Brazil: Identical Trademarks For Same Goods Of Different Quality - Court In Brazil Permits Coexistence

Companhia Prada Indústria e Comércio (plaintiff), owner in Brazil of the registered trademark PRADA for clothing, filed an ordinary court action with the State Court of São Paulo in 1997, requesting an injunction and damages, against Boutique Daslu Ltda. (defendant) for infringement of the mark PRADA. The plaintiff argued that the identical marks, both PRADA, created a risk of confusion, and could not coexist in the same clothing segment. It further claimed that its mark is notoriously well known in Brazil to identify clothes and clothing accessories, and that the defendant was diverting plaintiff’s clients, as it was selling articles of clothing, imported from Italy, with the illegally reproduced mark PRADA.

The State Court of São Paulo found in favor of the defendant, a decision which was sustained on appeal by the Superior State Court of São Paulo, on the grounds that the products sold by the plaintiff and those sold by the defendant, although they both identify clothing, are distinct in terms of origin, quality, nature, value and target consumers. The decision favorable to the defendant was based on the reasoning that the imported products sold by the defendant are luxury goods, sold in very exclusive boutiques to selective members of the public, who would never confuse the defendant’s products with those of the plaintiff. Furthermore, the articles sold by the defendant were always identified by the inclusion of the word "Milano" directly below the mark PRADA. The Court also stated that not only trademark rights must be considered, but also the interests of consumers. The final piece of reasoning offered was the principle of relative novelty, which could be interpreted to mean in the present case that identical marks may coexist to distinguish the same products, provided they are of a different quality and consequently will not be confused.

This final decision, and the first instance decision it affirmed, mean that the defendant may continue selling articles of clothing and accessories under the mark PRADA, provided it includes the element "Milan". No appeal lies from the final decision.

A background fact of the case is that "Daslu" (the title of defendant’s boutique) is actually a string of luxury stores located in the State of São Paulo, founded in 1958, which sells original very high price quality products from the most prestigious firms of foreign fashion to the most select of consumers in Brazil. One of the famous customers who purchases these products at Daslu is Brazilian top model Gisele Bündchen.

(Companhia Prada Indústria e Comércio vs. Boutique Daslu Ltda.-Appeal 103992–4/1 – São Paulo–September 26, 2000).