Chile: Turbulent Year Sees IP Rethink and Introduction of Madrid Protocol

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In summary

As of May 2022, important changes have been implemented to Industrial Property Law 19,039, ranging from the introduction of non-traditional trademarks, the incorporation of a revocation action due to non-use or loss of distinctiveness, an improvement in the regulation of collective and certification trademarks and a modification in the trademark renewal period. Likewise, as of 4 July 2022, the Madrid Protocol entered into force in Chile, which has led to some legal questions, especially regarding its implementation.


Discussion points

  • Registration of non-traditional trademarks under Law 19,039
  • Modification of deadlines for renewal of trademarks
  • Creation of regulation of collective and certification marks
  • Chile’s designation as a recipient of international trademarks

Referenced in this article

  • IP Law 19,039, of 1991 and its Regulation
  • Amendment Law 21,355, which introduces changes to IP Law 19,039
  • Exempt Resolution 135 of 2022, which approves instructions for the processing of trademark matters
  • Exempt Resolution 140 of 2022, which approves instructions for the processing of collective marks and certification
  • Exempt Resolution 184 of 2022, which approves instructions for the processing of international trademarks under the Protocol Relating to the Madrid Agreement
  • Protocol Relating to the Madrid Agreement and its Regulation

Recognition of non-traditional trademarks and review of some important aspects of prosecution of trademarks

On 9 May 2022, several changes to the Industrial Property (IP) Law (Law 19,039 of 1991) came into force (under Amendment Law 21,355 of 2022), expanding the concept of trademarks and the types recognised. These improvements were made possible thanks to the elimination of the requirement for a graphic representation of a trademark and the recognition of the general rule that any sign capable of distinguishing goods and services could qualify as a trademark. Notwithstanding the fact that, other than the traditional marks,[1] the IP Law mentions only olfactive, 3D and sound marks, according to the trademark office (TMO) Guidelines, it also covers other possibilities, such as colour combination, movement, multimedia, hologram and position trademarks. This suggest that the list is not exhaustive and, as technological changes are generated, other non-traditional brands could be incorporated.

The technical requirements for the representation of each of the non-traditional trademarks mentioned above (formats, dimensions, file weights, etc) have been regulated by the TMO through Exempt Resolution 135 of 2022, which approves instructions for the prosecution of trademark matters.

Undoubtedly, the regularisation of non-traditional trademarks is a long overdue response to technological changes. Currently, the holders of unregistered trademarks only have the right to oppose a trademark application by a third party or to apply for the invalidation of a trademark registration in the following cases:

  • when the unregistered trademark has been actually and effectively used in Chile prior to the application for registration by a third party for the same or a similar trademark for identical or similar goods or services in the same class or related classes, and the coexistence may create confusion; and
  • when the unregistered trademark is famous or notorious and is registered abroad but not in Chile, and this trademark is identical or similar to a trademark requested in Chile to distinguish the same products or services – a situation that may create confusion. This claim must be supported by evidence of fame or notoriety among the relevant consumer public in Chile.

Moreover, the Chilean Institute of Industrial Property (INAPI) may reject an application based on an unregistered prior mark, provided that the existence of the unregistered trademark that serves as the basis for an opposition is publicly known to the extent that its renown does not require evidence.

If the owner of a famous unregistered mark is successful in an opposition or cancellation action, he or she will be granted a period of 90 days from the date of the decision to apply for registration of the mark in his or her name. Failure to do so entitles any third party to file an application for that mark, with priority being given to the party whose application for registration was rejected as a consequence of the opposition or invalidation action. The 90-day term applies to those that successfully oppose an application on the basis of previous use in Chile.

Despite this new concept of what constitutes a trademark under the IP Law (ie, any sign capable to distinguish products and services), there is a varied list of things that cannot be a trademark, such as:

  1. coats of arms, flags or any other symbols, names or initials of any state or international organisation, or state public service;
  2. technical or scientific denominations in respect of objects for which they are destined, plant variety denominations, common international denominations recommended by the World Health Organization and those indicative of therapeutic action;
  3. the name, pseudonym or picture of any natural person, except if consent is given by that person, or his or her heirs if deceased. However, the name of a historical celebrity may be registered if at least 50 years have elapsed since his or her death and the registration does not affect the personality’s honour. A person’s name cannot be registered if it constitutes an infringement of any of the signs described in points 5, 6 and 7, below;
  4. reproductions or imitations of signs of official guarantee or control stamps adopted by a state without its authorisation, and reproductions or imitations of medals, diplomas or honours granted in national or foreign exhibitions whose registration is requested by someone other than the person who obtained them;
  5. expressions or signs used to indicate the kind, nature, origin, nationality, source, destination, weight, value or quality of the products or services, those of general use in trade to name a certain kind of product or service, and those that exhibit no innovative feature or that describe the products or services to which they must be applied. However, signs that are not inherently distinctive may be registered if they have acquired distinctive character through their use in the country;
  6. signs that may induce error or deceit regarding the source, quality or kind of product or service;
  7. signs that are identical to other marks, or that graphically or phonetically resemble other marks that have been registered abroad for the same products or services in a manner likely to create confusion, provided that the prior marks are famous or notorious;
  8. trademarks that are identical or similar to prior well-known Chilean registered trademarks, requested for different classes, however related, if the registration could affect the interests of the owner of the well-known trademark;
  9. signs that are identical to, or that graphically or phonetically resemble in a confusing manner, other trademarks that are already registered or have validly been applied for earlier marks in the same class, or that have effectively been used in Chile prior to the application date. INAPI may allow coexistence agreements, as long as they do not affect the prior rights of third parties or cause consumer confusion;
  10. the shape or colour of either products or containers, and colours themselves;
  11. protected geographical indications and appellations of origin; and
  12. signs that are contrary to public order, morality and good behaviour, and the principles of fair competition and business ethics comprised therein.

