Blockchain: a “disruptive” overview on various commercial sectors

Alessio Balbo di Vinadio – Trainee at Clarke, Modet & Co. Spain
Gilberto Macías – Senior Advisor and Lawyer at Clarke, Modet & Co. Spain

“In 10 years 10 percent of the global GDP will be stored in blockchains” this data insight comes from the World Economic Forum, but what implications does it have (pragmatically) on nowadays society? This article will approach some advantages and disadvantages of the blockchain and how its possible applications may be disruptive in relation to many sectors but, first and foremost, let’s start with some brief background.

Created in 2008, the blockchain is an encrypted program that acts as an online ledger of transactions, and it provides an “irreversible, secure and time-stamped record”. Each block of transactions is linked on a chain, giving its participants an overall picture of what is taking place in the system. The program is designed to be decentralized, allowing transactions to take place between users without the need for third parties such as banks, or a central clearing system like SWIFT. In essence, in the context of finance, each user acts as their own independent bank — free from administrative and associated costs, normally found in “traditional” financial centers. Each transaction is viewed as a single block where subsequent transactions or blocks are added. When a new transaction is recorded, a copy of the blockchain is sent to each node as they join the network (a node is each computer that is connected to the blockchain network). Blockchains can be public, private or hybrid (permissioned). The main principle behind it is trust, and the blockchain is safe, incorruptible and encrypted. By assigning to every single one of its users a public key, it allows them to identify their transaction publicly. Such key will not be disclosed by the blockchain, so every user can be totally anonymous, unless it is voluntarily disclosed.

Furthermore, records are not deleted on the blockchain, so nobody would be able to change the data stored on it, as it would have to change the whole “chain” of transactions.

As every new invention, one of the most important innovations is that the Blockchain is extremely cost effective. This is because it excludes intermediaries from the picture, but it does not only cut costs by doing so, it also increases efficiency.

Let’s analyze the impact on a sector-by-sector analysis

In respect to banking the blockchain could be effectively revolutionary. In fact, the implementation of the blockchain into the banking system would allow banks to save around 20B$ a year by 2022.

Looking at the latest news on the matter, it can be indisputably said that almost daily a new enterprise, a tech giant, or a new company comes out with an application of the blockchain. As an example, on the 15th of May, Amazon announced his partnership with Kaleido (CNBC article available here) in relation to the Bezos’ cloud computing service, to simplify the creation of a company based on the blockchain.

Particularly, one of the most interesting application of the blockchain relates to healthcare. In fact, a distributed ledger in relation to health records would allow any hospital to access medical data belonging to any individual, with no need of additional paperwork. This could be particularly useful in relation to emergencies concerning patients rushed into surgery. The threat here would be addressed in the context of data protection and privacy.

Another further implication in the same industry (i.e. healthcare) could be the distribution and tracking of pharmaceuticals. To this regard, the well-known multinational company Merck has filed a patent claiming that the blockchain technology enables a reliable, secure storage of the reading results with very high data integrity, such that it is essentially impossible to manipulate or erase or otherwise taper [sic] with or lose such data, e.g., due to unintended or deliberate deletion or due to data corruption.”^[1]. Blockchain adoption would result in increased transparency, safer and more secured delivery of pharmaceuticals and decrease in the counterfeiting of healthcare products.

In the legal sector, the blockchain’s impact on Intellectual Property (IP) can be noteworthy. The constitution of blockchain networks in relation to IP offices, the traceability of trademarked products, the implementation of royalty distribution mechanism all have a sweet sound to the ears of the professionals working in this sector. To this regard, many international institutions are starting to use such technology to foster innovation. In fact, the European Union has set up the Bloomen project, where “blockchains will be used as a distributed database for media copyright information, for fast micropayments of media content, and for transparency in copyright management and monetization”. The expansion of such project would improve dramatically the efficiency of the sector.

Other figures within Intellectual Property, will may also take advantage of the use of the Blockchain, for example, regarding trademarks, it is expected that it will be possible to register or renew a mark using Blockchain technology. We know that the EUIPO is looking very seriously and actively at using blockchain to records and enforce IP Rights. However, in the USA, there is already an online platform using Blockchain technology to file trademarks (Cognate). The use of blockchain in the protection of trademarks or patents would represent a real revolution in the registration of these assets.

Similarly, another giant in the field of consultancy, Deloitte, is partnering up with the next participant to blockhaton, Seal Network, to develop an anti-counterfeiting platform and technology to stop such illegal practices.

In a different sector, another giant, Alibaba, has announced the pilot program to track international shipments to China, in order to safely be aware of the origin, shipment and destination of the effective product ordered.

In relation to fashion, blockchain may be disruptive too, as QR codes or tracking numbers on labels may be able to tell the customers the origin of the specific item, the full history of the supply chain behind each garment and possibly even more (i.e. the history of the company, the materials used, the instructions on how to wash, etc.). Since the statistics only for 2016 amounted to 1 billion dollars of counterfeited articles sold, blockchain would be a blessing for the sector, allowing to fight more effectively against the growing scourge of counterfeits and piracy.

A similar approach has been applied to food, for instance, in emerging markets. A traceability of the product “from farm to fork” would simply facilitate the business of guaranteeing an origin and avoid corruption and quality control. The matter concerning food safety has historically increased up to the point of creating Agencies in charge of such control. A giant in the industry of supermarkets, Walmart, has already successfully carried out several blockchain project, proving that such technology is a real game changer. Blockchain could also have an important role in the protection of foods identified and commercialized with a Protected Geographical Indication or a Designation of Origin, the control of raw materials (as to their origin, use, transformation, etc.), all of the aforesaid could be followed with greater ease and transparency.

The jewelry business may also be reformed and secured. Chemical fingerprints could radically change the industry and blockchain may be the key to track the diamonds, in order to guarantee the effective origin and a safe shipment too.

The industry of photography and works protected by copyright exposed to the dangers of internet may be helped by blockchain too. Since copyright does not need any registration to be valid, it does not depend to registries (unless the holder of such rights decides to submit them for registration to an Office). In this field, the real issue has always been the distribution of royalties to the legitimate owners and to the management entities of competence. As everyone can imagine, internet has certainly opened a new way of making business in this sector, but it has also exposed works to more infringements and violations. For instance, by allowing a file to be downloaded, the author spreads his/her work online and reaches bigger audiences indeed, but such audiences may not always be having pure and honest intentions and may misappropriate the copyrighted work.

Particularly, the afore-mentioned applies to the music industry. In fact, the advent of new technologies transformed the music industry into an important source of income with high levels of exploitation, notwithstanding the existence of blatant disadvantages (i.e. the increase in piracy and the lack of payment in relation to the reproductions).

The effects of technology in the music industry are twofold, on the one side there is the acceleration in the diffusion of musical works, which allows us to visualize a very positive scenario for authors and intermediaries, just as consumers are greatly benefited from this fact. On the other, there is the uncontrolled circulation in the network, the speed at which music circulates on the internet is unstoppable and untraceable by the holders of rights, since it facilitates the unauthorized use of digital works and recordings. Uncontrolled circulation reveals very negative consequences for the basic and intellectual property industry.

Another consequence derived from the implantation of new technologies in the basic industry is the change in the relations between the authors of music, services, intermediaries and consumers. The digital environment allows a direct connection between the creator of the musical work and the audience, and that is precisely why the blockchain could be a real game-changer in the music industry. Media Chain, for instance, a company recently acquired by Spotify, takes care of the royalty distribution matter, offering music platforms to protect the authors and their works in the online world. Mediachain allows artists to create a digital record for songs on the Bitcoin blockchain and InterPlanetary File System . Spotify, in fact, aims to use such tool to create fairer conditions and more transparency in respect to the payment to artist for their musical works.

