Federal Court Takes Over Jurisdiction in a Trademark Cancellation Action Based on Absolute Grounds and Bad Faith

In the case "Consorzio per la Tutela del Formaggio Gorgonzola v. Couly, Mauricio Antonio – Cancellation of trademark" the plaintiff filed an action seeking the cancellation of the trademark "QUESO PATAGONZOLA" in class 29, based on the provisions of article 24, section a and b of the Trademark Law (absolute grounds and bad faith respectively), and the cease of use of said trademark. The plaintiff invoked its registration of the trademark "G GORGONZOLA" (design).

The plaintiff argued that the cancellation on absolute grounds was sought since the defendant had registered a trademark that included a substantial part of an appellation of origin, which is prohibited by article 3, section c) of the Trademark Law, while the bad faith grounds were based on the fact that the defendant knew or should have known about the existence of the appellation of origin 'GORGONZOLA'.

In the decision issued on December 21, 2022, Division I of the Federal Court of Appeals in Civil and Commercial Matters reversed the first instance decision that had decided to archive the proceedings based on the mandatory prior instance before the Trademark Office for cancellation actions based on absolute grounds.

In so deciding, the appellate court referred to the opinion of the Attorney General, who argued that even when cancellations based on absolute grounds must be filed before the Trademark Office, there is no explicit provision mandating an administrative instance for cancellations based on bad faith, which was the main argument on which the plaintiff grounded the complaint.

In this regard, the Attorney General referred to the arguments made by the plaintiff when appealing the first instance decision- There, the plaintiff had emphasized that both grounds for cancellation were irremediably linked to each other. Indeed, the fact that the defendant knew or should have known of the existence of the appellation of origin 'GORGONZOLA' determined that he applied for a trademark that includes a substantial part of said appellation.

Consequently, the Attorney General understood that, even though the plaintiff invoked two grounds for the cancellation, it would not be appropriate to artificially split the controversy. This would have caused administrative and judicial bodies to intervene simultaneously but without a comprehensive and consistent view of the matter.

Based on these arguments, the appellate court reversed the first instance decision and ordered the lower court to take over jurisdiction to hear the cancellation action.