Nº1 mark lacks distinctiveness

The Administrative Court has upheld a Trademark Office (TO) decision to refuse registration of the service mark Nº1 on the grounds that it lacked sufficient distinctive character (0462-2004/TPI-INDECOPI).

IDT Peru STL applied to register the service mark Nº1 with the TO for credit card services and prepaid telephone calling card services in Class 36 of the Nice Classification. The TO refused registration stating that the mark lacked distinctiveness, especially as it had no additional figurative elements that would enable consumers to establish that the services originated from a specific source. The TO added that the proposed mark simply made reference to a characteristic of the services it was meant to distinguish, namely that they were, according to IDT Peru, the best in this field of business. It was, therefore, a laudatory sign commonly used in advertising by various third parties providing similar services. IDT Peru appealed.

The Administrative Court upheld the TO's decision and refused registration. It stated that the proposed mark could not be registered pursuant to Article 135(e) of Andean Community Decision 486 on a Common Industrial Property Regime, which provides that signs may not be registered as trademarks when they:

"consist solely of a sign or statement that may serve in commerce to designate or describe, in respect of the goods or services for which they are to be used, their quality, quantity, purpose, value, geographical origin, or time of production, or that impart other details, characteristics, or information, including expressions of praise for those goods or services."

The Administrative Court referred to a previous decision in which it established that the number one, when used in association with a product or service, although not a direct reference to the qualities or characteristics of the product or service, is perceived to be an indication that the product or service has acquired a superior position or is the best in the market in some respect. The Administrative Court held that it could not grant exclusive rights in such a sign to a specific party as this would prevent that party's competitors from using the sign.

Gonzalo Ferrero, Ferrero Diez Canseco & Asociados, Lima