The decisions were based in article 242(1) of the Industrial Property Code (IPC). Under this article, ‘registration will also be refused if a trademark, even when it is designed for products or services without identity or affinity, is an interpretation of, or is identical or similar to, an already existing trademark that enjoys prestige in Portugal or the European Union, if it is registered in the European Union, and whenever use of the subsequent trademark seeks to take undue advantage of the distinctive character or prestige of the trademark or may prejudice it’ (translation taken from INPI’s English version of the IPC – available here).

To interpret this provision, the first instance court resorted to the definition of ‘prestige’ provided by a dictionary - respect, consideration and merit - and held that an ‘idea of great prestige’ is required, as it is an unanimous and unusually high degree of respect.  According to the first instance court, the provided evidence showed that: the trade mark had been used since 1993; it was owned by one of the biggest companies in the sector with 40 stores in the country; a big variety of Salsa clothing products were sold in those stores; it invested thousands of euros in advertisement; it had tripled profits since 2002; in a survey, it had been considered a well-known company with a great reputation in the Portuguese market; it was a registered trade mark in several countries.

Although such undoubtedly demonstrated that ‘Salsa’ was a well-known trade mark for clothing, it was not sufficient to demonstrate that the trade mark enjoyed from an unanimous and unusually high degree of respect in the Portuguese market. Further, it had not been demonstrated that the registration would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark, specially taking into account the coexistence in the market of other signs comprising the word ‘SALSA’. As such, nothing prevented the registration of ‘Salsa’ for ‘Cigars and cigarillos’.

The Court of Appeal (CoA) maintained this decision, despite the fact that two prior decisions of the same court had in the meantime accepted the prestige of the trade mark. Further to reiterating the principles devised by the first instance court, the CoA held that, contrary to other jurisdictions which offer all the trade marks with a reputation the same protection, the Portuguese law distinguishes between notorious (article 241, which only protects against use in identical or similar goods) and prestigious (article 242) trade marks.

On the one hand, the concept of notoriety is mainly quantitative and applies to trade marks that are immediately and generally known by the general public. On the other hand, the concept of prestige is both quantitative and qualitative and requires that the trade mark is exceptionally notorious and attractive to (at least) a part of the public, identifying a high degree of quality and proportioning a high satisfaction. According to the CoA, the prior judgements which had considered Salsa to be a prestigious trade mark failed to grasp this difference.

The CoA also agreed with the first instance court in relation to the inexistence of any unfair advantage, tarnishment or blurring of the earlier trade mark. It based its decision on the fact that the applicant of the subsequent trade mark was only intending to obtain a registration in Portugal for a sign that it was already using in other countries and, hence, no unfair advantage could be found. Further, considering the different markets for each of the trade marks, the existence of prior and subsequent registrations comprising the word ‘SALSA’ and the fact that this word has several connections (dance style, aromatic herb, trade mark), no tarnishment or dilution could be found.