Trademark Law as a Strategy for Protection of Distinctive Signs

8 May 2018 , 11:27am

Brazil's courtroom battle over jeans must be noted by apparel manufacturers, says IP and technology lawyer Maíra Schweling Scala of Mattos Filho.

 Levi's get legal protection

It is difficult to find an individual who does not know the famous jeans created and produced by the American company Levi Strauss & Co ("Levi's"). What few know is that Levi's was founded in 1853 by the Bavarian Levi Strauss in San Francisco and that, since then, the company has had the legal protection of such jeans, through patent no. 139121, duly granted by the US Patent and Trademark Office. Originally, the first jeans made by Levi's had a leather tag affixed to the belt clip and a right-side rear pocket whose central part featured an arched seam design. It was only in 1900 that the pants came to have two back pockets. In 1936, Levi's began to affix to its pants the red label on the inner top of its right back pocket with Levi's written in capital letters and in white (referred to as "RedTab").

Distinctive signs

It could be argued that the arched stitching in the pocket, the leather tag and the RedTab (collectively referred to as "Distinctive Signs") were fixed by Levi's in the pieces with the primary objective of differentiating them from other pants manufactured by its competitors. Therefore, when checking the existence of Distinctive Signs in some particular jeans, Levi's wants consumers to instantly associate its branded pants with the quality of the product being offered.

The ability to communicate the origin of products to consumers and to prevent misuse and "hitch-hiking" by competitors are the main reasons for the protection of certain distinctive signs created by a company. In Brazil, two primary institutes seek to protect such distinctive signs and, consequently, prevent competitors from misusing them, namely: industrial design; and trademark.

Industrial design

Generally, the institute of industrial design consists in the ornamental plastic form of an object or the ornamental set of lines and colors that can be applied to a product, providing a new and original visual result in its external configuration (object's design)[1]. In accordance with Law No. 9,279 of May 14, 1996 ("Industrial Property Law"), the ownership of an industrial design, within the national territory, is acquired by registering it with the Brazilian Patent and Trademark Office ("BPTO"). The period for protection of an industrial design is ten years, as of the date of filing the application for registration, and extendable for another three successive periods of five years.

Trademarks

Trademarks, in turn, are visually noticeable signs, which are used to distinguish a product and/or service from another identical, similar or related product of different origin. The marks may be classified as follows: (i) Nominative: is the sign consisting of one or more words in the broad sense of the Roman alphabet, including neologisms and combinations of Roman and/or Arabic letters and/or numerals; (ii) Figurative: is the sign consisting of a drawing, image, symbol, words composed by letters of the Hebrew alphabet, Arabic, among others, and ideograms; or (iii) Composite marks: is the sign consisting of the combination of word and design elements.

"Mcdonalds", "Unilever" and "Levi's Strauss" are examples of trademarks that have been registered in Brazil, in the nominative, figurative and mixed forms, in order to distinguish the companies that own these brands from their respective competitors.

Similarly to industrial design, ownership of a trademark is acquired by a validly issued registration with the BPTO, whereby the owner is assured its exclusive use throughout the national territory, subject to certain exceptions listed in said law. The protection granted by the State does not exceed territorial limits of the country and only in this specific area the right of exclusive use of the registered trademark is acknowledged.

Another important aspect that should be noted regarding brands is the principle of specialty. That is, except in certain special situations, the protection afforded to a certain trademark includes only products and/or services related to the activity of the petitioner, being restricted to a particular class of products and/or services.

A trademark is valid for ten years, as of the date of publication granting the registration of the trademark in a magazine called Revista de Propriedade Intelectual, which is published by BPTO. If the holder applies for an extension of the registration of a particular trademark with the BPTO, as established in the Industrial Property Law, the holder should maintain the registration of its trademark for an undetermined period.

