1. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 1 Trademark in Brazil Luiz Henrique O. do Amaral amaral@dannemann.com.br Rodrigo Borges Carneiro rcarneiro@dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved.

2. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 2 Authors  Rodrigo Borges Carneiro and Luiz Henrique O. do Amaral Introduction  This guide presents the key issues regarding the process of protecting trademarks in Brazil. What can and cannot be protected and registered as a trademark? How long does it tipically take, and how much does it cost, to obtain a trademark regisrtation? What types of legal or administrative proceedings are available for enforcing trademark rights against an infringer? These and many other questions are answered objectively in the following pages.  This content was originally prepared by the authors for the guide "Getting the Deal Through - Trademarks 2005", edited by Law Business Research.

3. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 3 Contents  Chapter I - Ownership and scope of marks  Chapter II - Trademark office procedures  Chapter III – Assignment  Chapter IV - Trademark enforcement proceedings  Chapter V - Miscellaneous

4. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 4 Chapter I - Ownership and scope of marks Who may apply?  According to Section 128 of the Brazilian Industrial Property Law 9279/96 (the BIPL), natural persons, private or public legal persons may apply for the registration of a mark.  Private natural or legal persons may only request the registration of a mark relating to the activity that they effectively and legally exercise directly or through undertakings that they control directly or indirectly, such condition having to be declared on the filing papers, subject to the penalties of the law.  The registration of a collective mark may only be requested by a legal entity representing a group and able to exercise an activity different to that of its members.  The registration of a certification mark can only be requested by a person without any direct commercial or industrial interest in the product or service being certified.

5. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 5 Chapter I - Ownership and scope of marks What can and cannot be protected and registered as a trademark?  The general principle is that any visually perceptive distinctive sign, when not prohibited under law, may be registered as a mark. The definition includes words, logos, composite marks and three-dimensional marks. Product and service marks, as well as collective and certification marks, are allowed. The registration of smells and sound marks is not expressly prohibited by the BIPL but there are no final decisions on this issue.  The BIPL (Section 124) prohibits the registration of the following as marks:  (i) crests, armorial bearings, medals, flags, emblems, official public distinctions and monuments, be they national, foreign or international, as well as any respective designations, figures or imitations;  (ii) an isolated letter, digit or date, except when sufficiently distinctive;  (iii) expressions, figures, drawings or any other sign contrary to morals and good customs, or which offend a person's honour or image, or are an affront to the liberty of conscience, beliefs, religions or to ideas and sentiments worthy of respect and veneration;

6. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 6 Chapter I - Ownership and scope of marks What can and cannot be protected and registered as a trademark? The general principle is that any visually perceptive distinctive sign, when not prohibited under law, may be registered as a mark. The definition includes words, logos, composite marks and three-dimensional marks. Product and service marks, as well as collective and certification marks, are allowed. The registration of smells and sound marks is not expressly prohibited by the BIPL but there are no final decisions on this issue. The BIPL (Section 124) prohibits the registration of the following as marks: i.crests, armorial bearings, medals, flags, emblems, official public distinctions and monuments, be they national, foreign or international, as well as any respective designations, figures or imitations; ii.an isolated letter, digit or date, except when sufficiently distinctive; iii.expressions, figures, drawings or any other sign contrary to morals and good customs, or which offend a person's honour or image, or are an affront to the liberty of conscience, beliefs, religions or to ideas and sentiments worthy of respect and veneration;

7. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 7 Chapter I - Ownership and scope of marks What can and cannot be protected and registered as a trademark? iv.designations or acronyms of a public entity or establishment, when registration is not requested by that public entity or establishment; v.reproductions or imitations of a characteristic or differentiating element of a title of establishment or the name of an undertaking belonging to a third party, which are likely to cause confusion or association with such distinctive signs; vi.signs of a generic, necessary, common, usual or simply descriptive character, when related to the product or service to be distinguished, or those commonly used to designate a characteristic of the product or service with respect to its nature, nationality, weight, value, quality and moment of production or of giving a service, except when presented in a sufficiently distinctive manner; vii.signs or expressions used only as a means of advertising; viii.colours and their names, except when arranged or combined in an unusual and distinctive manner; ix.geographic indications, imitations thereof likely to cause confusion or signs that might falsely suggest a geographic indication; x.signs that suggest a false indication with respect to origin, source, nature, quality or utility of the product or service to which the mark is directed; xi.reproductions or imitations of official seals, normally adopted for the guarantee of a standard of any type or nature;

8. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 8 Chapter I - Ownership and scope of marks What can and cannot be protected and registered as a trademark? xii.reproductions or imitations of signs that have been registered as a collective or a certification mark by a third party, without prejudice to the provisions of Article 154; xiii.names, prizes or symbols of sporting, artistic, cultural, social, political, economic or technical official or officially recognised events, as well as imitations likely to cause confusion, except when authorised by the competent authority or entity promoting the event; xiv.reproductions or imitations of titles, bonds, coins and bank notes of the Union, the States, the Federal District, the Territories, the Municipalities or of any country; xv.personal names or signatures thereof, family or patronymic names and images of third parties, except with the consent of the owner, his/her heirs or his/her successors; xvi.well-known pseudonyms or nicknames and singular or collective artistic names, except with the consent of the owner, his/her heirs or his/her successors; xvii.literary, artistic or scientific works, as well as titles protected by copyright and likely to cause confusion or association, except with the consent of the author or owner; xviii.technical terms used in the industry, science or art that is related to the product or service to be distinguished;

9. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 9 Chapter I - Ownership and scope of marks What can and cannot be protected and registered as a trademark? xix.reproductions or imitations, in whole or in part, even with additions, of a mark registered by a third party, to distinguish or certify a product or service that is identical, similar or akin, and which are likely to cause confusion or association with the third party's mark; xx.duplications of marks of a single proprietor for the same product or service, except when, in the case of marks of the same nature, they are presented in a sufficiently distinctive manner; xxi.necessary, common or usual shapes of a product or of its packaging, or, furthermore, shapes that cannot be dissociated from a technical effect; xxii.objects that are protected by industrial design registrations in the name of third parties; and xxiii.signs that imitate or reproduce, wholly or in part, a mark of which the applicant could obviously not fail to have knowledge in view of his/her activity, and of which the proprietor is established or domiciled in the national territory or in a country with which Brazil maintains an agreement or guarantees reciprocity of treatment, if the mark is intended to distinguish a product or service that is identical, similar or akin, and is likely to cause confusion or association with such third-party mark.

10. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 10 Chapter II - Trademark office procedures How long does it typically take, and how much does it typically cost, to obtain a trademark registration? The grant of a trademark registration is currently taking approximately four years from its application. The official costs related to the filing of one application in one class are approximately US$90. The final official fees are approximately US$175. What classification system is followed, and what goods/services may be claimed? The Brazilian Trademark Office has adopted the eighth edition of the International System of Classification of Products and Services (the Nice Agreement).

11. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 11 Chapter II - Trademark office procedures How long does it typically take, and how much does it typically cost, to obtain a trademark registration? Are applications examined for conflicts with other trademarks? What is the procedure followed in the trademark office? Yes. First the Trademark Office will perform a formal preliminary examination where office actions can be issued and have to be answered in five days under penalty of rejection of the application. This preliminary examination will only check if the fees have been correctly paid and if the papers have been properly filled in. Afterwards, applications will be published for opposition purposes without further examination. Oppositions may be filed during the 60 days subsequent to the publication of the trademark application in the Industrial Property Journal.

12. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 12 Chapter II - Trademark office procedures How long does it typically take, and how much does it typically cost, to obtain a trademark registration? Afterwards, in case oppositions are filed, they are published in the Industrial Property Journal, thereby bringing them to the applicant's attention and thus starting a 60-day period during which the applicant may file a non-mandatory reply, contesting the arguments presented in the opposition. Only after the period for opposition or, if such is filed, after the period for reply, will the examination begin. Examination occurs with or without the opposition and/or reply. If the application is rejected, the applicant will have a chance to appeal and the decision of the appeal will be final. If the mark is admitted for registration, the applicant will have 60 days to pay the final fees and afterwards the grant will be published. Interested third parties or the Trademark Office may seek the administrative cancellation of the registration within 180 days from its grant.

13. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 13 Chapter II - Trademark office procedures How long does it typically take, and how much does it typically cost, to obtain a trademark registration? Does use of a trademark or service mark have to be claimed before a registration is granted? Does proof of use have to be submitted? The use of a trademark or service mark does not have to be claimed before a registration is granted. The owner has five years after the grant of the registration to begin using the mark under the penalty of forfeiture of the registration. The use cannot be interrupted for a period of more than five years, also under penalty of cancellation for non-use. No documents to this effect have to be presented unless an administrative request is filed. Is there an appeal process if the application is denied? Yes. The applicant will have 60 days after publication of the rejection to file an appeal. The decision of the appeal will be final and will close matters at the administrative level.

14. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 14 Chapter II - Trademark office procedures Can a third party oppose registration or seek cancellation of a trademark or service mark? What are the procedures? Yes. All applications are published for opposition purposes without examination. Oppositions may be filed during the 60 days subsequent to the publication of the trademark application in the Industrial Property Journal. Afterwards, if oppositions are filed, they are published in the Industrial Property Journal, thereby bringing them to the applicant's attention and thus starting a 60-day period during which the applicant may file a non-mandatory reply, contesting the arguments presented in the opposition. Only after the period for opposition or, if such is filed, after the period for reply, will the examination begin. Examination occurs with or without the opposition and/or reply. An administrative cancellation procedure may be commenced ex officio or on the request of any person with a legitimate interest, within 180 days counted from the date of issuance of the certificate of registration. The registrant will be notified to respond within a period of 60 days. Once the period to respond has passed and even if no response has been presented, the procedure will be decided by the President of INPI, thereby terminating the administrative instance.

15. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 15 Chapter II - Trademark office procedures How long does a registration last and what is required to maintain a registration? The registration of a mark will have a term of 10 years counted from the date of its grant, it being renewable for equal and successive periods. An application for renewal must be made during the last year of the term of the registration and must be accompanied by proof of payment of the respective fee. If the request for renewal has not been made by the end of the registration, the proprietor may make such request within the following six months on payment of an additional fee. There is no need to present proofs of use in order to maintain a registration unless a cancellation for non-use is filed.

16. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 16 Chapter II - Trademark office procedures What are the benefits of registration? The property in a mark is acquired only by a validly granted registration, in accordance with the provisions of the Industrial Property Law, the owner being guaranteed exclusive use thereof throughout the national territory. The registration of a mark is also necessary to enable the remittance of royalties abroad in case of a licence.

17. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 17 Chapter III - Assignment What can be assigned - trademark with goodwill, without goodwill, all of the goods/services, some of the goods/services? Must other business assets be assigned to make it a valid transaction? Applications for registration and registrations may be assigned, provided that the assignee meets the legal requirements for requesting such registration. A trademark can be assigned without goodwill, but all of the goods/services have to be assigned as it is not possible to have just a partial assignment. An assignment must include all the registrations or applications, in the name of the assignor, for identical or similar marks relating to a product or service that is identical, similar or akin, on the pain of cancellation of the registrations or shelving of the unassigned applications.

18. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 18 Chapter III - Assignment What documents are required? The following documents are required:  A suitable power of attorney, which only has to be filled in and signed by the legal representative of the assignee. It should be noted that the signatory's full name, title, nationality and address have to be indicated and that neither notarisation nor legalisation is required.  An assignment document. The said document should be signed by the legal representatives of both parties as well as by two witnesses (one for each party). All signatures must be notarised, legalisation is not required.  The original of the certificate of registration.  A declaration in the assignment petition that the assignee is engaged in the business activity covered by the registrations being assigned.

19. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 19 Chapter III - Assignment Must the assignment be recorded for validity? It is necessary to record the assignment before the Patent and Trademark Office for validity against third parties but the assignment need not be recorded for validity between the parties. Are security interests recognised? Yes. Security interests have to be recorded before the Patent and Trademark Office for validity against third parties.

20. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 20 Chapter IV - Trademark enforcement proceedings What types of legal or administrative proceedings are available for enforcing trademark rights against an infringer? Are there specialised courts or other tribunals? It is possible to file a civil and/or a criminal action for enforcing trademark rights against an infringer. It is possible to obtain a temporary ex parte injunction to suspend the infringement until a final decision and to search for and seize the infringing products and related items, such as packages and labels, which contain the infringed trademark. Also, administrative actions can be requested before customs for the seizure of infringing products. The administrative actions before customs must be followed by the filing of a civil action so as to obtain a court order for the seizure of the products pending the final decision of the action. In some jurisdictions, like the state courts in Rio de Janeiro, there are specialised courts for handling industrial property-related matters.

21. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 21 Chapter IV - Trademark enforcement proceedings What is the format of the infringement proceeding? Is discovery allowed? Live testimony? Experts? Who decides the case? How long does the proceeding typically last? The civil action will take the form of an ordinary civil action. Temporary injunctions can be requested pending the final decision of the court action. Permanent relief is also available. The concept of discovery as it exists in the United States is not applicable in Brazil, but there is the possibility of using all legal methods of evidence such as live testimony, experts opinions, surveys and documentary evidence. The case is presided over and decided by a judge. The proceeding will usually take up to two years until a decision of first instance. Appeals to the State Courts of Appeal and for the Superior Court of Justice and/or the Supreme Court are also possible.

22. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 22 Chapter IV - Trademark enforcement proceedings What is the burden of proof to establish infringement or dilution? In the case of injunctions, the plaintiff must show the likelihood of success and the risk of irreparable harm. In order to prevail on the merits, it is important to note that there are no objective criteria in the law such as the American concept of 'preponderance of evidence'. The judge will be free to reach his/her own decision on the facts and evidence submitted by the parties. In principle there is no need to prove actual harm in order to prevail in a case based on dilution. However this matter has not been dealt with thoroughly by the courts. Who is entitled to seek a remedy (trademark owner, licensee, etc) and under what conditions? The trademark owner and a licensee if authorised in the licence agreement which has to be registered before the Patent and Trademark Office for validity against third parties. Even in the case of an exclusive licence agreement, the owner will have standing to sue.

23. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 23 Chapter IV - Trademark enforcement proceedings Can activities which take place outside the country support a charge of infringement or dilution? In the case of activities that have effects in Brazil, such as a website hosted by a foreign ISP but directed towards Brazilian consumers, it will be possible to sue locally. What, if any, discovery devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country? The concept of discovery as it exists in the United States does not apply in Brazil. The parties must request the items of evidence to the judge and it will be at the judge's discretion to decide which may be obtained. The most commonly requested are expert opinions, live testimonies, depositions and the presentation of documents. What is the typical timeframe for an infringement or dilution action, at the trial level and on appeal? A typical timeframe for an infringement action is two years until a first-instance decision. Appeals may take two more years, or even longer depending on the State and the nature of the appeal, such as appeals to the Supreme Court.

24. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 24 Chapter IV - Trademark enforcement proceedings What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal? The typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal, is between US$50,000 and US$100,000. What avenues of appeal are available? There are a number of possible appeals but the most common are:  interlocutory appeals against decisions which grant or reject requests for injunctions;  appeals against decisions of first instance directed to the State Courts of Appeals;  special appeals to the Superior Court of Justice or extraordinary appeals to the Supreme Court. What defences are available to a charge of infringement or dilution? There are a number of defences, such as the statute of limitations (five years), invalidity of the registration and lack of likelihood of confusion or association.

25. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 25 Chapter IV - Trademark enforcement proceedings What remedies are available to a successful party in an action for infringement or dilution? How is monetary relief apportioned? Is injunctive relief available, preliminarily or permanently, and under what circumstances and conditions? Both criminal and/or civil remedies are available as follows. Criminal remedies:  search and seizure  criminal complaint  arrest of infringers;  costs Civil remedies:  search and seizure;  injunction;  damages;  destruction of seized products;  costs.

26. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 26 Chapter IV - Trademark enforcement proceedings What remedies are available to a successful party in an action for infringement or dilution? How is monetary relief apportioned? Is injunctive relief available, preliminarily or permanently, and under what circumstances and conditions? Compensation will be determined by the benefits that the injured party would have gained had the violation not occurred. Lost profits will be determined by the most favourable to the injured party of the following criteria:  the benefits that would have been gained by the injured party if the violation had not occurred;  the benefits gained by the author of the violation of the rights; or  the remuneration that the author of the violation would have paid to the proprietor of the violated rights for a granted licence which would have legally permitted him/her to exploit the subject of the rights. Injunctive relief, temporary and permanent, is available. In the case of injunctions, the plaintiff must show the likelihood of success and the risk of irreparable harm.

27. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 27 Chapter IV - Trademark enforcement proceedings Are alternative dispute resolution techniques available and commonly used? What are the benefits and/or risks? Alternative dispute resolution (ADR) techniques are available in cases of trademark violations but are not commonly used in Brazil as the parties usually do not have a prior relationship and therefore no enforceable arbitration clause exists. The benefits would be a fast resolution of the case by a mediator or arbitrator elected by the parties with knowledge in the field and who could preserve an existing relationship between the parties. The risks of mediation are that it is non-binding and that further delay and costs will be incurred before the matter may, in any case, ultimately be brought to court. An arbitration clause, once established by the parties, is binding but the process can be costly in some cases. In the case of injunctions, the arbitrators will not have the power to force compliance by the parties and may have to request the issuance of an injunction by a court.

28. dannemann.com.br © 2012 Dannemann Siemsen. All rights reserved. 28 Chapter V - Miscellaneous What words or symbols can be used to indicate trademark use or registration? Do these words or symbols have to be used? What are the benefits of using them and the risks of not using them? The use of words or symbols to indicate trademark use or registration is not mandatory. It is common to use the symbol ® for registered marks and TM for applications or just to indicate trademark use. There are no additional benefits, other than merely alerting third parties that the element is a mark, and no risks for not using them. Are there any emerging trends or hot topics in the law of trademark infringement or dilution in the country? In recent years there has been a growing number of decisions awarding moral damages caused to the reputation of the mark as a result of infringement and dilution activities.