Trade Dress in Chile: Fragmented Protection in a Global Market

Although Chile has modernized its industrial property legislation, trade dress —the overall appearance of products— still lacks a specific legal framework. Protection relies on indirect mechanisms such as trademarks, industrial designs, unfair competition, and consumer law, creating legal uncertainty and exposing companies to imitation risks. This gap contrasts with models like the United States and highlights the challenge of aligning Chilean regulation with international standards.

This report will analyze the ways of protection that exist in Chile for trade dress. With this goal in the first instance we will be referring to the lack of regulations that protect the appearance of the products, and later discuss possible routes that are configured in the national legal system to deal affectations to the right of property over the design of a product. Finally we will present conclusions.

The Trade dress can be defined as the appearance of a product. The overall appearance of a product can be made up of different elements, such as the shape, the distribution of content, colors, images and texts, among others.

Trade dress protection is essential as part of the assets of a company advertising, while the elements of a product can be recognized and perceived by its customers and final consumers  independently of the brand name . That is why one of the most frequent forms of violation of industrial property rights is through copies of the distinctive elements of a product, which translates into a direct capital appropriation and influences the economy of the company which manufactures and / or sells the product in question.

Despite the central importance of the trade dress protection, in Chile there is no specific legislation that protects in a clearly and precisely way the appearance of products. This fact is surprising in an economy that is constantly growing, and where one of the bets of economic development was the signing and ratification of international commitments on commercial and industrial property.

In Chile the Industrial Property law is the law 19,039[1] amended by law N° 21,355. This law protects certain rights in this matter. Title II of that body of law concerns trademarks. In accordance with Article 19 "“Under the designation of a trademark, any sign capable of distinguishing goods or services in the market is understood. Such signs may consist of words, including personal names, letters, numbers, figurative elements such as images, graphics, symbols, combinations of colors, sounds, scents, or three-dimensional shapes, as well as any combination of these signs. When the signs are not inherently distinctive, registration may be granted if they have acquired distinctiveness through use in the national market.”

Subsequently Article 19 bis D determines that "A trademark grants its owner the exclusive right to use it in commercial trade in the manner conferred and to distinguish the goods or services covered by the registration.

Accordingly, the owner of a registered trademark may prevent any third party, without consent, from using in the course of trade identical or similar marks for goods or services that are identical or similar to those for which the registration has been granted, provided that such use by the third party is likely to cause error or confusion.”

The law protects the exclusive use of the mark by the proprietor, enabling him to prevent that the mark it’s used to generate confusion or error.

The protection against possible confusion hypothesis is reaffirmed in Article 20 letters f and g of the law in question. This precept indicates "may not be registered as trademarks ... f) “Those which are liable to mislead or deceive as to the origin, quality, or nature of the goods or services, including those belonging to different classes whose coverage is related or indicates a connection between the respective goods or services.

(g) Marks that are identical or that are graphically or phonetically similar in such a way as to be confusing with others registered abroad to distinguish the same goods or services, provided that such marks enjoy fame and notoriety in the relevant sector of the public that habitually consumes those goods or demands those services in the country of origin of the registration.”

Unfortunate the guard doing by the legislator does not crystallize level trade dress. Hence, in accordance with the letter i of the above legal article color of products or packaging, can not be trademarked[2]

Regarding packaging the legal alternative is the registration as industrial designs, yet Article 62 of the law is quite restrictive, noting that "The packages are included among the items that can be protected as industrial designs, as long as they satisfy the novelty condition novelty[3] ... Thus it is not feasible for those that do a special design for the product protect it from copies or imitations if this does not have the features of novelty determined by law to be registered.

This situation demonstrates the legal hole that is configured on the protection of trade dress in Chile.

The lack of regulation on the trade dress or appearance of products means that a vey important area of industrial property right, constitutionally[4]recognized, is unprotected, this leads to possible affections to this right.

This legislative lack effect that in order to advocate full respect of industrial property on the design or appearance of products it’s necessary to seek for alternative argumentations to achieve the stated objective.

Trade Dress Protection in Industrial Property law and international treaties of Chile.
 

Although the lack of regulation on Trade Dress or appearance of products is a reality that can not be ignored there are some alternatives that may constitute a solution for cases where right of industrial property is injured. Knowing these alternatives while our legislation includes a direct mechanism to protect the Trade Dress for the moment seems to be the only mechanism for the protection of rights that are violated daily without any apparent defense.
 

Some forms of protection to safeguard that right:

Protecting the "Trade Dress" in international treaties ratified by Chile.

• During the last time Chile has signed several international treaties on intellectual property among which we can mention:

• The Inter-American Convention on the Law of Copyright in literary, artistic and scientific works, 1946.

