Resolution No. 2005-2014/TPI-INDECOPI (July 25, 2014)
Peru’s Administrative Court of Appeals recently affirmed a decision by the Peruvian Trademark Office refusing Nissan Motor Co., Ltd.’s application for NP300 covering, inter alia, cars, trucks, recreational vehicles, wagons, and parts thereof in Class 12. The Trademark Office concluded that Nissan’s NP300 is confusingly similar to General Motors LLC’s prior registrations No. 197311 for N300 and No. 197312 for N300 MAX , and No. 20130 for N300 MOVE, all covering “motor vehicles and parts” in Class 12.
Nissan appealed to the Administrative Court of Appeals, citing various other marks in Class 12 that include the number “300” (including L300, LEXUS NX300h, CROSSMAX CR 300, R-300, and T-300, among others), arguing that its “300” combined with the letter “N” and another letter is also capable of coexisting with the cited marks. In further support of its position, Nissan submitted a coexistence agreement with General Motors, in which both parties agreed to take “all necessary measures” to avoid consumer confusion relating to their respective marks and to “maintain such measures in the future.”
Notwithstanding Nissan’s arguments and the parties’ coexistence agreement, the court sustained the Trademark Office refusal based on confusing similarity with the General Motors marks. It held that the addition of the letter “P” is insufficient to avoid consumer confusion between N300 and NP300, where the public could be led to believe that Nissan’s mark is a variation of GM’s. With respect to N300 MAX and N300 MOVE, the court held that “MAX” is laudatory and “MOVE” is frequently used in connection with motor vehicles, and that the distinctive element of these composite marks is N300.
Further, the court applied Andean Community Decision 486 on a Common Intellectual Property Regime, as interpreted by the Court of Justice of the Andean Community, stating that two marks’ coexistence must not deprive consumers of their “right to choose freely between products on the market.” While parties may, in principle, agree to the coexistence of similar marks covering goods in the same class, the competent administrative authority must ensure that such coexistence does not “adversely affect the general interest of consumers,” and it is these consumer interests – not the wishes of mark owners – that are most important. Of specific concern to the court in this instance was the failure of the coexistence agreement to specify the actions the parties would take to avoid consumer confusion.
This decision underscores that, in Peru, to overcome citation of a prior mark based on a coexistence agreement, it is not enough for parties to set forth their general intent or belief that the marks do not conflict. Rather, they must expressly identify the means by which their marks, goods and services are differentiated in practice. Specifically, coexistence agreements have been accepted where they describe with particularity the concrete measures undertaken by the parties to differentiate their marks and to avoid confusion. Such measures can include provisions undertaking to use the mark at issue in a particular manner, and promising to avoid using certain elements that would bring the mark closer to that of the other party. Other measures acceptable to the court would relate to the nature/extent of use such as restrictions to certain goods or services and limited channels of trade, and undertakings to avoid the goods or services, as well as the trade channels, utilized by the other party.
The rigors of a coexistence agreement in Peru can prove cumbersome, however, to parties accustomed to acceptance of looser agreements in other jurisdictions. While such agreements provide greater flexibility to both parties, if not carefully crafted they can fail to anticipate business changes and developments that are not foreseen at the time of execution. A Peruvian coexistence agreement especially can box a party into a very limited, specific position. The desire for future flexibility on the part of all parties, however, would need to be balanced against the more immediate need for securing a trademark registration. Generally, parties seeking protection for their trademarks in Peru should bear in mind that the Trademark Office has substantial discretion, supported by the courts, in accepting or rejecting “consents” (coexistence agreements), and requires detailed undertakings by both parties with respect to potential consumer confusion.