Concept of use in cancellation actions clarified

The Administrative Court has reversed a decision of the Trademark Office that ordered the cancellation of the trademark FAMILIA on the grounds of non-use (Resolution 0030-2008/TPI-INDECOPI, January 3 2008).

Productos Familia SA filed a cancellation action on the grounds of non-use against the trademark FAMILIA (Registration 81471), which is owned by Kimberly-Clark Worldwide Inc.

The Trademark Office ordered the cancellation of the trademark. The office based its decision on market studies according to which Kimberly's FAMILIA-branded goods represented a very small share of the market (approximately 0.04% for toilet paper and 0.02% for paper napkins). The office had requested a technical opinion by the economic branch of INDECOPI. Considering the share of other goods marketed by Kimberly, the economic branch had held that the sale of FAMILIA-branded goods and use of the mark were insufficient to establish rights in the FAMILIA mark.

The Administrative Court reversed the decision, finding that the mark was in use. The court relied on decisions of the Andean Court of Justice, which stated that use of a mark must be real and effective (eg, Cases 17-IP-95, 11-IP-96, 22-IP-2005).

The Administrative Court held that under the Trademark Law, non-use of a mark during the three-year period preceding the filing of a cancellation action will result in the cancellation of the trademark. The court stated that the purpose of the law is to:

• strengthen the role of trademarks as a link between a symbol and a product; and
  
  
• remove from the registry all trademarks which do not exist in the marketplace, thereby providing third parties with the opportunity to register identical or similar marks.

The court held that where a mark identifies goods that are present in the marketplace, the authority in charge of the opposition proceedings should determine whether use of the mark is effective. In doing so, the authority need not assess the size or characteristics of the entity that owns or uses the mark, but need only consider the mechanisms adopted in order to market, promote, publicize, manufacture or distribute goods bearing the mark.

Therefore, the court held that a trademark will be cancelled only where use of the mark is:

• inappropriate in light of the nature and marketing of the products; or
  
  
• fraudulent or fictitious (ie, the registrant has no economic interest in the products or services distinguished by the mark and uses it only to maintain its trademark rights).

It is the first decision by the Administrative Court which defines the concept of use. The Trademark Office should follow the criteria set forth by the court.

Jose Barreda, Barreda Moller, Lima