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SENADI protects widely recognised unregistered trademarks

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DETAILS

DATE: 03-07-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

–Andrea Miño

MEDIA:

– WTR

  • SENADI has declared the nullity of the mark SAVOY TORONTO on the ground that the application had been filed in bad faith
  • The applicant had full knowledge of the prestige of the SAVOY and TORONTO marks and of their original owner
  • The mark was applied for to take advantage of the original owner’s positioning and prestige

The Ecuadorian IP Office (SENADI), in a significant move that aligns local practice with Andean jurisprudence in recent prejudicial interpretations, has declared the nullity of a trademark that is widely recognised by consumers in different jurisdictions, and was registered in Ecuador by a party other than its legitimate owner. 

Background

The IP offices of the Andean Community member states, which play a pivotal role in safeguarding trademark rights, may declare – either ex officio or at the request of an interested party – the nullity of a trademark registration when it has been granted in contravention of the absolute or relative grounds set forth by the law. This includes the infringement of third-party rights, bad faith and unfair competition. 

In 2021 SENADI granted the registration of a trademark composed of two marks, SAVOY and TORONTO, in Class 30. These trademarks had been previously registered abroad and are fully recognised based on their business origin (Nestlé). The applicant purchased the original products in his own country and sold them in Ecuador under the trademark SAVOY TORONTO. He had been aware of the Toronto and Savoy products and their business origin for several decades, since they are widely known and favoured in several countries, including Venezuela (the applicant’s birthplace).

Decision

Community jurisprudence states that, to prove the existence of bad faith in trademark applications or registrations, the plaintiff must prove that the applicant/owner had prior knowledge of the trademark and demonstrate, at least, the existence of a contractual relationship between the parties. Although there was no contractual relationship in this case, the facts and evidence confirmed that the applicant had full knowledge of the prestige of the SAVOY and TORONTO trademarks and of their original owner. 

SENADI also analysed when the original trademark owner offered its products in Ecuador before the application. It concluded that the mark was applied for to take advantage of the owner’s positioning and prestige, and to obtain exclusive rights over the mark to prevent third parties (including the legitimate owner) from offering and marketing them in the Ecuadorian territory.

In Resolution No OCDI-2024-202 (26 March 2024), SENADI considered that the existence of bad faith had been established and issued a resolution declaring that the trademark was null. The original trademark owner had offered the Savoy and Toronto products since 2018, three years before registration was applied for.

In addition to the broad knowledge of the TORONTO and SAVOY trademarks recognised by SENADI, the resolution was also based on the fact that the marks identify a particular business origin (Nestlé).

Comment

SENADI, through Resolution No OCDI-2024-202, not only acknowledged but also underscored the severity of the trademark infringement in this case. SENADI found that the applicant sought to take undue and unjustified advantage of the prestige of Nestlé’s trademarks, qualifying the case as an act of unfair competition aiming to confuse consumers as to the origin of the products.

The resolution constitutes a strong precedent against actions that may damage trademark holders’ rights. Trademarks with a wide recognition may be registered by third parties seeking to obtain an undue advantage, which is contrary to good faith and competition.

Read the article in WTR here.

This article first appeared in WTR Daily, part of World Trademark Review, in (July 2024). For further information, please go to www.worldtrademarkreview.com.

Bitter victory: Delayed justice in the patent system in Ecuador

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Delayed Justice…

The Administrative Litigation Court ruled in our favor in a patent proceeding, correcting a mistake made by the local IP Office; we achieved protection, a victory, no doubt, but a bittersweet one.

This patent application was filed on January 23, 2006, under a political regime acting against patentability.

In the first instance, and within the absurdly long period it takes for the local IP Office to resolve a patent, patent protection was denied on February 9, 2012, to which we filed an administrative appeal with a new set of claims.

Contrary to the law and ignoring jurisprudential provisions, the IP Office considered that a new claim set could not be submitted in this instance and again denied protection using the same previous arguments, taking almost seven additional years.

We appealed judicially, trusting that the existing illegalities would be sufficient to correct the error and grant protection. This happened because we were fortunate enough to have competent Judges in the Court.

Unfortunately, the favorable ruling was issued when only three days of protection remained for the invention sought to be patented.

The question then arises: Is the justice obtained fair? Obviously not.

The need to press for the application of the accelerated patent system is now becoming imperative. Without patents, there is no development or investment. Once and for all, it is necessary to adopt the solutions already in the Law or compensate with additional protection time patents that, as in this case, have obtained protection three days before their expiration due to the absolute irresponsibility of the State. State that has also charged annuities for a non-existent right and the highest fees in Latin America for examination.

