THE MANDATORY USE OF TRADEMARKS AS A KEY ECONOMIC TOOL

08 / 07 / 2021

 

Opinion column by Max Villaseca, partner of Villaseca Abogados, leader of Trademarks area, originally published on El Mercurio Legal.

 

Until very recently, Chile was part of the short list of countries that did not require effective commercial use for the preservation of a trademark registration, which was terminated with the recent modification of Law 19.039 on Industrial Property. This has just successfully passed the preventive examination, as it contains rules of the Constitutional Organic Law, to which it has been submitted by the Constitutional Court, where it was sent on April 20, 2021.

However, the approved amendment on the effective use of branding wastes the opportunity to really catch up on this matter. The cause? The new standard opts only for the cancellation at the request of part of the trademark registration in question, in the event that a third party proves its lack of use for a period of 5 years from the date of granting the registration.

Indeed, cancellation due to lack of use, at the request of a party, is partly ineffective since, according to world experience, it will occur very sporadically when a conflict of interest with a third party converges. This will not solve the saturation of the Chilean Trademark Registry that must be maintained and updated by the National Institute of Industrial Property (INAPI), investing large sums of money from the national treasury in this task.

Nor does it solve the abuse of companies that register numerous defensive brands that they will not use in our country, with the sole objective of hindering the entry into the country of products and / or services that are distinguished with identical or similar brands to those registered locally. This distorts the free competition that must exist between domestic and imported products, making it possible to use trademarks as tools to distort the market, rather than as means that facilitate the correct identification of products and services.

Through the institution of expiration due to non-use, declared ex officio by the authority, in countries such as the United States it has been achieved that behind each registered trademark there is actually a product, establishment or service actively operating in commerce. In this way, trademarks have become very effective tools for job creation and commercial and industrial activity, declaring the expiration of all those “paper trademarks” ex officio by the Trademark Office of that country (USPTO) and maintaining only the so-called “chimney brands”, that is, those that the owner has been able to prove that they protect a product factory or a service company.

The options that can be used to support an application to register a trademark in the United States are:

– Current use in commerce: it means that the trademark is already being used in commerce in the United States, which must be accredited together with the trademark application.

– Intent to use: implies that the owner requesting registration agrees to use the trademark in the US trade in the immediate future. In this case, it will be necessary to subsequently provide a Declaration of Use for your registration to be granted.

– Application based on a trademark registration of the owner’s country: in this the owner must accompany the local Registration Certificate.

Returning to Chile, we consider that although it is an advance that the legislation establishes the effective use of the trademark, an opportunity has been lost by including only the request for cancellation by the interested party as a control mechanism, instead of determining different conditions, as occurs in United States.

If we want the incorporation of the long-awaited institution of mandatory use of trademarks to be truly effective and, incidentally, to become an engine of economic activity and job creation, so necessary to help the country out of the social, health and economic crisis that has shaken it for about two years now, we must dare to make big changes that force the holders of the thousands of trademarks registered in Chile to undertake some commercial or industrial activity after each one of them.