Industrial Property Department clamps down on device mark registrations

In the decisions of Unilever Bestfood Chile SA v Distribución y Servicio D&S SA (Case 569.317) and Unilever NV v Distribución y Servicio D&S SA (Case 572445), the Industrial Property Department has set strict criteria for the registration of device marks. The department held that a device mark registration application should be refused if its design features are confusingly similar to a prior registered device mark, even if the wording used in the later application is different. This means that a trader will no longer be able to register a device mark made up of its own branding on packaging similar to that of a leading brand.

Unilever brought two separate opposition actions against a large supermarket chain - Distribución y Servicio D&S - following its applications to register device marks for the packaging of its corn starch and a domestic cleaning product. The packaging designs, forming part of each registration, were very similar to counterparts manufactured by Unilever. However, the wording used by D&S in its device marks differed from that used by Unilever. The wording only featured references to the generic name of the product and D&S's own branding. In spite of these differences, Unilever argued that D&S's device marks were confusingly similar to its own prior registrations.

The Industrial Property Department agreed with Unilever and rejected the applications. The department held that a device mark registration application should be refused if its design features are confusingly similar to a prior registered device mark, even if the wording used in the later application is different. The department reasoned that since D&S's registrations imitated the design features of Unilever's registered device marks and D&S had merely substituted Unilever's trademarks with generic names, consumer confusion was likely.

These decisions mark a change in the department's policy. Until now, it has been willing to allow device mark registrations that imitate the layout or trade dress of the leading brand. The marks have then been protected at the same level as the original product's device marks. It is expected that these decisions will prompt a flood of cancellation actions as the legal grounds for opposition and cancellation are the same. Cases involving infringement actions may also be affected because Article 16 of the Chilean Industrial Property Law requires the courts to consult with the Industrial Property Department on such matters.

Juan Pablo Egaña, Sargent & Krahn, Santiago