• The Universal Convention on Copyright adopted at Geneva in 1952,

• Rome Convention

• The Convention Establishing the World Intellectual Property Organization (WIPO) signed at Stockholm on July 14, 1967,

• The Berne Convention for the Protection of Literary and Artistic Works,

• The International Covenant on Economic, Social and Cultural rights

• The Marrakech Agreement, among others.

Despite the large number of treaties signed by Chile with respect to intellectual property, not all of them can constitute an effective protection in the area of ​​trade dress. This is why it is essential to know the following provisions that contain such protection but only in an indirect way:

Paris Convention for the Protection of Industrial Property:

This Convention was concluded in 1883 and is open to all States. Its three main provisions are: The National Treatment. It is stipulated in the Convention - in regard to the protection of industrial property - that each contracting State will have to grant to nationals of other Member States the same protection as its inhabitants. The Convention will protect the nationals of the Contracting States, if they are domiciled or have effective and real industrial or commercial establishments in a Member State.

The Paris Convention (ratified in Chile by Law 17,011) establishes the right of priority for patents, trademarks, and industrial designs, giving applicants 6 or 12 months to extend protection abroad. It also sets common rules among member states.

While it does not expressly regulate trade dress, Article 10bis prohibits acts of confusion, disparagement, and misleading the public, which can be invoked to defend trade dress.

TRIPS (Trade-related aspects of intellectual property rights)

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets out its general objectives in the Preamble, reflecting the Uruguay Round’s negotiating goals from the 1986 Punta del Este Declaration and the 1988/1989 mid-term review. These objectives include reducing distortions in international trade, fostering effective protection of intellectual property rights, and ensuring that enforcement measures do not themselves become barriers to legitimate trade.

Of particular relevance is Article 26, which grants the owner of a protected industrial design the right to prevent third parties, without consent, from making, selling, or importing articles that copy or substantially copy the protected design for commercial purposes. It also allows limited exceptions, provided they do not conflict with the normal exploitation of designs or unreasonably prejudice the rights of the owner, taking into account the interests of third parties. Protection must last at least 10 years.

In addition, Article 15 establishes that member states may recognize as trademarks “any sign, or combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings.” This includes words, personal names, letters, numerals, figurative elements, color combinations, and their combinations. Distinctiveness may also be acquired through use, and while members may require visual perceptibility, the treaty does not strictly limit trademarks to graphic or visual representation. Importantly, it allows for the registration of signs that are not inherently distinctive if distinctiveness has been acquired over time, a principle incorporated into Chile’s current industrial property legislation.

PROTECTION OF TRADE DRESS IN OTHER AREAS OF OUR LAW.

Protection of the "Trade Dress" by Unfair Competition.

In Chilean law, the protection of the external presentation of a product or service—what in comparative law is commonly referred to as trade dress—is not expressly recognized in trademark legislation. Nevertheless, those affected by imitations of the appearance of their goods have relied on Law No. 20.169 on Unfair Competition as a tool to challenge such practices. This statute is intended to safeguard both competitors and consumers from behaviors that, through improper means, seek to divert clientele or exploit the prestige of others.

Article 3 of the Law clearly establishes that any conduct contrary to good faith or fair market practices, which illegitimately attempts to attract customers from another economic agent, must be regarded as an act of unfair competition. Building on this general provision, Article 4 sets out a non-exhaustive list of specific scenarios, among which are practices involving the undue exploitation of another’s reputation, and the dissemination of false or misleading signs or statements regarding the characteristics, origin, or quality of a product, among others.

These provisions have been invoked in practice to challenge the copying of the look and feel of certain products or services. On the one hand, when a competitor imitates the appearance with the intent to create confusion among consumers regarding its origin, this constitutes an illegitimate appropriation of the established reputation of another economic actor. On the other hand, when packaging, designs, or presentations are reproduced in a manner that misleads consumers about the nature or source of goods, the conduct may fall under the category of disseminating false or inaccurate information.

The practical effect is that the reproduction of the external image of products is subsumed within the categories of unfair competition acts recognized by the law, even though trade dress itself is not explicitly regulated. In this way, the statute functions as an indirect mechanism of protection, enabling claims for cessation of the conduct, damages, or even the publication of the judgment, in line with the remedies provided in Article 5 of the Law.

Despite the broad wording of the statute, civil courts—the competent bodies to adjudicate such disputes—have been reluctant to uphold claims based solely on the imitation of product appearance. In many cases, they have raised the evidentiary threshold, requiring proof not only of copying, but also of an actual diversion of clientele or the existence of concrete harm. This restrictive approach underscores the absence of a specialized jurisdiction to directly address the nuances of trade dress.

