Confusing similarity need not be basis for non-use actions

The Court of Appeals of Argentina has issued two decisions that confirm that the reasons for cancelling a mark on the grounds of non-use are not limited to the elimination of a risk of confusion. Applicants may have other legitimate reasons for bringing such an action, including preventing the current owner from using the mark in order to strengthen the position of the applicant's own mark.

In the first case (Case 5257/99, December 10 2003), the Court of Appeals rejected the application by Fournier Industrie et Santé to cancel the mark LIPIDIUM for non-use. Fournier applied for and registered its LIPIDIL mark in Class 3 of the Nice Classification after Laboratorios Bagó SA had registered the LIPIDIUM mark.

At first instance, the court established that Fournier did not have a legitimate interest to ask for the cancellation of the mark because Fournier had argued that there was no risk of confusion between LIPIDIL and LIPIDIUM when it applied for the registration of its own trademark. Fournier appealed.

Despite finding the marks confusingly similar and, accordingly, reversing the first instance ruling, the Court of Appeals analyzed the legitimate interest issue. It stated that an applicant can have a legitimate interest in bringing a non-use cancellation action for reasons other than the elimination of a perceived risk of confusion. In the court's opinion, legitimate interest can include cancellation of a mark to allow the applicant to register the mark itself or prevent the current owner from later using a mark that the applicant considers to be attractive.

In Saenz Briones y Cía SA v Goyeneche SA (Case 8434/99, February 17 2004) another chamber of the Court of Appeals dealt with the same issue. Saenz Briones y Cía SA owns the marks GRAN SIDRA REAL and REAL in Class 33. Goyeneche SA owns the mark TERO REAL in the same class. Both marks had coexisted for more than 25 years. Saenz filed an action to cancel TERO REAL.

The first instance court rejected the cancellation action. The Court of Appeals affirmed the decision, recognizing that the trademarks at issue were not confusingly similar. The court had to decide if "the mere will to strengthen one's trademark through the suppression of the registration of another sign that in some way has an aptitude to dilute the distinctive value of one's own mark" could be considered legitimate interest. The court reiterated that wide criteria should be applied when assessing whether an applicant has a legitimate interest in cancelling a mark. Accordingly, it accepted that preventing another party from using a mark in order to strengthen the position of the applicant's own mark can be a legitimate interest. However, in this case it refused to cancel Goyeneche's mark as it had been used within the required legal term.

Jorge Otamendi, G Breuer, Buenos Aires