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Barreda Moller writes...

Nullity of a trademark

Decision 486, Common Regime on Industrial Property, in Article172°, establishes the power of the competent national authority to order, sua sponte or at request of a party, absolute or relative nullity of a registered trademark. Nullity is total when a trademark registration was issued contravening the absolute prohibitions of registration of a sign as a trademark, set forth in Article 134°, first paragraph, and in Article 135° of Decision 486. Nullity will be relative when a trademark registration was issued contravening the prohibitions of registration of a sign as a trademark, established in Article 136° of Decision 486.

Decision 486, in Article 173°, concordant with Article 78°, clearly establishes the steps to be followed for the nullity of a trademark. According to the due process, the trademark owner must be served with the nullity action, and said owner will have a two (2) month term extendible to two (2) more months to respond to said nullity action. Upon expiration of this term, the competent national authority will issue a decision and, according to the laws of the member country, it will be possible or not to appeal said decision.

So there exists an Andean rule that grants the competent national authority the power to file sua sponte the nullity action against a trademark, and said rule also clearly establishes the causes of said action and the proceedings through which it must be prosecuted.

By virtue of the above-mentioned, it is incomprehensible, in principle, why the Peruvian competent authority is using another type of proceedings to order sua sponte the nullity of an issued trademark registration, thus contravening the aforementioned prohibitions. Nevertheless, this occurs.

When the First Administrative Instance, that is, the Trademark Office, considers that it granted a trademark registration in contravention of the abovementioned prohibitions, the Office simply asks the Administrative Second Instance, that is, the Administrative Court of Indecopi, to decide if the decision which granted the trademark registration must be declared null.

If the Administrative Court deems it appropriate, it will issue a new decision and will annul the decision issued by the Trademark Office and, consequently, will cancel the certificate of the respective trademark.

The Peruvian authority intends to base its behavior on a national rule, Law 27444, General Administrative Proceedings Law, which Article 10° establishes that defects causing the nullity of the administrative act are those which contravene the Constitution, the laws or the regulations. This same rule establishes in Article 202° that, in application of said Article 10°, the Hierarchical Superior (Administrative Court of Indecopi) can declare sua sponte the nullity of decisions issued by the First Instance (Trademark Office) even when they have become non-appealed final decisions. The rule also establishes that this power of the Administrative Court lapses after a year the decision has become non-appealed and final.

The Peruvian authority:
a) when the 1-year term, counted from the date on which the decision granting the trademark registration became final, has not expired yet, the authority will proceed sua sponte to annul said decision in application of Law 27444.
b) If the 1-year term, counted from the date on which the decision granting the trademark registration became firm, has already expired, then the authority, who cannot apply the “expeditious” proceedings established in Law 27444, will file sua sponte the nullity action against the trademark registration, as established in Decision 486.
This way of acting of the Peruvian authority contravenes the Andean legislation as it is not observing the procedural provisions established in the Andean system.

Due to the abovementioned, a claim against the Republic of Peru was filed with the Andean Community General Secretariat for non-compliance with Articles 172°, 175° and 78° of Decision 486, as it had annulled up to five (05) trademark registrations of a Peruvian company through the above described proceedings.

The General Secretariat has issued Ruling No. 08-2012, concluding that the Republic of Peru did not comply with the Andean rules as it had used the abovementioned proceedings to annul trademark registrations. The Ruling established that the Republic of Peru failed to comply because:

a. It did not observe the procedural Andean rules applicable to the nullity of trademarks.
b. It did not observe the general principles of law that are part of the Andean Community law, which competent administrative authorities must inexorably observe, including the due process and the right of defense of the interested party.

Ruling No. 08-2012 orders the Republic of Peru to take the necessary measures to comply with the Community rules and thus remedy the detected non-compliance.

Consequently, it is expected that the Republic of Peru adopts the necessary measures which are not other than prohibiting the use by the Trademark Office of the undue nullity proceedings described in this article.

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