The Europa Case & Other Trademark Developments in Brazil

Author:Mr Denis Allan Daniel
Profession:Daniel Advogados
 
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Co-written by Deborah Portilho

The Europa Case

The amount of damages that are awarded by Brazilian courts for trademark infringement have normally been insignificant. One particular case has become an exception. The case involves use of the mark EUROPA by Fiat AutomÛveis S.A. (Fiat) from 1979 to 1981 to identify a line of cars. Mec‚nica Europa S.A. (Mec‚nica), which has held a registration on EUROPA since July 1976 for automobile parts, sued Fiat for trademark infringement in 1982, after having notified the company requesting that Fiat cease use of the mark or pay royalties of 3%. Mec‚nica was unsuccessful at first instance as the court accepted Fiat's argument that it had not used EUROPA as a mark, but merely in a descriptive sense, notwithstanding that the word appeared on all advertising material and even on Fiat's manual.

Mec‚nica appealed the decision insisting on damages equivalent to 3%. The appeal was sustained but the Court awarded damages of 1.5% of the value of the cars sold (during the three year period) by Fiat bearing the mark EUROPA. It was Fiat's turn to appeal, but without success, and the decision was upheld, with Fiat being ordered to pay R$3.792.378,00 (around US$1,600,000.00) plus legal costs. Fiat then filed an appeal to the Superior Court of Justice on grounds of legal procedure, rather than the legal or factual basis for the decision. This appeal was dismissed in November 2001, with the Court deciding that there had been no violation of the Code of Civil Procedure, as Fiat had claimed. Fiat's attorneys indicated in a written note shortly thereafter that all possible steps would be taken until the decision was overturned. However, the only possible appeal now would be to the Supreme Court, which would only hear the case if it could be alleged that Fiat's constitutional rights had been violated. As such, Fiat may have little alternative but to pay the damages, which, after adjustments for inflation, now stand at R$8.500.000,00 which is around US$3,500,000.00.

THE MADRID PROTOCOL

While the introduction of the Eighth Edition of the Nice Classification may increase the costs of protecting a mark, depending on the services covered, discussions are now taking place in Brazil to encourage the country to join the Madrid Protocol promising to introduce major cost savings. It is known that under this system, administered by the World Intellectual Property Organization, a single registration gives protection in various jurisdictions. However, many important countries, particularly in the Americas, are not yet signatories of the Agreement, including, United States, Canada, Mexico, Argentina and Brazil.

The Madrid Protocol has introduced a number of changes to the Madrid Agreement which have made it more attractive to these...

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