The blockchain does not uniquely help the music sector in relation to copyright. In fact, it applies also to photographers, whose works are constantly at risk of being copied, used or transformed without being remunerated. The need to broadcast and divulge the work is often the most significant mistake that leads to piracy. To this regard, Kodak, earlier on in January 2018, firmly declared to be willing to develop a blockchain based platform to remunerate photographers through the use of Ethereum. Photographers will register their photos on the KodakOne platform and buyers will purchase rights using the KodakCoin cryptocurrency. The platform will provide cryptographic proof of ownership and monitor the web for infringement, offering an easy payment system for infringers to legitimize their use of photographs. A pioneer to this regard is Fernando Alonso, the Formula 1 player who recently announced that he will be protecting his image and copyrights with KodakOne^[2]. Mr Alonso is the first public figure to release such a statement.

Another sector where the blockchain has arrived into is the timestamped proving of paternity of literary works. An example of this is Po.et, a shared, open, universal ledger designed to record metadata and ownership information for digital creative assets. Po.et is a continuation of Proof of Existence, the first non-financial application of the blockchain.

An interesting article of February 2018 explained how the blockchain may be a solution which could definitely solve the adult industry of pornography. Already various projects are underway with ICOs in relation to this industry, as stated by the author of the article on El País (cryptocurrencies like Sexcoin, Titcoin will be used as purchasable tokens and reusable on the various adult blockchains by keeping complete anonymity).

Conclusions

The blockchain technology has created a whole new playing field, and the game could yet be very hard-fought. With the prize at stake of higher transparency, efficiency and cost-effectiveness, it remains to be seen whether this becomes a winner-takes-it-all race and how the issue of standards for the technology will be managed.

Blockchain enables a completely new level of information exchange between different kind of industries, some of them unknown until now and others just emerging.

This new technology has a huge potential to help everybody improve their creativity, their relationship with technology and the realization of new business and, consequently, increase the value of such new creations. Obviously, the protection of these new assets will be closely linked to the protection of intellectual property, a field in which, as we have seen previously, Blockchain is already playing a leading role, providing different solutions to securing IP assets and innovation processes.

In our opinion, although blockchain is still growing day after day, it is getting closer to its breakout moment and it is just a matter of time before it will be necessary to adapt all related regulation, inter alia, IP laws.

^[1] https://cryptodisrupt.com/blockchain-in-pharmaceuticals-fighting-counterfeit-drugs/

^[2] http://www.expansion.com/directivos/deporte-negocio/2018/07/03/5b3a8605e5fdea8f2f8b45ba.html

Relevant amendments to the Industral Property law of Mexico

Citlali Carlos
Associate attorney at VILA Attorneys at Law

There have been two transcendental amendments to the industrial property law of Mexico, which are important to keep in mind for those EU SMEs who are planning to invest in our country.

The first amendment was published on March 13 2018, mainly in the field of Industrial Designs and Geographical Indications.

Industrial Designs:

Industrial designs refer to the appearance of a product, namely any element or combination of flat elements, with aesthetic or ornamental nature such as shape, colour, design, texture, with or without relief, that incorporated into an industrial or craft product (two-dimensional object), may serve as a pattern for industrial or handicraft production.

Most countries demand novelty as a minimum requirement for design protection.

Main changes: The concept of “new” is clarified for the effects of the registration of industrial designs, since previously it was stipulated that only designs created independently and that were different in a significant degree would be considered new, with no definitions given for “independent creation” and “significant degree”, now a creation is considered independent when no other identical industrial design has been made public before the filing date of the application or before the priority date, and an industrial design will be considered identical to another one, if it differs only in irrelevant details; the term “significant degree” is now stipulated as the general impression that and expert in the subject has on the industrial design, which should be different from the general impression caused from any other industrial design.
The validity of industrial designs has been modified, which was previously of 15 non-extendable years and that has changed now to 5 renewable years for equal periods of time up to a maximum of 25 years.

It is important to mention that, industrial designs registered before the entry of the mentioned decree will maintain their validity until the 15 years come to an end, and they will be able to be renewed for 2 successive 5 year periods, without exceeding the maximum of 25 years.

However, industrial designs’ applications submitted but not granted yet, could benefit from the new extension provided that the applicant opts in no later than 30 days after the entry into force of the reform.

Appellations of Origin and Geographical Indications:

Geographical Indications (GI) refer to signs that identify products by the name of their particular provenance, and stand out because of their quality, reputation or other characteristics which are essentially attributable to that geographical origin.

Appellations of Origin (AO) are similar to GI as long as both identify the geographic origin where a product is produced, and stand out by their quality, reputation or other characteristics, which are essentially attributable to that geographical origin as well. However, the main difference is that AO also take in consideration, the human and/or natural factors of the significant environment.

These two forms of protection are not mutually exclusive, thus they could coexist.

Main changes:

Unlike the Appellations of Origin, the figure called Geographical Indication is now included, which had been left out from the Mexican legislation.
The figure of expiration based on the lack of use for a period of 3 years is included regarding Appellations of Origin and Geographical Indication.
The Mexican Institute of Industrial Property (IMPI), will now recognize Appellations of Origin and Geographical Indications protected abroad, through a registry created by the Trademark Office.
Opposition is now introduced for Appellations of Origin and Geographical Indication, as long as the party justifies its interest to file the opposition according to the law.

The aforementioned reforms are now in force.

The second relevant amendment was published on May 18^th, 2018 changing several things mainly in the fields of trademarks and opposition system.

Trademarks

Trademark is any sign, word, symbol, or a combination thereof that are capable of distinguishing the source of a product or a service on the market.

Main changes:

Non-traditional trademarks are recognized; before this amendment, only visible signs were susceptible for registration and now sensorial signs can be registered such as sounds and scents.
The recognition of “certification marks” is now included, which it is defined as a sign that distinguishes goods and services with qualities or other characteristics that have been certified by the owner of the mark, such as components of the product; the conditions under the products have been elaborated or the services have been rendered; the quality; process of the goods or service and the geographical origin of the goods.
The option of protecting geographical indications as certification marks is allowed.
The provision that required the registration of the trademark in order to obtain the statement of notoriously known or famous is abolished.
The statement of use is now mandatory, after the third year of registration of the trademark.
Trademark applications filed in bad faith will be now an impediment for registration and a cause of nullity if a registered trademark falls under this statement.
Generic and descriptive trademarks that through their use in the market have acquired distinctiveness will be susceptible for registration, known as “secondary meaning”.
“Trade dress” figure is now included, meaning that image elements of the trademark such as size, design, color, label, packaging, decoration or any other that combined distinguish goods or services in the market, will be susceptible for registration.
Coexistence agreements are now allowed, meaning that the registration of trademarks or commercial names similar to others already registered or in the process of registration will be allowed, as long as the consent is given by the owner or applicant with prior rights.
The period to file a cancellation action based on the prior use of a trademark, that has been used whether in Mexico or abroad has been extended from 3 to 5 years.

Opposition

The kind of proof that can be filed on opposition proceedings is now determined.
The possibility of filing closing arguments (allegations) after the response to the opposition has been filed is also included.
The PTO will now dictate resolutions regarding the oppositions, which was not mandatory before the reform.

In general, the opposition system recently introduced in Mexico is strengthen and improved.

The aforementioned reform will come into force on August 10^th, 2018.

We hope that these measures will encourage EU SMEs to protect their intellectual property rights in Mexico.

What to expect on Intellectual Property as Colombia joins the OECD

Álvaro Ramírez Bonilla

CEO, Latin American IP LLC

Colombia has recently been accepted to join the Organisation for Economic Co-operation and Development (OECD). It is the third Latin American country to join this organization after Mexico and Chile.

