Latin American Intellectual Property Report 2007/20081
The aim of this brief is to offer legal and business advisors an overview of the most relevant trends that have taken place in the field of IP in Latin America between 2007 and the first semester of 2008 as well as to comment on the most expected news that are likely to rise in the short term.
From a general macro-economic point of view this period has been another positive one as the GDP of the region has grown at a high rate. Yet the forecast for the future does not look so brilliant, especially in some particular countries facing problems like inflation and others2.
Yet, there are particular industries blooming like those related with commodities given that most countries of the region are within the main exporters of many of them. This is the case with coffee (Colombia), oil (Venezuela), gas (Bolivia); transport equipment and ethanol (Brazil), cooper (Chile) as well as products made out of soybean (Argentina).
Another interesting fact is that the number of citizens from developed countries like the U.S. and those of the European Union choosing the region to retire is rapidly growing, particularly in countries such as Mexico, Costa Rica, Belize and Panama that offer especial benefits to those individuals. This is relevant for those interested in serving the special demans of such group having a very high income and standard of living.
Focusing on IP, it is noteworthy first that the number of applications patent, trademark and other IP rights filed in the region continues to raise. Second, that more countries of the region are joining or starting to analyze becoming members of treaties such as the PCT and the Madrid Protocol. Moreover, the trend of implementing the relevant provisions dealing with IP rights contained in Bilateral Free Trade Agreements (FTAs3 ) and the like.
Let us analyze these facts and trends, seen in the region, in greater detail:
1. IP filing in Latin America continues to grow in absolute terms.
According to public sources and our own records, the following patent applications were filed in these Latin-American countries, which can be used as an example to estimate what has happened in the whole region4:
The number of patent applications filed in Argentina (not a PCT member) during2006 is 5,876 and for 2007 is 5,997.
In Brazil (a PCT member)5 the number for 2007 is not available yet but the one for 2006 is 10,750, which contrast with the more than 21,000 informed for 2005. In this regard, it is worth pointing out that in 2006 the Brazilian Patent Office changed the system to count patent applications: before then, PCT applications were considered new patent applications but since then PCT applications are distinguished from patent applications filed therein.
In Chile (not a PCT member)6 the number for 2006 is 3,730) and for 2007 it is only available the number for the first semester: 1,930.
In Mexico (a PCT member)7: the number for 2006 is 15,500 and for 2007 16,599.
In the case of Peru (not a PCT member)8 the number is 1,270 for 2006 and 1,359 for 2007.
This increasing number of patent applications (the same happens with trademarks, designs and the like) filed in the region is also putting more pressure on the local Trademark and Patent Offices, which most of the time do not get larger human and non-human resources to deal with all the extra work.
Therefore, we are seeing an expansion of the existing backlog in those offices. That is why some particular existing projects such as the one for establishing a regional system of IP in South America look very challenging and far from being reachable in the short term9.
In the meantime different approaches are being taken and/or considered by the local PTOs to tackle the backlogs, as we will point out shortly.
2. Bilateral Free Trade Agreements keep being approved and implemented.
In prior Regional Reports we had already referred to the “new wave of bilateral treaties”, generally called Free Trade Agreements (FTA), which include whole chapters dealing with particular IP measures that are considered TRIPs-plus standards.
One of the Latin-American countries that has so far used this sort of tool for economic and social development the most is Chile, which has signed bilateral treaties with the U.S. (2003), China (2006), Japan (September 2007) and the European Union (2002).
Many positive IP trends have resulted from these treaties including the implementation of the obligations agreed upon TRIPs through the enactment of local legislation in 2005 and 2007 (see our prior Regional Reports for details).
However, there is one particular obligation that is still overdue: joining the Patent Cooperation Treaty (PCT), which should have happened by January 2007 according to article 17.1.2. of the FTA in force between the U.S. and Chile. This and other issues such as the lack of appropriate coordination between health authorities and the Chilean PTO are cited as the reasons to include Chile in the Priority Watch List of the Special 301 (i.e. the US annual trade report focusing on IP compliance) for 2008.
Regarding other FTAs under ongoing negotiations and/or pending of local implementation by one of its parties (such as the cases of the treaties between Peru, Ecuador, Colombia on the one hand, and the U.S. on the other), these are some of the most relevant news:
Regarding the U.S.-Peru Trade Promotion Agreement (“Acuerdo de Promoción Comercial” in Spanish) that had entered in force in Peru in 2006, its final ratification by the U.S. Congress was achieved after long internal discussions in December 2007. As a result of said facts, the local implementation of the Treaty in Peru has been started on June 28, 2008 when the Peruvian government issued Legislative Decree Nº 1072 enacting test data protection for pharmaceuticals for a non-fixed term of (in principle) 5 years of marketing exclusivity, however, said protection and term are subject to particular limitations and exceptions.
Regarding the FTA between the U.S. and CAFTA-DR10 , the approval of the Treaty was subject to a National Referendum in Costa Rica in October 2007, which resulted in a positive vote of 51,62% and 48,38% against same. However, the complete ratification of the Treaty by the Congress of that country is still pending, although expected to occur by the end of 2008.