I consider this ruling a professional achievement. Reversing patent decisions in courts is not easy, but it is a failure of our country’s patent system. If we do not take these types of facts seriously and seek a correction that solves these problems at the root, we will continue, at best, obtaining unfair justice.

 

Eduardo Ríos
Partner at CorralRosales
eduardo@corralrosales.com

Protecting IP rights through criminal actions: insights from a recent court ruling

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DATE: 12-04-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

–Maria Cecilia Romoleroux

MEDIA:

– WTR

  • In a recent case, counterfeit goods were released and the prosecutor ordered to close the investigation 
  • An expert was asked to assess the infringing goods pursuant to the principle of evidentiary freedom
  • Based on the expert’s report, the judge rejected the prosecutor’s request to close the case

Background 

In August 2021 a reform to the Criminal Law corrected several errors which, in practice, made it impossible to prosecute and sanction IP crimes. The minimum appraisal of seized goods was reformed (except for foreign trade cases) and a penalty of imprisonment (of up to one year) was reintroduced.

The reform also clarified several aspects to be considered in a crime (eg, the appraisal of the goods based on the price of the genuine goods and the possibility of reaching an agreement between the parties), which put an end to litigations.

Recent court ruling

In practice, although these provisions are regulated by law, certain prosecutors and judges have unfortunately not proceeded as expected. For example, in a recent case, an infringer appeared before a judge of constitutional guarantees, arguing a violation of the principle of legal certainty due to an alleged late notification by Customs, which resulted in the release of the counterfeit goods. The prosecutor hearing the case ordered that the investigation be closed, arguing that, with the release of the goods, there was no crime to prosecute.

IP crimes should be prosecuted following the criminal justice principles established in the Criminal Law. One of these principles is that of “evidentiary freedom”, which allows the parties to provide elements that may be considered as evidence, which will be subsequently assessed as to their relevance and usefulness. In other words, based on this principle, a wide range of opportunities are open to lawyers to prove that a crime has been committed – in this case, an IP crime.

Based on the principle of evidentiary freedom, an expert was requested to assess the infringing goods based on the documents and pictures in the official records. The expert’s assessment concluded that the released goods were counterfeit, which proved that a crime had been committed and should therefore be investigated.

The expert’s report was submitted to the judge, who reviewed all the documentation submitted, and rejected the prosecutor’s request to close the case. The judge also ordered that the case be brought to the attention of a higher authority within the Attorney General’s Office, stating that the investigation of a possible crime should be prioritised. 

A new prosecutor must now be appointed so that the investigation may continue and sanctions may be imposed (including a term of imprisonment of up to one year and a fine of up to $138,000).

Comment

This court ruling is important as it shows that, despite limitations in training, a lack of specialised IP knowledge and the abuse of constitutional actions, it is possible to obtain an adequate outcome by submitting documents demonstrating the mistakes made by the authorities, and by providing the judges with tools to support their decisions. 

The protection of IP rights can be achieved by using all the available mechanisms and principles established by the Criminal Law for all types of crime, as IP crimes cannot be considered as minor crimes. 

Read the article in WTR here.

This article first appeared in WTR Daily, part of World Trademark Review, in (April 2024). For further information, please go to www.worldtrademarkreview.com.

Does Mickey Mouse belong to everyone? NO

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On January 1st, Mickey Mouse, the most famous mouse in the world, made headlines worldwide, mentioning he entered the public domain as the copyright protection term on STEAMBOAT WILLIE expired. Many people believed anyone could use the iconic character without authorization from its owner, Disney.

First, we must define the term “public domain”. The World Intellectual Property Organization, WIPO, has defined it as:

“As far as intellectual property (IP) law is concerned, “public domain” is generally understood as any intangible asset that is not subject to exclusive IP rights and can therefore be freely used or exploited by anyone.”[1].

This means that all intangible assets that do not have a holder of rights entitled to prevent their exploitation or to demand the payment of compensation are in the public domain.

Does this open the door for anyone to use the Mickey Mouse figure? No, not at all.

It is important to clarify that the most famous work that entered the public domain is STEAMBOAT WILLIE, which many of us will not identify by its name, but by its iconic scene: Mickey Mouse captaining a boat while whistling. This scene is included at the beginning of many Disney productions. Other less famous scenes, henceforth, can also be reproduced and exploited by anyone[2].

