (Special Appeal No. 1,843,339).

The third panel of the Superior Court of Justice decided that a company that commercialises a counterfeit product is jointly and severally liable with the manufacturer for damage caused to the trademark holder. In addition, the initial term of the 10-year statute of limitations for filing the lawsuit starts with the offer of products to consumers (Special Appeal No. 1,719,131).

Last, but not least, the fourth panel of the Superior Court of Justice authorised the use of the trademark 'Legião Urbana', which identifies a very successful band in the 1980s and 1990s, by its former musicians in connection with their artistic activities. The trademark has been registered for more than 20 years in the name of a company owned by all musicians. Since Dado Villa-Lobos and Marcelo Bonfá ultimately sold their shares of this company, the company claimed that they could no longer use the trademark 'Legião Urbana'. This decision is significant because the court took into consideration the constitutional principle of the social function of property and applied it to trademark rights, balancing it with the possible negative consequences of the restriction on the use of the trademark to the dissemination of culture and free exercise of related copyrights, considering that Dado Villa-Lobos and Marcelo Bonfá were also authors of the band's songs (Lawsuit No.0012488-26.2016.8.19.0000 and Special Appeal No. 1,860,630).

Legal framework

i Legislation

The following legislation is the most relevant concerning trademark protection in Brazil:

  1. Law No. 9,279 of 14 May 1996 (the Brazilian Industrial Property Law);
  2. the Paris Convention for the Protection of Industrial Property (Brazilian Decree Law No. 75,572 of 8 April 1975);
  3. the World Trade Organization TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights);
  4. Decree No. 10,033 of 1 October 2019, which enacts the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks; and
  5. Resolutions and Administrative Decrees issued by INPI with emphasis on the Trademark Guidelines, enacted by Resolution INPI/PR No. 142/2014.

ii Authorities

The authority responsible for the administration of the Brazilian trademark register is INPI, which grants protection for trademarks, patents, utility models, industrial designs, geographical indications and software, and records licensing agreements and technology agreements.

The Commercial Boards of Trade are the authorities responsible for registering company names, companies' by-laws and any and all amendments thereof. Each Brazilian state has a commercial board of trade and a company must be registered in the state in which its head office is located. The jurisdiction of each commercial board of trade is restricted to its state.

As for copyrights, although registration is not mandatory for protection, it is possible to register these rights before the National Library, Fine Arts National School and notary offices, among others.

The authority responsible for registration and maintenance of domain names with the extension '.br' is Registro.br. It is also responsible for executing the service of distribution of IPv4 and IPv6 addresses, as well as numbers of autonomous systems (ASN) in Brazil.

iii Substantive law

The legal basis for the protection of trademarks (including collective or certification marks) and geographical indications is the Brazilian Industrial Property Law.

Brazil is a first-to-file system, and trademark rights arise from registration granted by INPI. This notwithstanding, applicants of pending applications may defend the material integrity and reputation of their marks.

In general, unregistered trademarks are protected under unfair competition claims.

If the owner of an unregistered trademark wishes to object to a third party's trademark application before INPI, it must prove:

  1. that its trademark has been used in Brazil for at least six months prior to the opposed application's filing date. However, if the applicant also evidences use of its mark for at least six months prior to the application's filing date, INPI will grant preference to the party who firstly filed its application in Brazil;
  2. the well-known status of the trademark among Brazilian consumers before or at the time the opposed application was filed; or
  3. that the other party undoubtedly had knowledge of the mark when it filed the opposed application.

Oppositions based on any of the above grounds will only be recognised if the owner also files an application for its mark in Brazil and submits evidence of this filing along with the opposition or within 60 days counted from the opposition's filing date.

The Brazilian Industrial Property Law also affords a distinctive level of protection to 'famous marks', which are trademarks that have acquired a high level of recognition among Brazilian consumers, deserving protection in all classes of goods and services. For obtaining this special protection, the owner must have a trademark registration granted by INPI and follow a specific procedure that includes the submission of several documents supporting the fame of the mark, including market research. Once granted, the trademark will have the famous status for 10 years. To extend this period of special protection for an additional 10 years, the owner must reapply and follow the same procedure to evidence that the notoriety of the mark has been maintained over the years.

