Before the International Centre for Settlement of Investment Disputes

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Before the International Centre for Settlement of Investment Disputes BEFORE THE INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES Philip Morris Brands Sàrl, Philip Morris Products S.A., and Abal Hermanos S.A., Claimants v. Oriental Republic of Uruguay, Respondent ICSID Case No. ARB/10/7 Expert Rebuttal Opinion by Professor Gustavo Fischer ____________________________________________________________________________ I. Introduction and Summary of Key Conclusions 1. In this Opinion, I respond to each of the issues and arguments raised by Professor Andrea Barrios Kübler in her report, dated October 2, 2014 (“Barrios Report”) and explain their lack of merit. 2. In Section II, I discuss the right of trademark owners to use their trademarks in Uruguay. First , I discuss the right to use trademarks under Uruguayan law. Second , I explain that trademarks are considered property under Uruguayan law; as such, owners of trademarks are entitled to their “enjoyment” which includes the right to use the marks. 3. In Section III, I address Claimants’ trademarks. First , I explain that trademark owners are entitled to protection under Uruguayan law even if the trademark in use differs from the registered trademark in non-essential features that do not affect the distinctive character of the trademark. Second , I compare the trademarks as used and as registered by Claimants, noting that all of Claimants’ product variants that use Claimants’ trademarks in commerce fall within the scope of protection of Claimants’ registered trademark rights. 4. For the reasons that I explain below in this Opinion, I conclude that: • A trademark owner in Uruguay has an affirmative right to use his or her trademark under Uruguayan law. • International agreements applicable in Uruguay (including the Protocol on Harmonization of Intellectual Property Regulations in Mercosur for Trademarks, Indications of Source and Appellations of Origin, approved by Law No. 17,052 of December 14, 1998 (hereinafter, “the Protocol”)) recognize that trademark owners have a right to use their marks. • Intellectual property rights are property rights under Uruguayan law and, therefore, owners of such property are entitled to its use. • Uruguayan law treats intellectual property rights as property rights. • The right to enjoy and use property (including intellectual property) is protected under Uruguayan law. • A trademark owner is entitled to protections under Uruguayan law even if the trademark in use differs from the registered trademark so long as the differences do not affect the trademark’s distinctive character. • The scope of a trademark right in Uruguay encompasses both the right to use the trademark exactly as registered, as well as the right to use the trademark in a form that maintains its distinctive character. • Claimants’ trademarks as used in commerce do not differ in distinctive character from Claimants’ trademarks as registered; therefore, Claimants have a right to use those marks. II. Right to Use 5. In my First Opinion, I explained that the registration of a trademark with the Uruguayan Patent and Trademark Office (“DNPI”) grants both a positive right to use the trademark and a negative right to exclude others from using the trademark. I noted that Uruguayan Trademark Law No. 17,011 (the “Trademark Law”) as well as Law No. 17,052 that incorporated into Uruguayan law the Mercosur Harmonization of Intellectual Property Regulations Protocol (the “Protocol”) expressly refer to “the right to use” trademarks, in addition to the right to exclude others from using them. 1 I also noted that Uruguayan law treats 1 See Law Concerning Trademarks, Law No. 17,011, dated September 25, 1998, Art. 70 [Exhibit C-135]; see also id. at Art. 58 (expressly referring to the “ right of use, in whole or in part, of a registered trademark ”) [Exhibit C- 135]; Law No. 17,052 dated December 14, 1998, approving the MERCOSUR Harmonization of Intellectual Property Regulations Protocol [Exhibit AB-22]. See Expert Opinion of Professor Gustavo Fischer, February 28, 2014 (“First Fischer Opinion”), at paras. 28-37 [Exhibit CWS-012]. 2 intellectual property rights as property rights, the “enjoyment” of which is protected under the Constitution and Civil Code. 2 6. Respondent’s Uruguayan expert on intellectual property, Professor Andrea Barrios Kübler, disagrees. According to Professor Barrios, there is no right to use under Uruguayan law, either on the basis of international law or domestic law. Professor Barrios’s allegations are without merit. In the sections that follow, I respond to each of the issues raised by Professor Barrios in her report. First , I discuss the right to use trademarks under Uruguayan law, including under international agreements applicable in Uruguay. Second , I explain that trademarks are considered property under Uruguayan law; as such, owners of trademarks are entitled to their “enjoyment” which includes the right to use the marks. A. The Right to Use Trademarks under Uruguayan