An appeals court in Brazil will deal with the issue of trademarks related to cannabis and, in particular, their registrability under the country’s Intellectual Property Law (LPI), which forbids the registration of trademarks “against morality and common decency” (Article 124 ). III).
One of the main issues at the intersection of cannabis law and the cannabis business is the protection of intellectual property rights (IPR). This is a common topic on this blog, with my colleague Alison Malsbury in particular keeping a close eye on developments in the US. After spending a significant portion of my career working with international brands to protect their intellectual property rights in emerging markets, I have seen that intellectual property law is usually one of the “early stage promoters” when a country’s legal system adopts adapts to changed economic realities. Companies will be wary of even basic activities in a new market if they cannot get at least de jure protection for their brands.
Unsurprisingly, the protection of intellectual property is also one of the first problems to arise as the legal systems react to the increasing normalization of cannabis. Latin America and Brazil in particular are no exception. A common tension exists between the natural desire of cannabis entrepreneurs to protect their creations and differentiate their products from the competition and legal provisions that, for reasons of public order, deny the protection of certain products from intellectual property rights. The LPI ban on brands that “offend morality and morality” is a textbook example of the latter. (For a good example of how these tensions manifest outside of both the brand and cannabis contexts, see the Oncomouse.)
In some cases, determining whether a mark is in violation of Article 124 is straightforward. For example, the National Institute of Intellectual Property (INPI) trademark manual uses a swastika and the word mark KU KLUX KLAN as examples of trademarks that cannot be registered under any circumstances.
With cannabis, however, the line isn’t that clear. The brand manual itself offers a certain amount of leeway. When assessing whether a brand is against morals and common decency, account should be taken of the characteristics of the product or service market that the brand is trying to differentiate, e.g. B. the type of target group (general or specific) as well as the sales, marketing and advertising channels of the products or services concerned. “
In practice, this has led to obvious inconsistencies. According to an intellectual property lawyer quoted by Valor Econômico in an article on the matter, the process is “super subjective”. For example, INPI approved the ULTRA 420 brand for one tobacco dealer, while the 4EVINTE brand was rejected for another tobacco dealer (4EVINTE sounds like 420 in Portuguese).
The tobacco trader applying for the 4EVINTE to register has appealed against INPI’s decision to the Regional Court of the First Region (TRF1) based in Brasilia. TRFs are roughly the same as the U.S. appeals courts, and as is common in the U.S., there is opposing jurisdiction in another region, particularly the Rio-based TRF for the Second Region (TRF2). According to the article by Valor Econômico, this summer the TRF2 rejected the application for registration of the BRAZILIAN CANNABIS and the BRAZILIAN [sic] MARIJUANA brands.
It should be noted, however, that although INPI rejected the trademarks on moral grounds, “it understood that they are non-distinctive, that is, use generic terms denoting characteristics of the products they refer to – tobacco-free cigarettes and herbs for medicinal purposes derived from cannabis. “It’s hard to see how the 4EVINTE trademark could be disapproved of as generic, potentially requiring the TRF1 to address the moral issue.
Compared to some of its neighbors, Brazil has been shy about legalizing cannabis. That said, as the largest economy in the region (and one of the largest in the world), the country holds incredible promise not only as a consumer market but also as a hotbed for research and innovation. And as the trademarks indicate, Brazilian cannabis entrepreneurs are ready to roll.
Overall, it’s a market worth seeing, and by that we mean Brazil in general. Despite the problems with COVID, “the Brazilian economy will be less affected than the emerging market median in 2020 and 2021,” in part due to a robust government response to the tax to offset unemployment. With the addition of São Paulo based attorney Rodrigo Guedes Nunes, Harris Bricken is well positioned to assist clients with legal issues in Brazil.