Brazil is one step closer to recognising and regulating registration of position marks

The National Institute of Industrial Property (INPI) recently carried out a public consultation on the examination of applications for the registration of position marks, enabling interested parties to express their opinions on the matter.

Introduction

The National Institute of Industrial Property (INPI) recently carried out a public consultation on the examination of applications for the registration of position marks,⁽¹⁾ enabling interested parties to express their opinions on the matter.

The wording proposed by the main IP associations in Latin America is as follows:

The distinctive set formed by the application of a sign in a specific position on given support, capable of distinguishing products or services, will be registered as a POSITION MARK, to be able to distinguish itself from other identical, similar or alike products or services.

This means that a certain element in a particular position on a product (known as a "set") could have the necessary characteristics of a distinctive sign and could thus start to be recognised by consumers. Examples of such sets include:

• the red sole of Louboutin shoes;
• the red label on the back pocket of Levi's pants; and
• the blue label on the part of the heel of Keds sneakers.

Not all elements in a specific position have the required characteristics to be considered position marks. The whole set (ie, the mark and its position) must:

• be sufficiently distinctive;
• be used continuously and/or intensely; and
• not be functional.

Registration of position marks

Many parties have taken advantage of the ability to register marks as design marks, which protect only designs or symbols that identify a certain product or service to the consumer. The judiciary has been enforcing the trademark rights of their holders as if they were position marks, since article 122 of the Industrial Property Law provides that "any visually perceptive distinctive sign, when not prohibited under law, is susceptible of registration as a mark". Therefore, there is no legal prohibition for the registration of position marks. The regulation of such registration by the INPI is thus of major importance.

However, even though some marks that could be considered position marks are being granted registration by the INPI, the lack of specific regulation for position marks unnecessarily lengthens judicial discussions. On various occasions, the judiciary has supported marks against infringers of position marks. On the other hand, many marks that could be considered to be position marks have not been granted registration by the INPI because of the lack of regulation and, in these cases, the consequences can be serious. Third parties can take advantage of such position marks in bad faith under the argument that the INPI itself would have denied their registration. In other words, the lack of regulation leads to unnecessary legal uncertainty for position mark holders:

Improvement of position mark regulation

To avoid financial loss for those legitimately interested in the protection of position marks, it is extremely important to improve the trademark system, in line with global trends in this regard.

The public consultation aimed to collect the opinions of specialists and those interested in the subject so that clear rules can be created to officially regulate the matter in Brazil and the Brazilian trademark system can thus be modernised.

Recent Supreme Court decision on patent term for pharmaceutical products and processes

On 6 May 2021 the Supreme Court decided that the sole paragraph of section 40 of the IP Law is unconstitutional. This legal provision allowed a minimum validity term of 10 years for patents of invention and seven years for utility models, counted from the granting date. After this decision, all patents granted will be valid for 20 years from the filing date, regardless of the time spent by the BPTO in examining the applications. In addition, the decision applies retroactively to already granted patents relating to pharmaceutical products and processes, as well as equipment and materials for use in healthcare. This ex tunc effect of the decision also covers patents that were subject to lawsuits challenging the 10-year rule filed by 7 April 2021, irrespective of the technological field.

Since the Supreme Court decision did not provide any information on how to determine whether a patent relates to the group of cases defined as "pharmaceutical products and processes, medical equipment and materials for use in healthcare", the BPTO is making this classification based on the following criteria:

• patents that were sent to Anvisa for prior consent;
• patents that have the following international patent classification (IPC) numbers: A61B, A61C, A61D, A61F, A61G, A61H, A61J, A61L, A61M, A61N and H05G (these are technologies associated with medicine, according to the World Intellectual Property Office);
• patents that have the following IPC numbers: A61K/6, C12Q/1, G01N/33 and G16H;
• patents about which a lawsuit decision has been published; and
• granted certificates of addition.

The granted patents affected by the retroactive effect are being reissued with the validity term adjusted in the BPTO Official Bulletin. Where the 20-year term counted from the filing date has already elapsed, the extinction of the patent is subsequently published.

Secondary meanings

An important question remains: is it possible to regulate the registration of position marks without at the same time regulating the institute of "secondary meaning" (ie, acquired distinctiveness)? A secondary meaning occurs when an initially generic or commonly used denomination or sign acquires distinctiveness due to its continued and intense use for a certain product or service (eg, American Airlines, Banco do Brasil (Bank of Brazil) or Casa do Pão de Queijo (House of Cheese Bread, a Brazilian fast-food chain)), thus making it immediately identifiable to consumers.

Because the distinctiveness required for position marks can be intrinsically associated with their continued use in a specific position and because the possibilities for positioning a mark are limited, position marks most often acquire the characteristics of a secondary meaning. For this reason, it would be ideal for these matters to be dealt with together.

Endnotes

(1) Public consultation 01/2021.

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