Controversial Council of State decision might affect foreign mark owners

Colombia

The Colombian Council of State has issued a controversial decision within the context of nullity proceedings. The decision is pending confirmation on appeal; if confirmed, it will have dramatic consequences for trademark owners around the world who are interested in protecting and enforcing their rights in Colombia.

The plaintiff was a US-based corporation involved in the health and wellness industry. In 2009 it sought to penetrate the Colombian market and filed an application for the registration of its main trademark before the Trademark Office; however, an identical mark was already registered in the name of a third party that was unconnected to the plaintiff. The owner of the Colombian trademark presented himself on several websites as the plaintiff’s distributor in Colombia.

The plaintiff initiated nullity proceedings on the grounds that the application for the Colombian mark had been filed in bad faith under Article 172 of the Andean Community Decision 486 on a Common Industrial Property Regime. Article 172 provides that the competent national authority shall, either ex officio or at the request of a party, declare the registration of a trademark to be null and void where it has been granted in contravention of the provisions of Articles 134 and 135, or where it has been obtained in bad faith. These proceedings are distinct and independent from nullity actions established under the domestic law of the Andean Community member countries.

The Council of State refused to admit the plaintiff's claim because the latter had not filed legal remedies before the Trademark Office, whose resolution it sought to have annulled. The councillor in charge of the proceedings admitted that he had compared nullity proceedings under Decision 486 with nullity actions and actions for the reestablishment of rights under Article 86 of the Colombian Contentious Administrative Law. Filing legal remedies against the administrative act that is the subject of the nullity action is a precondition for the filing of nullity actions under domestic law. The Council of State concluded that both types of action were equivalent and that the admissibility requirements for domestic actions were applicable to Community actions. 

However, the plaintiff could not have filed legal remedies against the resolution that it sought to have annulled, because it had not filed an opposition against the trademark at issue during the administrative registration process. According to Article 146 of Decision 486, filing an opposition against an application is voluntary, rather than mandatory. Yet, according to this decision, if a party intends to access justice by using the Community nullity action, it must have filed an opposition against the trademark at issue in the first place. As a result, filing an opposition would be an admissibility requirement and, therefore, would be mandatory in Colombia.

In addition, this decision suggests that filing a nullity action on the grounds of bad faith would be ineffective. If the decision is confirmed, trademark owners around the world will have to file oppositions against trademarks that are identical or confusingly similar to their registered marks, even if they are not yet interested in entering the Colombian market. Otherwise, as the plaintiff in this case, they might miss the opportunity to challenge those registrations and might not be able to register their trademarks in Colombia in the future.

The case is important not only from a legal point of view, but also from an economic perspective. Over the past nine years, Colombia has tried to attract foreign investors and has negotiated several free trade agreements, including with the United States. The present decision would clearly deter foreign investors, since it impedes their access to justice. Arguably, for the sake of the trademark registration system, this decision should be revoked.

Fernando Triana, Triana Uribe & Michelsen, Bogota

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