Court considers good-faith use of descriptive trademarks

The Second Criminal Court of Guarantee in Santiago has issued its decision in an infringement case involving the trademark SUPREMO.
Local firm Cambiaso Hnos SAC is the owner of Chilean trademark registrations for SUPREMO and SUPREMA for tea and herbal tea in Class 30 of the Nice Classification. It filed a criminal action against Carlos Pastene, as representative of the firm Pibamour Ltda. Pibamour imported Dilmah tea bearing the phrase 'Ceylon Supreme Tea' on the packaging.

Although the trademark DILMAH was registered in Chile in the name of Merrill J Fernando & Sons, the manufacturer of the tea, Cambiaso claimed that use of the word 'Supreme' - the English for 'Supremo' and 'Suprema' - violated its exclusive rights over the registered trademarks SUPREMO and SUPREMA.

Pastene and Pibamour countered that, although SUPREMO and SUPREMA were registered trademarks of Cambiaso, the word 'Supreme' was not used to distinguish the origin of the products, but to describe their quality. This was demonstrated by the fact that 'Supreme' was used together with the word 'Ceylon', which indicates a variety of tea. In other words, the goods were sold under the trademark DILMAH and 'Supreme' was used only to complement the mark. Further, the defendants showed that other distributors and manufacturers of tea used the word 'Supreme' in a descriptive manner on their labels.

The allegedly infringing labels were sent to police experts for analysis. The expert report concluded that, although Cambiaso owned the registered trademarks SUPREMO and SUPREMA, the defendants' use of the word 'Supreme' did not create a likelihood of confusion among consumers.

In December 2011 the Second Criminal Court of Guarantee in Santiago held that the case should be dismissed, as the facts that were the object of the action did not constitute trademark infringement.

The decision is significant because, according to consecutive changes in criteria at the Chile Trademark Office, terms that are at the limit between suggestive and descriptive can be protected as trademarks. Although the decision is not extensively grounded, it suggests that third parties can use suggestive or descriptive trademarks in good faith - that is, where the suggestive/descriptive term is not used as a trademark, but accompanies the trademark to indicate the quality or other properties of the goods.

Sergio Amenábar, Estudio Villaseca, Santiago

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