Are there people taking advantage of this opportunity? Of course, we can already find on YouTube uploads of the scene which, because of what we have just explained, cannot be removed from this platform based on copyright infringement. On the contrary, they would be able to benefit commercially from the number of views, which are not few, largely due to the publicity given to this event.

One example is a video uploaded to this platform on January 1st by CORRIDOR, which in less than 48 hours was close to reaching one million views.

https://www.youtube.com/watch?v=hmzO–ox7X0

To sum up, can STEAMBOAT WILLIE be used freely, without any authorization, or without having to pay or retribute in any way to Disney? The answer is YES.

Can Mickey or Minnie Mouse be used freely? The answer is NO. Their protection extends far beyond this short scene. All works created subsequently are still protected and maintain rights around the world.

This iconic character’s presence in the market makes its isolated and indiscriminate use impossible without proper authorization from Disney. Its notoriety is evident and will be protected by the legislation of each country for a very long time.

Mickey is the boss in the Disney world and will continue to be for many years to come.

 

[1] Comité Intergubernamental sobre Propiedad Intelectual y Recursos Genéticos, Conocimientos Tradicionales y Folclore – WIPO/GRTKF/IC/17/INF/8 (24/11/2010) https://www.wipo.int/edocs/mdocs/tk/es/wipo_grtkf_ic_17/wipo_grtkf_ic_17_inf_8.pdf

[2] Plane Crazy, The Gallopin Gaucho

 

 

Eduardo Rios
Partner at CorralRosales
eduardo@corralrosales.com

Ecuador: Well-known trademarks; reinforced protection against non-use cancellation actions

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Once granted, a trademark gives its owner the exclusive right to prevent unauthorized third parties from using a similar trademark that could cause confusion and association among consumers. The owner is also obliged to use the trademark effectively in the market as registered and for the protected goods or services.

Unjustified non-use of the trademark may result in cancellation of the acquired right, which entitles a third party to file an action for cancellation for non-use.

Article 165 of Decision 486 does not make a specific distinction as to whether cancellation actions are appropriate in the case of well-known or renowned trademarks; however, the Andean Court of Justice has repeatedly stated in its jurisprudence that cancellation actions for lack of use are not suitable against a well-known trademark, due to the exceptional protection granted by Community regulations to this type of trademark.

The trademark’s well-known quality must have been declared and be in force in one of the member countries of the Andean Community, which implies the obligation of the owner to prove, before the competent IP Office, the facts proving the trademark’s reputation.

The National Service of Intellectual Rights by Resolution No. OCDI-2022-859, issued in November 2022, breaks the typical standards of evidence acceptance. The IP Office rejected the cancellation action filed against the trademark NOEL in international class No. 29 based on the well-known status, duly proven, of this trademark to protect “cookies” in international class No. 30.in order to guarantee the special protection of well-known trademarks.

The Ecuadorian IP Office stated that the well-known status of the trademark NOEL was demonstrated through declarations of notoriety issued by the Colombian IP Office during the relevant time frame for the cancellation action (three years before the filing of the action). The IP Office ratified the existence of a competitive connection between the goods for which well-known was declared (cookies IC. 30) and those that the trademark under cancellation protects (IC. 29) since there is a competitive connection between these goods

In this way, the IP Office ratified the special protection that well-known trademarks have in the Andean countries. Stating that this type of trademark breaks the principles of territoriality, registration, and real and effective use. It concluded that, in strict compliance with the applicable normative and jurisprudential precepts, it is not appropriate to analyze the cancellation for lack of use against well-known trademarks.

This decision sets a precedent for the protection of trademarks that, thanks to the prestige and positioning achieved in the market and the advertising efforts made by their owners, have obtained a well-known status in the Andean Community.

Andrea Miño
Associate at CorralRosales
andrea@corralrosales.com

WTR World Trademark Review – Foreign Companies as Intellectual Property Holders in Ecuador

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DETAILS

DATE: 14-07-2021

PROFESSIONALS IN THE NEWS:

–Andrea Miño Moncayo

MEDIA: World Trademark Review

On July 14, 2021, World Trademark Review (WTR), the media specialized in Intellectual Property, published an article written by Andrea Miño Moncayo.  In her article, our associate comments on a pervasive problem in Ecuador regarding the appropriation of internationally recognized brands by third parties.

The appropriation is usually done through registration applications with the relevant authority and even by marketing products under these brands without proper authorization.

The arguments of the offenders are varied, and they particularly emphasize that the foreign companies in question are not domiciled in the country. Therefore, they could not carry out activities or defend their intellectual property rights in this particular case.

