Brazil has a very particular legal system. Civil law tradition guides rights in the country, but common law is also present. Civil procedure is heavily influenced by Roman and German concepts, which has resulted in a coded law setting forth the rules that cover the vast majority of litigation in the country.
In Brazil, preliminary injunctions are widely available. This includes injunctive relief in more complex IP litigation, such as patents, designs and the topic of this article, trade dress. To give an idea of the lower standards required for obtaining injunctive relief in Brazil, plaintiffs can have ex parte in chamber meetings with judges to explain their arguments. The courts seldom give prior notice to defendants. There are no prerequisites established when it comes to the evidence required for injunctive relief.
At least up until now.
While IP litigation hasn't been driving significant discussions around the interpretation of procedural rules, decisions in the last couple of years from Brazil's Superior Court of Justice (STJ) have triggered conflicting rulings from lower courts involving disputes based on trade dress. These decisions are shifting interpretations of the standards for granting injunctive relief in these cases – in particular, what evidence must be presented by the plaintiff to support its claims. Two cases are relevant for this discussion and will be addressed below.
Case examples
The first relevant case was an infringement action involving a trade dress dispute over two cotton manufacturers' packaging:
On October 25 2017, the third panel of the STJ ruled on an appeal concerning the lower court's dismissal of a technical opinion. Based on the defence's argument, the STJ's unanimous opinion was to overrule the trial court's decision that rejected the party's request for technical advice on the trade dress dispute.
In Brazilian civil procedure, judges can exercise a considerable level of free will in determining the evidence required to form the court's conviction of the case's merits. A judge has the express ability to dismiss expert testimony when it involves factual matters.
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What must be avoided is the denial of injunctive relief based on a misinterpretation of non-binding STJ decisions, especially when the factual elements of the case are clear enough for a judge to, comparing the packaging, have no doubt it is a case of clear-cut infringement. |
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However, for the STJ, although there were certain similarities between the packaging, the assessment of infringement was considered to be beyond a mere matter of fact and therefore out of the judge's field of action. For the STJ, the lower court could not have used the judge's personal opinion to assert the likelihood of confusion, especially given the lack of a proper record for the packaging or the image set provided in the case.
The STJ established that the existence of unfair competition in trade dress conflicts could not be resolved based on each judge's opinion, but rather based on technical analysis. The lower court's decision was annulled, and the case was remanded so that an expert's opinion could be issued.
Before we go on to our second case, it is worth recalling that Brazil operates under Roman law principles. Decisions from appeal courts and even superior courts are not necessarily binding. These decisions can set, however, important milestones and have persuasive effect.
In this case, the decision was included in the STJ's jurisprudence report. However, it does not constitute a qualified precedent. Therefore, it is not binding.
Furthermore, the opinion rendered by the rapporteur and unanimously agreed upon by the court justified the need for an expert's opinion due to the factual context that was presented in the case – that is, the conflict between the packages which were considered to have the same set of colours, but considerable dissimilarities, which caused doubt in the judges.
Put another way, there has been some debate whether the STJ's ruling would have gone differently if there were greater consensus on the similarity of the trade dresses at hand.
At the very least, it means that the STJ's decision, in this case, should be understood with some level of restraint. Unfortunately, it seems that some lower courts have taken it as (non-binding) precedent.
The second judgment, which also involves a STJ decision included in the court's jurisprudence report, was rendered on December 6 2018, by the fourth panel. This judgment had as a background the allegation of conflict between the visual configurations of the following packages:
As in the previous case, the rapporteur outlined in the unanimous vote that the lower court's dismissal of the need for expert evidence in assessing the trade dress conflict was mistaken.
Once again, it was asserted that the likelihood of confusion must be established with the help of an expert, who could also examine specific market aspects, consumption habits, advertising, and marketing techniques, the degree of attention of the common or typical consumer of the product in question, the time when the product launched on the market, as well as other elements that give identity to the presentation of the product or service.
As in the previous case, this decision, in addition to being non-binding, was issued by only three ministers, given the justified absences of two other ministers that compose the fourth panel of the STJ.
More importantly, the unanimous vote warned that the likelihood of confusion in trade dress disputes should be examined on a case-by-case basis. Even though the decision was unanimous in annulling the lower court's decision and remanding the case to initiate a technical opinion, it became more apparent that each case's peculiarities will determine the actual need for performing said expert evidence.
Unfortunately, the STJ did not provide any test to establish when a technical opinion is necessary and when it is not. Ultimately, we have two rulings from the STJ annulling and remanding cases where expert evidence was dismissed in trade dress disputes.