This law also affords protection to company names and trade and business names against third parties that attempt to register identical or similar expressions as trademarks, when capable of causing consumer confusion or association. Other than that, the protection for these types of intellectual property rights is stated in the Brazilian Civil Code and Brazilian Commercial Code, and may be covered by unfair competition claims.

Regarding domain names, they follow the provisions set forth by Registro.br. Domain names do not afford trademark protection per se, but may be cited as grounds for unfair competition claims.

Registration of marks

The trademark registration procedure before INPI begins with the filing of an application. Once the trademark application is filed, a formal examination is conducted, in which the conditions necessary for the continuity of the process are verified.

If the application does not comply with all formalities, INPI will issue an office action. The applicant must comply with the office action within five days counted from its publication in the Official Gazette. If the applicant does not satisfactorily comply with the office action, the application will be considered non-existent.

If all formalities are complied with, the trademark application is published in the Official Gazette for third parties' knowledge and opposition purposes. After the publication, third parties have 60 days to file oppositions.

If no opposition is filed, or after the submission of a reply to the opposition (which is optional), the application will be examined by INPI. It is important to mention that INPI carries out an independent analysis and may reject trademark applications due to the issue of likelihood of confusion with hindering registrations, regardless of oppositions that have been filed. The application will be examined on absolute grounds and on relative grounds.

Once the examination is concluded, INPI may issue an office action, reject or allow the application.

In the event of an office action, the applicant has a 60-day term to file a reply. Lack of reply will cause the dismissal of the application. If the office action is duly complied with, INPI will resume examination.

In the event of rejection, the applicant has a 60-day term to file an appeal, under the penalty of having the application permanently dismissed.

If the application is allowed, the applicant will have a 60-day term to pay the final registration fees for issuance of the certificate of registration. This payment can also be done within an additional 30-days term, upon additional fees. The corresponding certificate of registration will be valid for 10 years, subject to renewal for successive 10-year periods at the registrant's request in the last year of each term of duration.

If a trademark application follows a smooth procedure, the costs of official fees are 1,160 Brazilian reais, and a decision is usually issued within 12 to 18 months. Individuals, small companies, educational entities, non-profitable entities and public offices are granted a discount of 60 per cent over official fees for some services performed before INPI.

The same time frame applies to the registration proceeding via the Madrid System. In this case, applicable costs are charged and paid directly to WIPO. If the applicant is required to adopt any measures directly before INPI (such as filing an appeal), it will be required to engage a Brazilian legal representative.

i Inherent registrability

The Brazilian Industrial Property Law does not distinguish absolute from relative grounds of refusal, and INPI does not take into consideration, at the time of examination of trademark applications, claims of distinctiveness acquired through use.

However, Brazilian courts tend to accept this form of acquired distinctiveness.

ii Prior rights

When analysing the registrability of a trademark application, INPI takes into consideration all grounds of refusal foreseen in the Brazilian Industrial Property Law.

INPI carries out an independent search of prior trademark rights, and may reject trademark applications based on the issue of likelihood of confusion, regardless of the filing of oppositions.

However, it is advisable for right holders to constantly monitor trademark applications and registrations applied for and registered before INPI in order to object and draw the examiner's attention to any infringement of its rights.

Priority rights based on the Paris Convention can be claimed if the Brazilian application is filed within six months counted from the filing date of the priority application. It would also be necessary to submit a copy of the priority document with the respective Portuguese translation. It is possible to file these documents within four months counted from the application's filing date in Brazil, upon payment of additional fees.

As mentioned in Section III.iii, any person who was using in Brazil, in good faith, on the date of the priority or the filing of an application, an identical or similar mark for at least six months to distinguish or certify a good or service that is identical, similar or akin shall have the right of preference in registering this mark.

If the applicant also evidences use of its mark for at least six months prior to the application's filing date, INPI will grant preference to the party who first filed its application in Brazil.

According to INPI, the good faith prior user must invoke this right in an opposition proceeding and file a trademark application to support their claim. Brazilian courts, however, understand that this right may be invoked at any time, including in a lawsuit seeking the nullity of the senior registration.

There are other prior rights that can be claimed against a third-party trademark application or registration other than prior trademark rights, such as prior company, trade or business names and prior copyrights, among others things.

iii Inter partes proceedings

Opposition

Trademark applications may be opposed on any of the grounds for refusal foreseen in the Brazilian Industrial Property Law.

