By Rafael Marques Rocha and Paulo Armando Innocente de Souza
Judicial Appeals against PTO’s decisions in Brazil, especially when addressed to contest rejection of trademark applications, have always brought some sort of doubt concerning the role of each party (the PTO, the Applicant and the owner of the blocking registration). However, these days are near to be over. This is because Rio de Janeiro’s Federal Court, in very recent rulings overturning PTO’s rejecting decisions based on senior registrations opted to rule out the owner of the blocking registrations when the Applicant’s claim is supported by a letter of consent or coexistence agreement provided by the seniority’s owner. Therefore, as the PTO remains as solo Defendant in the Court Action and there would be no further efforts to serve a Co-Defendant and wait until the third party to present its full response, as well as further delays brought by replying two full responses, the timeline will indeed be reduced, as well as the costs for Applicant.
The Brazilian IP Law is clear on the fact that court actions challenging trademark registrations should be addressed to the PTO and the participation of the blocking registration owner as Co-Defendant is mandatory, once the owner has direct interest in the result of the nullity claim. However, the IP Law is silent about the position of the owner of a senior registration that blocked the application in an eventual court action challenging the PTO’s rejection decisions. Therefore, the District Judges of Rio de Janeiro’s Federal Court have been understanding that if the owner of the blocking registration has provided the Plaintiff with a letter of consent or coexistence agreement, the owner of cited senior registration should participate only as a third interested party. This benefits the timeline of the court action because the third interested party is only subpoenaed to present, in a reduced deadline, its acquiescence to the coexistence and no further delays would prevent the court action to move forward.
This is a very reasonable understanding because if a trademark owner is not interested in opposing the Plaintiff’s plea, once it has already consented with the use and registration of the mark the PTO rejected, it would not make sense to obligate this particular one to spend more money to present a defense – since there would be no interest for the owner in the outcome of a court action of this kind to justify the filing of a defense – and would even prevent this trademark owner to bear the legal costs and attorney fees in case the Plaintiff succeeds in overturning the PTO’s decision, as in Brazil the English Rule applies. As a result, the proceeding becomes faster due to the elimination of unnecessary parties and defenses, which benefits both the court action proceedings and the Plaintiffs.