If you have a start-up or an established business and wantto safeguard the trademark you have created and registered, when faced with infringement of the trademark in Portugal you should follow five rules:
- anticipate and act quickly;
- conduct a thorough investigation with support from a professional monitoring service;
- secure evidence of the infringement;
- work with your IP lawyer to understand the best possible options and scenarios for an agreement or
- weigh up and anticipate what a litigation case entails in the big picture and in light of your business. We will explain how to go about it.
Successful products and services are likely to have their trademarks copied. It is not that you in particular and your trademark are being targeted, but awareness on how to proceed yields value to your brand.
Moreover, the sooner you take action and follow the recommendations below, the less likely the infringement will be to have severe consequences. Registrations will not prevent others per se from trying to enter the market with similar signs covering similar goods and services: you need to be vigilant and take into account the following ground rules. If you own a business in Portugal and have a registered trademark, these recommendations will prove useful.
- Anticipate and act: prevention
As soon as you are alerted to a potential infringment, you should act quickly. If you are informed about a potential infringement early on, you will be more likely to enforce your rights faster and intervention and remediation costs will be lower.
An effective way of being aware of potential infringements, especially in cases where your company operates in different territories, is to engage a trademark monitoring service. These services inform you of any new trademark applications being filed that are identical or similar to your registration or any new company names and/or domain names that may have been registered, which fully or partially include your trademark and cover the same goods and services as your mark. In addition, depending on the type of goods and services offered by your company, you may also consider hiring an internet trademark monitoring service. This type of watch service provides regularly information (weekly or monthly) on trademark usage by third parties, identifying signs identical to your trademark which are associated with the same type of goods or services as your mark.
- Coincidence is evidence
After detecting a potential infringement, you need to remember that it is not usually a coincidence. Suppose there are simply too many resemblances between your trademark and the infringing sign: the infringing company probably knows your company and your trademark. It is most likely using the infringing sign to enter your market, leading the relevant public to believe that its trademark/business is somehow related to your company.
Sometimes, the infringer is someone you know or with whom you do or did business. If this is the case, you may be dealing with companies acting in bad faith. They may have filed and registered a trademark similar to yours, covering the same goods and services, where they operate. This course of action is typical in companies that once worked as local distributors of products for a certain period. When the commercial agreement supporting their use of a third party trademark ends, they continue to use that third party trademark and may even register it in their name.
There are of course situations in which the infringing trademark may just be a coincidence or, simply that the person behind the choice of infringing sign was unaware of your mark.
Therefore, before emabarking on any enforcement action, you need to gather as much information as possible on the entity copying your trademark(s).
Nowadays since almost every company has a digital presence, with a few simple searches of their website, social media profiles and of the public registries of companies and trademarks, you can obtain most of the relevant official information on the company:
- The name of the entity that is copying your trademark and where their headquarters are located;
- Who the share capital partners of the company are;
- How they use the infringing sign(s) and for which goods and services;
- Whether they own other registrations besides the trademark you detected, and,
- In some cases, who their clients are.
With all this information, you will be able to correctly assess the impact of that company’s use of a trademark similar to yours and determine the next steps you need to take.
- Secure evidence of infringment
Once you have detected a potential infringement of your trademark, you need to act fast in order to prevent the infringement from continuing. Preferably, while conducting the above investigations, you should gather as much evidence as you can to support a potential future claim against the infringement of your rights.
In this context, securing evidence means certifying the evidence of how, where, and since when the infringing sign has been used in the market, in association with the same goods and services as your trademark. In Portugal, this certification can be provided by attorneys-at-law or by public notaries and it has been proven to be key evidence when (and if) the time comes to support a potential injunction or civil proceeding before the IP Court.
- Enforcement strategy: litigation or agreement?
Any enforcement strategy usually begins by contacting the counterparty and negotiating a friendly settlement: in some countries, this initial stage is mandatory, but not in Portugal. Still, it is the best approach.
The strategy commences by sending a cease and desist letter to the other company detailing which rights you are enforcing and the consequences of not complying with the request to “cease using the trademark”. When and where applicable, it is also possible to request in these notifications that are sent by regular mail, that they withdraw or surrender the potential trademark applications/registrations filed in the meantime. If you receive a reply from the other party, you can negotiate a potential agreement and end this conflict swiftly and at a relatively low cost.
You should keep in mind that an agreement involves both parties having to reach a compromise, even if the counterparty is the one that is acting illegally and infringing your rights. In some cases, the infringing company will ask you to give it time to sell at least part of its stock during a phase-out period. Indeed, it is possible that the company acted in good faith and even obtained a company name or trademark registration for the infringing sign. In that event, you may be willing to agree to pay the infringing company a small amount of money to cover the costs of filing a new trademark.
It may not seem like a good outcome, but an agreement that is not fully satisfactory for either party is, sometimes, the best solution available in an infringement case in Portugal, especially in those cases in which the similarities between the signs in conflict are not striking.
Furthermore, trademark litigation cases in Portugal can take several months or even years, leading to adverse brand effects and increasing litigation costs. Additionally, even if you win a lawsuit in Portugal, the courts tend to be very ungenerous when determining the amount to be potentially awarded as compensation due to a “simple” trademark infringement. Moreover, if you are unable to obtain the immediate “cessation in the use” of the infringing trademark with an urgent injunction, the counterparty will keep using the infringing sign on the market while the dispute is addressed by the court. In other words, the infringing sign may be on the market for several months, with consequences for your trademark that are very difficult to remedy, namely, the dilution of the distinctiveness of your trademark. You should therefore carefully weigh up the pros and cons before leaving the negotiating table and resorting to litigation!
- Court dispute and awareness
If an agreement with the infringer is simply not a solution, you need to act fast (and firmly) in order to prevent the infringement from continuing. In Portugal, the court that has jurisdiction over a trademark infringement case is the IP Court in Lisbon. Its decisions can be appealed at the Lisbon Appeal Court, which has recently created a section specialized in IP matters.
If you are the owner of a valid trademark right and the infringing sign is an imitation of your sign, you should consider filing a request for a preliminary injunction before the Portuguese IP Court. This will allow you to obtain a decision in three to four months if you are successful. It is important to underscore that Portuguese procedural law allows you to request an injunction even in cases where the infringement has been going on for months. Consequently, you only need to secure evidence of the infringement and demonstrate to the Court that you are the rightful owner of the trademark.
If you are successful with the injunction, in most cases the infringer will try to settle the case and gain time to stop using the infringing sign. However, suppose an agreement is not reached. In that event, you will have to file the main civil action: all together, between preliminary hearings and regular court hearings, it may take around two to three years for a decision to be issued in the first instance proceeding. The decision handed down by the IP Court can be appealed at the Lisbon Appeal Court, which may take between six to ten months to issue a final ruling on the case.
Francisca Ferreira Pinto