Limitations to the exercise of the “preferential” right derived from the cancellation of a trademark registration

The legal concept of “preferential” right in Trademark Law is regulated in Article 168 of Decision 486. It grants, whoever obtains the cancellation of a trademark registration, the “preferential” right to register it for the same products and/or services distinguished by the cancelled mark.

The application of this right is not unrestricted since there are parameters for its exercise which are expressly contained in the same rule and others that flow from its content and that have brought about specifications made by the Intellectual Property Specialized Court of INDECOPI, in vast case law.

It must be understood, in principle, that the preferential right only determines that the application for registration has “priority” over any other application filed after the start of the cancellation proceeding, so it does not invalidate the “priority” right of applications that have been filed beforehand.

In accordance with the rule, the “preferential” right is very personal since it can be invoked only by who obtained the cancellation of the trademark registration and not by a different person or a person related thereto. Without prejudice to the abovementioned, the Court has stated that the application for registration with which the “preferential” right is invoked can be transferred in favor of a third party by who exercises it and that said transfer comprises the “preferential” right to obtain the registration of the cancelled trademark (Resolution No. 1961-2016/TPI-INDECOPI).

Even if the rule does not expressly establish that the trademark applied for registration claiming “preferential” right must be the same which cancellation was obtained, since it only indicates that “the person who obtains a favorable resolution will have preferential right to registration”, the Andean Community Court of Justice has issued a prejudicial interpretation in connection with Proceeding 288-IP-2015 dated March 2, 2016, stating that “the mark object of the “preferential” right has to be identical or, in any case, contain secondary or accessory modifications with respect to the cancelled trademark. In other words, the denominative and graphic elements must coincide in their essence, since the cancellation fell on a specific and individualized mark and it is based on said mark that the preferential right must be exercised. Moreover, the mark must distinguish the same products or services as those that the cancelled trademark distinguished, though the mark could identify less products or services, comprised in the same class or specified category.”

With respect to the products and/or services to be distinguished by the mark based on which a “preferential” right is intended to be exercised, the Intellectual Property Specialized Court has established that although it is not possible to demand that the new application be exactly identical to all the products and/or services for which the cancelled trademark was registered, it is allowed that they be comprised within the products and/or services that the cancelled trademark distinguished, but a different or larger protection is not accepted, that is for different products or services or for a list of products or services larger than the list that the cancelled registration protected (Resolution No. 2159-2016/TPI-INDECOPI).

The “preferential” right cannot be invoked again if it has been already exercised in a different process, since upon the “preferential” right is invoked and enjoyed, it becomes exhausted (Resolution No. 2706-2009/TPI-INDECOPI).

Finally, it is worth mentioning that the exercise of the “preferential” right does not imply that the applied-for mark automatically be granted registration, since it must be evaluated by the Authority to determine whether it falls or not into any of the prohibitions contained in Decision 486.
In a legal concept like the “preferential” right, wherein case law has specified and developed the scope of Article 168 of Decision 486 which provides for this concept, we will have to be attentive to future interpretations of the Andean Court and to the decisions that the Intellectual Property Specialized Court issues, since they will allow delimiting its scope and application to validly exercise it.

Salome Urquiaga