Moral damages cannot be assumed as an automatic consequence of counterfeit merchandise

Moral damages cannot be assumed as an automatic consequence of counterfeit merchandise

Patricia Covarrubia   August 20, 2010   No comments:

A Brazilian Superior Court of Justice has held that the marketing of counterfeit merchandise does not necessarily cause damage to an image.

Grêmio Football Porto Alegrens, a football club, brought a case against Beneduzi Jachetti, a company marketing products under the name of the football club. An interim order and seizure of the counterfeited products were sought. The club also requested compensation for material and moral damages. The Court of the State of Rio grande do Sul upheld the interim order but the compensation for moral damages was dismissed.

Grêmio appealed arguing that the sale of fake products do not promote the image of the sports club, and it was evident the moral damage suffered, since it would be presumed to harm the reputation of the entity. However, the Terceira Turma do Superior Tribunal de Justiça (STJ) and under the rapporteur of the case, Minister Sydnei Benetti, rejected the arguments explaining that despite all the reasoning presented by the plaintiff – regarding the damage to the image, “the facts actually make up material damage and do not necessarily cause damage to the image." For the minister, the case at issue did not lead to the conclusion that the fans and the general public were associating the brand of the club with the counterfeited (bad quality) products. Nevertheless, he added that “damage to an image can indeed be compensated, but losses were not in evidence in this case”. Affixing the brand in these products - hypothetically of poor quality, “does not induce the consumer to think that Gremio Football Porto Alegrense produces bad stuff, unworthy of respect.”

The sentence, which became final on that point, ordered the company Beneduzi Jachetti Ltd to compensate for ‘material’ damages only.

Marketing unofficial merchandise causes economic damage to the right holders, but does it produce moral damage? I will have to agree with the STJ in saying that there are circumstances when this could happen but this need to be proven by the plaintiff – what do you think?

Read More

Rio 2007: can moral damage be presumed or must it be proved?

Rio 2007: can moral damage be presumed or must it be proved?

Jeremy   June 16, 2010   No comments:

Although soccer World Cup ambush marketing is currently getting plenty of publicity, it is the Rio Pan American Games in 2007 which is the focal point of a recent piece of Brazilian litigation -- the Court of Appeals for the State of Rio de Janeiro has upheld a damages award in a trade mark infringement action brought by the Rio Pan American Games Organizing Committee against a taxi cooperative which used the RIO 2007 word and design trade mark without authorization.

According to the trial court, the cooperative infringed. The court awarded damages based on the royalty the cooperative would have paid, had it been a licensee of the Committee. The Committee also sought “moral damages” (compensation for harm to the Committee’s reputation) and it was against that court's refusal to award damages under this head of claim that the appeal was lodged.

Dismissing the appeal, the Court of Appeals said there was no proof of reputational harm. This decision is said to be at odds with recent decisions of the Brazilian Superior Court of Justice. According to that court, specific proof of reputational harm is not required in the case of trade mark infringement because damage to reputation may be presumed.

Source: INTA Bulletin, vol.65, no.11

Read More