Good faith, as a fundamental principle of the legal system, governs all areas of law, including trademark law. Under this precept, the actions of individuals are presumed to be carried out with the conviction of not harming third parties and within the framework of the law.
The registration of the trademark SAVOY TORONTO in class 30 (edible decorations for pastry and bakery products, cocoa-based beverages, chocolate-based beverages, chocolate bonbons, peanut (confectionery products based on), peanuts (confectionery products based on), cocoa, cocoa (beverages based on), cocoa (products based on), chocolate, chocolate (beverages based on), sweets, milk (cocoa with), milk (chocolate with) [drink]), was granted in 2021 under the presumption of being a good faith application, in favor of a natural person in Ecuador engaged in the marketing of food products.
The trademark was registered having fulfilled all necessary steps until the issuance of the registration certificate. However, it was not analyzed in a timely manner by the intellectual property authority, as the SAVOY TORONTO brand is one of the emblematic brands of Societé des Produits Nestlé in some countries of the region. At the time the trademark was requested, Nestlé did not have its trademark registration in Ecuador and therefore did not oppose it.
In 2022, Nestlé filed a nullity action against the SAVOY TORONTO trademark, claiming to be the legitimate creator and owner of the trademark rights, so the registration obtained by the applicant in Ecuador was made to perpetrate an act of bad faith and unfair competition, as the applicant was fully aware that it was a third party’s trademark and sought to take advantage of its fame and level of recognition among consumers.
In the nullity action, Nestlé demonstrated with convincing evidence that the request was made in bad faith, as it was practically impossible for the coincidence in the name of the trademark and the confronted products to occur as a mere coincidence, especially considering: (i) the high level of recognition of Nestlé’s brands; and (ii) that the applicant marketed products under the conflicting brands before applying for their registration in Ecuador.
Based on these grounds, by resolution No. OCDI-2024-202 of March 26, 2024, the National Intellectual Property Rights Service established that “It seems highly improbable that two different persons would have devised a distinctive sign with exactly the same terms to protect the same products, and whose registration in the Andean territory dates back to the year 2005.” and nullified the registration of the SAVOY TORONTO trademark. This resolution constitutes progress in the comprehensive protection of intellectual property rights, as the applicant’s intention in the trademark registration request was considered, not only the objective elements. The competent authority has made a correct assessment of the specific circumstances of this particular case.
Katherine González
Senior Associate at CorralRosales
katherine@corralrosales.com
