Supreme Court issues important decision on ex officio refusal of applications

The Chilean Supreme Court has issued an interesting decision stating that trademark cases arising from an ex officio refusal must be assessed according to the principle of reasoned judgment, in the same way as when an opponent is involved.

By means of Application No 960.979 dated July 12 2011, Holding Benjamin et Edmond de Rothschild, Pregny Société Anonyme (Switzerland) applied for the registration of EDMOND DE ROTHSCHILD as a trademark for services in Classes 35, 36, 38 and 41 of the Nice Classification. No opposition was filed.

The head of the National Institute of Industrial Property (INAPI) rejected the application for Classes 35 and 36 in view of the earlier registration for the trademark ROTHSCHILDS, which was owned by Shield Trust Ltd and covered services in Class 36.

The applicant appealed to the Industrial Property Court, which confirmed the decision of the head of INAPI on the same grounds.

The applicant filed a cassation recourse before the Supreme Court, alleging that the decision infringed Article 16 of the Chilean IP Law, which states that the evidence must be assessed according to the principle of reasoned judgment.

According to the applicant, the error stemmed from the fact that the differences between the signs, which were an essential factor, had not been properly examined. Further, the applicant claimed that the contested decision had not taken into account the evidence demonstrating the pacific coexistence of the marks and, further, had not considered the relationship existing between their owners. Therefore, the applicant argued that the contested decision was not based on a rational conclusion regarding the protection of the trademark applied for.

The Supreme Court, in a final decision, accepted the recourse filed by the applicant and reversed the Industrial Property Court’s decision on the following grounds:

• The denomination EDMOND DE ROTHSCHILD, considered as a whole, was distinguishable from ROTHSCHILDS and fulfilled the essential function of a trademark, which is to identify the goods or services of a particular undertaking;

• Shield Trust's ROTHSCHILDS sign had coexisted for a long time with the mark applied for, both in Chile and in other countries, for services in the same classes, without any evidence of confusion, error or mistake regarding the corporate origin of the services; and

• The absence of opposition to the registration of a trademark used for at least four years in Chile and in 50 other markets demonstrated the lack of confusion within the group of consumers who are familiar with the relevant services.

Arguably, the decision constitutes a very important precedent for the following reasons:

• It stresses that an ex officio refusal by the trademark authorities must be well grounded in law - this was not the general rule in Chile;

• The evidence filed by the interested party must be carefully and properly assessed; and

• The lack of opposition by the owner of the cited trademark must be taken into account.

Sergio Amenábar, Estudio Villaseca, Santiago