The opponent must file the opposition within 60 days counted from the publication of the application in the Official Gazette. The notice of opposition will be published in the Official Gazette within approximately 60–90 days after the date of filing of the opposition. The applicant may file a reply to the opposition within 60 days after the date of publication of the notice of opposition in the Official Gazette. After that, the application will be examined and the allowance or rejection decision will be published within 12–18 months.

In addition, INPI carries out an independent analysis and may reject trademark applications based on the issue of likelihood of confusion, regardless of whether an opposition has been filed or not.

The official fees for filing an opposition are of 355 Brazilian reais and for filing a reply to an opposition are of 280 Brazilian reais.

Administrative invalidity actions or administrative nullity proceedings

A trademark registration shall be declared null and void if granted in violation of the law, including all grounds for refusal foreseen in the Brazilian Industrial Property Law. Any third party with legitimate interest can file an administrative nullity proceeding (PAN).

A PAN may be filed by INPI ex officio or by any person with legitimate interest within 180 days counted from the registration's granting date. The registrant will be able to file a reply within 60 days after the publication of the notice of the invalidity action in the Official Gazette. INPI's decisions on administrative invalidity actions are usually rendered within 18–24 months. This decision is final and ends the administrative sphere, but may be challenged before the federal courts within five years counted from the registration's granting date.

Once the registration is declared invalid, the invalidation effects retroact until the date of filing of the corresponding application.

The official fees for filing a PAN are 590 Brazilian reais and 280 Brazilian reais for filing a reply to a PAN.

Revocation actions or non-use cancellation actions

A trademark registration may be cancelled or revoked by request of any person with a legitimate interest if, after five years having elapsed since it was granted and, on the date of the request: (1) the use of the mark in Brazil had not begun; (2) the use of the mark had been interrupted for more than five consecutive years; or (3) within the same time limit, the mark has been used with a modification that implies a significant change in the registered sign. The trademark registration will not be cancelled or revoked if the owner justifies the lack of use for legitimate reasons.

Once the non-use cancellation action is published in the Official Gazette, the registrant has a 60 days to file proof of use of its trademark in Brazil within the five-year investigative period (counted retroactively from the filing date of the non-use cancellation action).

Evidence may be presented by all means of proof accepted by law, provided that they are dated, and the evidence is written in Portuguese or translated into Portuguese. The use of the mark by licensees or authorised third parties is also accepted, irrespective of a formal licence agreement recorded before INPI.

INPI's decisions on non-use cancellation actions are usually rendered within 12 months and are appealable to the president of INPI within a 60-day deadline counted from their publication in the Official Gazette. The timescale for a final decision by INPI is of approximately six to eight months.

INPI's decision on the appeal is final and ends the administrative sphere. To challenge this final decision, it is necessary to file a lawsuit before the federal courts within five years counted from its publication in the Official Gazette.

The official fees for filing a non-use cancellation action are 590 Brazilian reais and 280 Brazilian reais for filing a reply to a non-use cancellation action.

iv Appeals

All refusal decisions are subject to appeal to the president of INPI within a 60-day deadline counted from its publication in the Official Gazette. A decision on such appeal, usually rendered within six to eight months, is final and ends the administrative sphere.

The official fees for filing an appeal are 475 Brazilian reais.

To challenge this final decision, it is necessary to file a lawsuit before the federal courts within five years counted from its publication in the Official Gazette.

Civil litigation

i Forums

Trademark infringement lawsuits must be filed before state courts.

Applying for a preliminary injunction is advisable in cases where the plaintiff has strong arguments to prove that there is an immediate and irreparable risk to its rights due to the defendant's actions.

Lawsuits challenging INPI's decisions must be filed before federal courts within five years counted from the publication of the challenged decision in the Official Gazette.

ii Pre-action conduct

Brazilian legislation does not require pretrial formalities for trademark claims to be admissible in court.

Nevertheless, as a general rule, it is recommended that claimants send cease and desist letters to infringers (whether an individual or a company) and try to settle the matter amicably before considering a lawsuit. This is due to practical and financial issues: courts are severely backlogged and trademark infringement actions can last for many years, resulting in high costs to claimants, especially if the engagement of experts is required during the procedure.

