Dominican Republic: Key Improvements To and Challenges In the Current Trademark Prosecution Landscape

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight


In summary

This article provides an overview of the most relevant improvements in the past couple of years in the prosecution landscape of Dominican Republic, including the issuance of digital certificates for registration, recordals in ownership and renewals, and recordals of pledges concerning IP rights. It also highlights relevant updates on how the protection of trademark rights can be affected by the criteria used by examiners and the courts. We also explore the main
challenges of trademark protection, which primarily affect famous marks.


Discussion points

  • Technological developments in the trademark prosecution field
  • New pledge law that affects security interest records for trademarks
  • Recent criteria adopted by examiners in analysing the use of trademarks
  • Updates on the competence of contentious administrative jurisdiction in appeals against Patent and Trademark Office (PTO) decisions
  • Approach by the PTO in the recognition of well-known trademarks

Referenced in this article

  • Decree No. 260-18
  • Law 20-00 on Industrial Property, article 95
  • Law 45-20 on Security Interest on Movable Property
  • Electronic System of Security Interest on Movable Property (SEGM)
  • Joint Recommendation Concerning Provisions on the Protection of Well-Known Mark approved by WIPO

The Dominican Patent and Trademark Office (PTO) is one of the most advanced in the Caribbean and Central America. Directors and examiners strive to keep up with the most relevant jurisdictions in the intellectual property (IP) field. Aside from the substance of the law, it is also pushing forward to apply technological tools to help with the prosecution of IP rights in the Dominican Republic.

The technological advances are also part of a more extensive government project, named ‘Digital Republic’, which consists of creating mechanisms to encourage innovation and competitiveness to facilitate trade and attract foreign investment. One of the main objectives of this project is to reduce unnecessary administrative hurdles, including the digitalisation of many services.

All of the above has triggered multiple digital developments, such as the issuance of digital certificates and the creation of a new system for the registration of pledges.

Furthermore, there have been notable decisions that shape considerations on the use of trademarks during a cancellation action proceeding, and updates on a long-standing dispute concerning the competence of the Supreme Administrative Court to rule on appeals against decisions issued by the Dominican PTO.

Although all these advances are favourable and truly show the commitment of local authorities to the protection of IP, there are still factors that can hinder the protection of famous marks in the Dominican Republic.

Technological developments in trademark prosecution

Background

In 2018, the Dominican PTO issued Decree No. 260-18, which enabled a quicker registration process for trade names and established a mandatory e-filing system for new trade name and trademark applications.

Although this new system made it easier for the examiners to enter the information into the Dominican PTO’s database, in practice this had no benefit since the mandatory e-filing system still had to be validated by hand to ensure a proper filing date.

What is new?

During the pandemic, the Dominican PTO enhanced its efforts to provide a reliable online platform, where no physical validation was needed. The complete prosecution process was improved by removing paper registration certificates once and for all. In fact, official actions and approvals were also being served in digital format through the Dominican PTO’s system.

The following statistics show that implementation of the new system has generally resulted in a consistent increase in the number of trademark filings.

Dominican PTO’s trademark filing statistics

YearNumber of trademark filings
201910,458

2020

10,158

202112,445

2022

13,655

In spite of the onset of the covid-19 pandemic early in 2020, trademark filings only decreased by 3 per cent compared with 2019.

The same process of digitalisation was later followed for recording changes of address, for which digital certificates were issued. The Dominican PTO also recently implemented digital renewal certificates for trademarks and trade names.

These steps provide a more cost-efficient process for registrations, records and renewals, since it allows smoother proceedings and removes the costs arising from sending original copies of certificates by courier.

New law affecting security interest registration of IP rights

Background

IP owners have the ability to leverage IP assets by granting a creditor or lender security interest in all or any of their intellectual property.

These security interest agreements must be registered with the corresponding entity, which is usually the Dominican PTO. Prior to January 2023, the security interest agreements had to be registered with the Dominican PTO for them to have legal effect.

