Argentina: Cancellation Of Trademarks

Last Updated: 7 November 2017
Article by Patricio M. Albornoz and M. Florencia Bossi

The court of appeals emphasizes the necessity that the consumers identify directly the products with the trademark object of the claim and that it is not a secondary sign.

In a ruling dated May 16, 2017, in the case entitled "Nike Argentina SRL v. Pace Susana on nullity of trademark", Division III of the National Court of Appeals in Federal Civil and Commercial Matters revoked the judgment of First Instance which had sustained the request for cancellation of Nike Argentina S.R.L. ("Nike Argentina") of the trademark "ZOOM" (registered at the name of Ms. Susana Pace).

The First Instance judge sustained the plaintiff's claim, who had requested the cancellation of registration of the trademark "ZOOM", in class 25 (Reg. No. 2.047.506), with foundation in the evident use at a worldwide level of the trademark "NIKE ZOOM" and in section 24, subsections b and c of the Trademarks Law No. 22.362, which sets forth: "nullity of the registered trademarks (...) by whom, upon the request of the registration, knew or should have known they belonged to a third party (subsection b), for its commercialization, by the person that develops as usual activity the registration of trademarks to such effect (subsection c)".

Likewise, in the First Instance, the judge rejected the counterclaim of the defendant which requested to order Nike Argentina to cease with the wrongful use of the trademark and pay damages.

According to the facts detailed in the decision, Nike Argentina used as from year 1999 the sign "ZOOM" together with its trademark "NIKE" ("NIKE ZOOM") to identify a special kind of trainers, which had a technology based on the incorporation of air chambers to achieve the reduction of impact against the surface. Nevertheless, the company had not registered such trademark in Argentina.

On its part, the defendant had started in 2003, together with two partners, a project for selling clothes aimed at the young market, using the trademark "ZOOM" to identify its products. At that stage, the sign was registered in class 25 in the name of a plastic manufacturer, Ms. Pace achieved to register the trademark "ZOOM" on October 19, 2005, since such company did not renew the trademark.

The arguments of the First Instance judge to sustain the claim of Nike Argentina was the well-known character of the trademark "NIKE", considering also that the company had associated the word "ZOOM" to the trademark for the identification of a special kind of sport shoe and the possibility that, as the parties have similar commercial activities (sale of clothes/sale of shoes), the prestige of the plaintiff could be affected by the use of the sign by Ms. Pace. In consequence, even if the judge did not consider there was a speculative intention by the defendant (situation of subsection c of section 24, Trademarks Law), he did admit that the defendant had made the registration of the sign while it knew or should have known it belonged to a third party (subsection b of the mentioned section).

Ms. Pace appealed the judgment by arguing that when she requested the registration of the sign "ZOOM" there was no other in the class with such word, and that, prior to 2003, the trademark had been exploited by Panamericana de Plásticos S.A.; for such reason, it was not possible that Nike Argentina would have lawfully used it as de facto trademark.

Even if the Court of Appeals admitted the use of the trademark at issue by Nike Argentina, it highlighted that the sign was not used by it in isolation but only as an addition to its famous trademark "NIKE" and that it was aimed at distinguishing only a certain line of products among all the products it offers. In such sense, the court highlighted the necessity that the person who requests the cancellation of a trademark based on the prior use of the same sign must prove that the sign invoked as of its own has been extendedly used to distinguish its products and generate a determined clientele. About this issue, it sustained that Nike Argentina could not prove such situation, whereas according to the documentation of the file, the consumers did not identify the trainers of the plaintiff under the sign "ZOOM", but the relevant sign continued being the famous trademark "NIKE".

Likewise, the Court of Appeals rejected the suspicion that Ms. Pace should have known that the sign "ZOOM" belonged to the plaintiff, considering the lack of fame of such word, associated with the products of Nike Argentina, at the moment when the business of the defendant began.

On the other hand, the Court of Appeals added that the great disparity regarding the commercial reputation and kind of products dissolved even more the possibility of confusion between the signs.

Regarding the counterclaim for the cease of use and damages brought by the defendant, the Court of Appeals also rejected the request, using precisely the argument that Nike Argentina did not use the sign "ZOOM" as its trademark, and for such reason it was not appropriate to request it to cease in any activity or that it had to pay any amount for damages.

In conclusion, the precedent, apart from repeating the requirements which are already known for the admittance of the action of cancellation of a trademark, especially emphasizes the necessity that the consumers identify the products or services directly with the trademark object of the claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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