Trademark Infringement, Injunctions, and Damages: The Case of “Paraje Los Ciervos” v. “Los Ciervos” — Is Compensation Warranted?
Originally published in the Intellectual Property 4.0 Supplement of La Ley Thomson Reuters magazine, Year III – No. 2, August 2024, ISSN: 3008-8712
SUMMARY: I. The facts – II. First instance analysis – III. The appeal – IV. Second instance analysis – V. Conclusions: Ekmekdjian and other concepts
The facts
Paraje Los Ciervos S.A. filed a lawsuit against Nordelta S.A., following a preliminary injunction request, seeking to put an end to the unauthorized use of the trademarks “LOS CIERVOS” and/or “CIERVOS” in the real estate development “Puerto del Lago.” The plaintiff also claimed compensation for damages and legal costs.
The plaintiff asserted ownership of the “PARAJE LOS CIERVOS” trademark, both in word and figurative forms, registered in classes 35, 36, 37, 41, and 43 to identify a private neighborhood project launched in 2000 in Campana, Buenos Aires Province.
Paraje Los Ciervos further requested that its oppositions to Nordelta’s applications for the trademarks “LOS CIERVOS” and “LOS CIERVOS PUERTO DEL LAGO” in classes 35 through 45 be upheld, on grounds of likelihood of confusion.
In response, the defendant argued that the use of “LOS CIERVOS” was always in connection with “PUERTO DEL LAGO,” a town-like development consisting of several neighborhoods owned by Nordelta.
Nordelta denied the likelihood of confusion, stated that the trademark applications had been abandoned, and noted that following notification of the injunction, it had ceased using “CIERVOS” and “LOS CIERVOS,” replacing the names with “LOS CEIBOS.”
With the oppositions declared moot and the cessation of use confirmed, the case ultimately turned on whether Paraje Los Ciervos had suffered damages due to the alleged unauthorized use of the trademarks—despite the cessation.
First instance analysis
To determine whether the defendant’s use of “LOS CIERVOS” had caused damages, the judge compared the contested signs.
The court found no likelihood of confusion between the trademarks. It held that “PARAJE,” the distinguishing element in the plaintiff’s trademark, was the dominant and distinctive feature, despite both marks containing “LOS CIERVOS.”
Furthermore, the judge noted that Nordelta had not completed the access road to the development, nor had it carried out any subdivision or lot sales. Thus, there was no evidence that consumer confusion had actually occurred.
The damages claim was therefore dismissed. The judge held that Paraje Los Ciervos had failed to prove that it suffered harm from Nordelta’s use of “LOS CIERVOS” prior to being notified of the injunction.
The appeal
Paraje Los Ciervos S.A. appealed the ruling, seeking reversal of the decision and admission of its claims. Among the arguments presented:
a. The court had declared the oppositions moot without fully considering the timeline of events. The oppositions were filed in 2011, the injunction was granted in 2012, but the defendant did not stop using the trademarks until 2014, prompting this action.
b. The court had also declared the cessation of use moot without acknowledging the context: Nordelta ceased use only after resisting enforcement of the injunction for over a year, and only following multiple non-compliance complaints and this main action.
c. The judge erred in the comparison of the marks. According to the appellant, the dominant element was “CIERVOS,” not “PARAJE,” and both marks identified identical services.
d. The plaintiff held valid trademark registrations containing the term “CIERVOS” in classes 35, 36, 37, 41, and 43.
Second instance analysis
The appellate court began by noting that Nordelta’s trademark applications had been abandoned nearly a decade ago and that it had stopped using “LOS CIERVOS” around the same time, replacing it with “LOS CEIBOS.” It thus upheld the first instance ruling on the mootness of the oppositions and the cessation of use.
The court then addressed the remaining issues—whether the marks were confusingly similar and whether the damages claim had merit.
Upon comparing “PARAJE LOS CIERVOS” (registered in word and figurative forms) with “LOS CIERVOS” and “LOS CIERVOS PUERTO DEL LAGO” (used and applied for by Nordelta), the court found a likelihood of confusion.