When searching the BPTO database, it is noted that Levi's legal strategy to protect its Distinctive Signs occurs by means of registration of trademarks, according to the records indicated below[2]:

 

 

Holder: Levi Strauss & CO. (US)

 

Holder: Levi Strauss & CO. (US)

Registration No.: 817928014

 

Registration No.: 790053853

Date of Grant of the Registration: September 3, 1996

 

Date of Grant of the Registration: December 2, 2014

Class: 25/10.20.30 (Clothing and accessories of general clothing and travel goods; Clothing and accessories of clothing of common use; Clothing and accessories of sports clothing; and Clothing and accessories of professional clothing).

 

Class: 25/10.20.30 (Clothing and accessories of general clothing and travel goods; Clothing and accessories of clothing of common use; Clothing and accessories of sports clothing; and Clothing and accessories of professional clothing).

 

 

 

 

 

Holder: Levi Strauss & CO. (US)

 

Holder: Levi Strauss & CO. (US)

Registration No.: 607112670

 

Registration No.: 828288739

Date of Granting the Registration: March 30, 1993

 

Date of Granting the Registration: January 19, 2010

Class: Ncl(8) 25 (Clothing, footwear and headgear).

 

Class: Ncl(8) 25 (Clothing, footwear and headgear).

 

Holder: Levi Strauss & CO. (US)

 

Holder: Levi Strauss & CO. (US)

Registration No.: 828895830

 

Registration No.: 007178085

Date of Granting the Registration: December 15, 2009

 

Date of Granting the Registration: May 25, 1980

Class: Ncl(8) 25 (Clothing, footwear and headgear).

 

Class: Ncl(7) 25 (Clothing, footwear and headgear).

 

In practice, the legal strategy adopted by Levi's is justified by the indefinite term for trademark protection in Brazil. That is, provided that Levi's complies with the provisions of the Industrial Property Law for maintenance of trademark registration, Levi's will be the only company that can use Distinctive Signs to identify its clothing, footwear and headwear products in Brazil.

When the above records granting the registration are scrutinised, it is noted that Levi's, when registering its trademark with BPTO in the products class No. 25, is assured the right to use it in the entire national territory to identify products that fall into this class (that is, clothing, footwear and headgear), and to prevent third parties from using the trademark (or similar mark) in the national territory to identify the products within this class. Therefore, if it finds that other person (individual or entity) is using Distinctive Signs or a similar symbol that causes confusion to consumers, Levi's may sue it for trademark infringement and request suspension of marketing the products.

Trademark reproduction claim

It was in this context of alleged undue reproduction of trademark that the legal dispute between Levi's and a clothing company called Damyller Comércio de Confecções Ltda. (“Damyller”) arose. In early 2016, the company learned that Damyller was selling the following jeans model, as shown in the image[3]:

On March 24, 2016, Levi's sent a notice to Damyller in order to amicably prevent Damyller from marketing and advertising on social media pants whose characteristics were allegedly similar to those manufactured and marketed by Levi's. Subsequently, on April 6, 2016, Damyller filed four applications for registration of figurative marks with BPTO, which was very similar to the trademarks registered by Levi's, according to the registration requests specified below[4]:

 

 

 

Applicant: Damyller Comércio de Confecções Ltda.

 

Applicant: Damyller Comércio de Confecções Ltda.

Proceeding No.: 910870071

 

Proceeding No.: 910870110

Filing Date: April 6, 2016

 

Filing Date: April 6, 2016

Class: Ncl(10) 25 (Clothing, footwear and headgear).

 

Class: Ncl(10) 25 (Clothing, footwear and headgear).

 

 

Applicant: Damyller Comércio de Confecções Ltda.

 

Applicant: Damyller Comércio de Confecções Ltda.

Proceeding No.: 910870179

 

Proceeding No.: 910870241

Filing Date: April 6, 2016

 

Filing Date: April 6, 2016

Class: Ncl(10) 25 (Clothing, footwear and headgear).

 

Class: Ncl(10) 25 (Clothing, footwear and headgear).

 

On June 20, 2016, Levi's filed an opposition to Damyller's trademark applications, based on the argument that those applications filed under class No. 25 duplicated the figurative marks it owned and duly registered with BPTO. Accordingly, Levi's requested BPTO to deny Damyller's trademark applications.