Miño Moncayo emphasizes in the article that, “to try to justify this (blatantly illegal) conduct, some lawyers have resorted to wrongly allege before the courts that the doctrine of the Superintendency of Companies will be applied, according to which a company established outside the country must be domiciled in Ecuador to be able to carry out activities in the country. “

Miño Moncayo then goes through international and local regulations applicable in this case, including the hierarchy of each of them, to demonstrate that the appropriation and use of these marks are illegal and are not justified within the Ecuadorian legal system.

She concludes by highlighting that “it is essential that the preliminary decisions issued by the Court of Justice of the Andean Community in these cases are specific and clear, to avoid erroneous arguments causing damage to the rights of foreign companies not domiciled in Ecuador.”

To see the full article (under registration), click here.

World Trademark Review – The fact that two marks cover different classes is not a determining criterion when examining the risk of confusion

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DETAILS

DATE: 30-09-2020

CORRALROSALES IN THE NEWS:

-Katherine González

MEDIA: World Trademark Review

Our associate Katherine González publishes an article in the specialized media World Trademark Review in which she comments on SENADI’s decision to reject Discovery’s opposition against the registration of the trademark DOKI MAS LOGOTIPO, based on its previous trademark DOKI. On appeal, the Intellectual Property Office ruled that the fact that two trademarks belong to different classes does not necessarily imply that there is no confusion between them and that there was a direct relationship between their goods and services.

In the text, González explains that, initially, SENADI granted the registration of the DOKI MAS LOGOTIPO brand for class 44 services; SENADI considered that there was no risk of confusion with the DOKI registered trademark, since the latter belonged to a different class. In the appeal to this registration, the Intellectual Property Office accepted the opponent’s arguments and established that the fact that two trademarks that belong to different classes is not a determining criterion to assess the risk of confusion between them.

“In the first instance, SENADI rejected the opposition and granted the registration because there was no risk of confusion or association for consumers. Despite the fact that the trademarks shared an identical word element, they covered products / services of different classes. Discovery appealed this decision presenting a clear and detailed list of the products and services in question and arguing that, despite the difference in classes, the trademarks were intended to protect the products and services that were directly related and complementary “, details our associate.

“The decision confirms the importance of carrying out a detailed and specific analysis in each case, in the event of possible trademark litigation,” adds González, who believes that this decision is very important due to the large number of products offered for sale online.

If you want to see the article (under registration), click here.

The exhaustion of Instances by the State: A Problem in Intellectual Property

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The administrative authority and one or more private parties intervene in the vast majority of administrative procedures regarding Intellectual Property. Once this stage has been exhausted, resolutions issued by the National Intellectual Rights Service (SENADI) can be judicially challenged before the competent Administrative Contentious Court. The processes culminate with the sentence that agrees with one of the parties. With its execution, the mission of imparting justice is considered accomplished. However, the experience in intellectual property matters is different.

Once the client obtains a favorable ruling from the Contentious Administrative Court, SENADI usually files a cassation extraordinary appeal to prevent the execution of the Court’s ruling. This attitude is not justified because it is a dispute between private parties, in which the resources of the State are not compromised.

The competence of the aforementioned institution to appeal adverse decisions is not questioned, since we understand that it wants its criteria to prevail, however, it is necessary to consider that the filing of these appeals by SENADI is not always motivated to protect public interests.

In terms of intellectual property, there is no justification for SENADI in all cases to try to nullify the sentence so that its legal criteria prevail. With this attitude, state resources are wasted because the Supreme Court must allocate time to address these challenges. Worse still, in cases in which SENADI files an extraordinary protection action before the Constitutional Court.

It is very difficult for Intellectual Property clients to accept this behavior from the administrative authority, which seems to be destined to hinder the timely exercise of the corresponding rights. This reality is even worse in the case of patents, whose validity is 20 years from the filing of the application, since the administrative and judicial procedures can consume half of that time and in some cases the full term.

The justice system is saturated in Ecuador; responsibility, effective judicial protection and legal security do not go hand in hand with the principle of opportunity. The exhaustion of resources and actions by SENADI should not become the rule, since this causes the processes to be delayed, the execution of the sentences postponed and greater public and private resources spent.

Ruth Holguín
Associate at CorralRosales
ruth@corralrosales.com

LexLatin – It is now possible to cancel commercial names due to lack of use in Ecuador

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DATE: 20-08-2020

CORRALROSALES IN THE NEWS: 

-Katherine González

MEDIA: Lex Latin

The LexLatin communication medium publishes an article by our associate Katherine González detailing the modification regarding the possibility of canceling commercial names due to lack of use in Ecuador. Previously, the National Service for Intellectual Rights (also known as SENADI) did not process this type of cancellation request since “the authority considered that the rights were acquired with their use.”

