/ Alessandri en Latin Lawyer: L’Oréal in landmark IP ruling with implications for Chile

Monday, 17th January 2011 by Joe Rowley

In a landmark case that will have significant implications for how IP litigation is handled in the future, the Supreme Court in Chile has overturned the decisions reached in the country’s lower courts concerning the copyright of the brand ‘PRO Keratina’ owned by L’Oréal.

The ruling by the Supreme Court in Chile could set a precedent for the way IP cases are decided in the future

In a judgement issued on 6 January, the Supreme Court overturned two rulings; one rejecting L’Oréal’s ownership claim to the trademark due to the pre-existence of ‘PRO’ as a registered trademark and its usage as a common prefix, and a decision reached in the second instance which rejected the company’s claim to ‘Keratina’ due to its scientific definition which was seen as being too “descriptive and generic”.

In opposition to the previous decisions, the Supreme Court ruled that the trademark should be analysed as a whole with all the aspects that make up the sign rather than as a combination of two separate words. The court ruled that ‘PRO Keratina’ was sufficiently distinctive to be registered as a trademark.

Alessandri & Cía partner Rodrigo Velasco, who represented L’Oréal throughout the case, explains that the intervention of the Supreme Court was necessitated by the “unique situation” of the courts reaching completely different conclusions based on the same evidence between the first and second instance.

“This was a very special case in the sense that it is highly unusual to have contradictory decisions from the first instance court and the second instance court”, he says. “What is important to remember is that there was no new evidence submitted in the second instance and yet the court raised a new issue that had never been mentioned before based on completely different arguments”.

Velasco also says this was a very exceptional decision by the Supreme Court in a trademark issue where the applicant was fighting against the authorities rather than another, private counterparty.

Taking more than two years to complete since it was first launched in June 2008 and involving different attorneys at almost every stage of the proceedings, Velasco says that the lack of a precedent made the case all the more complicated and drawn out.

“I have been working in IP litigation for more than 20 years and this is the first case I’ve seen reach the Supreme Court where there is only one private party fighting against the state authorities,” he says.

“The decision will be very important for the appeal court and for the Chilean trademark office because both, in one way or another, have been punished by this ruling by the Supreme Court. It’s a very curious situation when you have the upper court saying what was done by the lower court is completely wrong”.

Velasco also believes the special appeals court of industrial property will have to think more about what they decide in future, similar cases. ‘They will have to admit that it is not possible to change the scenario completely from first instance to second instance,’ he notes.

Alessandri & Cía’s Loreto Bresky, who delivered the oral pleadings before the Supreme Court in the final hearings, agrees: ‘it was an important case because the Supreme Court emphasised the importance of analysing the mark as a whole and because it also showed that the second instance could not phrase their resolution in a different way to the first resolution.’

“The aspect that I will take from this case is a ruling that emphasises the analysis of the trademark as a whole and I will definitely draw on it in the future if the courts reject a trademark it doesn’t consider in this way.”

Whilst the ruling is likely to be an important boon to L’Oréal whose ‘PRO Keratina’ products are distributed worldwide and increasingly imitated by competitors, both attorneys say it is difficult to predict at this stage the impact the ruling will have on future IP cases due to the unique combination of factors that have to be considered in each individual IP case.

In a similar case in Chile, albeit with a different outcome, Nestlé’s claim that the Chilean food company Córpora Tresmontes had copied its red mug branding was dismissed in the second instance on the basis that the multinational corporation had sought “to obtain, by unfair competition, the exclusive use of the red mug and other generic elements” not covered by the trademark.

Counsel for L’Oreal

In-house counsel – Jose Monteiro and Sophie de Malherbe in Paris

Chile

Alessandri & Cía

Partner Rodrigo Velasco and associates Loreto Bresky, Marcos Morales and Maribel Muñoz