Lower courts
An incorrect message concerning the generalised need for technical evidence in trade dress disputes was received by the lower courts. As a result, lower court judges have used the requirement for an expert opinion to dismiss preliminary injunction requests.
In 2019 and 2020, several lower court decisions concerning trade dress disputes have been citing the STJ abovementioned decisions, frequently, as the sole basis for rejecting injunction relief. We are seeing a consistent application of an incorrect interpretation which presumes that the STJ has generally stipulated the need for expert witnesses to assess the likelihood of confusion in trade dress disputes.
Curiously, in the vast majority of these decisions, the judges admit they find a "great similarity" between the packaging or trade dresses, but conclude that the lower court is prevented from granting injunctive relief based on the STJ's "position" on the "issue".
It is worth recalling that the STJ decisions mentioned above never addressed preliminary injunctions specifically, but rather focused on the question of whether a judge can dismiss technical evidence based on their personal experience of the factual matter at hand.
Given, however, the current behaviour of the lower courts, we consider certain precautions advisable whenever entering a trade dress dispute where injunctive relief plays a part.
The decisions of the STJ do not set qualified precedents but are simple decisions by the third and fourth panels that have persuasive effect. They are not binding on lower courts.
Furthermore, the Superior Court decisions were in the context of addressing issues raised by the defence. Therefore, when considering the need for expert evidence, the specific case peculiarities were considered (case-by-case analysis).
More importantly, however, one must remind the lower court that decisions involving injunctive relief are based on a judgment of probability or appearance.
The probability judgment, required for urgent provisional measures, is based on allegations and evidence that demonstrate the likelihood of the plaintiff's claim or "demonstrate great reasons for making us believe that it corresponds to the truth."
For a probability judgment, it is enough for the party to convince the judge, through his allegations and evidence, that "the existence of the law is likely, that is, that there are strong indications of its existence."
Although it may be possible to discuss some degrees of probability for granting urgent relief or even to distinguish between probability and likelihood as proposed by Brazilian scholars, the fact is that, if the facts and evidence presented demonstrate, in appearance, that the author has the right he claims to have, the judge not only can, but must grant the injunctive relief.
Put plainly, if the lower court, when examining the preliminary injunction request in a trade dress dispute finds that there is a great similarity between the products or packaging in question, it seems to us that, at the very least, there is potential to consider the probability of the plaintiff's right.
Should there still be doubt about the likelihood of the plaintiff's claims, the judge can always elect to give notice to the defendant, so that it may present its brief response. After hearing both sides, the judge will be in a better position to decide on injunctive relief.
What must be avoided is the denial of injunctive relief based on a misinterpretation of non-binding STJ decisions, especially when the factual elements of the case are clear enough for a judge to, comparing the packaging, have no doubt it is a case of clear-cut infringement.
We exposed this because in at least two of the cases analysed, which denied injunctive relief, the defendant's products could be considered knockoffs that were clearing infringing the plaintiff's trade dress. It was not by chance that these decisions to deny injunctions were later overruled on appeal.
Robert Daniel-Shores
Robert Daniel-Shores is a key member of Daniel´s technology, trademark and litigation departments. He focuses his practice on a wide array of emerging technology-related issues, including data protection and privacy, information security, and online brand protection. Daniel-Shores also has particular expertise in providing strategic legal advice, combining brand protection and portfolio management to develop and execute enforcement strategies in both the online and offline areas.
He has been working in the IP field since 2010 and is a recommended attorney, listed in WTR 1000, Chambers and Partners, Legal 500 and Leaders League. He has worked on matters connected to a range of industries, notably technology, entertainment, pharmaceuticals, fashion, and energy/oil and gas. He is also a member of the Brazilian Bar Association and is registered in Rio de Janeiro and São Paulo. He serves on the association's Fashion Law Committee. He is active in other professional associations and is a member of the International Trademark Association (INTA), where he was approved for a new term on its Enforcement Committee (2018/19), the European Communities Trademark Association, serving on its Anti-Counterfeiting Committee (2016/2019), MARQUES, the Pharmaceutical Trade Mark Group, and the Brazilian Intellectual Property Association (ABPI).
Fábio Leme
Fábio Leme joined Daniel Law at the beginning of 2012 as a partner in the trademark and litigation departments after 12 years of experience in other law firms, all specialised in IP rights. His expertise covers all fields of IP and related areas with particular emphasis on judicial and administrative litigation, both in terms of Brazilian law and the PTO.
He provides legal opinions on the full range of IP matters and related areas including trademarks, domain names, trade names, copyright, litigation, image rights, regulatory issues (ANVISA) and alternative dispute resolution. He also manages corporate IP portfolios for clients' intangible rights.