In the region, Colombia is the third most populous country in Latin America after Brazil and Mexico and the fourth largest economy after Argentina.

The OECD is an international organization composed of 37 countries. The main objective of this organization is to promote policies to improve social and economic well-being, as well as to achieve the strongest possible expansion of the economy and employment in the member countries and the developing non-member countries.

Belonging to the OECD “club” means to share standards, public policies and good practices common in the most developed countries. This makes a positive impact in terms of investments, services and international business exchanges, which are good news for European SMEs.

The road to accession

Accession demands considerable efforts to fulfill the requirements and minimum standards set out by the OECD.

Intellectual Property (IP) regulations were one of the obstacles Colombia had to face during the process to join OECD. The United States of America included Colombia on its last 301 USTR report (an annual report that “evaluates the level of adequacy and effectiveness provided by U.S. trading partners’ countries on Intellectual Property Rights (IPRs) protection and enforcement” as it was explained in a previous article here).

Colombia has made significant progress to live up to its responsibilities and must continue to do so. As a result of the taken measures, the country has dramatically reduced its prosecution timeframes. Nowadays, registering a trademark can take as little as four months while in 2000 it took 24 months. The same happened with patents — the time frame was reduced from 55 months to 37.

Colombia to adapt its regulation to demands and policies of the OECD, also has carried out several actions, among them a new copyright law that seeks to protect economic rights for writers, actors, artists and other creators.

What to expect

The OECD will probably propose to create an independent IP authority. Currently the Superintendence of Industry and Commerce (SIC) is the IP authority, which is also in charge of competition law, and consumer and data protection. Many countries already have a specialised office devoted exclusively to IP matters.

We agree with this proposal of an independent entity with its own court system, including the ability to review the granting decision. This function is now on the hands of the highest court of the Administrative law, the Council of State. Unfortunately, this court has a big backlog and IP is not in its priorities. This is a very sensitive matter as most conflicts between parties involve disputes around the validity of IP rights. At this time, civil courts cannot determine the validity of an IP right so cases get suspended until the Council of State makes a decision.

Challenges Colombia must overcome

The Colombian economy is highly dependable on commodities. Coffee, coal and oil have been the major legal Colombian exports. The biggest challenge is to diversify the Colombian offer and the manufacturing of higher value goods and services.

The use of IP by Colombians has been strengthened. Although the number of patent applications filed by locals is very small, the government, through Colciencias, has made an effort to support inventor’s initiatives, but there is still much more to be done.

International organizations like CAF (Andean Development Corporation- Development Bank of Latin America) is also working on increasing the use of the patent system. It has achieved an important growth in Panama, where the pilot project was performed.

Regarding geographical indications, Colombia has more than 26 geographical indications, related to artisanal and agro-food products, among which the most important one is “Café de Colombia”. The SIC has made efforts to seek the protection for more indications that have an impact on international markets.

Colombia has to improve its agenda on IP for innovation. Both the public and private sector must work closely in optimizing the use of IP as an engine for development.

Conclusion

We are confident that Colombia is taking the right steps and will create a safer environment for innovation and foster trust among EU SMEs interested in entering the Colombian market. We strongly believe that, as a new member of the OECD, Colombia will improve its overall innovation process and IP system.

GDPR: a simple approach for European and Latin American SMEs

Alessio Balbo di Vinadio – Trainee at Clarke, Modet & Co. Spain

Following our previous publication on data processing, this article will address the issue of the first few small repercussions of the European Union General Data Protection Regulation (hereinafter ‘GDPR’) on the online world.

In that same aforementioned article, the author rightly stated that companies should hurry up for compliance, as time was running out and the road to achieving full compliance is a very long one (depending on the activity the company carries out, obviously!). One would think that now, approaching the end of the first decade of June 2018, most businesses have already taken care of the privacy matter, in light of its pivotal importance. Well, as we all know, that is not true (not for everyone, at least).

This article is intended to provide a useful overview of important aspects not only for European SMEs but also for Latin American companies operating in the European Union (EU), since one of the highlights of the new regulation is its broadened scope: it is applicable to all companies in the world that handle personal data from European customers, even if the processing takes place outside of the EU.

Preliminarily, it is worth noting that in contrast to the European Union, at present, Latin America has no harmonised legislation on data and privacy, due to different national legislations. This inevitably leads to different levels of protection, all of them still considerably lower than the EU standards (i.e. Guatemala, for instance, still lacks a specific legislation on data protection).

Bearing this in mind, the Latin American region is making serious efforts to respond to the demands of today’s global market. Notwithstanding the current situation, through the Ibero-American Data Protection Network (RIPD) some regional standards have been set as a reference for future implementations. There is still a long way to go and striking differences between countries yet remain. However, it must be acknowledged that Argentina, Mexico, Uruguay and Chile stand out for their domestic legislations on the matter, by virtue either of their age or the existence of local authorities specialized in data protection.

Indeed, all these relative progresses both national and regional, have been developed in accordance with the model established by the EU-GDPR. Therefore, these countries are likely aware of the need to bring Latin American legislation in line with Europe’s in order to attract foreign investment and create a better climate for European SMEs.

Let’s quickly analyse the GDPR: the main changes concern the personal data definition, the increased territorial scope, the penalties, the consent, the newly introduced rights (to access, to be forgotten, data portability), the immediate (within 72 hours) and compulsory data breach notification and, finally, the introduction of the Data Protection Officers (DPO – compulsory only in some cases). Furthermore, companies need to comply with the definitions of ‘Privacy by design’ and ‘Privacy by default’ when dealing with personal data.

Certainly, it can be affirmed that consent is at the very centre of this legislation. The Consent has to be “freely given, specific, informed and unambiguous”, “clearly distinguishable, intelligible and using clear and plain language”, according to, respectively, articles 4 and 7 of the GDPR.

Prior to this introduction, privacy had not been changed this radically for over 20 years and the “data market” was ‘wild’ and uncontrolled. The straw that broke the camel’s back was when Max Schrems, an Austrian privacy lawyer, filed a complaint in 2013 against Mark Zuckerberg’s social network Giant due to the lack of Privacy compliance by Facebook. In his unveiling to the general public, Mr Schrems disclosed 1,200 pages of data that Facebook possessed on him and proved the flaws of the social network’s privacy policy (and its consequent conduct) to be enormous. As an example, prior to those decisions, Facebook would transmit personal data to app developers, with no reason or legally obtained consent. The ‘profiling’ (“any form of automated processing of personal data consisting of the use of personal data to evaluate certain personal aspects relating to a natural person”, as defined by article 4 GDPR) was an activity that allowed Facebook to provide Page Managers with users’ precise information for the advertisement targeting. Advertising was a very relevant source of income for Mark Zuckerberg’s tech Giant.

We are only a few days away the entry into force of the new GDPR and the email boxes of half the planet have been filled up with newsletters, data processing requests, “We care about your privacy” statements and so forth. Notwithstanding, when analysing those emails, not all of them appear to be fully compliant and actually, most of them, have not achieved the ‘simplification’ requirement of privacy law, which was one of the many targets of the GDPR. In fact, emails with excessive material and written in “legalese” (technical-juridical language) do not allow the consent to be informed for the majority of the public, due to the extremely complex language used by the policies.

This new regulation has re-shaped the online (and offline) world, as we have moved from an (online) environment with full access to websites and limitless actions available, to almost completely blocked websites until full GDPR compliance is achieved. To this regard, in these days, when accessing websites, very disturbing banners do not allow the correct displaying of the website (or will ‘bother’ you until you click “I agree”). Additionally, if you are an ‘informed user’ and want to know the purposes of the processing of personal data on the accessed website, a “More information” button should be available (usually next to the “I agree” box) and you should be provided with full disclosure of the data processing carried out on such page. Normally, clicking on that button will redirect the user to a special page displaying the cookies implied (which can be essential, functional and targeting). That particular page is where your preferences will be saved by the “Controller” (the legal entity that determines the purposes of the processing) or the “Processor” (the legal entity that actually processes the data) so that each user’s data will (or will not) be processed and, especially, inform the user for what purposes.

