Trade Dress in Paraguay: A Substantial Shift in Case Law.

When we think of brands, we generally most of us imagine a specific, distinctive name, image, logo, or label that we attach to a product or to the advertising of a service, giving it a distinctive character—a seal of quality and guarantee—so that we can distinguish our products and services from those of third parties and competitors.

But the term “trademark” goes beyond a simple name or a mere label, encompassing much more, including various shapes, colors, sounds, and even three-dimensional objects (three-dimensional trademarks) and “trade dress”—that is, the elements that make up a product’s external appearance, such as the shape of a package, a store’s ambiance, the fonts used, etc.

In fact, the definition provided by Paraguay’s Trademark Law, Law 1294/98, is quite broad, defining “trademark” as: “…all signs that serve to distinguish goods or services. Trademarks may consist of one or more words, slogans, emblems, monograms, seals, vignettes, or reliefs; names, fanciful terms, letters, and numbers in distinctive shapes or combinations; and combinations and arrangements of colors, labels, containers, and packaging. They may also consist of the shape, presentation, or packaging of the goods or their containers or wrappings, or of the means or place of sale of the corresponding goods or services. This list is merely illustrative…”¹

So, a brand can consist of a word, a slogan, or the arrangement of colors, labels, packaging, and other elements; the list includes for illustrative purposes only, based on this, we can conclude that the meaning is broad and not restrictive, and that we could consider a myriad of signs which, by meeting the characteristics that every “trademark” must have—namely, being distinctive—could be registered and protected as a trademark.

In this regard, legal doctrine generally accepts that the term “trademark” can be understood to encompass various distinctive and original signs, such as embossed designs, advertising slogans, combinations of letters or numbers, containers, packaging, and even the shape of buildings.

In our country, the doctrine of trade dress—or the acceptance of non-traditional marks—was not and continues to be poorly accepted by the authorities at the National Intellectual Property Office, and in countless cases, sound marks, color combinations, packaging, and building shapes, among others, have been rejected.

SUPREME COURT OF JUSTICE DECISION NO. 227: A Shift in Legal Doctrine?

Notwithstanding the foregoing, the Supreme Court of Justice, in a recent judgment issued on June 2, 2020, it reversed all previous provisions and, for the first time, allowed the registration of the combination and arrangement of colors applied to a motor vehicle.

In fact, the Paraguayan Touring and Automobile Club requested the registration of the term T A C Py CRANE (Design and Emblem in Color) with the following label:

In International Class 39, to cover “Roadside Assistance and Towing Services”, thereby seeking to protect not the vehicle’s design itself, but rather the combination and specific arrangement of the vehicle’s colors. That application was rejected at various levels, both administrative and judicial.

First, it was rejected by the Trademark Office; then, on appeal, by the General Directorate of Industrial Property; and finally, by the Supreme Court of Justice—all of which ruled that the application did not meet the requirements for a trademark.

In fact, the National Intellectual Property Office considered that the aforementioned application for registration fell under the prohibition set forth in Article 2, subsection “c” of the Trademark Law², in that The car or vehicle presented as an original is not owned by the applicant in terms of its creation or production; therefore, the applicant cannot register or claim as his own something that does not belong to him….”

The Supreme Court of Justice ruled otherwise. After analyzing the matter at hand, the Court issued the following ruling:

1. The applicant sought to register his design and logo in color, which is referred to in legal doctrine as “trade dress”….
2. That, according to legal doctrine, trade dress consists of the set of elements that identify a specific product, service, or establishment and that allow it to be distinguished from those marketed by competing third parties. It constitutes the product's external appearance, such as the shape of the packaging, labels, colors, and others; and
3. That this would be permitted under Article 1 of Law 1294/98, since that very article provides a broad definition—neither restrictive nor exhaustive—of what may constitute a trademark, provided that it is distinctive, original, and serves as a means for promoting products in the market and facilitating their purchase by consumers.

This has brought about a significant change, reversal, and transformation in all aspects of the doctrine of trade dress and its acceptance in Paraguayan law. From now on, the provisions of Article 1 of Law 1294/98 —the Trademark Law—regarding the registration of products and the protection of various signs that, while not traditional trademarks, may nonetheless be distinctive and enable consumers to distinguish a product or service from a specific individual or company from the rest.

¹Law 1294/98 – Trademark Law – Article 1: Article 1. Trademarks are all signs that serve to distinguish goods or services. Trademarks may consist of one or more words, slogans, emblems, monograms, seals, vignettes, or reliefs; names, fanciful terms, letters, and numbers in distinct forms or combinations; and combinations and arrangements of colors, labels, containers, and packaging. They may also consist of the shape, presentation, or packaging of the goods or their containers or wrappings, or of the means or place of sale of the corresponding goods or services. This list is merely illustrative.

² Law 1294/98 – Trademark Law – Article 2: The following may not be registered as trademarks: “…c) the usual shapes of a product or its packaging, the necessary shapes of the product or service in question, or those that provide a functional or technical advantage to the product or service to which they are applied;…”