Does Portuguese case law conform to the EU regime on secondary meaning?

Under the EU Trade Marks Directive (Article 4(1)(b)–(d)) and, consequently, under Portuguese law (Article 209(1)(a), (c), and (d), and Article 231(1)(b) and (c) of the Portuguese Industrial Property Code (Código da Propriedade Industrial, or CPI)), a trademark may be refused registration. If already registered, it may also be declared invalid, inter alia, where the sign consists exclusively of descriptive, customary, or otherwise non-distinctive elements.

It is, however, important to underline that such cases of lack of distinctiveness may be overcome where the applicant or proprietor demonstrates that, through use in the marketplace, the sign has acquired distinctive character (Article 4(4), Trade Marks Directive; Article 231(2), CPI). In the Portuguese legal tradition – and likewise in that of certain other member states – this phenomenon is, under North American influence, commonly referred to as “secondary meaning”.

Although the expression has no roots in European or Portuguese law, the terminology aptly describes the underlying phenomenon: a sign that was ab initio devoid of distinctive character comes to be perceived by the relevant public as an indicator of commercial origin for specific goods or services; that is, the sign acquires a secondary meaning as a trademark.

What is decisive, therefore, is not the mere use of the sign but the demonstration that at least a significant portion of the relevant public has come to perceive it as an indication of business origin. The case law of the Court of Justice of the European Union (CJEU) has consistently affirmed this understanding, clarifying, on the one hand, that the assessment of acquired distinctiveness is highly fact-specific, and, on the other, that its establishment must be based on a global evaluation of various factors. These include the market share held by the mark; the intensity, geographical extent, and duration of its use; the scale and relevance of the undertaking’s advertising investments; the proportion of the relevant public identifying the goods by means of the mark as originating from a particular undertaking; and statements from chambers of commerce or professional associations (CJEU, Joined Cases C-108/97 and C-109/97, Chiemsee).

For this purpose, market surveys are often adduced as evidence, although the CJEU has made it clear that proof of acquired distinctiveness cannot depend exclusively on such evidence (CJEU, Joined Cases C-217/13 and C-218/13, Oberbank v Deutscher Sparkassen- und Giroverband).

An examination of the European and Portuguese regimes reveals that the possibility of overcoming absolute grounds for refusal through acquired distinctiveness is not universal. Even where it is empirically demonstrated that a sign has acquired distinctiveness through use, this cannot override certain absolute grounds; for example, those based on technical or aesthetic functionality. However, the law provides no such exception with regard to the grounds relating to distinctiveness.

This normative choice diverges from the US model, where the doctrine of secondary meaning is expressly inapplicable to generic signs; i.e., those that commonly and necessarily designate the very kind or nature of the goods or services. Although such an exclusion is not found in Portuguese legislation, some higher Portuguese courts, under doctrinal influence, have interpreted Article 231(2) of the CPI restrictively.

Since the 1990s, Portuguese case law has consolidated the view that not all non-distinctive signs are capable of registration through acquired distinctiveness, particularly where it is necessary to preserve their availability for use by other economic operators. This understanding has been especially applied to generic signs, thereby elevating a principle of absolute availability.

The Pão de Rio Maior case is paradigmatic in the above regard. The Lisbon Court of Appeal held that the regime of acquired distinctiveness must not be applied without limitation and should instead be subject to constraints arising from market dynamics and the sound functioning of the economy.

According to the court, recognising acquired distinctiveness in that case “would involve the total unavailability of primary and basic signs and a closure of the market at a primordial level, with effects that would stifle the associated economic activity [...], creating a ‘scorched earth’ effect” (Case No. 60/21.0YHLSB.L2-PICRS, September 7 2022).

The above interpretation, however, faces serious criticism. First, nothing in the European or Portuguese trademark systems authorises the interpreter to exclude categories of non-distinctive signs from the scope of acquired distinctiveness. The legislator draws no distinction for this purpose between generic, descriptive, customary, or merely non-distinctive signs.

Moreover, the CJEU has repeatedly affirmed the general aptitude of any type of sign to function as a trademark, provided that, in practice, it is perceived as an indicator of origin (CJEU, Case C-299/99, Koninklijke Philips Electronics v Remington Consumer Products). It follows that an interpretation excluding, a priori, certain categories – such as generic signs – from the operation of acquired distinctiveness is inadmissible.

In its landmark Chiemsee judgment, the CJEU explicitly stated that the regime governing acquired distinctiveness does not allow differentiation based on an interest in keeping certain signs – such as geographical names – available for use by other traders.

From another perspective, a closer analysis of the reasoning adopted by the Portuguese court in Pão de Rio Maior reveals it to be unconvincing. Recognition of acquired distinctiveness does not entail the grant of an absolute monopoly over the sign. The legal framework already provides safeguards to ensure the freedom of non-distinctive use of certain signs, even where they are registered as trademarks.

Indeed, the limitations on trademark rights – notably the descriptive use in accordance with honest practices in industrial or commercial matters (Article 254(b), CPI; Article 14(1)(b), Trade Marks Directive) – remain fully applicable. These provisions ensure that competitors may continue to use the sign legitimately, provided that such use is not as a trademark.

Accordingly, it is incorrect to claim that all production of the relevant goods would be reserved for a single undertaking: what is precluded is only use in a distinctive sense, not descriptive or informative reference to the goods or their geographical origin. In fact, the acquisition of distinctiveness does not extinguish the primary meaning of the sign; it may continue to be used by others in that same descriptive sense.

The approach adopted by the Portuguese higher courts not only contravenes EU law but also risks generating consumer confusion, as it allows third parties to use, as a mark, a sign that a significant portion of the public already associates with a specific commercial origin. This may mislead consumers as to the provenance of the goods.

Portuguese case law, by imposing a material limitation not envisaged under European law, undermines not only the coherence of the system but also the very informational function of the trademark as an instrument of communication in the marketplace.