Before the introduction of such law, privacy was almost “disregarded”, as it referred to lengthy and boring legislation with few implications. Nowadays, we can undoubtedly assert that there was – and there still is – indeed a big business on (personal) data used with no legitimate consent. The change derives from the concern that companies have developed about the newly regulated sanctions, in accordance with article 83(4) and 83(5) of the GDPR (20 Million or 4% of the global revenue – whichever is higher – for the harshest fine and 10 million or 2% of the annual global revenue – again, whichever is higher).

In recent days, we have seen many blocked non-EU websites, which, prior to the entry into force of the GDPR, were accessible for European users. Many businesses from all over the world are still not yet compliant with the GDPR, mainly due to the investment required, both economically and in terms of time-management. Full compliance will come with time and dedication, and hopefully, companies that process big amounts of personal data will stop seeing it as an asset and start approaching it in a more intimate and personal manner. The temporary blockage of the access from the EU (until full compliance is achieved) has to be merely momentary, as the GDPR is an issue that has to be addressed compulsorily, as the repercussions can be relevant (sanctions). An incentive to avoid permanent blockage of the website to EU customers would be to avoid losing a considerable market share (significant to most businesses – 508 million inhabitants). As a suggestion, quick GDPR compliance companies have found a niche market at the moment (i.e.Trustarc or OneTrust); these provide a minimum level of compliance and allow to ‘buy’ some time in order to align the business to the newly introduced legislation.

In short: how can we know if the EU GDPR applies to my company?

Due to its wide range, it appears to be difficult not to be affected by the GDPR, but let us summarize in which cases it will be mandatory to implement its measures:

When the company tracks EU customers’ data;
When the company is based outside the EU but provides goods and/or services (even when free of charge) to EU customers;
EU-based companies’ data is collected and processed regardless of the place of collection. This means that EU SMEs operating in Latin America must comply, in any case, with the EU GDPR (even if the data comes from Latin-American customers only) due to the nationality of the company itself.

Generally, compliance is always suggested and carefulness is needed when processing any kind of personal data originating from the EU, so be carefully compliant!

Colombia: a true step towards patenting procedure optimization

Sara Isabel Tortosa – Partner at Tortosa Gadea Lawyers
Ana A. García Torralba – Junior associate attorney at Emilio García y Abogados Asociados

Colombia set, as an objective, the consolidation of an effective and reliable patent system. This objective has been reached as it has been statistically proven. According to the Colombian Intellectual Property Office, namely the Industry and Commerce Superintendency (SIC), the whole patent procedure now takes, depending on the technical field, from 1 to 3 years, which entails an improvement in comparison to the last decades, where a patent application could last more than 5 years.

In such a context, it is worth recalling the latest developments made by the Colombian patent system in order to reduce both filing fees and decision times.

However, improvements regarding national legislation is not the only driving factor. Indeed, the signature of several international agreements with other national and regional patent offices has meant significant advances in improving patent proceedings and services. Through these agreements, Colombia has contributed to the economic development, offering greater trading opportunities to Micro, small and medium-sized enterprises (SMEs).

All these measures have effectively increased the number of patent applications (between 2011 and 2016, SIC reported an increase of 345% in the number of patent applications) and it is expected to continue growing over the next years.

Protecting your inventions in Colombia

After drafting a patent application, you have to decide where to file it. A patent granted by the Intellectual Property Office of Colombia, provides only national protection, due to the territorial nature of IPRs.

In order to acquire protection in multiple territories, investors and entrepreneurs as the European SMEs may submit their applications through the Patent Cooperation Treaty system; which Colombia joined on February, 2001.

The PCT is an international cooperation agreement, that enables to file a single “international” or “PCT” patent application valid across all the countries/regions in the PCT system, (see the full list of the 152 PCT members here), instead of filing several separate regional/national patent applications requiring multiple tasks such as translations and even taxes.

Keep in mind that whether or not the patent is finally granted remains under the exclusive competence of each national or regional intellectual property office. Each office will examine the application according to their national or regional laws. Thus, even if the application is international, the granting process, decision and its effects remain national.

The PCT is not only a cost-effective route to protect IPRs internationally. It will also allow to save and “buy time”, since the applicant gets up to 18 additional months to delay both:

the decision of whether or not to pursue patent protection and;
the substantial costs of the patent procedure arising in the national phase: appointing a foreign attorney, paying official fees and translate the application and documents required to the official language (when necessary). Take into account that some IP Offices offer reduced fees for SMEs.

This additional period may be crucial for European SMEs seeking to expand their own market, since it allows them to adequately evaluate where to pursue patent protection, and get more information regarding the novelty and the technical value of their invention.

**Colombia joins the Global Patent Prosecution Highway (GPPH)**

Examining patent applications is a complicated task. Patent application are technical and complex documents, the examination carried out by patent examiners is exhaustive and the workload important. These were one of the main reasons that led to the creation of the so-called Patent Prosecution Highway (PPH): they constitute a work-sharing initiative between different IP offices, allowing patent applicants to request accelerated processing in the national phase.

The Global PPH (GPPH) Pilot Program launched in 2014, involves 24 patent offices around the world. Colombia, effectively joined on July, 2017, being the first and only (so far) adherent from Latin America. Under the GPPH, applicants can benefit from an accelerated examination through a simple procedure at their request.

To that end, patent examiners in a national or regional office are allowed to reuse the documents issued in the framework of a prior exam accomplished by another participating PPH office such as the Written Opinion issued by the international search and examination authorities.

The main goal of this procedure is to provide a fast-track prosecution and ease search and examination tasks, which directly benefits stakeholders. However, these documents are not binding, thus the final decision about whether or not to grant the patent rests within the hands of the national IP Office where the application has been filed according to its own applicable law.

It is, therefore, to be expected that such an agreement will be a boost for business, innovation and commercial growth of European SMEs. Indeed, shorter timelines stimulates SMEs’ creative intellectual endeavor for the benefit of public interest.

In order to be eligible for the GPPH, the applicant shall comply with the two following indispensable conditions:

A patent application must have been already filed before at least two GPPH participating offices by the applicant.
One or more claims should have already been deemed as patentable by any of the other offices involved.

The Global PPH pilot program superseded bilateral PPH pilot programs between the Colombian patent office and the other PPH partner offices. Participating Offices of the Global PPH pilot are listed here.

Since it is a pilot program, the limit of patent application before SIC is of 30 per month or 300 per year.

Benefits arising from the use of GPPH:

Effective reduction of patent pendency, (the amount of time between the filing date and the final decision’s day granting or refusing the patent).
Shortening of the examination period, because of the possibility to reuse search/examination history.
Allows to save time, money and effort for both applicants and GPPH participating offices.
Harmonization of qualifying requirements.
Improvement in the quality, since the previous work serves: as a basis for an accurate assessment of the patentability criteria; and also as an exchange of good practices between offices.

Colombia’s accession to the GPPH, is a clear sign of the active role that the country wishes to play in the international scene, in order to strengthen investors’ confidence.
If your company wishes any further detailed information about protecting your IPRs in Latin America, do not hesitate to visit the Latin America IPR SME Helpdesk website or to contact our Helpline, it is free, fast and confidential.

