Bernardo Alarcon
IP Specialist Lawyer – Catholic University of Louvain (Belgium)

Intellectual property infringement is a matter of constant concern for companies across the globe. At an European level, EUIPO´s Intellectual Property SME Scoreboard indicated that preventing others from copying their products or services is one of the top three reasons why SMEs register IPRs. Moreover, the top second reason for registering their IPRs is obtaining greater legal certainty to exploit their IP fully. 

In line with the above, it must be noted that the World Intellectual Property Organization (WIPO) have been supporting for a long time national IP offices and national governments, which require the technical assistance of WIPO in order to deal with the counterfeiting and piracy existing at their respective countries.  

 In this context, the Chilean government introduced last year a bill in the Congress which aims to improve trademark and patent procedures, adjust national legislation to international standards, and increase legal certainty within the industrial property system. On April 09, 2019, the bill won the House of Representatives approval (Cámara de Diputados) and it is now waiting for being sanctioned by the Senate.

As previously pointed out, counterfeiting is one of the main concerns face by companies today. The term counterfeiting is commonly understood as an IP infringement against a commercial brand.

Chile had already issued numerous regulations to tackle counterfeiting, as for instance, the ones included within its Crime code or its Intellectual Property Act 2017 according to its latest amendments.

However, none of these regulations specifically sanctions counterfeiting as a crime per se. The new bill seeks to modify the Industrial Property Law and create a new section that establishes the penalty of imprisonment to whom manufactures, imports or commercializes counterfeit products. To enforce this regulation, the victim of counterfeiting is required to have its trademark registered in Chile, and the competent criminal court will be the one in where the offence was committed. 

Up until now, fixed civil compensation for damages had not been considered in the Industrial Property Act. Compensation for damages was calculated based on the general rules of the Civil Code. If winning Senate approval, the new regulation clarifies the maximum amount for compensation (i.e., 2.000 Unidades Tributarias Mensuales), improving certainty for parties. 

On the other hand, this bill seeks to improve and make more efficient the procedures before the Chilean Institute of Industrial Property (INAPI), for example, by modifying the administrative notice, which will consist of a digital means in place of a registered letter.

In terms of trademarks, the current Chilean legislation allows one to register as a trademark only those symbols susceptible of graphic representation, namely word marks, figurative marks (ie, designs or logos), mixed marks (ie, word plus design) and sound marks (ie, musical recordings). These categories exclude the so-called “non-traditional brands” or “new types of brands”, which fulfill a trademark function and, therefore, are worthy of protection. The new regulation thus protects, for example, trademarks in movement, holograms and three-dimensional marks; it also considers a clearer regulation for collective marks and certification marks. In addition, drawings and industrial designs, following on from international customs, will have a term of protection up to 15 years.

One key trademark aspect is now considered: cancelling protection in case of lack of distinctiveness. The cancellation procedure takes place if after 5 years from registration the trademark has not been effectively used by the owner or by a third party within the national territory, or if the trademark has lost its strength or distinctiveness. Therefore, it applies the general principle that trademarks are distinctive signs that differentiate products and services from one company to another.

Lastly, the current legislation does not permit stating a filing date on a patent application until the fee payment has been received. This date is essential because it determines the priority of the application, and therefore, influences the procedure that assesses the “state of the prior art” and eventually rules whether or not the invention is plausible with respect to novelty. In addition, this date determines the moment from which the 20-year protection will cover.

Long awaited, these legal improvements come to comply with international standards that Chile has adhered to through various international treaties relating IP. All this progress notwithstanding, there is still a lot of work ahead with regards to effective enforcement mechanisms. In this sense, it has to be reminded that according to the latest Special Report 301, Chile was placed in the Priority Watch List for being considered by the Office of the United States Trade Representative a trading partner that do not adequately or effectively protect and enforce intellectual property (IP) rights.

Taking all of this historic track and changes into consideration, for the time being, it is important to closely follow up the evolution of the ratification by the Senate and further implementation of the legislation.

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