Coexistence agreement issues clarified

The Civil Chamber of the Supreme Court, on judicial review of an administrative decision refusing registration of the mark RADIANT SILVER by Avon Products Inc, has clarified the rules on coexistence agreements in Article 158 of Legislative Decree 823 on Intellectual Property (Case 3637-2007, March 27 2007).

Legislative Decree 823 allows for parties in an administrative procedure to agree on the coexistence of identical or similar trademarks as long as, in the opinion of the National Authority, such coexistence does not affect the general interest of consumers. The National Authority has interpreted this rule to the effect that it is entitled to reject such an agreement and refuse registration when, in its view, the products of interest for the parties have a "competitive connection".

In the case at hand, Avon Products Inc declared an interest in using the RADIANT SILVER mark in respect of "hair care products, mainly, shampoos, conditioners, hair atomizers, hair gels, hair spurts, hair lotions, hair mousse, hair ointments, hair creams, hair masks and hair mascara". It came to an agreement with Unilever NV in relation to the coexistence of the RADIANT SILVER mark with Unilever's RADIANT registration, which covers "detergents; cleaning preparations and other substances for use in laundry; cleaning, polishing, scouring and abrasive preparations; soaps".

Notwithstanding the agreement, the National Authority refused to allow the registration of RADIANT SILVER on the grounds that, pursuant to Legislative Decree 823, the products at issue had a competitive connection. Avon applied for judicial review.

The Supreme Court overturned the decision and allowed registration.

The decision by the Supreme Court, even though it does not constitute a mandatory precedent, sets out useful guidelines with regard to coexistence agreements. It noted that the parties to such an agreement must designate with sufficient clarity the products to be distinguished by each mark in a way that avoids a competitive connection and eliminates the risk of confusion. The Supreme Court next stated that, under the rules in Article 158 of Legislative Decree 823, an objection by the National Authority to a coexistence agreement or letter of consent during an examination proceeding must be based on evidence that the general interest of the consumer will be affected by the registration.

José Barreda, Barreda Moller, Lima