Buenas noticias para la PYME europea en Perú: cooperación en materia de Propiedad Intelectual

Sara I. Tortosa

América Latina se está configurando como una de las regiones más atractivas para la PYME europea. Cada vez más empresas se proponen internacionalizar su negocio y adentrarse en esta región del continente americano. Las PYMEs representan el 99% de las empresas en la UE, por lo que su impacto en las economías emergentes ha aumentado notablemente la competitividad y nadie quiere dejar escapar las oportunidades que ofrece Latinoamérica.

Perú es uno de los territorios con mayor atracción de inversión, gracias a los acuerdos comerciales alcanzados con instituciones y organismos de la Unión Europea, con el fin de reforzar la cooperación y concienciación en materia de protección de derechos de propiedad intelectual de las empresas, tanto locales como extranjeras.

Diversificar la inversión en territorio extranjero es una estrategia clave para los operadores que compiten en el mercado globalizado. Sin embargo, antes de adentrarse en territorio extranjero, debemos conocer ciertos aspectos que nos ayudarán a utilizar con acierto los recursos humanos y económicos para obtener una protección adecuada de nuestros derechos de propiedad intelectual: nuestras marcas, nuestros diseños, nuestras patentes, nuestro know-how, etc… en definitiva, todo el valor que nos diferencia del resto de competidores, y cuya regulación varía de un territorio a otro.

Debido al carácter eminentemente territorial de los Derechos de PI, gozar de una protección adecuada en nuestro mercado local no garantiza protección en el mercado al que nos dirigimos, de allí la necesidad de contar con una estrategia adecuada. Desde Latin America IPR SME Helpdesk, te ayudamos con algunos consejos para reducir los riesgos de conflicto entre tus derechos de Propiedad Intelectual y los de terceras empresas que ya se encuentran operando en el territorio de destino, sin perjuicio de que sea aconsejable contar con la orientación de un profesional en la materia para la región de que se trate.

Tmview y Designview: también en Perú

Desde octubre de 2.017, INDECOPI (Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual en Perú), gracias a un acuerdo con la EUIPO (Oficina de Propiedad Intelectual de la Unión Europea), forma parte de los sistemas internacionales TM View (desde el 10 de Octubre de 2017) y Design View (desde el 18 de Septiembre de 2017).

TM View y Design View son dos herramientas esenciales en materia de Marcas y Diseños. Se trata de dos de las bases de datos más extensas y completas del mundo, con información relevante sobre Diseños y Marcas, registradas o en trámite, (más de 44 millones de marcas y signos distintivos, y alrededor de 12,4 millones de dibujos y modelos) procedentes de 59 bases de datos de diferentes Oficinas de Propiedad Intelectual del mundo.

Estos sistemas permiten, tanto a particulares como profesionales, realizar consultas en línea, de manera gratuita, centralizada y fácil, en cualquiera de los países que integran la red.

Contienen información sobre los Diseños y las Marcas, los productos o servicios que designan, su tipología (denominativa, figurativa, mixta, entre otras) y su fecha de publicación. De este modo, podrás conocer la situación jurídica en que se encuentran y si están en vigor, así como los plazos para presentar oposiciones de terceros a las solicitudes de marca que estén en tramitación.

TM View y Design View están disponibles las 24 horas al día, 365 días al año, siendo actualizadas diariamente por cada oficina de Propiedad Intelectual.

Este convenio PERÚ-UE beneficia tanto a empresarios, emprendedores y ciudadanos peruanos como a las PYMEs europeas que pretendan abrir mercado en el país andino, ya que aumenta la seguridad jurídica tan importante para el empresario que cruza fronteras.

5 tips básicos

Te dejamos algunos TIPS a tener en cuenta antes de (i) introducir tus productos en mercados extranjeros, o (ii) de usar y/o registrar tu Marca, Diseño, o cualquier otro derecho de propiedad intelectual en dicho territorio:

MARCAS: Comprueba si la Marca elegida para identificar los productos y servicios de tu empresa es idéntica o similar, tanto a nivel denominativo como gráfico, a otras Marcas ya conocidas, utilizadas o previamente registradas por terceros.
NOMBRES DE DOMINIO: Comprueba la disponibilidad de los nombres de dominio que incluyan tu Marca o puedan asociarse con ella, o si están siendo utilizados en el país de destino y para qué tipo de productos o servicios. Esto es importante para mantener la imagen, el prestigio y los valores de la Marca.
DISEÑOS: Los Diseños, al igual que otros derechos de propiedad intelectual, sólo tienen efecto en el país en el que han sido registrados y concedidos. Puede solicitarse protección en otros países. Algunas legislaciones permiten la protección del Diseño no registrado, pero NO es el caso de Latinoamérica, por lo que es importante tener en cuenta este aspecto.
PATENTES/MODELOS DE UTILIDAD: Verifica si tu idea o invención es realmente nueva (requisito imprescindible para su registro como Patente o Modelo de Utilidad) o si ya ha sido registrada por otra persona/empresa. Recuerda que, aunque no esté registrada, es posible que ya la hayas publicado a través de otros medios (internet, o cualquier otro medio de difusión accesible al público), lo cual también impediría registrarla por carecer de “novedad”.
EXPLOTACIÓN DE LOS DERECHOS: Tu plan de internacionalización y expansión, debe contar con una estrategia clara de protección del patrimonio intelectual de tu empresa, para asegurar el respeto a la imagen corporativa y a los valores que deseas transmitir. Por ejemplo, es conveniente definir una política de explotación que prevea posibles acuerdos de transferencia (licencia, cesión, franquicia, outsourcing, asistencia técnica, formación, ingeniería, etc…).

Internacionalización: sí

En resumen: apuesta por la internacionalización de una forma segura y eficiente, gracias a la multitud de recursos y herramientas que existen a disposición de la pequeña y mediana empresa. No dejes de consultar nuestro blog, encontrarás contenido de interés que te ayudará a despejar tus dudas a la hora de adentrarte en el mercado latinoamericano.

Te invitamos suscribirte a nuestra newsletter si quieres estar al día de las últimas novedades en propiedad Intelectual en Latinoamérica.

Firma del nuevo TPP y sus exclusiones: ¿puede este acuerdo afectar mi estrategia de Propiedad Intelectual en Chile?

Diego José Acuña Domínguez
Associate lawyer at Beuchat, Barros & Pfenniger, Abogados

Después de años de rondas de negociaciones, el pasado 08 de marzo de 2018 se firmó en la ciudad de Santiago de Chile el denominado “Tratado Integral y Progresista de Asociación Transpacífico – CPTTP”, antes llamado Acuerdo Transpacífico de Cooperación Económica o TPP.

Tras la retirada de Estados Unidos en enero de 2017, este acuerdo de libre comercio ha sido celebrado entre 11 países de la Cuenca del Pacífico, a saber, Brunei, Chile, Nueva Zelanda, Singapur, Australia, Canadá, Japón, Malasia, México, Perú y Vietnam (por lo que también es conocido como TPP-11), y entrará en funcionamiento dos meses después de ser ratificado por los parlamentos de al menos 6 de los 11 países firmantes.

La entrada en vigor del acuerdo no solo eliminará entre el 65% y 100% de las barreras arancelarias, sino que también supone un aumento de las ventajas comerciales y mejor acceso a mercados extranjeros como Canadá, Japón o Malasia. Cabe mencionar que el conjunto de estas naciones supone un mercado de cerca de 500 millones de personas y representa entre un 13% y un 15 % del comercio mundial, lo que resulta sumamente interesante en términos económicos para cada uno de sus integrantes.

El objetivo principal de este Tratado de libre comercio es rebajar las barreras comerciales que actualmente existen entre los países firmantes. En cuanto a Chile, único país del Acuerdo que ya contaba con tratados de libre comercio con los restantes 10 miembros, verá mejoradas sus condiciones en virtud de la suscripción del CPTPP.