Law 1. International Agreements Applicable in Uruguay Recognize that Trademark Owners Have a Right to Use their Marks a. The Mercosur Protocol Provides a Right to Use 7. As I explained in my First Opinion, Article 11 of the Protocol on Harmonization of Intellectual Property Regulations in Mercosur for Trademarks, Indications of Source and Appellations of Origin, approved by Law No. 17,052 of December 14, 1998 (hereinafter, “the Protocol”), leaves no doubt that a trademark registration grants both a positive right to use and a negative right to exclude others. Article 11 expressly provides that: [t]he registration of a trademark shall grant the owner the exclusive right to use , and the right to prevent any person from performing, without the patentee’s consent, the following acts, among others: the use, in commerce, of a sign identical or similar to the trademark, for any products or services, when said use may cause confusion or a risk of association with the holder of the registration, or unjust economic or commercial damage, caused by a dilution of the distinctive force or the commercial value of the trademark, or a risk of an improper use of the prestige of the trademark or of its owner. 3 8. Although Professor Barrios recognizes in her report that “various international [treaties] were taken into account” during the parliamentary debate regarding Uruguay’s 2 Uruguayan Constitution, 1967 Article 7 [Exhibit C-259]; see also Uruguayan Civil Code, Arts. 486 and 487 [Exhibit C-266] . See First Fischer Opinion at paras. 7, 31-33 [Exhibit CWS-012]. 3 MERCOSUR Harmonization of Intellectual Property Regulations Protocol, Article 11 (emphasis added) [Exhibit C-155]. 3 Trademark Law, 4 according to Professor Barrios, there is no right to use provided in those treaties. Professor Barrios, however, deliberately omits the Mercosur Protocol from her list of intellectual property treaties that were considered during the Parliamentary debate on Uruguay’s Trademark Law. 5 9. According to the legislative history on which she relies, not only was the Protocol among the sources considered for Uruguay’s 1998 Trademark Law, but the Uruguayan Legislature debated the Protocol the very same day that it debated the Trademark Law No. 17,011. For example, when debating the Trademark Law on April 15, 1998, the Uruguayan Legislature stated: [W]ith the approval of [the Trademark Law] . we will have an adequate legal framework fundamentally in the region and, in particular, with relation to MERCOSUR. 6 * * * Article 11 [of the Protocol] establishes the rights that are conferred. The same expresses that the registration of a trademark shall confer to its owner the right of exclusive use and shall impede a third party from realizing, without his consent, certain acts. 7 10. Professor Barrios argues that the Mercosur Protocol is irrelevant because it is only in force between Uruguay and Paraguay and has no force of law domestically. 8 This is incorrect. In fact, the Protocol is directly applicable as Law in Uruguay. The Protocol, signed by the Mercosur member countries through Decision 8/95 of the Common Market Council on August 5, 1995, was effectively approved by Uruguay in Law 17,052 of December 14, 1998. The Protocol is law in Uruguay, and is an integral part of the body of laws currently in effect in Uruguay on trademark matters, as of January 18, 1999, 10 days after its publication. 4 Expert Opinion of Professor Andrea Barrios Kübler, October 2, 2014 (“Barrios Opinion”), at para. 6 n. 1 [Exhibit REX-004]. 5 See Barrios Opinion at para. 6 n. 1 (stating that “the parliamentary debate of Law No. 17,011 show[s] that various international sources were taken into account, including: [listing a number of IP treaties but omitting the MERCOSUR Protocol]” (citing Uruguayan Senate, Minutes of Sessions , No. 228, Vol. 387 (April 15, 1998), pp. 319, 322, 333 [Exhibit R-141])) [Exhibit REX-004]. 6 Uruguayan Senate, Minutes of Sessions , No. 228, Vol. 387 (April 15, 1998) English Translated Excerpts p. 336 [Exhibit C-364]. 7 Uruguayan Senate, Minutes of Sessions , No. 228, Vol. 387 (April 15, 1998) English Translated Excerpts p. 377 (emphasis added) [Exhibit C-364]. 8 See Barrios Opinion at para. 8 [Exhibit REX-004]. 4 11. Professor Barrios contends that an International Convention that contains provisions on trademarks, even if it has been approved by Law in Uruguay, would lack legislative force and value within the country. 9 That is incorrect. The argument that Professor Barrios makes is a point that has already been debated and resolved in Uruguay, contrary to what Professor Barrios contends. It was resolved in the past when the force and value of the Paris Convention for the Protection of Industrial Property was analyzed, which Convention was approved by the Uruguayan legislature in Decree Law No. 14,910, dated July 19, 1979. 10 12. In Uruguay, treaties that have complied with the approval mechanism established in the Constitution, pursuant to the legal system of Uruguay, constitute rules of law directly applicable to the national territory.
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