Developments

Law 45-20 on security interest on movable property, which came into force on 20 January 2023, also regulates IP rights as intangible property.

This new law creates a digital registration system for pledges – the Electronic System of Security Interest on Movable Property (SEGM) – the aim of which is to create leverage in movable property as a security interest by having a single system to streamline the registration, publicity and execution process.

Important changes

The changes introduced by Law 45-20 include the following:

  • Legal effect: Although Law 20-00 on Industrial Property provides that the legal effect of a security interest is upon registration with the Dominican PTO, the new law clearly states that the same has legal effect as soon as the agreement is signed by the parties, and it is effective against third parties when it is published by means of registration through the SEGM.
  • Registration system: The registration of a security interest of intellectual property will be identical to all other personal property rights. Therefore, its registration will not be with the Dominican PTO but through the SEGM. In fact, the law requires the Dominican PTO to post a publication on its website indicating that the security interests affecting the IP rights that are managed by the PTO should be registered and published through the SEGM.
  • Effects on due diligence: Investigations before the Dominican PTO will no longer be sufficient to clear trademarks and patents for potential assignments, mergers and acquisitions, or new pledges against IP rights.
  • Registration duration: Registration under the SEGM is for five years, unless the parties agree otherwise, and may be renewed as needed.

Since Law 45-20 has come into force only recently, there are still many details to be defined by local authorities. It remains to be seen whether the Dominican PTO will check the SEGM before allowing registration of ownership or cancellations of trademark and patent registrations.

Criteria adopted by local examiners in analysis of use of trademarks: preparations for imminent use

Background

Three years after the registration of a trademark,[1] any interested third party may file a non-use cancellation action before the Dominican PTO. In this scenario, the owner of the challenged trademark must file evidence to prove use during the three years prior to the filing date of the non-use cancellation action or provide a reason that justifies the lack of use (the exception).

Among the permitted exceptions, the law clarifies that these are based on facts or incidents beyond the owner’s control, and does not include anything relating to insufficient economic and technical resources. A typical example is the process of obtaining licences or marketing authorisations for the commercialisation of controlled products.

Nevertheless, in the assessment what are acceptable causes, article 95 of IP Law 20-00 establishes that ‘the acts already carried out by the owner for the effective use of the trademark should be taken into account, provided that they reflect a serious intention to put the trademark into use and that such use would be imminent’.

What is new?

This aspect was not previously considered at the local level to safeguard the rights of a registered trademark.

However, in a recent case,[2] local examiners took into consideration this line of argument, setting a valuable precedent by maintaining the registration of a trademark that was not being used in the market but had carried out preparations to put the mark into use in ‘imminently’. The novel aspects of the decision issued by the Dominican PTO are:

  • email correspondence with local distributors for the commercialisation of the product in the Dominican Republic and to obtain marketing authorisation constitute sufficient evidence to show ‘a serious intention to use the trademark;
  • these acts must be carried out prior to the filing date of the non-use cancellation action; and
  • evidence dated after the filing of the action is admitted as long as it is to prove ‘imminent use’ of the trademark, as the second requirement of the exception raised. In the aforementioned case, it was accepted that invoices and photos showing a certain date complied with the requirement.

The criteria followed by the Dominican PTO expand the precedents in this matter, helping trademark owners to be clear about the parameters under which the non-use exception would be accepted, and to protect the efforts already made to use the trademark in the territory.

Updates on the competence of contentious administrative jurisdiction in appeals against PTO decisions

Background

The competence of the Supreme Administrative Court to rule on appeals against decisions issued by the Dominican PTO has been a matter of national controversy for many years now. The discussion has arisen because although the Trademark Law assigns jurisdiction to the civil and commercial courts, a subsequent legislative reform gave rise to contentious administrative jurisdiction and the creation of the Supreme Administrative Court for that purpose. In this conflict of laws, it was not clear whether a decision issued by the Dominican PTO should be appealed before the civil and commercial courts (following Trademark Law) or the Supreme Administrative Court (following the Contentious Administrative Procedural Law).

