The registration of a trademark gives the owner the right of exclusive use of the mark, in the negative aspect of this right, empowers the owner to prohibit third parties from using the mark without his consent or authorization. The unauthorized use of a mark constitutes a violation of industrial property regulations, and the affected party may take the necessary measures against whoever infringes their right, for which they have the possibility of initiating an action for infringement of industrial property rights regulated in articles 99 and subsequent articles of Legislative Decree 1075 and articles 238 to 244 of Decision 486 of the Andean Community.
Pursuant to Article 238 of Decision 486, it is established that “the holder of a right protected by virtue of this Decision may initiate an action before the competent national authority against any person who infringes his right. He may also act against whoever executes acts that show the imminence of an infraction” (Commission of the Andean Community, 2000).
Likewise, article 155 subparagraph d) of this same regulation states the following:
“The registration of a trademark confers on its owner the right to prevent any third party, without his consent, from the following acts:
(…)
d) use in commerce a sign identical or similar to the trademark with respect to any products or services, when such use could cause confusion or a risk of association with the owner of the registration. In the case of the use of an identical sign for identical products or services, it will be presumed that there is a risk of confusion; (...)” (Commission of the Andean Community, 2000).
The complainant of a trademark infringement can request the authority to order measures such as the cessation of the acts of infringement, compensation for damages, the withdrawal from the market of the products resulting from the infringement, the prohibition of import or export of these products, among other measures indicated in article 241 of Decision 486. In addition, the complainant can ask the authority to order immediate precautionary measures established in article 246.
Among the sanctions imposed by the authority for cases of trademark infringement, there is a reprimand and a fine. The fines imposed for violations are up to 150 UIT, and in cases where the real illicit profit obtained from the infringing activity is greater than 75 UIT, the fine may be 20% of the sales or gross income received by the infringing activity, as established in article 120 of Legislative Decree 1075. In addition, it must be taken into account that recidivism in these acts is considered an aggravating circumstance.
As an example, we can cite the case of the sign AQUATEARS[1].The company Espect S.A. (Peru), owner of the trademark AKWA TEARS R that distinguishes products of class 5, with which it commercializes eye drops, whose therapeutic use is artificial tears, filed an action for infringement of industrial property rights against Eske S.R.L. because it had launched a product called AQUA TEARS with a similar therapeutic use to its product. The complainant requested the cessation of the commercialization of the AQUA TEARS product by the company, the confiscation, deposit and/or immobilization of the pharmaceutical products, labels, boxes and advertising material of AQUA TEARS, among other measures.
Eske S.R.L. responds the action, pointing out that the manufacturer and original owner of the mark was the Indian company CIpla Ltd., being his company the commercial representative in Peru and responsible for the drug's health. They argued that there was no confusion between the signs if it takes into account that the particle TEARS is common in mark construction, so the comparative analysis should focus on the other names AKWA and R and AQUA. In addition, they added that the names AKWA TEARS R and AQUA TEARS were not graphically, phonetically or conceptually confusing, that the term TEARS is a common name, being weak signs that can coexist peacefully in the market.
By Resolution No. 13549-2004/OSD-INDECOPI, the Office of Distinctive Signs declared the infringement action filed by Espect S.A. unfounded, considering the following:
- The sign used by the defendant company AQUA TEARSlacks distinctiveness, as it does not have any element that endows it with said characteristic, being a sign incapable of individualizing by itself before the consuming public the products to be distinguished as coming from a certain business origin. In this sense, the denomination AQUA TEARS, lacking the necessary distinctiveness, cannot be constituted as a mark and therefore its application in the products will not be perceived as such.
- The name AQUA TEARS fulfills an informative function about the products it distinguishes, since it makes direct reference to the characteristics and function for which the consuming public would choose the products of class 5 of the Official Nomenclature offered by the defendant.
- The signs are not similar, since the sign used by the defendant does not constitute a sufficiently distinctive sign, through which the consuming public identifies the product in which it is used as coming from a certain business origin, unlike the registered trademark AKWA TEARS R that as a whole has elements that give it the necessary distinctiveness to fulfill its function as an indicator of business origin.