El nuevo acuerdo establece la incorporación por referencia de todo el contenido del TPP original, entre el que se encuentra el relativo a los derechos de Propiedad Intelectual, materia la cual ha sido especialmente sensible dentro de las rondas previas de negociación. En particular, y como consecuencia de la dificultad para alcanzar los correspondientes consensos, este nuevo acuerdo ha visto suspendida la aplicación de 20 de sus normas, de las cuales 11 precisamente pertenecen al Capítulo de Propiedad Intelectual, a la espera de que los firmantes decidan ponerle fin a esta suspensión.

El resultado, es toda una serie de disposiciones sobre PI que hubieran afectado radicalmente a los empresarios con idea de aterrizar en territorio americano y que podrían entrar en vigor en un futuro. Por ello, si sus previsiones comerciales a corto plazo pasaban por ver aprobadas estas normas, le recomendamos que reconsidere su estrategia y se atenga al estatus actual (normativa local vigente + lo que sobrevivió del TPP).

Si quiere saber más sobre cuál es el marco normativo vigente, le invitamos a que consulte nuestros Fact Sheets o nos haga llegar su duda a través de la Helpline.

Para aquellos que quieran ahondar en las normas suspendidas, y más concretamente, en lo que concierne a Chile, a continuación, abordamos las que consideramos de un posible mayor impacto para los empresarios europeos que operen en el país suramericano o tengan intención de hacerlo.

1.- Materias patentables. Nuevos usos de un producto conocido e invenciones derivadas de plantas.

En virtud de esta suspensión los países contratantes no estarán obligados a otorgar patentes para invenciones en sus territorios respecto de nuevos usos de un producto conocido, nuevos métodos de uso de un producto conocido, o nuevos procedimientos de uso de un producto conocido, como tampoco respecto de invenciones derivadas de las plantas.

En el caso de Chile, éstas se encuentran expresamente excluidas como materias patentables por la Ley de Propiedad Industrial vigente, por lo que la aplicación de esta norma del Tratado habría obligado a efectuar un cambio legislativo.

2.- Ajuste de duración de la patente por retrasos irrazonables de la autoridad otorgante.

En virtud de esta suspensión, los países firmantes no se encuentran obligados a extender la duración de la protección de una patente a través del mecanismo de la denominada “protección suplementaria”.

En el caso de la Chile, la legislación actual ya contempla el mecanismo de la protección suplementaria para las patentes, pero sujeta a ciertas restricciones, a saber:

i) que la solicitud sea presentada dentro de los seis meses de otorgada una patente;
ii) que el plazo de otorgamiento hubiere sido superior a cinco años contado desde la fecha de presentación de la solicitud o de tres años contados desde el requerimiento de examen; y

iii) que hubiere existido una demora administrativa injustificada por parte de la Oficina de Patentes encargada de su registro.

3.- Plazos de protección para los Derechos de Autor y los Derechos Conexos.

Ha quedado suspendida la obligación de los países miembros de elevar el periodo de protección de una obra, interpretación, ejecución o fonograma en los siguientes términos:

a un plazo no inferior a la vida del autor y 70 años después de su muerte en caso de ser una persona natural, o
de 70 años a contar del final del año calendario de la primera publicación autorizada; o
a falta de publicación autorizada, dentro de los 25 años contados desde la creación de la obra, interpretación, ejecución o fonograma, no inferior a 70 años desde el fin del año calendario de ese hecho.

Dentro de las rondas de negociación se llegó a discutir incluso un plazo de protección de 120 años luego de la muerte del autor, pero finalmente se mantuvo el criterio de los 70 años. México es el único país firmante que concede 100 años de protección después de la muerte del autor. Ahora bien, incorporó en el TPP una cláusula para no dar a autores extranjeros protección por un periodo mayor al que le concede su país de origen.

En el caso de Chile, la Ley de Propiedad Intelectual ya establece un plazo de protección de estos derechos durante la vida del autor y 70 años después de su muerte en caso de ser persona natural, y de 70 años a contar de la primera publicación en caso de ser persona jurídica.

4.- Medidas tecnológicas de protección (TPMs).

Con la exclusión de este artículo queda sin efecto la obligación de regular pormenorizadamente lo relativo a mecanismos de protección legal y recursos legales contra la elusión de medidas tecnológicas efectivas que los titulares decidan usar para proteger sus derechos, restringiendo así actos de explotación no autorizados en relación con sus obras.

Estas medidas tecnológicas de protección son procedimientos, técnicas, dispositivos, componentes o una combinación de ellos cuya función es controlar, impedir o restringir de alguna forma el acceso o la utilización de las obras (por ejemplo, los sistemas anti-copia, de encriptación, marcas de agua, firmas digitales, entre otros).

En el caso de Chile, no existe una legislación específica sobre este tema, sino que le son de aplicación las reglas generales de la Ley de Propiedad Intelectual o la Ley de Delitos informáticos, por lo que la exigibilidad de esta disposición implicaría un cambio legislativo en esta materia.

5.- Información sobre Gestión de Derechos (RMI).

En virtud de la suspensión, queda sin efecto la obligación de que las Partes establezcan sanciones civiles, administrativas o incluso penales, para quienes alteren o supriman información sobre la gestión de derechos de los autores en obras protegidas, retomando lo dispuesto en el Tratado de la OMPI sobre Interpretación o Ejecución de Fonogramas.

La Información sobre Gestión de Derechos es aquella que permite identificar una obra, a su autor, al artista intérprete o ejecutante, al productor, o al titular de cualquier derecho sobre la misma. También permite identificar la información sobre términos y condiciones de utilización de la obra.

En el caso de Chile, la Ley de Propiedad Intelectual vigente establece sanciones de carácter civil para quien suprima o altere cualquier información sobre la gestión de derechos, y para quienes distribuyan, importen, emitan, comuniquen o pongan a disposición copias de obras a sabiendas de que la información ha sido suprimida o alterada sin autorización de su titular.

6.- Protección de señales de satélite y cable encriptadas portadoras de programas.

Con la suspensión de esta disposición, queda sin efecto la obligación de considerar como un delito penal la manufactura, ensamble, modificación, importación, exportación, venta, arriendo o distribución de dispositivos o sistemas destinados a desencriptar, recibir o distribuir sin autorización señales de satélite y/o cable encriptadas, sin la autorización del distribuidor legítimo de dicha señal.

En el caso de Chile, no existe una legislación específica en esta materia, sino que son de aplicación las reglas generales de la Ley de Propiedad Intelectual, la Ley General de Telecomunicaciones o la Ley de Delitos informáticos, por lo que la aplicación de este artículo implicaría un cambio en el marco legislativo.

7.- Recursos legales y limitaciones (Proveedores de Servicios de Internet).

Con la suspensión de esta norma, queda sin efecto la obligación de los países contratantes de contar con un Sistema de “Safe harbours” o “puertos seguros” que permitan, cuando se cumplan determinadas condiciones, excluir la responsabilidad de los proveedores de servicios de internet por los contenidos que circulen en sus redes y sean susceptibles de violar derechos de autor o conexos.

En el caso de Chile, la vigente Ley de Propiedad Intelectual ya cuenta con un extenso capítulo dedicado a este tema, que describe una serie de limitaciones a la responsabilidad de los proveedores de servicios de internet en la medida en que se cumplan las condiciones señaladas.

8.- Trato Nacional.

Con la suspensión de dos frases de esta norma, queda sin efecto la obligación de los países de extender el alcance del concepto de “protección” para prohibir la elusión de las medidas tecnológicas efectivas, establecidas en el artículo sobre Medidas Tecnológicas de Protección y en las disposiciones concernientes a la información sobre la gestión de derechos antes señaladas.

