DURAX | Cancellation of trademark based on notoriety and bad faith on its registration.

BACKGROUND

Cristalux S.A., was a company dedicated to the manufacture of glass products under the brands “DURAX” and “DURAX TODA LA VIDA”. The mentioned company was a symbol of the Argentinean industry in the decades of 70 ‘and 80’, but in the middle of the 90’s, it started a deterioration process that concluded with its bankruptcy at the end of 1999.

The company recovered due to the hard work of their employees, who under a cooperative structure, attempted to maintain the positioning of the DURAX brand as a trademark of excellence and quality.

Due to of its commercial expansion and in an attempt to restart commercialization of the iconic DURAX products in neighboring countries, this factory which was recovered by its workers, who formed a “Cooperativa de Trabajo Cristal Avellaneda Limitada”, found an obstacle in Uruguay for the marketing of these products: the existence of DURAX trademark registration for identical products (Int. Class 21) registered in the name of a third party.

The DURAX’s trademark in Uruguay had been granted by resolution of November 17, 2008 under Act No. 385.163 on behalf of a third party and transferred then on June 26, 2009 to its current owners VG and EG.

For this reason, and with the aim of recovering the registration of its legitimate
trademark, on March 22, 2017 “Cooperativa de Trabajo Cristal Avellaneda Limitada” filed a nullity action before the Trademark Office against the registration of the DURAX trademark No. 385.163.

NULLITY ACTION

The nullity action filed on behalf of “Cooperativa de Trabajo Cristal Avellaneda
Limitada” was based on the following arguments:

1. Cooperativa de Trabajo Cristal Avellaneda, as successor of Cristalux S.A. is the legitimate owner of the DURAX brand and DURAX TODA LA VIDA slogan.

2. The notoriety of the DURAX brand and its associated slogan DURAX TODA LA VIDA.

3. Bad faith in the registration of the DURAX brand before the DNPI and attempt
of unfair exploitation of notorious brand.

4. Current owners bad faith because it was proved that they used the DURAX brand on the market associated with the legendary slogan DURAX TODA LA VIDA.

ARGUMENTS OF THE COUNTERPART

1. The absence of trademark registration DURAX and DURAX TODA LA VIDA in thename of Cristalux S.A. or its successor “Cooperativa de Trabajo Cristal AvellanedaLimitada” in Uruguay.

2. The lack of objection to the registration of DURAX trademark by Cristalux S.A. orthe Cooperative up to date.

EVIDENCE OFFERED AND PRODUCED IN THE NULLITY ACTION

The evidence offered and produced by us was crucial and relevant for the present case. Among others, conducting a survey through which it was demonstrated that the DURAX brand is a notorious brand for more than 30 years in Uruguay was categorical. The association of the products exhibited to the survey respondents to the DURAX brand undoubtedly marked a very high level of brand recognition. 

This survey was carried out for 308 people between 40 and 69 years old. The 88% of the surveyed people knows DURAX as a brand. Additionally, the declaration of various witnesses offered was fundamental to demonstrate the use of the DURAX brand in Uruguay by the plaintiff prior to the contested registration, the advertising of the mentioned Argentinean brand in the Uruguayan market and the association of DURAX to DURAX TODA LA VIDA as a historical slogan of the brand.

DNPI RECOGNIZES THE NOTORIETY OF THE TRADEMARK DURAX AND THE BAD FAITH IN REGISTRATION

By resolution dated August 2, 2018 DNPI resolved to annul registration of the DURAX trademark No. 385.163 registered in the name of VG and EG to distinguish the products of Int. class 21. 

To substantiate said resolution, it was stated that the alleged facts and the evidence produced in the present case demonstrate the prestige and quality associated with the brand DURAX for several decades as well as the legitimacy of the Cooperative in filing the nullity action.

