Time frame for opposition mediation process clarified


In Instituto Sidus SA v Astra Aktiebolag (Case 2947/99), the Supreme Court of Justice has clarified the law on the mandatory mediation process that forms part of trademark opposition procedure in Argentina. It rejected previous case law and held that the time frame for the mediation process, which must take place prior to the commencement of any court action, is not limited to one year.

In 1995 Law 24,573 on Mediation and Conciliation was enacted in Argentina. This legislation requires that prior to filing a court action in relation to, among other things, a trademark opposition, the relevant parties must take part in mediation proceedings. Law 22,362 (the Trademark Act) provides that the party defending an opposition action has a one-year period as from the date of official notification of the opposition to start negotiations for a settlement with the opponent resulting in the withdrawal of the opposition. If no settlement is reached (ie, if the opposition is not withdrawn) within that time, the defending party should bring a court action against the opponent in an effort to obtain a declaration that the opposition is unfounded.

Following the implementation of Law 24,573, a number of questions arose as to the exact time limit on the mediation process, with particular reference to the Trademark Act's stipulation that if the parties have not settled their differences within the specified one-year period court action should commence.

In a bid to clarify the law in this area, the Federal Court of Appeals held, in 1997, that the mediation process should be commenced and completed within the one-year period provided by the Trademark Act. Thus, according to the court, the defending party would need to summon the opponent to a mediation hearing and close the mediation process within one year if it wanted to file an action in the courts. The court's ruling, however, has caused problems for parties involved in opposition mediation. On many occasions, it has forced the parties into closing the mediation process after one year - even if they were still negotiating a settlement. The settlement agreement has then often been finalized after the initiation of court action.

The Supreme Court of Justice's ruling in the case Instituto Sidus SA v Astra Aktiebolag has now modified the criteria established by the Federal Court of Appeals and the various trademark administrative authorities. In that case, it held that the compulsory mediation process should be commenced within the one-year period provided by the Trademark Act. However, the Supreme Court stated that the mediation process does not need to be completed within that one-year period to permit the commencement of court action, should it prove necessary.

The Supreme Court reasoned that there is no legislation forcing the parties to conclude the mediation process within the term provided by the Trademark Act. It stated that to hold otherwise would be excessively formalistic, since the aim of this legal remedy is to allow the parties to come to a settlement; it should not be used to obstruct this process.

Alberto R Berton-Moreno Jr, Sena & Berton Moreno, Buenos Aires

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