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Portugal: Lack of legitimacy, Unfair Competition or Bad faith?

Issued on 21 June 2013, but only published in the Industrial Property Bulletin no. 199/213, of 17 October, is an interesting judgment of the Portuguese Intellectual Property Court, which annulled the Portuguese Trade Mark no. 488843 on the grounds that the Applicant lacked legitimacy to proceed to its registration (Case no. 228/12.0YHLSB, 1st Chamber e of the IP Court).

According to the established facts, the Plaintiff's main activity is the operation of private schools, one of them being “Colégio Vieira de Castro”. Since 2008, this private school is commonly identified by the following sign:


On 19 September 2011, the Defendant applied for the registration of a sign identical to the one used (but not registered) by the Plaintiff, aiming to cover educational services (Portuguese Trade Mark no. 488843). As no prior similar or identical trade mark was registered and no opposition was presented, INPI granted the registration. It should be noted that the Defendant had never owned any kind of educational establishment.

On 5 January 2012, the Defendant sent a letter to the Plaintiff, informing it that “Colégio Vieira de Castro was a private and registered property” and showing its availability to discuss the use of its trade mark. Following a meeting between the parties, the Defendant e-mailed the Plaintiff, saying it was willing to assign its trade mark for EUR 3,000.00. Considering the situation to be unfair, the Plaintiff initiated proceedings against the Defendant.

Under s.225 of the Portuguese Industrial Property Code, “The right to register a trademark belongs to those with a legitimate interest, namely:

a) Industries or manufacturers, for the purpose of distinguishing the products they manufacture;

b) Traders, for the purpose of distinguishing the products they sell;

c) Farmers and producers, for the purpose of distinguishing the products of their activities;

d) Artists and craftsmen, for the purpose of distinguishing the products of their art, craft or profession;

e) Service providers, for the purpose of distinguishing their respective activities.

S.238 (1) (e) states that a registration of a trade mark shall be refused if it contradicts the above provision. S.265 (1) (b) states that a trade mark registration is null and void when, in the process of granting it, s.238 (1) has been violated.

Ingeniously applying the referred to provisions to the case, the Court held that the Defendant lacked any legitimacy to apply for the registration of the sign, as it had never been its will to develop any activity covered by s.225. In fact, upon analysing all the facts, the court found out that the Defendant’s sole purpose was to register the trade mark and demand a compensation for its assignment. Therefore, the registration of Portuguese Trade Mark no. 488843 was declared null and void.

On a final note, the court denied that this could fall within any unfair competition provision, since no facts supporting the existence of competition between the parties were found. Notwithstanding this mention, the court advanced that, if the Defendant was exploring any educational establishment, the circumstance that the sign was being used by the plaintiff since 2008 was strongly supportive of the fact that a situation of unfair competition was a possible outcome, regardless of the applicant’s intentions, therefore fulfilling the grounds for annulment in s.266 (1) and 239 (1) (e). It should be noted that, although this solution is defended by several people – including this blogger –, the protection of unregistered trade marks through unfair competition is far from an easy task under the Portuguese law.

Following this outcome, the Plaintiff applied for and obtained the registration of its sign as a trade mark – Portuguese Trade Mark no. 516070.

This blogger is certainly happy with the outcome of this case, but he cannot be left to wonder if a provision similar to s.3(6) of the Trade Marks Act 1994 (UK) should not be included in the Portuguese Industrial Property Code (despite its “often alleged, rarely proved” characteristic). In fact, although s.266 of the Portuguese Industrial Property Code provides that any annulment action might be proposed out of the 10-year expiry period if a trade mark was registered in bad faith, this provision seem to be only applicable if one of the grounds of annulment is verified. In fact, no reference is made to this provision in the described judgement and, as far as this blogger is aware, no other provision makes any reference to bad faith in trade mark applications. Do any of the readers have a different opinion on this? I can only see s.326, which is a criminal provision solely applicable to “patents, utility models and registrations of designs or models”. Or, on the other hand, the unfair completion clause and the legitimate interest provision are sufficient to cover all the cases that might raise from bad faith registrations?

Posted by: Pedro Malaquias @ 19.09
Tags: Portugal, Lack of legitimacy, Unfair Competition, Bad faith,
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MARQUES does not guarantee the accuracy of the information in this blog. The views are those of the individual contributors and do not necessarily reflect those of MARQUES. Seek professional advice before action on any information included here.

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