The processing of non-traditional trademarks will follow the same rules as classic trademarks, that is, each trademark application is subject to an examination to determine whether it meets the formal requirements, including whether the application specifies the goods or services of the Nice Classification for which registration is sought. The TMO (INAPI) notifies the applicant of any changes required. The applicant has 30 working days to file the necessary corrections. Failure to do so will result in the application being deemed abandoned. If there are no formal objections or any objections have been corrected in a timely manner, the application is accepted for further processing and published in the Official Gazette within 20 working days for opposition purposes.

After publication, the application is subject to substantive examination. Any objections must be filed within 30 working days of notification, and any interested party may file an opposition within 30 working days of publication. The opponent may base its opposition on any of the grounds to reject an application provided by the law.

Applications that have passed the formal and substantive examinations and are unopposed, or that have overcome any objections or opposition by a final decision, are accepted for registration. Mark owners have 60 working days from that date to pay the registration fees. Registration is granted for an initial period of 10 years, renewable indefinitely for consecutive periods of 10 years.

A granted registration can be divided during cancellation action proceedings or during an appeal against a decision in a cancellation action.

Response times by the TMO during the processing of a trademark application have been affected by the covid-19 pandemic, Amendment Law 21,355 and the Madrid Protocol. However, based on the response times at the time of writing, we can generally indicate the following:

  • eight to 10 months for an unopposed application to proceed to registration;
  • 18 months for an opposition procedure to reach a first-instance decision (and a further 24 months for an appellate decision to be given);
  • 20 days for a renewal to be accepted;
  • three to four weeks to record mergers and changes of name; and
  • two to three years for a cancellation action at first instance, between six months and a year at second instance and about eight months if a further recourse is filed before the Supreme Court, and three months for renewals.

Finally, given the recent modifications referred to above, it is too soon to see any trends in these new types of trademark applications, but we expect these to develop by the end of 2023.

New trademark cancellation actions

First, prior to the amendments to Law 19,039, a trademark registration could only be cancelled in two ways:

  • Voluntary withdrawal: Any party can voluntarily withdraw a registration. When made through a representative, special powers are required.
  • Invalidation action: Registration granted to signs deemed unprotectable by the IP Law may be invalidated on the basis that prohibitions for granting registration were ignored. Such an action must be filed within five years of the registration date. Notwithstanding, there is no time limit for filing an invalidation action against a mark registered in bad faith. This kind of action is heard at first instance by the head of INAPI and at second instance by the Industrial Property Court. In some circumstances, decisions of the Industrial Property Court may be appealed before the Supreme Court.

With the changes introduced by Amendment Law 21,355, a revocation action for lack of use is now available in Chile. As of 9 May 2022, the following revocation scenarios are possible.

First, for new trademarks, a registration granted after 9 May 2022 will be cancelled if the trademark has not been put to real and effective use in the Chilean territory within five years of when registration was granted, either by the owner or by a third party with his or her consent, to distinguish one or more of the goods or services for which the registration was granted; or use was suspended without interruption for the same period.

Nevertheless, Amendment Law 21,355 grants a grace period for those trademarks that were registered prior to 9 May 2022, establishing that, in such cases, the term to exercise the revocation action for lack of use will be counted from the first renewal occurring after 9 May 2022. The revocation action can also be exercised as a defence against a demand for opposition or invalidation.

Last, regarding the real and effective use of products and services in the market, since no cases have yet been presented, no jurisprudence or criteria in this regard have been established by the TMO, the Industrial Property Court or the Supreme Court.

Second, the modification that brought these rules into force also established a cancellation action for when a trademark has become generic. This action can be exercised as of the entry into force of Amendment Law 21,355, that is, from 9 May 2022.

New deadlines to renew trademarks

Prior to the enactment of Amendment Law 21,355, Law 19,039 stated that renewal could be requested only within 30 days of the expiration date of the trademark registration. Payment of fees could be made within six months of expiry of the trademark, subject to a surcharge of 20 per cent for each month that elapses, counting from the first month to elapse after the initial 30-day term.