In the case of the FTAs between the U.S. and Panama and the one between the U.S. and Colombia, both are still pending ratification by the US Congress while the governments of both Latin-American countries have urged the U.S. to ratify them. Last but no least, negotiations on a FTA between the U.S. and Ecuador and the U.S. and Uruguay have been suspended.
Indeed, the different FTAs are most likely going to affect the landscape of the legal protection through intellectual property rights in the region although many difficulties must be overcome to reach that goal. For instance, the Andean Community has recently approved a particular regional legislation allowing its members to implement the different obligations under FTA while keeping in force the regional legislation regulating the substantive protection of industrial and intellectual property rights (this is Decision 486 issued in 2000).11
3. Particular IP new measures in the region.
In January 2008 a system of recordal of trademarks and copyrights with the local customs of Paraguay was enacted with the goal of fighting the cross-border of counterfeited goods, which is a serious problem in this country especially at the called “tri-border” area (the borders of Argentina, Brazil and Paraguay).
More recently, a similar system has been formally enacted in Peru (by Legislative Decree 1092) but the same must wait for the issuance of further internal regulation for the system to enter in force.
These systems implement article 51 and others of TRIPs and follow the experience of Argentina with a similar system that has been in force since April 2007.12
However this is not the only path seeing in the region to deal with counterfeiting as some other countries like Mexico and Uruguay are working very strongly in favor of a new International Treaty that would tackle some of the many particular and difficult issues composing the problem of commercializing fake products. Anticounterfeiting Treaty (ACTA).
Despite these improvements in relation to the protection of trademarks in Latin-America, there is one pending issue that only very recently has started to be addressed by private and public organizations: the adoption of the Madrid Protocol in the region, which is something that we firmly believe is going to happen sooner or later.13
Let us just remember that the Madrid Protocol entered in force in 1996 (just right after the TRIPs was signed) and, regional speaking, so far has been joined only by Cuba (December 1995), Antigua and Bermuda (March 2000) and the U.S. (November 2003). Even countries like Canada and Mexico (members of NAFTA with the U.S.) have not joined the Protocol.
Among the existing signs that the Protocol is very likely to enter in force in our region we can mention: in November 2006 the Brazilian Chamber of Foreign Trade (CAMEX), which has strong influence and relations with other important public and private sectors, issued a recommendation in that direction.
Likewise, in October 2007 a legislative proposal was introduced in the Argentine Congress to request the Federal Government to take all required measures to join the Protocol.
Last but not least, another factor driving the incorporation to the Protocol are the already mentioned FTAs, especially those signed with between the U.S. Thus, according to the FTA between the U.S. and Colombia, this country should join the Protocol by January 2009 (according to section 16.1 of the FTA).14
On the cost side to join the Protocol, it is worth mentioning the lack of human and non human resources at most PTO’s to deal with new complexities such as “international trademarks”. In addition to that, establishing multi-class application systems in most countries of the region (that do not allow such practice) is a major change that should be adopted in Latin America.
We pointed out that the number of patent applications filed recently in Latin America continues to increase despite the same does not happen with the resources available in most PTOs of the region. That is why procedures to speed up the substantive examination of patent applications have been implemented in many countries like Uruguay and Brazil (see our prior Regional Reports).15
The same has happened in Argentina in many occasions like in 2004 with Resolution 264. More recently, in July 2008, the Argentine Patent Office issued Resolution No. 178/2008 requiring applicants of patents filed before 1 January 2008 claiming a priority under the Paris Convention, to inform the ongoing interest of the applicant in keeping the file alive.
In Argentina there has also been important developments brought in by case law addressing many existing issues on the requirements and availability of ex parte preliminary injunctions. Most of said issues had been introduced with the amendment of Patent Law No. 24.481, occurred in December 2003 and since then they were subject of intense discussions among local scholars. So different decisions of first and second instance issued since 2007 have been tackling the requirements for granting ex-parte injunctions, particularly those set forth in article 83(ii).
Other very interesting news comes from Brazil, whose Patent Office has become the first Latin-American international search authority under the PCT system after the corresponding agreement was signed in Geneva in August 2007. Furthermore, in June 2008 the Brazilian sanitary agency in charge of regulating the health sector (the local counterpart of the FDA of the U.S. that is named ANVISA) issued resolution RDC-45 implementing the examination of patent applications on pharmaceutical products and processes that this agency is to conduct.
3.3. Cyber squatting
Since 2008 it is possible to handle disputes with Peruvian ccTLDs through the system of the UDRP administered by the Mediation and Arbitration Center WIPO.
Despite the importance of having flexible and efficient systems to solve disputes with domain names like the UDRP, in some countries like Brazil and Argentina the only available remedy is to resort to the judicial courts of each country.
