The Internet of Things (IoT) allows objects to be sensed or controlled remotely across existing network infrastructure, and a completely new set of products and services focused on providing a unique customer experience is emerging. As in any competitive market, original and innovative products or services – if successful – will attract unwanted attention from copycats, and a better understanding of how these can be protected by trade dress can thus be crucial.
Traditionally, trade dress applies to more readily recognisable objects, such as products or product packaging. This is in line with the fact that trade dress must be distinctive. Trade dress covers the overall commercial image ('look and feel') of a certain product, and this concept clearly extends to services. To receive protection the trade dress must be inherently distinctive, unless it has acquired secondary meaning, and serve as a designator of origin.
Over the years, the scope of trade dress protection has been expanded and, given that the concept itself is rather open, it is possible that further applications have yet to be better addressed and understood. From its original definition, trade dress has already branched out to cover product shape and configuration, colour combinations, external and interior building designs and, more recently, website layouts.
This shows how the adaptability of trade dress as a means to preserve innovative ways of doing business makes it an incredibly interesting concept, especially for signs that do not fit the limits imposed by standard ways of protection, such as trademarks and designs.
Trade dress protection is considered a 'Jack of all trades' – mostly in a positive way – given that it pervades different industrial property rights and can be used by rights holders to curb unfair competition acts. This applies even more so in first-to-file countries, such as Brazil, where the system for acquiring rights does not take into account the facts predating the trademark application’s filing.
The enforcement of traditional IP rights can also be a hurdle due to the backlog of work at the Brazilian Patent and Trademark Office, as an applicant must wait to secure a registration before taking action against infringers.
Trade dress is one of the few tools available for enforcing unregistered rights. In this sense, Law 9.279 (1996) provides that IP rights can be used to combat unfair competition. The law states that unfair competition is committed by whoever “uses fraudulent means to divert another person’s clientele, for his own benefit or for the benefit of someone else”.
There is no reason to believe that trade dress protection will be limited to the products and services available to customers today. New experiences made available through the IoT could be protected under the broad umbrella of trade dress and unfair competition rules. It is only natural that competition will intensify in the virtual world, where there is room to create unusual and memorable experiences with products or services, which are susceptible to being copied.
In Brazil, discussions concerning the loT and its legal protection, specifically the interface with IP rights, are new. Judicial precedent mostly relates to the protection of the visual identity of a product, whether or not combined with registered rights. However, these precedents set interesting and rather important standards that could be applied to any case involving the infringement of trade dress in the virtual world.
In a lawsuit filed by brewery Duvel Moortgat against Cervio Comercio e Indústria de Bebidas based on infringement of the trade dress of the famous beer Duvel, a court for the first time based its decision on a set of objective criteria to establish infringement:
- the degree of inherent distinctiveness of the infringed sign;
- the degree of resemblance between the signs side by side;
- the legitimacy and expertise of the infringer (the higher the awareness of the original product, the higher the responsibility for the infringement);
- assessment of the duration for which the signs coexisted in the relevant market (quick enforcement actions are welcome);
- the quality and nature of the products or services identified;
- public awareness and skills in the art; and
- the potential to make undue profits from the use of a similar design and/or risk of dilution of the brand or trade dress.
Even considering that some features of Duvel’s product packaging and label were not eligible for exclusive protection, the way in which the features were adopted by Cervio reproduced Duvel’s trade dress and caused undue association, even to a highly skilled consumer. All the standards set out above were met in this case. The court ordered the defendant to adopt a different and distinctive trade dress for its beer. This was a pioneering decision based on the set of pre-established requirements.
On September 27 2016 the Rio de Janeiro 22nd Court of Appeals confirmed a lower court decision which had found trade dress infringement in the reproduction by Athletic Way Comércio of a line of exercise machines produced and commercialised by Technogym Equipamentos and Technogym.
According to the ruling, the same visual standards used in the original machines were adopted. Unfair competition with the owner of the original products was assessed along with the risk of confusion and undue association, not specifically among business managers in the exercise industry, who are highly skilled, but in parallel sectors such as hotels, resorts and clubs. Damages were issued for infringement.
In both cases, the plaintiffs established that they owned rights to a certain combination of elements that were unique, permanent and distinctive, deserving protection irrespective of any prior registered rights. The courts relied heavily on consumers’ perspective.
Brazilian courts are constantly asked to decide trade dress infringement cases and have established fair objective criteria to recognise protection. These criteria are flexible enough to be applied to different scenarios and may be relevant tools in deciding cases involving online infringement that goes beyond website pages.
An earlier version of this report first appeared in World Intellectual Property Review.
For further information please contact:
DANIEL Legal & IP Strategy
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