The court held that “PARAJE” was a generic term and that the distinguishing element in both cases was “LOS CIERVOS.” Similarly, “PUERTO DEL LAGO” was deemed a secondary element, merely descriptive of a location.
The marks had coexisted in the same industry—real estate—and designated the same product—a residential neighborhood. The applications filed by Nordelta overlapped with the plaintiff’s registrations in five of the six classes, and with its own filings in five of the ten classes.
The court further noted that both developments were located in adjacent areas (Campana and Escobar), targeting the same consumer base.
Although the plaintiff had not completed its development, it had incorporated in 2005, applied for the trademarks in 2006, and launched advertising campaigns by 2012. The court thus found that the lack of completed construction did not negate the plausibility of damages.
Conclusions
The appellate court reversed the first instance ruling and ordered Nordelta S.A. to pay damages. The remaining judges concurred.
The case is notable because damages were awarded even though the unauthorized use had already ceased. The court ordered Nordelta to pay ARS 40,000,000 for damages caused between 2010 and 2014, during which time it had promoted and successfully sold properties under the “LOS CIERVOS” name—diluting and weakening the distinctiveness of the plaintiff’s “PARAJE LOS CIERVOS” trademark.
As widely accepted in case law and legal doctrine, the gradual loss of association between a mark and its product creates a presumption of damage—aimed at preventing unlawful conduct from going unpunished due to evidentiary challenges.
The court also considered the total value of preliminary sales contracts (Boletos de Compraventa) for the lots in the “Ciervos” neighborhood, as well as the franchise value of a real estate development at that time.
Awarding damages despite the cessation of the unauthorized use is not exceptional. The precedent was set in the well-known 1992 ruling “Ekmekdjian, Miguel Ángel v. Sofovich, Gerardo et al.,” in which a television program had ceased airing but damages were still awarded for moral harm caused.
Other similar cases include “Campillay, María Eugenia v. National State – Gendarmería Nacional” (2017), related to police violence that had already ceased, and “M.M.A. v. Building Owners Association A.L.E.” (2007), concerning water damage from leaks that had been repaired by the time of the ruling
As for the other aspects discussed in the case, the appellate court’s treatment of various key trademark law concepts appears highly sound. One such example is its analysis of the “mot-vedette” in the assessment of ‘PARAJE LOS CIERVOS’.
As Dr. Mitelman explains, “it is undisputed that if one of the components plays a more relevant distinguishing role than the others, then the examiner or judge must give that element a predominant place in the comparison. And this is logical, as it will be through that element that the consumer associates one trademark with another.”
Beyond the entire body of legal doctrine surrounding the “mot-vedette” concept, it is enough to look at case law—at least a few of the many decisions that address the idea of the dominant element—to confirm that the decision was appropriate.
For example, in a case involving the trademarks “PATIO DE TANGO” and “TANGO,” both in class 33, the judge stated: “the remaining words (‘PATIO DE’) constitute a set of common expressions that do not weaken the distinctive strength of ‘TANGO’. Consequently, when focusing the comparison on the predominant expression of the applied-for mark, it becomes clear that it is identical to that of the opponent, which leads to the conclusion that a likelihood of confusion exists.”
This concept is well established; in fact, it can be found in a 1999 decision involving “CASA FIESTA” and “LA FIESTA,” both in class 30. There, the court considered that “FIESTA” was the dominant element “since the article ‘LA’ adds nothing, and (…) the word ‘CASA’ appears merely descriptive of it (‘party house’, ‘house where parties are held’), regardless of the number of syllables or word placement.”
Additionally, it would have been desirable for the lower court to have taken all relevant facts into account—among them, that two years had passed between the issuance of the preliminary injunction and the actual cessation of trademark use by the defendant, despite complaints of non-compliance.
On another note, I agree with the final judgment’s assessment of the “consumer public,” as both parties indeed target the same market segment.
In conclusion, this case is notable for several reasons. Chiefly, because it applies to a trademark dispute the principle developed in the Ekmekdjian case: the defendant was ordered to pay damages despite having ceased the unlawful conduct—in this instance, the unauthorized use of a trademark.