However, so far it is possible to handle disputes through the UDRP system administered by the WIPO when such disputes are related with Latin American ccTLDs of:
AG (Antigua and Barbuda) – BS (Bahamas) – BZ (Belize)
CO (Colombia) – EC (Ecuador) – GT (Guatemala)
MX (Mexico) – PA (Panamá) – PE (Peru)
PR (Puerto Rico) – TT (Trinidad and Tobago) – VE (Venezuela)
In our opinion, the trend to improve the protection of intangible assets in Latin America through a sound system of intellectual property rights efficiently enforced continues to move forward.
However, there are still major challenges like:
Increasing the accession of Latin American countries to the Madrid System for filing international trademark applications
Increasing the membership to the Patent Cooperation Treaty (PCT).
Diminishing the backlog of patent and trademark applications pending of examination or issuance.
Improving the enforcement of intellectual property rights.
We are confident that there will be news arising in these directions so please do not hesitate to contact us at firstname.lastname@example.org if you would like to receive more information about any particular issue in our region.
Notes: 1 (c) Moeller IP Advisors; August 2008. Author: Mariano Municoy, Argentine lawyer at Moeller IP Advisors (www.moellerip.com), WIPO Neutral. LLM International Intellectual Property graduated from Chicago-Kent College of Law, U.S. Candidate LLM Law & Economics Torcuato Di Tella University, Argentina.
2 According to “International Monetary Fund, Consensus Economics, Latin Focus, JP Morgan, and the Economist Intelligence Unit” , the real GDP Performance and Forecast of the region is 2002 (0,5); 2003 (1,9); 2004 (6,0); 2005 (4,4); 2006 (5,4); 2007 (5,3); 2008 (4,1); 2009 (4,2).
3 We want to thank Gustavo Fischer, managing partner of Fischer Abogados (Uruguay) ; Cristina Guerra and André Moreira from Guerra Advogados (Brazil); Fernando López from Johansson & Langlois (Chile); Alfredo Puyo from Henri A. Puyo (Peru) as well as Mariano Soni from Bufet Soni (Mexico) for information provided, respectively.
4We want to thank Gustavo Fischer, managing partner of Fischer Abogados (Uruguay); Cristina Guerra and André Moreira from Guerra Advogados (Brazil); Fernando López from Johansson & Langlois (Chile); Alfredo Puyo from Henri A. Puyo (Peru) as well as Mariano Soni from Bufet Soni (Mexico) for information provided, respectively.
5According to the report titled “Pedidos de patentes depositados” elaborated by the CGPO department at Brazilian’s PTO available on INPI’s website www.inpi.gob.br.
6According to the report “Noticias y Estadísitcas” published by the Chilean PTO (Departamento de Propiedad Industrial or DPI), available on IMPI’s website http://www.dpi.cl
7According to “IMPI en cifras” available on IMPI’s website www.impi.gob.mx.
8According to INDECOPI’s publication titled “OFICINA DE INVENCIONES Y NUEVAS TECNOLOGÍAS – ESTADÍSTICAS” available on INDECOPI’s website www.indecopi.gob.pe.
9This project is led by the Argentine and the Brazilian PTO, includes the participation of the PTOs of Bolivia, Chile, Colombia, Ecuador, Guatemala, Paraguay, Peru, Uruguay and Venezuela and is divided in three stages.
The first one is foreseen to last between 2009-2011 and would consist in establishing a digital portal to share resources among the PTOs.
The second one would last between 2011-2014 and would consist in a regional system to examine applications of trademark, patent and other industrial property rights. For this stage no legislative changes are being considered necessary.
The last stage would start in 2015 with a Regional South American PTO in charge of receiving the applications and handling the prosecution of them. These tasks would be divided according to the ”particular capabilities” of each PTO. For this stage it is foreseen that legislative changes would have to take place.
10The Central American Region referred by CAFTA-DR comprises El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and Dominican Republic.
11We are referring to Decision 689 that was manly driven by Peru in order to implement the FTA signed with the U.S. in its different dimensions therefore including particular provisions that deal with patents, trademarks and the like. This new Legislation was preceeded by intense debates among members of the Andean Community and interested parties.
12This system has been working very well and although it could be more used by TM owners. It is worth nothing that despite many shipments of goods have been examined at the Customs so far no legal has been initiated by TM owners given that in most cases once an infringement is notified by the Argentine Custom the illegitimate goods are abandoned, which saves legal costs.
Even for foreign companies using third parties to commercialize their products in Argentina, the system provides the opportunity to control the channels of commercialization and the compliance with the contracts regulating said relationships.
13Just to keep a broad perspective on the current situation of the Madrid Protocol in the whole Americas, it should be recalled that the Madrid Protocol was signed in 1989, a time when many Latin-American countries (particularly those of Central America) were not even members of the Paris Convention of 1883.
14It is worth noting that INDECOPI, the Peruvian Trademark and Patent Office, has conducted a thorough analysis about the social costs and benefits to be expected from the accession to the Madrid Protocol.
15These are provisional measures taken in different countries of the region to diminish the examination of the (increasing) number of patent applications pending of substantive examination in these countries. However, the administrative procedures implemented by each Patent Office differ in their details and effective outcomes, which should be assessed and differentiated one from another in the short and medium term.