Although there had already been cases in which the Supreme Court of Justice (SCJ) confirmed the competence of the Supreme Administrative Court where there was only one party involved, some players still considered the civil and commercial courts as the competent courts for when a dispute involved adverse parties, other than the Dominican PTO (eg, an opposition or a nullity action).

What is new?

In a recent case,[3] the Supreme Administrative Court issued a decision that confirmed its own competence to rule on appeals against decisions issued by the Dominican PTO, including when the administrative case involves adverse parties other than the PTO.

This decision is a relevant step forward in the consolidation of the contentious administrative jurisdiction over decisions by the Dominican PTO, bringing clarity to this procedural question and paving the way for the long-awaited specialist IP court in the Dominican Republic.

Challenges in protection: recognition of trademarks as being well known

Background

For many years, the Dominican PTO was flexible in the recognition of a trademark as being well known. Evidence of a trademark’s reputation within the Dominican territory or even, in some cases, evidence from neighbouring jurisdictions, such as recognition in the field of endeavour by third parties, trademark rankings, local and foreign advertising materials or news articles, were all accepted to recognise the reputation of trademarks.

Although the flexibility of the Dominican PTO was usually guided by initial subjective impressions when analysing the evidence provided, this flexible approach led to the protection of international brands known worldwide.

Dominican PTO’s current approach

During recent years, the Dominican PTO has adopted a progressively stricter approach in the recognition of famous and well-known trademarks by claiming that it follows the Joint Recommendation Concerning Provisions on the Protection of Well-Known Mark issued by the World Intellectual Property Organization (WIPO), which states:

[1] [Factors for Consideration] [a] In determining whether a mark is a well-known mark, the competent authority shall take into account any circumstances from which it may be inferred that the mark is well known.

[b] In particular, the competent authority shall consider information submitted to it with respect to factors from which it may be inferred that the mark is, or is not, well known, including, but not limited to, information concerning the following:

  1. the degree of knowledge or recognition of the mark in the relevant sector of the public;
  2. the duration, extent and geographical area of any use of the mark;
  3. the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
  4. the duration and geographical area of any registrations, and/or any applications for registration, of the mark, to the extent that they reflect use or recognition of the mark;
  5. the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognized as well known by competent authorities;
  6. the value associated with the mark.[4]

To apply such a disposition in the Dominican Republic, the Dominican PTO has stated in several decisions that reputation may essentially be established by use of local surveys or market studies, impliedly given a secondary value to other means of proving reputation. The list of acceptable evidence, by order of relevance, is currently as follows:

  • market studies or surveys regarding market share or awareness of the trademark concerned in the Dominican Republic, by an independent or certified agency;
  • evidence of sales and advertising expenditure in the Dominican Republic provided in the form of a statement by a third party (eg, auditor or advertising agency);
  • evidence of exposure in local media (eg, press notes or articles, advertising samples, visits to official websites or social network profiles);
  • brand rankings or recognition by associations; and
  • evidence of registrations worldwide.

This strict approach leads examiners to disregard other type of evidence that may also prove the reputation of trademarks, leaving multiple famous marks unprotected or at least without the broader scope of protection that would provide recognition of their reputation in the relevant field.

