Failing to register your trademark can result in the loss of money, positioning, and time invested.
In the business world, there are decisions that seem minor but can shape the future of a business. One of these is registering a trademark before launching a product or service.
In Chile, it is common to see individuals, entrepreneurs, and companies spending months creating their brand, visual identity, commercial image, designing a logo/label, investing in social media and advertising material, designing packaging, and developing products under a specific brand, without first checking the feasibility of registering that brand or registering it directly with the National Institute of Industrial Property.
This omission can be a costly mistake that jeopardizes the investment and effort made to position the brand and business.
Let’s consider the following hypothetical scenario in which I, as an individual, entrepreneur, or company, launch a product on the market, investing time, resources, and money in developing my brand.
Notwithstanding this, despite all my efforts, I have not previously verified whether it is feasible to register it with the National Institute of Industrial Property (INAPI), nor have I submitted an application to obtain exclusivity over that name, in accordance with the provisions of the Industrial Property Law.
As a possible consequence and once this entire process has been completed, I decide to apply to register my trademark with INAPI. It is likely that after submission, it will be subject to an opposition claim filed by a third party who owns a trademark that is identical or substantially similar to the one I applied for and on which I have built my entire business model.
Additionally, INAPI makes a substantive observation, pointing out that there is a previously registered trademark with substantial similarities intended for the same products or services, which is why the one I tried to register cannot validly coexist in the market with the one previously registered or applied for by a third party.
What would happen in that case?
I do have the possibility of responding to both the opposition claim and the substantive observations in order to try to overcome these obstacles and achieve the registration of my trademark. However, there is a high probability that INAPI and the Industrial Property Court (if I have to appeal to a second instance) will affirm that the trademark I applied for is substantially similar or identical to a previously registered or applied for trademark and therefore decide to reject the registration of my trademark.
This situation clearly constitutes a serious problem for my business, in which I have invested time, money, and resources. I will therefore have to decide whether to continue using my unregistered trademark (assuming the risk of legal infringements) or to change the name in order to register it with INAPI, which will involve modifying labels, packaging, and advertising material, generating new expenses.
In this regard, it is very important to register the trademark before allocating significant financial resources and efforts to its development and positioning. In Chile, the principle that the first to register acquires the right applies. Obtaining registration grants the owner exclusive use of the sign throughout the national territory and allows them to prevent third parties from using it or attempting to benefit from it. In addition, registration is a defense tool to act against infringements and demand compensation for misuse.
Our Industrial Property Law expressly states in Article 19 bis D: “The trademark confers on its owner the exclusive and exclusive right to use it in economic traffic in the manner conferred upon it and to distinguish the products or services covered by the registration.
Consequently, the owner of a registered trademark may prevent any third party, without his consent, from using identical or similar trademarks in the course of trade for goods or services that are identical or similar to those for which the registration has been granted, provided that the use made by the third party is likely to cause confusion or deception. When the use made by the third party refers to an identical trademark for identical goods or services, confusion shall be presumed to exist.”
Therefore, registering a trademark should not be seen as an expense, but as a real investment. Registering the trademark from the outset protects the investment in marketing, allows it to be licensed with confidence, and grants exclusive rights in the event of any conflicts. More than an expense, it is a key action to safeguard and strengthen the business, ensuring exclusivity over its use and avoiding the risk of coincidences with previously registered trademarks.
For more information on these topics, please contact our Intellectual and Industrial Property Group:
Eugenio Gormáz | Partner | egormaz@az.cl
Carlos Lazcano | Senior Associate | clazcano@az.cl
Fernanda Rodríguez | Associate | frodriguez@az.cl
Esteban Orhanovic | Associate | eorhanovic@az.cl
Matías Selamé | Associate | matiasselame@az.cl
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