Consequently, although Law No. 20.169 provides a valuable instrument to combat parasitic practices related to the external presentation of goods and services, its effectiveness ultimately depends on the claimant’s ability to demonstrate that the imitation is not innocuous, but rather intended to exploit another’s reputation or to generate a real risk of consumer confusion.

Regulatory framework for free competition in Chile

The Decree Law No. 211 of 1973[5] provides the regulatory framework for competition in Chile. The updated version of that decree governs in its first article that “The present has as objectives to promote and defend free market competition. Any attack against free competition in economic activities will be corrected, forbidden or repressed in the manner and with the penalties provided in this law”[6] .

To obtain trade dress protection through competition law, it is argued that the overall image copy or distinctive elements of a product in order to associate them to other image-derived products of a competitor that has invested time and resources in creating new business presentations, is a form of unfair appropriation developed by a competitor. Additionally it is stated that through such practices free making decision and consent of the public is infringed.

These arguments are supported by Article 3 of Decree Law No. 211, which states that it will be considered as acts that prevent, restrict or hinder free competition “predatory practices, or unfair competition, conducted with the aim of achieving maintain or increase a dominant position”

The identity usurpation by inducing consumers to confuse their own goods, services, activities and logos with a third party, has as objective to appropriate the reputation of others to divert customers, so there is no doubt that this type of behavior would be an act of unfair competition.

Protection of Trade Dress in Consumer Law.

In Chile, the relationship between suppliers of goods or services and consumers is regulated by Law No. 19,496 of protection of consumer rights, law substantially amended in 2004 and for the last time in 2021.

Consumer law is defined as "a set of rights granted specifically to suppliers of goods and services”[7] or as the set of legal rules governing relations between users or consumers and suppliers.

In this way the consumer law comes to regulate the rights and duties that has the recipient of final goods, in their relations with the different suppliers and service professionals, strengthen their consumer relationships

One of the most important aspects in the consumer law is the transparency in the relationship between suppliers and consumers, transparency that is greatly damaged when a competitor confuse consumers imitating aspects, colors or shapes of marks (recognized or not).

Advertising Ethics

Another way that has been tried to obtain trade dress protection in Chile is submit copy cases of product image for consideration by the Council of Self-Regulation and Advertising Ethics. Those claims were based on several provisions of the Advertising Standards Code. One of them, referred to the confusion of the target audience of the product is contained in Article 4 F of the Code which states "The ads should not contain any statement or visual presentation which directly or by implication, omission, ambiguity or exaggerated pretense, may lead the public to erroneous conclusions, especially with regard to: ... F Copyright and industrial property rights such as patents, trademarks, designs and models, trade names [8]".

In order to illustrate the above it is necessary to refer to the claim made by Procter & Gamble against Rayovac Chile Limited Commercial Society Ltda. in March 2010. At that time, the claimant based its claim on the argument that the graphic elements characteristic of the product (batteries), the combination of letters, the arrangement of objects and other elements provide a comprehensive view to the product making it distinct from others of the market, and concluded that the copy produces a confusion among the public that buys the product violating thus the provisions of Article 4 of the Advertising Standards Code.

In the same resolution the Council undertook the comprehensive review of the arguments in terms of confusion, but ruled in favor of the respondent party basing its decision on considerations of comparative advertising.

Conclusion

In light of the foregoing, it is clear that Chile still lacks an explicit statutory framework to protect trade dress. While certain safeguards may be invoked indirectly through trademark law, industrial designs, consumer protection, unfair competition law, and even advertising ethics, the absence of a clear and direct provision leaves a significant gap in the legal system.

This gap is particularly striking given recent reforms to the Industrial Property Law through Law No. 21,355 (the so-called “ley corta” of INAPI). The reform could have served as an ideal opportunity to expressly incorporate trade dress protection, thereby providing companies with a direct tool to prevent the misappropriation of the overall appearance of their products. Instead, trade dress remains unregulated, leaving it vulnerable to imitation and creating legal uncertainty.

The importance of trade dress protection is evident when considering the U.S. experience, where courts have recognized it as an essential element of trademark law. In Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), the Supreme Court held that inherently distinctive trade dress is protectable under the Lanham Act without proof of secondary meaning. This case illustrates how trade dress can serve as a powerful mechanism to safeguard the identity of businesses and prevent consumer confusion.

In the Chilean context, explicitly recognizing trade dress would not only align the country with international best practices but also strengthen the constitutional right to property in its industrial dimension. Until such reform occurs, protection will continue to depend on fragmented legal arguments and the creative application of existing frameworks.