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Unfair Competition
September 1, 2021

A multinational American department store chain uncovered the fact that one of their competitors was using their slogans and marketing strategies. This took place immediately after the competitor hired one of its former employees.

Since this American company was setting up their operation in Rio de Janeiro, it was a strategic imperative that this unfair competitor’s behavior be blocked. If not, there would be a substantial loss of commercial advantage over their competitors.

Thus, the American multinational company went to court at the same time the current Industrial Property Law came into effect. The current Industrial Property Law changes the scope of trademark protection, especially where it no longer protects advertising slogans under the Brazilian Patent and Trademark Office - INPI (National Institute of Industrial Property).

The American company highlighted the extensive and previous use of advertising slogans and the use of commercial techniques, such as a guarantee of return of perishable products, and the use of a famous internal business policy (e.g.: Art 1 - Here the customer is always right / Art 2 - If the customer is not right, reread Article 1). These are used as identifying characteristics of their commercial establishments.

What are advertising slogans?

They are usually referred to as slogans and they recommend legal activities, attracting consumer attention and highlighting the qualities of a product or service. Some examples are: “I’m Lovin’ it” (McDonald’s), “it is not a Brastemp” (a well-known Brazilian brand of home appliances - Brastemp), “Nescau, energy that satisfies” (Nescau – a chocolate powdered drink brand made by Nestle in Brazil) and “Just do it!” (Nike).

Advertising slogans used by companies are no longer registrable as a trademark in INPI but are protected by an institution which combats unfair competition.

What is unfair competition?

It is defined as crime in article 195 of the Industrial Property Law – LPI - and is characterized by specific behaviors which distract clients and confuse businesses which compete against each other. Examples are product, names and distinctive trademarks imitation, the use of advertising to damage the image, product, or services of a competitor’s company.

Why is this case important?

The acting judge blocked the unfair competitor from using the American company's advertising slogan and commercial techniques, issuing a search and seizure warrant of the competitor's branches because such advertising techniques and slogan were developed and created by the American company.

According to the judge these accused practices are cited in article 195, items III and IV, of the LPI, which characterizes unfair competition.

Search and seizure were carried out in the competitor’s shops. The advertising material which imitated or reproduced advertising slogan previously used by the American Company were apprehended; as well as bags, employee uniforms, banners, and others.