Resolution No. SENADI-DTOP-2026-0000474-R, issued on May 15, 2026 by the Technical Directorate of Oppositions of SENADI, develops a particularly relevant analysis regarding bad faith and unfair competition within the Andean trademark system, from the perspective of Ecuadorian law.

The resolution rejected the opposition filed by DIDECO DISTRIBUIDORA DE COSMÉTICOS S.C.C. (holder of several SHOCK trademark registrations in Ecuador) and granted the registration of the trademark “SHOCK & Design” in favor of BELLEZA EXPRESS S.A. for products in International Class 20, based on concepts that constitute an important precedent by recognizing that bad faith, unfair competition, and parasitic exploitation of trademarks impose limits on the trademark registration system governing Ecuador.

SENADI relied on a decisive background circumstance: in previous proceedings, it had already been established that a prior commercial relationship existed between BELLEZA EXPRESS S.A. and DIDECO DISTRIBUIDORA DE COSMÉTICOS S.C.C. before DIDECO filed its trademark applications in Ecuador. According to the resolution, this demonstrated that DIDECO had full knowledge of the existence and prior use of the SHOCK trademark in Colombia, owned by BELLEZA EXPRESS.

Based on this background, the authority concluded that DIDECO obtained the “SHOCK CAPILAR” trademark registrations in Ecuador acting in bad faith and solely for the purpose of carrying out acts of unfair competition, unfairly taking advantage of the prestige of BELLEZA EXPRESS S.A. The resolution further states that the principle of good faith must govern both trademark applicants and parties filing oppositions.

Another important aspect of the precedent is that SENADI held that the subsequent registrations obtained by DIDECO over “SHOCK CAPILAR” do not cure or legitimize the defective origin of rights initially obtained in bad faith. In other words, the accumulation of subsequent registrations does not eliminate the unfair conduct originally identified.

Likewise, the authority expressly recognized that BELLEZA EXPRESS possessed prior and preferential rights over the denomination SHOCK, derived from a Colombian registration granted since 2004, long before the applications filed by DIDECO in Ecuador. Thus, although under the principle of territoriality BELLEZA EXPRESS did not possess a prior registration directly enforceable in Ecuador, such circumstance nevertheless constituted an additional element supporting the finding of bad faith on the part of the opponent.

Finally, SENADI considered it unnecessary to conduct a deeper traditional analysis regarding competitive connection or identity of products once it had already been determined that the opponent’s registrations had been obtained in bad faith.

From a practical standpoint, this precedent is important because: (i) it recognizes that prior knowledge of a foreign trademark arising from commercial relationships may invalidate local trademark appropriation strategies; (ii) it admits that bad faith and unfair competition may prevail even against formally valid registrations, thereby strengthening the principle of good faith as a substantive limit to the trademark registration system and allowing a more flexible application of the traditional likelihood of confusion analysis when opportunistic or parasitic appropriation exists; and (iii) it recognizes relevant legal effects for prior rights and prior use abroad when there is evidence of prior knowledge by the local applicant.

At ABREU & ASOCIADOS, our team of attorneys experienced in intellectual property and unfair competition matters can assist you in these proceedings, assess the viability of your case, and support you throughout the corresponding legal actions.