Previously, renewal fees could only be paid once the TMO had accepted a renewal. The TMO then modified its practice to be in line with the provisions of the Trademark Law Treaty and its Regulations,[2] which apply as of 1 April 2021, ceasing ex officio to apply the rule that had set the 30-day term to apply for renewal as this had become ineffective following Chile’s ratification the Trademark Law Treaty. Thus, it was expressly recognised that renewal could be requested up to six months after expiry of a trademark registration, subject to the same surcharges that were previously established; however, it is now possible to request renewal and pay the fees at the same time.

Amendment Law 21,355 has incorporated into Law 19,039 the practice adopted by the TMO as of 2021. It has also established by law that an application for renewal can be submitted for a maximum of six months before expiry of the trademark. Prior to 1 April 2021, this term was one year before expiry of the trademark.

With these amendments now in place, the Trademark Law Treaty is being correctly implemented in Chile as regards renewals. Owners of trademarks in Chile are using these new deadlines and the TMO has duly recognised them in practice and through its online platform.

Regulation of collective and certification marks

Prior to the enactment of Amendment Law 21,355, collective and certification marks were regulated by the TMO but not by law. The express incorporation of collective and certification marks under IP Law 19,039 has been a big step towards their regulation.

The following definitions now apply:

  • Collective trademark: Any sign or combination of signs capable of distinguishing in the market the products or services of the members of an association with respect to the products or services of third parties.
  • Certification mark: Any sign or combination of signs capable of distinguishing in the market the products or services of third parties, guaranteeing that they comply with common requirements and characteristics.

Certain particularities of each of these marks are now mentioned in Law 19,039: (1) a collective mark may not be assigned to third parties; (2) those who manufacture or market products or services that are identical or similar to those to which a certification mark is to be applied may not be holders of such a mark; and (3) the owner of a certification mark must authorise its use to anyone who complies with the conditions established in the regulations for the use of the mark.

Perhaps the most important requirement for both types of marks is to file with the TMO a regulation of use of the mark, which must contain, among other things:

  • the individualisation of the products or services that will be distinguished by the collective mark, or the products or services that will be the object of the certification;
  • the conditions and modalities for the use of the mark;
  • the circumstances under which someone may be denied the right to use the certification mark;
  • the requirements for affiliation of a collective mark;
  • a description of the methods of control of a mark;
  • the rights and the duties of the users of a mark, and the sanctions for non-compliance by users; and
  • the manner of modifying the regulations for use.

Furthermore, the TMO has the power to review and object to the regulation of use, at the stage of formal or substantive examination, if in its opinion the law has been infringed or if it contains provisions that are contrary to public policy or that may be misleading.

Other requirements of the regulation of use are established in Exempt Resolution 140 of 2022, which approves instructions for the processing of collective marks and certification.

Finally, since the modifications referred to above have not been introduced until recently, there are not yet any clear trends in these new types of trademark applications; however, these are likely to emerge by the end of 2023.

Implementation of Madrid Protocol in Chile

The TMO has decided to interpret the Madrid Protocol as being self-executing, and that, therefore, there is no need for a reform to Law 19,039 to apply it. Nevertheless, the TMO has drawn up instructions for the processing of international trademarks under the Protocol relating to the Madrid Agreement under Exempt Resolution 184 of 2022, which establishes the following, among other things:

  • The national regulations will apply to the international trademarks of the Madrid Protocol, but subject to the particularities that the instructions establish.
  • In the face of any conflict that arises between national regulations and the Protocol and its regulations, the latter will prevail.
  • The instructions have set a period of 60 days, counted from the communication that the TMO makes to the International Bureau of the World Intellectual Property Organization (WIPO) on the provisional refusal, for the holder of the international registration to respond to an opposition or an ex officio objection. Note that the standard term established in Law 19,039 is only 30 days for both circumstances, whether they are national or foreign applicants, which establishes an important difference that could be considered contrary to equality before the law.
  • The foregoing presents a practical problem since it is unclear how or when the applicant and the opponent will become aware in the national file that the notice of provisional refusal has been sent by the TMO to WIPO, creating uncertainty for both parties.
  • There is another practical problem in respect of the counterclaim for expiry because of lack of use that can be exercised by the defendant in an opposition procedure. In accordance with Law 19,039, that term is 30 days but in this situation, it could be extended to 60 days.
  • An internal gazette has been created by the TMO to begin calculating the 30-day term established by Law 19,039 to file an opposition against the international trademarks that have been designated to Chile. This establishes an institution other than the one established in Law 19,039, which provides that publications, for the purposes of calculating the opposition period, must be made in the official gazette.
  • The TMO has decided that it is not necessary for international owners to designate a representative in Chile except when they have to act before the TMO; however, the current regulations under Law 19,039 stipulate that foreign residents must designate a representative in Chile in any situation. This contradiction could create a further practical problem.

All these issues are under development, and we hope that they can be resolved soon, since it is important that users of the Madrid system have clarity regarding the way in which they can exercise their rights and that these are duly regulated.


Footnotes

[1] Exempt Resolution 135 of 2022, which approves instructions for the processing of trademark matters.

[2] Trademark Law Treaty, article 13(1)(c) and Regulations under the Trademark Law Treaty, Rule 8.

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