On June 23, 2016, due to noncompliance with Levi’s requests on the March 24, 2016 notice, Levi's sent a second notice of the same nature to Damyller. After the second notice, Damyller requested BPTO to withdraw from all applications for registration of a figurative mark that were filed by it on April 6, 2016, and modified the content posted on its social networks, excluding posts related to the pants under issue, although it continued to sell them on its website.

Levi's then filed a lawsuit requesting provisional protection of urgency, demanding that Damyller: (i) refrains from using Levi’s Distinctive Signs; (ii) refrains from manufacturing, ordering, marketing, offering for sale, and stocking products that copy or imitate Distinctive Signs; and (iii) provides information on the quantity and models in stock and which violate Distinctive Signs registered by Levi's, otherwise incur on a daily fine of R$ 10,000.

Although the injunction was granted to Levi's, Damyller has not refrained from using Distinctive Signs in its products, which justified the increase in the fine to R$ 20,000 per day of noncompliance and R$25,000 if Damyller refused to present the quantity of product in its inventory.

Damyller filed an interlocutory appeal against Levi's injunction, arguing that the time-limit established by the lower court to fulfill the order was impracticable and arguing, on the merits, that the consumer would not buy jeans from Damyller believing it to be a Levi's jeans because the differences between the products surpassed the insertion of the Distinctive Signs in the pieces manufactured by Damyller.

Court of Appeals decision

In a decision issued on June 7, 2017, the 2nd Civil Court for the State of Rio de Janeiro Court of Appeals determined that Damyller refrain from using in its products the Distinctive Signs, which are registered as figurative marks and are owned by Levi's. On that occasion, the reporting appellate judge was convinced that Damyller duplicates or imitates figurative marks that refer to Distinctive Signs with the intention of benefiting from the fame, reputation and trademark legally protected by the registration. Likewise, the judge reasoned that the potential for confusion between the marks was evident, which made clear the harmful conduct and worthy of judicial repression. Based on these arguments, the judges voted to grant partial relief to extend the deadline for Damyller to submit, in 30 days, the number of jeans in its stock that offend Levi's trademark right, maintaining the other terms in the lower court decision.

The merits of this lawsuit should be further discussed, but Damyller is prohibited from manufacturing and marketing jeans that duplicate Distinctive Signs. The decision on the merits to be handed down should decide whether there has been misuse of registered trademarks and whether there has been unfair competition practices (i.e., the use of unlawful practices by Damyller in order to attract customers and harm Levi's), as well as the existence of “parasitic exploitation” by Damyller (i.e., the use of commercial practices similar to the practices adopted by Levi's to confuse the consumer and divert customers).

If the judge believes that there is misuse of Distinctive Signs and/or unfair competition and parasitic exploitation, Damyller will likely be obliged to indicate the number of pants manufactured and marketed that have duplicated Distinctive Signs and may be condemned to pay compensation for damages to Levi's in amounts to be determined by the court.

Important

The decision on the merits to be issued will be of great importance to Brazilian companies in the apparel sector because it will point out, once again, the understanding of Brazilian courts regarding issues of misuse of trademarks, unfair competition and consumer protection, which are of high relevance to the industry. In particular, the decision will be emblematic for companies that manufacture jeans. In view of the fact that companies in this sector manufacture and market products of the same fabric (jeans) and most of the same colour (mainly navy blue), whose characteristics are not visually distinguishable by consumers, these companies are more vulnerable to engage in situations such as those reported above.

 

 


[1] Art. 95 of the Industrial Property Law: An industrial design is considered an ornamental plastic form of an object or the ornamental set of lines and colors that can be applied to a product, providing a new and original visual result in its external configuration and which it can serve as an industrial manufacturing type.

[2]  Results obtained through a public search, held on December 20, 2017, of the BPTO database.

[3]  Image taken from the site: http://blogs.oglobo.globo.com/ancelmo/post/justica-condena-marca-brasileira-por-vender-calcas-copiadas-da-americana-levis.html. Accessed on: January 29, 2017.

[4]  Results obtained through a public search, held on December 20, 2017, of the BPTO database,.