Con ello se busca dar consistencia al resto de las normas suspendidas, que, como hemos visto anteriormente, abordan las disposiciones relativas a las medidas tecnológicas de protección y a la información sobre gestión de derechos.

La mayoría de las disposiciones suspendidas en materia de Propiedad Intelectual fueron impulsadas por Estados Unidos y, tras su salida, como ya se adelantó al principio del artículo, las partes acordaron suspenderlas indefinidamente. El futuro dirá si los países deciden ir renegociándolos e incorporarlas de manera definitiva al acuerdo, con una formulación que sea capaz de contentar a todas las partes, o si, por lo contrario, seguirán suspendidas de cara a evitar desacuerdos o rechazos, como lo es en Chile la obligación que tendrá de acceder al Convenio de la UPOV 91.

Para despistados y recién llegados, en nuestra sección de “Noticias” puede seguirse la actualidad sobre Propiedad Industrial e Intelectual en América Latina. Para recibir información actualizada sobre próximos eventos y noticias en América Latina, nada mejor que suscribirse a la “Newsletter” del Latin America IPR SME Helpdesk.

Considerations for EU SMEs when transferring personal data to Latin America

Laia Esteban Guinea
ICT Lawyer

As many of you may know, next May 25, 2018, the new European Data Protection Regulation (GDPR) will be fully implemented for European companies. The GDPR, which was adopted on May 2016 establishing a two-year transition, will replace the Data Protection Directive (DPD 95/46/EC).

The main aim of this new regulation is, not only to harmonize the different national regulations existing at European level, in order to guarantee equality on the protection of personal data regardless of the nationality or place of residence, but also to ensure a legal framework adapted to the digital era.

Because the implementation of the GDPR is almost upon us, companies need to hurry up if they want to comply with the new obligations arising from said Regulation. Among other aspects, EU companies should be aware of:

The need to comply with the principles of accountability and transparency. This involves quite a significant amount of documentation requirements. Other principles such as privacy by design and by default, must also be observed. This entails designing and implementing appropriate technical and organisational measures.
Making an analysis of the potential risks in order to find weaknesses in the treatments performed by the company as regards personal data management.
Obligation to provide, at the time of the collection, some information regarding the identity of the controller (i.e. who decides how and why such data is processed), the purposes of the processing, the legal basis for the processing, the period for which the personal data will be stored and, where applicable, if the controller intends to transfer personal data to a third country or international organisation.
Attend and inform the data subject (i.e. individuals whom the data is about) about several data protection rights such as the right to be forgotten, right to restriction of processing, right to object an automated individual decision-making or right to data portability.
Notify the supervisory authority about any breach regarding personal data (e.g. in Spain, the Spanish Data Protection Agency) without undue delay and, where feasible, no later than 72 hours after being aware of it.
Designate a Data Protection Officer, if the core activities of the company consist of processing operation which require regular and systematic monitoring of data subjects on a large scale or if the core activities of the company is to process special categories of data, as may be the case of business performing profiling activities.
And if the company processes personal data using new technologies, it will be necessary, prior to the processing, to carry out an assessment on the impact of the envisaged processing operations on the ability to ensure appropriate protection of personal data.

Rather than extending myself in the description of the obligations imposed by the GDPR, I will highlight the impact that this new European regulation might have in Latin American countries.

In Latin America, data protection is a very topical issue. One of the major developments in the region was the creation in 2003 of the Ibero-American Data Protection Network (RIPD). This network began with representatives of 14 Ibero-American governmental agencies and focused its first activities in trying to advance in the adoption of a new regulatory framework and implementation of data protection authorities in its member states.

After the advances in the legal and institutional fields, the network switched its focus to cooperation activities: exchange of information and experiences, as well as the development of common actions and policies.

In this context, and now enlarged to 21 member states, the RIPD has recently recognized in the “RIPD in 2020”, that there are some countries such as Bolivia, Brazil, Ecuador, El Salvador, Honduras, Guatemala, Panamá, Paraguay and Venezuela, where an additional impulse regarding the legal framework is required.

Thanks to the RIPD’s labour, in June 2017 the “Ibero-American data protection Standards” was presented in Chile. Its main objective is to facilitate the flow of personal data, not only between Ibero-American states, but also beyond their borders, in order to foster innovation and economic growth in the region.

Those Standards were developed taking into consideration other international regulations, such as for instance the GDPR. It seems that one might say that the GDPR has a positive impact beyond the European borders, particularly in Ibero-American States; where the European example seems to inspire them to work towards homogeneous rules in the region facilitating the flow of personal data.

All the aforementioned, is important for European companies: if they are considering to transfer personal data to Latin-American companies, they will need to comply with the GDPR and, in particular:

Make sure that the third country where the company towards which personal data will be transferred is located in a country that ensures an adequate level of protection according to the European Regulation. Currently only Uruguay and Argentina comply with this requirement.
In the absence of the above, it could be possible to guarantee appropriate safeguards through binding corporate rules or standard data protection clauses.
Otherwise, companies could try to have the data transfer covered by one of the exceptions provided in article 49 GDPR: for example, because they have obtained explicit consent from the owner or because the transfer is necessary for the conclusion of a contract.

To sum up, if your company is considering transferring personal data from Europe to Latin America your company must comply with the GDPR. Do not forget it! Time goes by and 25 May 2018 is there!

2017 in review: summary of INDECOPI’s innovation in the field of Trademarks

Ernesto Barzola
Lawyer at Barreda & Moller

In recent years, many Intellectual Property Offices of Latin America have been enacting new provisions as to harmonize their IP systems according to the international standards. Countries such as Peru, through the National Institute for the Defense of Competition and Intellectual Property (INDECOPI), have implemented new measures in order to improve the efficiency and speed of the registration and granting procedures of IPRs.

In this regard, it must be highlighted that INDECOPI ended 2017 with a total of 34.213 registered trademarks, which represents a grow th of 27,3 % with respect to 2016. This increase was achieved as part of INDECOPI’s resolution to reduce registration time for trademarks from 6 months to less than 4 months.

One of the measures taken by the INDECOPI (covering both trademarks and patents) was the online publication of the applications. The online publication not only reduced time of registration proceedings but has also helped reduce the costs associated to such proceeding. Before online publication, applicants had to pay an additional fee (between 40 to 150 euros, depending on the size of the publication).

Early 2017, rules regarding Industrial property proceedings were modified. Some of these modifications, aiming to reduce processing times are the following:

– Adoption of measures to reduce the workload of Administrative Courts. Mainly through a better allocation of competence regarding grounds of appeal. The Administrative Court will hear of appeals of opposition, revocation, nullity actions and infringement actions. Directorates and Commissions will hear about appeals regarding denial of registration when no opposition has been filled.

– To avoid further delays during a proceeding, there is now a prohibition to file additional documents or briefs when a proceeding is ready to be resolved. Unless it provides an out-of-court settlement satisfactory to the parties (for example, coexistence agreement or an agreed suspension of proceedings).

Regarding infringement actions, henceforth the Administrative Court will not be able to increase a fine imposed on the defendant unless the plaintiff had appealed the amount of the fine. This practice, which arose in the courts, has now been included in the Peruvian Trademark Law.

Finally, the Peruvian Trademark Office uploaded its database to the TMview instrument allowing interested parties in filling application in Peru to have access to this registry. Not only it simplifies the procedures but it also allows to reduce the costs.

Two decisions issued last year by the Andean Community are also worth mentioning.

First, the Andean Court of Justice clarified the difference between a well-known trademark and a renowned trademark. The importance of the decision is due to the fact that Decision 486 does not regulate the renowned trademarks and its rules are limited to the well-known trademarks.