After many years without official recognition, the Dominican PTO recognised GATORADE in 2020 as a well-known mark for sports beverages and water consumed during sports activities in class 32. However, this decision follows the same strict approach (ie, market studies are to be filed in order for the examiners to recognise the well-known character). The main reasoning in the decision is as follows:

WHEREAS: After evaluating the abundant evidentiary evidence submitted by the appellant, it is necessary to point out that this Direction of Distinctive Signs has been able to verify the well-known character of GATORADE as a world mark for “sports drinks and waters consumed at times of sport” in international class 32. In this sense, we have been able to validate that GATORADE has a special recognition within the consumer public that distinguishes and prefers it within the category of “sports drinks and waters consumed at times of sport”, as evidenced by the different market studies provided by the appellant, duly stamped and signed by the responsible person, where the place of preference that the mark GATORADE (WORDMARK) occupies against products of the same category is visualized. Likewise, the evidence provided shows the geographical scope of the trademark, which is present in all regions of the country, in addition to sponsoring fairs and sports activities nationwide. All the above, as a result of the intense advertising work carried out by its owner, since it is frequent to visualize propaganda and promotions of the trademark, in the different newspapers of national circulation, some of them deposited in the framework of the present appeal in addition to the strong presence it has in social networks.[5]

Analysis of this case, in comparison with several others, shows that the relevant factor taken into consideration by examiners is the market studies and that those market studies not only show the market share in the Dominican Republic of the good or service under the trademark in question, but also shows ‘that the consumers prefer it’, the latter clearly being a subjective conclusion by the examiners.

The main challenge in this is that most famous international brands do not usually have market studies for all jurisdictions, which would be extremely costly. Indeed, the Dominican market is quite small and, therefore, it might not be considered a worthwhile expense by the trademark owners. For other brands, market studies remain confidential and may not be disclosed to the public or to competitors. All the evidence submitted before the Dominican PTO is publicly available.

Nevertheless, the Dominican PTO claims to act under the strict approach of the Joint Recommendation Concerning Provisions on the Protection of Well-Known Mark issued by WIPO, which also states that:

guidelines to assist the competent authority to determine whether the mark is a well-known mark, are not pre-conditions for reaching that determination. Rather, the determination in each case will depend upon the particular circumstances of that case. In some cases all of the factors may be relevant. In other cases some of the factors may be relevant.

Therefore, there is room for flexibility and it is hoped that the Dominican PTO will soon change its approach and extend the scope of protection to famous trademarks.

Duration of well-known character recognition

The aforementioned decision by the PTO introduced an additional component to the well-known character of a trademark, namely that once it has been recognised, that recognition is awarded for five years. In other words, the reputation of the trademark concerned does not have to be proven again within the following five years.

This approach is completely new since, in the past, the trademark owners had to provide evidence of reputation in each case where well-known character dispositions were being claimed.

Although the Dominican Republic does not have a registry for famous marks (as in Mexico, for example), the granting of the well-known character for five years has a similar effect. However, this is subject to analysis of the case before the national office and not through an independent request for recognition as in other jurisdictions.

Conclusion

As demonstrated above, the Dominican Republic continues to make progress in the protection of trademark rights.

Improvement in technology distinguishes the Dominican PTO from other national offices in the Caribbean and Central American regions and offers trademark owners advantages that translate into stronger trademark protection and, therefore, attracts foreign investment.

The improvements have also introduced substantive developments, as in respect of cancellation actions for non-use protecting a trademark owner’s investments within the Dominican territory.

Moreover, recent court decisions have paved the way for a specialist IP court, which would significantly enhance protection and legal security.

Finally, it remains to be seen whether the Dominican PTO will make progress in the coming years as regards the protection of famous brands, which is currently one of the main challenges at a local level.


Footnotes

[1] Law 20-00 of Industrial Property, article 93.

[2] Case decision no. 000275 of 22 October 2021 issued by the Dominican PTO legal department.

[3] Decision no. 0030-1647-2022-TSEN-00001 of 28 February 2022 issued by the Supreme Administrative Court.

[4] ‘Joint Recommendation Concerning Provisions on the Protection of Well-Known Mark’, adopted by the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of WIPO, article 2, paragraph (1), clauses (a) and (b), items 1 to 6.

[5] Case decision no. 000224 of 12 June 2020 issued by the Dominican PTO legal department, page 13 (emphasis added).

Unlock unlimited access to all WTR content