Member Article

You are undertaking a project for a new business, a startup.You already have the financial/commercial side well thought-out, and have commissioned a designer to sketch a logo and design a corporate identity under the brand you have decided to use. You buy stationery, signs, business cards, among others. You commence the required process to obtain a notice of operation (Aviso de Operación) at the Ministry of Commerce and Industries and, at that moment, you realize that there is not one, but several businesses whose names are identical or confusingly similar to yours.

How did this happen?

To answer this question, we must first understand what a trademark is and what is its purpose. A trademark is a distinctive sign or set of signs (below we will explain what signs can constitute trademarks) that allows us to differentiate the products, services and trade name of one company from those of another.

The main feature of a trademark is its distinctive character, that is, it must be capable of distinguishing a product and/or service from others that already exist, in order for a consumer to identify, distinguish and differentiate said product and/or service from an existing one that is identical or similar in nature.

What type of signs can constitute trademarks?

The applicable Panamanian law, Law 61 of October 2012, dictates that trademarks may consist of: words or a combination of words; images, figures, symbols and graphics; letters, numbers and combinations; three-dimensional shapes; colors in their different combinations; sounds; smells or tastes; or any combination of any of the previously mentioned elements.

So, based on the above, what are the different types of trademarks?

1. Fanciful Marks: Those that provide the greatest distinctive strength, since they are distinctive words or signs that did not previously exist and were conceived / created for the purpose of distinguishing a specific product or service, such as "Adidas" or" Starbucks".

2. Arbitrary Marks: Those that are nothing more than brands made up of words with a well-known meaning, but the key element is that said meaning has nothing to do with the nature of the product or service they seek to identify, such as "Dove" for soaps and shampoos or "Apple" for computers. These names have a common meaning that is different from the products they represent.

3. Suggestive Marks: Those which, as its name indicates, suggest the nature of the product or service or some of its characteristics, without directly describing it. For example,"Netflix” qualifies as a suggestive mark, since the word "net" suggests the use of the internet and the word "flix" is a shortened version of "flicks", which is a colloquial way of saying“movies”.

4. Descriptive Marks: Refers to words or sets of words that identify the characteristics or elements that make up a product or service and serve to describe that product. Examples of descriptive marks are “General Electric” for an electricity company and “Telefónica” for a mobile communications company.

5. Generic Marks: Those that, because of their constant use, are merely the common name used to identify a product or service, such as “Kleenex”.

Before investing in the corporate image of a business, an entrepreneur or startup founder must verify the existence of identical or similar marks, to the extent that those similar marks could cause confusion. This is accomplished by carrying out a search or verification of trademarks that are in the process of being registered or have been registered with the General Directorate for Registration of Industrial Property (DIGERPI, for its name in Spanish), and in the Panama Emprende system, since, with regards to intellectual property, Panama recognizes a right over a trademark to those persons who first used the trademark within Panama for commercial purposes.This verification can be carried out electronically, through queries in DIGERPI’s database, or in writing, by submitting a search request with said entity.

In any case, consulting with an intellectual property lawyer is advisable, so as to properly interpret the results of a trademark search and/or provide advice on theprocedureto register a trademark.

With regard to ideas, we note that a single idea is not protected intellectual property. Under the prism of copyright, the formal expression of ideas is protected. This means that the ideas must have been affixed or embodied in some material mean, such as a book, a canvas, an audiovisual work, an architectural plan, a poem or a song, to enjoy copyright protection.

Finally, the main advice before investing in the name and image of a new business, is to consult the various sources available with respect to trademark and notice of operations (Aviso de Operación), and seek legal advice from an experienced attorney in the field to avoid losing what was invested in promotional materials, creating an image, time and, in the worst case, being involved in a trademark dispute. We are at your service for any queries you may have on these issues.

For more information on these topics, please contact:

Allen Candanedo
MORGAN & MORGAN
Tel: 265-7777
Email: [email protected]