After having studied the possibility of carrying it out, the Court of Justice of the Andean Community has determined that trade names may be canceled if they have ceased to be used at a certain time and provided that a series of requirements are met.

Before this new ruling was published, if you applied for a trademark similar to a registered trade name but in disuse, the owner of said trademark had to oppose this fact. Likewise, having filed an opposition or not, the refusal of the trademark was considered due to the similarity to one already registered and, therefore, there was no option to register this new trademark.

As our associate explains, before taking any action it is necessary to bear in mind “that trade names are independent of the business name or determination of the companies and may be the same or different”.

“One of the solutions provided by the users to counteract this type of inconvenience was the presentation of cancellation actions for lack of use against registered trade names. For these matters, SENADI had no maintained a uniform criterion, in most cases these actions were inadmissible because it considered that the registration of a commercial name loses its validity and effectiveness as soon as use ceases, therefore, the cancellation was not legally appropriate, ”González points out.

Now, the criteria have changed and trade names may be canceled due to lack of use in Ecuador.

Ahora, los criterios han cambiado y se podrán cancelar nombres comerciales por falta de uso en Ecuador.

If you want to read the full article, click here

Aula Magna – The Ecuadorian Intellectual Property Office (or SENADI according to its Spanish acronym) rejected ex-officio the registration of a mark because it considered that it was applied for in order to perpetrate an act of bad faith

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DATE: 13-05-2020

CORRALROSALES IN THE NEWS: 

-Katherine González

MEDIA: Aula Magna

Through Resolution No. SENADI_2019_RS_19814, the Ecuadorian IP Office rejected the application to register the mark KRUSELINGS in Class 28, for being similar to a globally well-known mark. Therefore, it was considered that the registration was sought in bad faith so as to mislead consumers. 

A mark is any sign capable of identifying goods or services in the market. For the purposes of registration, the community and national legislation establish a series of grounds for irregistrability that must be reviewed by the intellectual property offices, in order to avoid the acceptance for registration of signs that do not comply with the minimum requirements of a mark or that affect the rights of third parties.

One of the most well-known grounds for refusal which tends to be the most common ground for denying a mark at the Ecuadorian IP Office and in general at the IP Offices around the world is when a mark is similar to a prior application or registered mark[1]. However, another of the grounds to deny a mark is when it has been applied for to mislead consumers or to perpetrate an act of unfair competition or in bad faith according to the articles 135 and 137 of the Decision 486 of the Andean Community and the article 362 of the National IP Law.

The KRUSELINGS Case:

An Ecuadorian natural person applied for the mark KRUSELINGS in March 2019, covering “games, toys; gymnastic and sporting articles not contained in other classes; decorations for Christmas trees” in Class 28.

The mentioned application was not opposed by third parties. However, when issuing its decision, the Ecuadorian IP Office considered that the applied-for mark was confusingly similar with a mark well-known globally, and therefore that the application fell within the grounds for refusal since consumers would be deceived, in addition to establishing that it was an application made in bad faith.

Within its decision, the authority made it clear that despite there not being a prior application or registration similar to KRUSELINGS in Ecuador, the relevant grounds are directed at protecting the general interest, particularly consumers.

These types of decisions are aligned with global trends in the protection of intellectual property, most notably in trademarks. In particular, a Board Resolution of the International Trademark Association[2] (INTA) has established indicators to help trademark authorities determine whether a trademark application has been made in bad faith, from which we cite the two most relevant to the current case:

  • If the mark has been applied-for primarily to appropriate a trademark well-known in other jurisdictions or to disrupt the business of a competitor;
  • If the trademark was applied for with the intention of creating confusion regarding the source, sponsorship, affiliation or endorsement of the goods or services of the applicant;

In the mentioned resolution, INTA arrived at the conclusion that “the possibility of arguing and demonstrating bad faith should be used as a tool to defeat the piracy of trademarks and other clear cases of misappropriation of trademarks”.

The decision in the case of KRUSELINGS signals progress in the protection of intellectual property in Ecuador, since arguing bad faith previously, at least in opposition proceedings, was almost always rejected or ignored, leading in many cases to the acceptance of the registration of marks that infringed the rights of third parties, under the sole pretext that the mark was not registered or applied for in Ecuador.

If you want to read this article in Spanish, click here.

[1] Article 136 section a), Decision 486 of the Andean Community
[2] Board resolution: September 22, 2009
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