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Brazil: Department Store Is Compelled To Cease Use Of Trademark CORTELLE

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Brazil: Department Store Is Compelled To Cease Use Of Trademark CORTELLE

A recent and interesting decision involving a big Brazilian department store called Lojas Renner S.A. was rendered by the Superior Tribunal of Justice (STJ), regarding a conflict between the marks CORTELLE and CORPELLE.

The plaintiff, Cortex Comércio Exportação e Importação Ltda., owns the trademark CORPELLE, registered in 1995 and 1996, both as a word mark and in a composite form, to identify clothing articles (underwear and others). Cortex used to sell its goods bearing the mark CORPELLE to the department store Lojas Renner S.A., thus being Renner’s supplier for many years, until the year of 2002.

In 2002, the Brazilian PTO granted a registration on the mark CORTELLE in the name of Lojas Renner S.A., to identify the same type of goods (clothing articles). At that time, Cortex ceased to supply Lojas Renner with the CORPELLE goods and Lojas Renner began selling goods under its own mark CORTELLE.

In view of the similarity between the marks CORPELLE and CORTELLE, Cortex filed a court action against Lojas Renner and the Brazilian PTO, based on unfair competition and risk of consumer confusion. The first instance decision was favorable to Cortex and consequently, Lojas Renner’s registration on the mark CORTELLE was cancelled and the company was compelled to cease the sale of any goods identified by this mark.

An appeal was filed by the defendants and the Federal Regional Tribunal of the 4th Region has accepted the appeal. It was then decided that there was no evidence that the coexistence of the marks CORPELLE and CORTELLE caused consumer confusion.

A special appeal was subsequently filed by Cortex to the Superior Tribunal of Justice and the decision was favorable to the plaintiff/appellant without a dissentient vote.

In her opinion, to which the other Judges of the STJ have agreed, the Reporting Judge of the special appeal has pointed out interesting arguments which led her to decide in the plaintiff’s/appellant’s (Cortex) favor.

Firstly, the Reporting Judge has mentioned that the Brazilian Industrial Property Law (IPL) does not require evidence of consumer confusion or association, but a mere potential risk of consumer confusion/association (Article 124, item XIX, of the IPL).

Secondly, with regard to the analysis of the conflict between the marks CORPELLE and CORTELLE, the Reporting Judge has stated that the marks should be taken into consideration “as a whole”, instead of on an isolated basis.

Based on the abovementioned criteria, the Reporting Judge’s decision stated that the marks CORPELLE and CORTELLE are almost identical and differ only in one letter (CORPELLE x CORTELLE). The decision has stressed that even the repeated use of the letter L was maintained by Lojas Renner on its mark (CORTELLE x CORPELLE).

The decision interestingly points out that Cortex’ mark CORPELLE was created by joining the words COR (colour) and PELE (skin) which are directly associated to the goods identified, that is, underwear. On the other hand, Lojas Renner’s mark was not created through the process of joining two words, thus revealing a clear intention of a) approaching as much as possible the previously-registered mark CORPELLE and b) creating consumer confusion regarding the origin of the goods.

Furthermore, the decision asserted that Lojas Renner used to sell CORPELLE goods in its stores up until 2002, but has curiously ceased sale of those goods and has begun selling its own goods under the mark CORTELLE. It was noted that Lojas Renner’s attitude represents bad faith and unfair competition, because its clear intention was to cause consumer association by misleading them to believe that it (Lojas Renner) was still selling CORPELLE goods. The truth is, however, that Cortex’ CORPELLE goods had been substituted with Lojas Renner’s own CORTELLE goods.

In view of the abovementioned reasons, the STJ has decided that there is unfair competition and consumer confusion in the present case and that, thus, the marks CORPELLE and CORTELLE cannot coexist in the same market segment, in accordance with Article 124, item XIX, of the IPL. Consequently, the STJ has stipulated the first instance decision be re-established.

The decision under reference shows that the judges of the Brazilian Superior Tribunal of Justice are sensitive to details in terms of analyzing trademark conflicts. In fact, attention to details can be crucial for the decision (for example, the detailed comments regarding the creation of Lojas Renner’s mark). Furthermore, the interpretation of the party’s behavior behind an imitation or reproduction of a third party’s previously-registered mark may also play an important role in reaching a decision (for instance, the conclusion that Lojas Renner’s intention was to mislead consumers into believing that the CORPELLE marks were still being sold).

Our expectation is that this decision is useful to cohibit future undue imitation or reproduction of trademarks, thus guaranteeing that loyal competition prevails over unfair competition.

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