Trade name cancellation based on non-use

Trade name cancellation based on non-use has been widely debated in academic writing and case law due to the particular nature of the trade name, which in most legislations is protected as from its first use in the market and in other legislations does not exist for being considered a service mark. 

Peruvian law has a gap in this respect, since this legislation and the current Andean legislation do not expressly provide for the trade name cancellation action based on non-use.

Although Article 87 of Legislative Decree 1075 establishes that the provisions concerning the Title of Trademarks and those of Decision 486, where appropriate, shall be applicable to trade names, the Peruvian Authority has repeatedly interpreted that the complementary application will occur only when such provisions are not contrary to the nature of the trade name.

By way of example, the Division Specialized in Intellectual Property of Indecopi (Administrative Court), by Resolution N° 2737-2016/TPI-INDECOPI, dated August 03, 2016, declared inadmissible the cancellation action of the trade name PERU CHASQUITUR and logotype, based on the following grounds:

(…) “Cancellation based on non-use of a trade name would lack practical purpose since if a third party applies for the registration of a mark identical or similar to a registered trade name, it suffices that the owner of the trade name does not prove the use of the trade name in said proceeding, for the owner not to exercise its rights in said trade name, not being necessary the cancellation of the trade name based on non-use.

In this sense, it has been determined that it is senseless to decide on the use (or lack of use) of the trade name PERU CHASQUITUR and logotype as cancellation based on non-use cannot be applied to the registration of trade names.”

In analogous cases, the Division Specialized in Intellectual Property of Indecopi (Administrative Court) decided along the same lines by declaring inadmissible the cancellation action against the registration of the trade name MONTESSORI, stating in Resolution N° 3154-2013/TPI-INDECOPI, of September 17, 2013, the following:

(…) “Contrary to C.E.P. María Montessori E.I.R.L.’s statement, the Court considers worth mentioning that unlike Decision 344, Decision 486 does not include an article that allows, in the case of trade names, applying the rules that regulate trademarks, as did Article 128 of Decision 344.

In fact, the reasons for cancellation based on non-use –provided for in Article 165 of Decision 486- are not applicable to the registration of trade names, since current legislation establishes that the right to the exclusive use of a trade name is born and keeps in force as a result of its effective use in the market, the registration of a trade name being merely declarative.

In that sense, it has been determined that it is senseless to decide on the use (or non-use) of the trade name MONTESSORI, as cancellation based on non-use cannot be applied to registrations of trade names.

Moreover, it is worth mentioning that Article 191 of Decision 486 makes no reference to cancellations actions based on non-use of trade names.”

Therefore, the deciding criterion of the Administrative Court in cases of cancellation of trade names is to confirm their inadmissibility.