According to this Decision, there is no need to prove the “renowned” character of the trademark in order to be recognized as such. Notwithstanding the aforementioned, the specification made by the Andean Court of Justice consist on a quotation as a footnote, hence, it is very likely that the National Courts continue to require proof of the alleged well-known character of the trademarks. We will have to wait for a modification of the Andean Trademark Law which is expected for a near future.

Second and finally, regarding revocation proceedings (also known as cancellations for non-use) when complying with the required proof of use, the following should be taken into account:

– Revocation proceedings are not intended to punish trademark owners who advertise and make their products available to the public if the number of sales is not as elevated as expected. Therefore, the analysis should not be limited to accountable documentation but also take into account advertisement and presence in the media or the market.

– Sales should be analyzed on a case-by-case basis in order to determine whether or not the pause of sales is justified or not.

– Given the above, if the owner of the trademark can prove the use of the trademark at any moment within the relevant period, revocation must be dismissed.

The repercussion of the latest decision is due to the reticence from the Trademark Authority to consider proven the use of a trademark, if the documents filed were not able to demonstrate an elevated quantity of sales or if the sales were sporadic.

In conclusion, 2017 was important for the Peruvian Trademark Office in terms of innovation and for the Andean Community in terms of a new vision on how to apply the different concepts of the Decision 486. We can expect the impact of these measures to be felt as of 2018 and, given the improvements implemented in 2017, further legislative developments can be expected for 2018.

Food labelling vs Trademarks in Chile: a conflict not yet settled

Diego José Acuña Domínguez
Associate lawyer at Beuchat, Barros & Pfenniger, Abogados

When two constitutional rights are at odds, it is always a difficult conflict to solve, not only for the Government authorities but also for the Courts of Justice, which are often responsible for settling the dispute.

This is precisely the current situation in Chile, which has taken the decision to go further than the rest of the countries in terms of food labelling. Chile has, indeed, decided to implement a legislation that restricts both the nutritional composition of the same, as well as the way to advertise and offer them to the consumer of the relevant market, especially in those cases where aimed at minors.

The Government is basing its decision on the need to protect public health, due to the obesity pandemic that has been afflicting Chile for a decade now and which is causing 1 in 11 deaths in Chile. In fact, according to national studies, one person dies every hour from obesity and 5 out of 10 children are overweight.

The problem is under the spotlight because of the new Health regulation. The new regulation establishes that no manufacturer can disseminate “advertising” aimed at attracting the attention of children under 14 years old regarding products whose nutritional composition includes concentrations of nutrients that exceed the established limits, and which ultimately is an indicator of high levels of sodium, saturated fats or sugars.

In turn, companies manufacturing, distributing and marketing this type of products claim that their industrial property rights regarding the trademarks used on their packaging is being restricted, without previous expropriation or compensation by virtue of such limitation.

The conflict has escalated and has eventually reached the Civil Courts of Justice. The claims were filed by the affected companies against the administrative decisions of the Ministry of Health (under which fines have already been filed against these manufacturers of foodstuffs), requesting for these fines to be waived and to be authorized to use their figurative marks on the packaging of their products.

One of the arguments put forward by these private companies refers to the fact that they are complying with the current legislation on food labelling. They have done so by incorporating the so-called “HIGH IN” warning disclaimers on the packaging of their products in compliance with the “daily food guide”.

They also point out that they have terminated their involvement in the “advertising” activity aimed at children under 14 linked to the “HIGH IN” products, calories, saturated fat, sugars or sodium. Currently, these figurative elements are only used on the packaging of the products and in retail outlets, but not in mass media such as television, newspapers or similar media.

The main argument is that the registered figurative trademarks used on their products cannot be consider as “advertising” directly targeting children under 14, since Trademarks are used to identify or distinguish their products on the market from the ones of their competitors. In other words, the main use for trademarks is to provide distinctiveness, not for advertising purposes.

According to them, the concepts of “brand” and “advertising” are not synonyms; they have a different nature. The main function of a trademark is to “distinguish” products (emanating from the very definition in the Industrial Property Act), not to “advertise” them. The main purpose of advertising is to “promote the consumption of a given product”.

There, the use of the mark on the packaging is for distinguishing purposes, not advertising (mark cannot be placed on the food product itself). It is this distinctive function that allows the consumer in the relevant national market to associate or identify a certain product with the figurative mark that represents it (such as Nike’s check or Apple’s chewed apple), and the quality associated with the product and the producer.

They also pointed out that, according to previous statements from the administrative authority trademarks would not be affected by the new legislation when used for identification purposes. However, it appears that there has been a unilateral change of criterion.

This new interpretative criterion produces effects similar to an expropriation. It prevents the use of an industrial property right, who was previously granted registration by the trademark authority, and which, is now being denied the use, which is at the very essence of the exclusivity granted by IPR (as established in the Chilean Intellectual Property Act and in the TRIPS agreements). On this regard, companies point out that limitations based on public health reasons must be established by law, in compliance with the Constitutional principle of legal reserve regarding limitations on dominance (as is the case, for example, with tobacco, where the law expressly refers to trademarks), a requirement that is not met in this case.

Finally, they claim that the use of the marks complies with the authorization granted through registration by the Trademark Office, and only for distinguishing purposes of the protected goods in accordance with the International Classification. Therefore, there would be no legal ground for the prohibition.

On the other hand, the Chilean Government relies on the preventive nature of the legislation regarding the fight against obesity in Chile and the need to transform the current environment into a healthier one that protects the population.

One of the option to achieve this purpose is by providing clearer and more comprehensible information to the consumer through the “HIGH IN” warning discs. These labels indicate that the foods bearing them contain high levels of sodium, saturated fats or sugars, therefore exceeding the limits established by the Ministry of Health. Another option is to protect children under 14 from overexposure to food “advertising” exceeding health limits established by the Ministry of Health. In this sense, advertising should be understood as any form of promotion, communication, recommendation, propaganda, information or action aimed at promoting the consumption of a given product.

The Food Health Regulations prohibit all kinds of advertising directed to children under 14 “regardless of where it is carried out”. They consider that some elements lead to the conclusion that this age group is the main target of the advertising campaign: “characters and or childish figures, animations, cartoons, toys, children’s music, if it contemplates the presence of people or animals that attract the interest of children under 14”. Furthermore, the legislation also prohibits offering or delivering these products free.

Thus, and even though it is true that trademarks have a distinguishing purpose, it is nonetheless also true that they fulfil multiple functions. One of them is advertising, which allows to position the distinguished product or service and thereby facilitate its promotion, influencing the purchase decision of the final consumer (catchy trademarks are more likely to attract the interest of consumers).

The Government also claims that industrial property rights are not absolute, they do admit limitations. According to the Doha Declaration on TRIPS and Public Health itself, IP rights do not and should not prevent Member States from taking measures to protect public health.

In addition, the definition of “advertising” given by the Food Labelling Act and the Health Regulations is broad enough and does not distinguish whether or not a figure constitutes a trademark. Otherwise, registration as a trademark would be enough to escape the application of the rules set out by the regulation.

Finally, they assert that if these products were to adjust their ingredients and composition to the tables drawn up by the Ministry of Health, they would be free to use the figurative elements on their packaging, even for advertising purposes directly directed to children under 14.

This is an ongoing discussion and both sides have already exposed their arguments. For now, all that remains is to wait for the outcome of these cases and the opinion of the Chilean Courts of Justice. Regardless of the outcome of the claims, the real impact of this legislative change is to be seen on the long term (one or two decades), after which Chile must analyze whether or not they had the intended effect: is there a reduction in obesity rates? Has physical inactivity decrease?

Meanwhile, Chilean consumers are getting used to a new packaging, where classic figurative elements that used to accompany them have disappeared (such as Tony the Tiger on the Frosted Flakes or the colorful M&M’s). The packages are now “plain” and the predominant element is the word mark.