Trademarks – Confronted by “pearls”
By Belén Sorrentino and Camila Sirianni.
The Federal Civil and Commercial Court upheld the decision of the lower court that ordered the cease of use of the trademark “PERLAS” and the compensation of the damages caused to the owner of the trademark “PERLAS DEL MAR” (Chamber II, “Despo Jorge Eduardo v. Agronor S.A. seeking the Cease of use and Damages”, Case No. 4664/2021, 02/3/22). In this case, the plaintiff and the defendant were in dispute over the use of “PERLAS” to identify rice, a mass consumption product that consumers do not pay much attention to at the time of purchase.
Mr. Jorge Eduardo Despo is the owner of the trademark “PERLAS DEL MAR” (Design) since 1996, limited to protect “rice” in class 30 and, after noticing that Agronor S.A. was manufacturing and commercializing rice with “PERLAS”, a mark confusingly similar to his registration and without his express authorization, he sent a cease and desist letter to said company.
Given the impossibility of reaching an out-of-court settlement, Mr. Despo sued Agronor, requesting the cease of use of “PERLAS” and he also claimed damages.
In their answer, Agronor acknowledged having been using “PERLAS” for years in the market, and also argued that the action was time-barred, pursuant to article 36 of the Trademark Act 22.362.
First instance ruling
The magistrate pointed out that the trademark “PERLAS DEL MAR” was for the exclusive use of Mr. Despo, as established in article 4 of the Trademark Act and, considered as proven that Agronor used “Perlas” as a distinctive sign to commercialize the same product as the plaintiff, in violation of Mr. Despo’s right. The judge then dismissed the statute-barre limitation because Agronor had not interrupted the use of the mark in question and continued to do so -as it was admitted in the answer to the complaint-.
Court of Appeal ruling
Agronor appealed the first instance decision, since this company considered that there was a wrong assessment of the evidence in relation to the peaceful and continuous use of the “PERLAS” trademark for 11 years. The losing party argued that both signs coexisted peacefully in the market and, additionally, rejected the magistrate’s interpretation in relation to the prescription of the civil action.
In response to the defendant’s arguments, on March 2, 2022, the Chamber adopted the following decision:
- Rejection of the statute-barre limitation
The Chamber considered that there was no doubt that the notification of the cease and desist letter let Agronor know that it had to cease the use and commercialization of the products with the trademark “PERLAS”, since it belonged to Jorge Eduardo Despo. It was undeniable that, since Agronor received such letter, the use of the trademark was with the awareness that the denomination used to identify rice belonged to a third party and from whom it had no authorization to use it.
Without further ado, the judges concluded that since the statute-barre limitation must start to run from the last illegitimate act and in the present case, the defendant had acknowledged continuing to use the trademark in question, the unlawfulness had never been interrupted.
- Mot Vedette
When in a set there is a word, drawing or other element that has a higher significance, it is appropriate to focus the analysis on that element, because it is the one that will play the role of identifying the products (‘mot vedette’). In this case, “Perlas” is the word that will identify a product and distinguish it from another, so it appears as incontrovertible that said identity of the word “Perlas” is not diluted by the addition “del mar” and, therefore, the Court or Appeal ruled that there was an infringement of the plaintiff’s trademark rights, based on the right of exclusivity recognized in article 4 of the Trademark Act.
- Coexistence of trademarks
The Chamber considered that the coexistence of two trademarks in the market cannot be authorized if they are confusingly similar, since this goes against the spirit of the trademark legislation.
- Compensation
The Chamber stated that, in cases of improper use of a third party’s trademark, the damage to be compensated is the one derived from such use and the consequent benefit obtained by the defendant due to the unauthorized use. Thus, the Court valued the sales of Agronor, and confirmed the amount of ARS $44,236.40 established in the first instance.
In this ruling, our judges prioritized the exclusivity right granted to the trademark owner, as opposed to a simple coexistence in the market -which had ceased to be peaceful, after the cease and desist letter-, making it clear that the spirit of Law 22.362 is to protect consumers against any possible confusion.
For further information please contact: csirianni@ojambf.com