Spect S.A. filed an appeal stating that the sign used by the respondent was distinctive, since it has identity (the AQUA TEARS sign is associated with a specific product on the market) and differentiation (since the sign and the product differ from each other not confusing one with the other, in addition to the fact that the consumer does not know that TEARS is a word in the English language that means “lágrimas” in Spanish). It indicated that Eske S.R.L. had been using the sign AQUA TEARS to distinguish pharmaceutical products in class 5 of the Official Nomenclature, which was similar to the degree of confusion with its registered trademark AKWA TEARS.
Likewise, it stressed that there was the possibility of direct or indirect confusion, to the extent that the sign AQUA TEARS contains a name that is graphically and phonetically very similar to its registered trademark AKWATEARS R, which would lead the consumer to think that they are similar products, or from the same manufacturing company that is launching a new line of products on the market.
By means of Resolution No. 0368-2005/TPI-INDECOPI, the Intellectual Property Chamber resolved to revoke Resolution No.13549-2004/OSD-INDECOPI of first instance, consequently the Chamber declared founded the action for infringement of industrial property rights filed by Espect S.A. against Eske S.R.L., prohibited the defendant company from using the name AQUA TEARS both independently and jointly with other elements, to distinguish products of class 5 of the Official Nomenclature and imposed the sanction of a fine amounting to one (1) UIT to Eske S.R.L.
To issue this ruling, the Chamber took into consideration the following:
- The sign AQUA TEARS used by the defendant company distinguishes eye drops, products that are included within the pharmaceutical products that distinguishes the trademark AKWA TEARS R registered in favor of the plaintiff.
- Carrying out the comparative examination between the sign used by the defendant AQUA TEARS and the registered trademark AKWA TEARSR, from the phonetic point of view, it is considered that the first term of the registered trademark will be pronounced as [AKWA TIERS or TEARS], while that the sign used by the defendant will be pronounced [A-QUA TIERS or TEARS], so they will be phonetically similar.
- From the graphic point of view, the presence of the letters Q and U in the sign used by the defendant company in the place occupied by the letters K and W in the registered trademark, as well as the letter R at the end of the registered trademark, determine that the signs produce a different overall visual impact.
- From a conceptual point of view, although the name TEARS belongs to the English language, its meaning (lágrimas) may be known by the public to whom the ophthalmic products are directed; although the term AQUA comes from Latin, given its similarity to the Spanish word for water “agua”, it evokes the latter meaning in the minds of consumers, in the same way that the name AKWA in the registered trademark can be associated with the term “agua”, taking into account the frequent use of the terms AQUA and TEARS in the market to refer to various products in class 5 of the Official Nomenclature, as well as the fact that i) advertising through the media has an increasing scope, ii) this great diffusion of communications familiarizes the Peruvian consumer public with other languages and cultures and, iii) the knowledge of foreign languages in the country depends a lot on the relevant sectors of the consumer public. In this sense, from the conceptual point of view, the signs can allude to the same concept, related to the products known as artificial tears.
For all these reasons, the Chamber of Intellectual Property indicates that, despite the graphic differences, given the existence of similarity or connection between the products that the signs distinguish and the phonetic similarity between the signs, the sign used by the defendant party is capable of inducing confusion to the consuming public. In the present case, the Chamber concludes that the sign used by the defendant violates the industrial property rights of Espect S.A., with respect to its mark AKWA TEARS R, registered to distinguish products of class 5 of the Official Nomenclature, being included within the scope of the provisions of article 155 subparagraph d) of Decision 486.
As a comment and taking into account both resolutions, we can note that an incorrect decision by the Trademark Office can reduce the rights of registered trademark owners. In this case, if the reasoning of the Office of Distinctive Signs in the first instance had been considered and had not been appealed as correctly did the owner of the registered trademark, it would not have obtained the most analytical ruling of the second instance and with it its action declared founded and the sanction for the defendant company.
The second instance decision was correct, since the Chamber did not focus on whether or not the sign used lacked distinctiveness, but instead dealt with the main issue of determining whether the defendant company with the use of the sign was affecting the rights of the owner company of the registered trademark, which, as we effectively noticed when reproducing its trademark almost completely, was violating the industrial property rights of the owner of the registration.
[1] Taken from Resolution No. 0368-2005/TPI-INDECOPI dated April 13, 2005, from file No. 201668-2004.
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