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Implications of lack of use of a trademark

  • 09 September 2010
  • Articles

Rights over a trademark are acquired when it is registered with the national competent office, granting the owner an exclusive, excluding right and protection against third parties who attempt to make use of its trademark, avoiding the risk of confusion among the markets consumer public.
Among the rights obtained by registering the trademark are the right to make exclusive use of the trademark by its owner, either through a licensee or through an authorised third party. Making use of the trademark fulfils its main function, which is to distinguish certain goods or services in a specific market. Likewise, the trademark regulations require that the owner of the trademark use the distinctive sign in order to ensure continuity of its right; an obligation that is bound to the concept of real and effective use, according to the specific circumstances involved in each particular case.

A trademark is presumed to be in use when the products or services that it distinguishes have been placed on the market in quantities and in a manner that normally correspond, according to their nature, to freedom of acquisition, the manner in which they are marketed or provided, or the fact that they are mass consumer goods or products intended for a select group of consumers. These factors make it possible to conclude whether the use achieved is effective, public, real and not symbolic in at least one of the Andean Community Member States. The mere intention to use the trademark is not enough.

However, when the registered trademark is not used in the aforementioned conditions during the three years after the date the trademark is granted, the competent national office will cancel it at the request of an individual or company that intends to use and/or register a trademark that is identical or similar to the registered, unused trademark, or which brings an action to defend itself in an opposition procedure based on lack of use of the trademark.

The trademark shall not be cancelled when the owner of the distinctive sign shows that lack of use was due to force majeure, or unforeseen events; and the calculation of the three-year period set out in the regulation shall be frozen. Once the cause that exonerated the holder from lack of use has disappeared, calculation of the aforementioned period shall resume.

The effect of cancelling a trademark is the extinction of the owners right, which will become available to a third party to have preferential right to its registration. This registration should be invoked as per the filing of the application for cancellation and within the three months following the date on which the decision for cancellation of the trademark in the administrative proceeding becomes final.

Therefore, preference will be given to the application made based on the preferential right derived from cancellation of a registration, so that the trademark filed is considered to have priority over the applications in progress, even prior to the application for cancellation, which in any case they had as priority the cancelled trademark. A fictional timeframe is thus created, in which the plaintiff in the cancellation has a priority right to obtain the registration over its previous applicant.

Trademarks are protected by a special regulation that grants their owners an exclusive and excluding right to use them, and therefore to use and to exploit them in order to enjoy this prerogative indefinitely. This therefore excludes other competitors on the market from the possibility of unauthorised imitation or use of the distinctive sign. By failing to use the trademark, the owner may lose its right and give a third party the chance to enjoy the special protection that the law has granted it and which has been lost through negligence.

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Implications of lack of use of a trademarkImplications of lack of use of a trademark