It was also proved that the trademark DURAX from Argentina was known at the time of requesting registration of the DURAX brand in Uruguay and that DURAX trademark and its associated slogan DURAX TODA LA VIDA has notoriety and recognition in our country.

The Trademark Office confirmed the argument that alleged that the registration was applied in bad faith. DNPI expressed that it was clear that the choice of the brand by the first owner of the registration was not a coincidence, that can be feasible that they knew the DURAX brand and took advantage of the absence of registrations in Uruguay to request the same.

That the DURAX trademark that is challenged is likely to generate confusion in the consumers, who when faced with identified tableware products under that brand, surely associate them with an origin and a quality that they really do not own.

On the other hand, the use of the DURAX trademark associated with the slogan DURAX TODA LA VIDA (Intellectual Property of the plaintiff) by VG and EG was a substantial argument that the DNPI considered as it shows the attempt to take advantage by the owners of the trademark registration that is challenged.

In this regard, the Legal Advisor of the DNPI resolved: “In conclusion, in opinion of the undersigned, it was demonstrated that: the plaintiff is the legitimate owner of the “DURAX” trademark; that the adjudication to the cooperative included the brand of reference, which is currently in use proving its legitimacy for the present action; which is one of the most common tableware brands known in our country; associated with products of good quality, long-lasting resistance; which is known by the majority of the national public since several decades ago, like its slogan; that there was an intention to seize the prestige and knowledge that the brand of others enjoyed; that is confused by the consumer at the time of acquiring the product, as he/she will surely think that it is about those products, when in fact they are not the same; that before applying for this registration, the “DURAX” brand of the plaintiff was known in our country; that the applicant for the brand in our country, probably knew the “DURAX” brand of Argentina and that has motivated the registration request here; that in application of the provisions of paragraph 2 of the Article 27 of Law No. 17.011, this action has not expired.”

This ruling was appealed by VG and EG requesting that the resolution issued by DNPI is revoked.

On November 23, 2018, the TMO issued a resolution mantaining in all terms the resolution issued on August 2, 2018 by which the registration of the trademark DURAX in the name of VG and EG was anulled. The TMO´s Examiner stated that it is clearly demonstrated by the evidence submitted that the plaintiff is the legitimate owner of the trademark DURAX, the notoriety of this trademark and the purpose of unfair competition by VG and EG.

The file will now by studied by the hierarchical to resolve if the TMO´s resolution must be mantained or not. Confirmed the cancellation decision by DNPI, it was the turn of the superior authority, the Ministry of Industry, Energy and Mining, to examine the case and resolve in the second instance whether or not maintaining DNPI´s resolution.

MINISTRY OF INDUSTRY, ENERGY AND MINING CONFIRMS THE CANCELLATION DECISION AND RECOGNISES DURAX TRADEMARK NOTORIETY AND THE REGISTRATION PERFORMED IN BAD FAITH

The decision of the superior authority was conclusive on the matter, maintaining in all respects the resolution issued by DNPI and specifically expressing that the Cooperative demonstrated being the DURAX trademark´s lawful owner, which, as well as its iconic slogan have been recognized by most of the Uruguayan public for several decades.

CONCLUSIONS

Despite the absence of registration in Uruguay by its legitimate owner, in the present case the notoriety and prestige of a brand that was installed in the mind of the consumer as a mark of quality and excellence in the market was demonstrated. In this way, it was possible to annul a trademark registered in bad faith.

Therefore, it was possible to protect not only the reputation and commercial interests of our clients but the interests of consumers who could be deceived in terms of the origin and quality of a brand, avoiding consequently unfair exploitation by third parties.

The fact that the DNPI annulled the registration of the DURAX trademark stating that it is a notorious mark that legitimately belongs to “Cooperativa de Trabajo Cristal Avellaneda Limitada” is a key aspect that reveals the importance of the evidence provided to the process.

The present case also reveals the importance of protecting Intellectual Property companies’ rights, as a way to avoid unfair exploitation by third parties.