Court of Appeals issues decision on certification marks

The Puerto Rico Trademark Act of 2009 allows for the registration of certification marks in Puerto Rico. The act defines a 'certification mark' as any word, image, symbol, trade dress, sound, colour or combination of any of these that is used to certify the origin, mode of manufacture, quality or compliance with certain standards (10 LPRA § 223). In addition, to be registered as a certification mark, the act requires the mark to be used by someone other than the trademark owner (Id).

An example of a certification mark used in Puerto Rico is the name Parador (roughly translated as 'stop place'), which identifies lodges that comply with certain quality standards, are located outside of a metropolitan area and close to natural or manmade attractions, and comply with certain architectural requirements (Rule No 7886, Tourism Company, April 8 2010). The trademark is owned by the Tourism Company of Puerto Rico, a public instrumentality. The Tourism Company evaluates lodges and certifies them into the Parador programme. Certified lodges can use the PARADOR trademark. As the trademark owner, the Tourism Company has the right and obligation to ensure compliance with the Parador programme and to protect the mark from unauthorised uses.

On March 12 2014 the Puerto Rico Court of Appeals confirmed an order from the Court of First Instance enjoining a lodge from using the mark PARADOR as part of its commercial name (Compania de Turismo de Puerto Rico v Oasis Inn Corp (2014 WL 1713994 (2014))). The lodge had previously been part of the Parador programme, but was decertified by the Tourism Company for lack of compliance with the programme's requirements. After its removal from the programme, the lodge continued to use the mark in its name Parador Oasis.

The Tourism Company filed a preliminary and permanent injunction suit against Parador Oasis, claiming that consumers could confuse the lodge’s name and the Tourism Company’s certification programme. Parador Oasis’ main defence was laches. It argued that it had continued to use the name Parador Oasis for a decade after being removed from the Parador programme, without notice or complaint from the Tourism Company.

The court concluded that, in addition to being a registered trademark, the Parador programme was created by legislation which conferred on the Tourism Company the rights and obligations related to the mark. Laches could not prevent the Tourism Company from exercising a legal right and obligation, particularly taking into account public policy considerations.