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Fabio José Zanetti de Azeredo and Wilson Pinheiro Jabur

In a new resolution (No. 166/2016) published on May 31, 2016, the Brazilian Patent and Trademark Office (BPTO) drastically changed the rules on trademark disclaimers, which very likely will affect trademark rights in Brazil in an unprecedented way.

Up to this resolution most frequently disclaimers were imposed by the BPTO when only part of the trademark would be registrable – and thus the most common form of disclaimer used by the BPTO would be to grant a trademark with the statement of “no exclusive rights are given over …”.

Although disclaimers are not expressly foreseen under the Brazilian law, they have been widely used for decades and have been regulated by the BPTO in its Trademark Guidelines.

However, in accordance with the new resolution, as of June 1st, 2016 there will be one single standard disclaimer as follows: “the protection arisen from this registration is limited as set forth on Article 124, items II, VI, VIII, XVIII and XXI of the Law No. 9.279 of May 14, 1996”.

The above-mentioned law is the Brazilian Industrial Property Law and the Article 124 deals with the prohibition of registering trademarks composed by non-distinctive terms, namely:

Article 124 – The following are not registrable as marks:

II – an isolated letter, digit or date, except when sufficiently distinctive;

VI – signs of a generic, necessary, common, usual or simply descriptive character, when related to the product or service to be distinguished, or those commonly used to designate a characteristic of the product or service with respect to its nature, nationality, weight, value, quality and moment of production or of giving a service, except when presented in a sufficiently distinctive manner;

VIII – colours and their names, except when arranged or combined in an unusual and distinctive manner;

XVIII – technical terms used in the industry, science or art that is related to the product or service to be distinguished;

XXI – necessary, common or usual shapes of a product or of its packaging, or, furthermore, shapes that cannot be disassociated from a technical effect;

It goes without saying that for the past years the BPTO has been facing difficult times – the number of trademark examiners is a tiny fraction of what ought to be considered minimum and the outrageous turnaround time for an application to be examined reaching the 3 year timeframe.

On one hand, and as the BPTO’s President announced on a recent speech given , it is expected that Examiner’s will save 6 minutes on each decision since they no longer will need to work on the wording of the disclaimers, thus being able to concentrate efforts on reducing the huge backlog. On the other hand, the new disclaimers will result in unclear limitations to the rights being granted, what possibly will lead to conflicting decisions once a trademark owner seeks to enforce its rights before the BPTO or more especially the Judiciary, since the lack of expertise by Brazilian Judges in relation to IP matters, with honorable exceptions, can be considered as one Brazil’s most resilient plagues.

Hence, even if the BPTO is able to expedite its administrative process, the new regulation outcome may lead to a rampant increase in the number of disputes and a disastrous decrease in the level of legal security since the interpretation of the standard disclaimer will rely on the different levels of understanding of trademark rights of the person rendering a decision on such a dispute.

Moreover another important point to mention is that of the large number of pending requests to revoke or modify a disclaimer filed before the BPTO which have not yet been decided. The new regulation states that all pending revocation or modification requests will be decided in accordance with the new resolution what in other words means that the new standard disclaimer will be automatically applied to all cases. This ultimately means that no decision or analysis will be rendered or made as to the merits of the cases and the true limitations of the rights being granted.

One could argue that being the BPTO legally bound to render a decision in connection to all requests submitted to it as long as the official fees are collected by the interested party, having a generic disclaimer would characterize a failure to accomplish such duties. This is a debate however that will need to take place before the Courts.

As a matter of fact the major IP associations have approached the BPTO before the new regulation came into force in an attempt to revert this path to chaos. Unfortunately the BPTO’s response was merely to postpone the new regulation which is now effective as of June 1st, 2016. Therefore, the scenario we now face is that of a continuous struggle for IP lawyers to overcome this so as to enable to clearly and efficiently be able to enforce the rights of trademark owners in Brazil.