Concerning online infringement, trademark owners may also send a notice and takedown request to online hosts and service providers, asking for the takedown of an infringing content. In this sense, Brazilian Law No. 12,965/2014 establishes principles, guarantees, rights and obligations for the use of the internet in national territory.

According to this law, internet providers cannot be held liable for damage from content created by third parties that infringes a trademark right. However, if there is a court order to remove certain content and the provider does not act accordingly, within the technical limits of its service, it can be held accountable.

Court orders must contain undeniable and specific identification of the alleged infringing content (by means of indicating the corresponding URLs), permitting clear tracking of the material.

Nevertheless, in reality, service providers have been removing material regarding trademark infringement without the need of a court order in cases in which the claimant's rights are easily verifiable through a registration certificate issued by INPI and the violation is unquestionable.

If the parties in conflict have previously entered into an agreement that provides for the resolution of disputes via arbitration, the claimant is obliged to initiate the procedure before the appropriate body. In Brazil, arbitration procedures are becoming increasingly common, and some of the most sought out arbitration chambers are the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (CCBC) and the Business Mediation and Arbitration Chamber – Brazil and International Arbitration Congress, among others.

Alternative dispute resolutions concerning domain names are regulated by SACI-Adm, which is the administrative system for internet conflicts regarding domains with extension '.br', registered after October 2010. Such proceeding can be brought before any of the authorised arbitration chambers in Brazil (notably, the Brazilian Association of Intellectual Property, CCBC and WIPO). These disputes are not subject to the Uniform Domain-Name Dispute-Resolution Policy (UDRP) (general rule for .com domains).2

iii Causes of action

According to Articles 129 and 130 of the Brazilian Industrial Property Law, the ownership of a trademark is acquired via a validly issued registration granted by INPI. Trademark owners, including of pending applications, have the right to look after the reputation and material integrity of their marks.

In addition to unfair competition claims, trademark holders (including authorised licensees and sublicensees) may also adopt measures against those who:

  1. reproduce, without the owner's authorisation, the whole or part of a registered mark, or imitate it in such a way that might lead to confusion;
  2. alter another's registered mark already posted on a product on the market; and
  3. import, export, sell, offer or display for sale, hide or stock:
    • a product identified by the mark of another that is illegally reproduced or imitated, either totally or partially; or
    • a product of industry or commerce contained in a vessel, recipient or package containing the legitimate mark of another.

All these types of claims may be brought before the court in the same lawsuit, provided that the parties in dispute (plaintiffs and defendants) are the same.

However, trademark rights are not absolute. The owner of a mark may not:

  1. prevent free circulation of a product put on the domestic market, either by him or her or others with his or her consent;
  2. prevent traders or distributors from using distinctive signs that belong to them, together with the mark of the product, in its promotion and commercialisation;
  3. prevent manufacturers of accessories from using the mark to indicate the destination or use of the product, provided they obey fair competition practices; and
  4. prevent a reference to the mark in speeches, scientific or literary works or in any other type of publication, provided that it is made without any commercial connotation and without prejudice to its distinctive character.

iv Conduct of proceedings

First, it is important to note that Brazil does not have a discovery system as the Brazilian Constitution states that no one is compelled to produce evidence against himself or herself. Therefore, the parties are allowed to withhold evidence that is damaging to their case.

The proceedings before court are very straightforward and commence with the plaintiff filing a written statement of claim detailing all relevant facts, claims, legal basis and pleas. Then, the case will be randomly directed to a court where the judge will (1) receive it and analyse the formal requirements; (2) decide on preliminary injunctions (if any); (3) order the service of summons to be served upon the defendant; and (4) schedule the mandatory mediation hearing.

If the mediation is not successful, the defendant will have a 15-business-day deadline to file its defence, under penalty of being deemed in default and the allegations raised by the plaintiff being presumed to be true. After the defendant files its defence, the plaintiff usually files a response within the same deadline. The judge then orders the parties to present their evidence and, if witness statements are needed, a hearing is scheduled. After that, the case is submitted to resolution.

It usually takes around 18–24 months for the lower court (first instance) to render a final decision on the merits of a trademark case.

v Remedies

According to Brazilian law, remedies may be ordered as a result of civil and criminal actions. Owners of trademarks regularly pursue civil actions to request the cease of the use of the infringing mark and compensation for material and moral damages.

