BRAZIL: An Introduction to Intellectual Property: Trademark, Copyright & Trade Secrets
Recent Changes in Trademark Prosecution and Protection in Brazil
The Madrid Protocol
The year 2019 marked the beginning of a number of structural changes to Brazilian trademark prosecution when Brazil agreed to the Madrid Protocol, an international treaty administered by the World Intellectual Property Organization (WIPO). This treaty handles the filing and registration of trademarks in more than 120 contracting countries. Hence, since 2 October 2019, Brazil has been sending and receiving international applications under this agreement. As of 2 March 2023, Brazil had received 33,731 designations, most of them coming from the United States, the European Union and China. A total of 461 requests originated from Brazil, with the United States as the main destination.
The signing of the Madrid Protocol follows the trend to focus on international co-operation and harmonisation, making it easier for foreign companies to protect their trademarks in Brazil and increasing the recognition of Brazilian trademarks abroad. Under the Madrid Protocol, trademark owners can file a single application with their national trademark office, designating other protocol member countries, with the intention of obtaining trademark protection in said jurisdictions in a cost-effective manner. This can save both time and money, making it easier for companies to expand their businesses globally. The designated jurisdictions will then analyse the applications based on their own laws and regulations.
The Madrid Protocol is also an efficient way to manage international trademark portfolios, as it allows filing and renewal procedures through a centralised system. Nonetheless, local assistance is still highly recommended, especially in Brazil, since opposition, nullity and forfeiture request notices will not be communicated through WIPO, but solely published in the Brazilian National Gazette. Moreover, local counsel can provide accurate guidance regarding the understanding of the legal system and possibilities within intellectual property protection.
The National Institute of Industrial Property
Faster registration
To comply with the requirements of the international community, the National Institute of Industrial Property (“INPI”) has implemented a number of measures and also expedited the analysis of applications, considering that, as per Article 5(2)(b) of the Madrid Protocol, the INPI must notify the applicant regarding an eventual rejection within 18 months counted from the date of notification of the Brazilian designation.
Since the INPI must respect the order of filing and priority of trademark applications for analysis, this obligation affects the speed of all Brazilian trademark processes. As a result of the new measures, the INPI has experienced a reduction in the backlog of trademark applications. Hence, the time for a trademark application to be examined has decreased from an average of 48 months in 2016 to 22 months in 2021. At present, unopposed applications take less than a year to be examined and, if opposed, approximately 16 months to reach examination. This has resulted in a more efficient and faster registration process, which is crucial for businesses looking to protect their trademarks in the Brazilian market.
Co-ownership and multiclass applications
The INPI has revised its third edition of the Trademark Guide six times since 2019. Among the administrative measures newly regulated by the INPI to allow complete compliance with the Madrid Protocol, are the possibility of co-ownership of applications and the implementation of multiclass applications. So far, the INPI has only been able to implement the co-ownership applications nationally, although multiclass applications designating Brazil are accepted and analysed relative to each class indicated.
Position marks, trade dress and figurative marks
Unrelated to the Madrid Protocol, in 2021 the INPI also implemented the possibility of protection for position marks, by means of Ordinance 37/2021. Position marks are formed by the application of a sign in a singular and specific position on a product, resulting in a distinctive set that can be used to identify products or services and distinguish them from identical, similar or related ones, provided that the application of the sign in that position may be dissociated from a technical or functional effect.
As non-traditional marks, position marks allow their owners distinguished protection, so they do not have to rely solely on trade dress and registration of figurative marks. In the past, many owners were subject to weaker protection for their distinctive signs in Brazil.
However, as one might suspect, trade dress protection is not subject to registration and depends on the subjective interpretation of sufficient elements to configure distinction enabling legal protection. Moreover, figurative marks protect the specific design portrayed – not the position in which the owner intends that design to be applied. Take, for example, a red sole on a pump shoe. As a figurative mark, it would be presented depicting a pump shoe with its sole painted in red. This figurative mark would probably be deposited in international class 25 to cover shoes. However, in practice, this would mean that the owner of this registration would have exclusive rights to place the design of a red sole pump in its shoes – and not exclusive rights to place a red sole on pump shoes.
Such restrictions and insecurities of trade dress and figurative marks protection have led to judicial proceedings, which are costly and unstable. Allowing the INPI to grant registration, an objective property title, to these types of non-traditional marks, gives companies doing business in Brazil a safe understanding of these cases.
However, it is important to highlight that the distinguished position must not result from technical necessity or generate product improvement. On that note, position marks ought to be distinguished from industrial designs. Although, in both cases, the ornamental aspect must exist, in the case of position marks, these must create a link with the brand and be identifiable by the public consumer – industrial designs lack this identification function, which is singular to trademarks.
This means that the position mark must be repeatedly placed in the same manner in order to comply with the identification function.
Thus, despite its recognition by Brazilian jurisprudence, the INPI’s understanding is still unclear based on the institute of secondary meaning. This is because item 12 of the INPI’s Technical Note 02/21 states that the application or placing of the sign to the product must result in a distinctive set, being perceived as a brand. Hence, it is not clear if this distinctiveness must be inherent to the placement of the sign or if it can be acquired at a later point, as a secondary meaning.
Registration with customs
Regarding trademark enforcement in Brazil in recent years, it is important to highlight that the COVID-19 pandemic significantly increased the number of online sales. Moreover, the INPI has been working with customs authorities to prevent importation of counterfeit goods.
Note that trademark owners can register with the Brazilian customs authority in an attempt to prevent the importation of counterfeit goods into Brazil, allowing customs officials to identify a potentially infringing load of goods at the border and to take necessary action.
In order to proceed, trademark owners must present proof of the registration in Brazil and other information about the goods on which the trademark is used. With this information in hand, customs officials should then be able to assess if a product is a counterfeit. Once identified as such, the goods will be detained by customs officials, who provide the trademark owner with notice to take legal action. This usually means following up the case and ensuring complete destruction of the goods. This is another opportunity for companies to rely on local counsel and guidance.
Use of technology
A trend experienced in recent years is the use of technology to monitor and enforce trademark rights. By using artificial intelligence and blockchain, trademark owners are able to track the distribution of their products and identify counterfeit goods. Moreover, social media platform screenings are also useful to identify and take action against infringing activities. Hence, the use of artificial intelligence and machine learning to analyse large volumes of data and identify potential infringing activities, as well as blockchain technology to track the distribution of products and prevent counterfeiting, have been playing an important part in trademark enforcement in Brazil. Social media monitoring and take-down services are also being used to protect trademarks online, as a simple, efficient and less expensive means of ensuring trademark protection.
Conclusion
The above recent changes to trademark prosecution in Brazil stirred the legal community, as there was a potential downside for law firms that heavily relied on international clients. However, the result has been positive with business flourishing with more effective trademark protection.
In conclusion, Brazil has made significant progress in improving its trademark prosecution process in recent years. The use of technology, reduction of the backlog, and harmonisation of protection under international law, have all contributed to a more efficient and effective registration process. With a growing economy and consumer market, the importance of trademark protection in Brazil is only set to increase, and the government’s continued efforts to improve trademark prosecution will be crucial for businesses looking to establish and protect their brands in the country.