In general, the following remedies are available as a result of a successful civil trademark infringement action: damages, injunctive relief and account of profits; order for delivery of infringing goods, materials and articles; and order for disposal of infringing goods, materials and articles outside of trade channels.

The successful party of an infringement case will be entitled to full recovery of the court fees, in addition to attorneys' fees, which vary from 10 per cent to 20 per cent over the amount attributed to the case or over the amount granted by the judge.

Other enforcement proceedings

i Criminal actions

The Brazilian Industrial Property Law states that private criminal actions may also be filed in cases of unauthorised (1) reproductions or imitations of trademark registrations; (2) alterations of registered trademarks already attached to products on the market; and (3) importation, exportation, sale, advertisement or exposure, or having stock of products or packaging with, illicitly reproduced trademarks. There are also provisions concerning crimes against patents, industrial designs, geographical indications and practices of unfair competition.

These actions may result in the payment of fines or the imprisonment of the defendant from three months to one year, even though the latter option is rarely applied. In the course of criminal proceedings, infringing products may also be seized and ultimately destroyed.

ii Customs seizures

Brazil does not have a formal registration system before customs. Thus, to avoid the import or export of counterfeit goods, or the import of grey goods, trademark owners may:

  1. request the inclusion of the trademark owner's information in the internal system of the Brazilian Federal Revenue, to which the customs agents have access. It is recommended to provide the following information: (1) representatives' information; (2) trademark registrations granted by INPI on behalf of the owner; (3) by which ports original goods are imported; (4) the names of the authorised importers, if any; and (5) a catalogue with a list and images of goods;
  2. send a letter with all the information of item (a) to the Smuggling and Embezzlement Repression Division (DIREP). Its agents are responsible for operations against the import of counterfeit goods in Brazilian borders; and
  3. register the trademark owner and its representatives in the National Directory to Combat Trademark Counterfeiting, which is a partnership between INPI and the Council for Anti-Piracy and Intellectual Property Crimes.

Besides the above measures, it is highly recommended to perform training sessions before customs, which helps customs agents to identify counterfeited goods.

In cases where customs seizes goods, it will notify the trademark holder to submit an administrative complaint within 10 business days, extendable for a further 10-day period, requesting the judicial seizure of the goods. Therefore, it is extremely important to have the trademark owner's and its representatives' contact information registered and updated in the Brazilian customs and Federal Revenue systems.

Depending on the circumstances of each case, it is possible to adopt administrative, civil and criminal measures, such as requiring the destruction of seized products.

If the trademark owner does not adopt any measure, customs may release the goods, provided that all other conditions to import or export goods required by the Brazilian Federal Revenue are met. The same procedure applies to copyright infringing goods.

Outlook

After a public consultation, INPI published, on 21 September 2021, the regulation and guidelines on the registrability of position marks. According to the regulation, a distinctive combination capable of identifying goods or services and distinguishing them from identical or similar ones will be registrable as position marks, provided that (1) it is formed by the affixation of the sign at a singular and specific position of a certain product; and (2) the application of the sign at this position can be dissociated from a technical or functional effect.

The regulation also provides that pending applications filed before 1 October 2021 may be converted to position marks if the applicants request this conversion before 1 January 2022.

Although this regulation came into effect on 1 October 2021, the examination on the merits of applications for position marks will have to wait for the necessary adaptations of INPI's systems. Unfortunately, there is no estimate as to when these technical updates will be implemented.

In addition, owing to difficulties in making the necessary adjustments to its internal system, INPI has not yet implemented the multiclass system for national applicants and the division of multi-class applications and registrations for all applicants, including those demanded by the accession to the Madrid Protocol.

The multi-class system is currently available only to international registrations filed via the Madrid Protocol, while the division of applications is not available under any circumstances. There is still no estimate for these implementations to occur.

Footnotes

1 Antonio Murta Filho and Luiza Duarte Pereira are partners, and Danielle Duarte Gonçalves, Michele Pinheiro Machado and Tatiana Ortiz de Almeida are associates at Murta Goyanes Advogados.

2 For more detailed information concerning the differences between UDRP and SACI-Adm: https://www.wipo.int/amc/en/domains/cctld/br/index.html.

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