15 good practices about IP management in the machinery sector in Latin America

Rodrigo Ramírez Herrera
Partner at Larraín Prieto & Cía.

A well-planned, tailor made IP protection and enforcement strategy is key to success in every new business adventure, particularly when you are going abroad. Seek professional IP advice before you take any step if you want to prevent undesired situations and check our recommendations on some of the most important IP aspects to be included in your checklist before, during and after you enter the Latin American countries.

1. Use technology watch and competitive intelligence tools in the destination marketplaces

Fix your aims, set-up your monitoring activity according to your strategy, look for sources to watch your marketplace in publicly available information and commercial software and make your own key performance indicators of IP information collected or outsource these activities.

2. Determine the Freedom to Operate (clearance for technology, innovations, and patents)

A prior in-depth analysis of marketplace in Mercosur and Chile, by sectors of machinery technologies it is a sound decision (also known as a market clearance search). Take into account to performance searches on international databases is useful the IPC (International Patent Classification).

Keep in mind that can it be risky to attempt to bring an innovation in machines to Mercosur market without first conducting a freedom-to-operate search, as such products (and their patents, including parts and tools) may be vulnerable to infringement suits, potentially resulting in costly litigation procedures in other jurisdiction and/or forcing your company to withdraw a product from the market altogether.

3. Search prior art of your machinery and parts and define its novelty

If your firm is researcher/developer of technologies, should define the prior art for each innovation in order to avoid spending resources or commit infringement of third parties rights, or outsource this work.

4. Identify, inventory your IP assets, ensure its ownership and adopt appropriate mechanisms for their protection

Ensure that the agreements specify, in as much detail as possible intangible assets of intellectual nature (including references non-disclosure data, secrets and relevant confidential information) supplied before and during the operations in the Mercosur and Chilean market, through audits and inventories.

5. Register your IP rights before commercializing in the destination countries

Even if it may sound obvious, registering your IPR at an early stage of your entry into the Mercosur or Chilean market has a deterrent effect and makes enforcement more effective. It also helps to avoid other problems, such as bad faith applications.

6. Register your trademarks in the Customs Service (where available)

Registration will facilitate the detection and blockage of infringing goods through special service of Custom agency available for trademarks in order to apply border measures. This type of register is not provided by all the Latin American Customs authorities and is independent from the National Intellectual Property Office’s.

7. Renewal your IP registrations in a timely manner and appoint a local legal representative (an IP lawyer, preferably)

Normally, you can avoid cancellation of your IP Rights by paying an additional fee during a certain period (3 or 6 months after expiration). An expert with expertise on the local regulation and the field will allow you to prevent incurring in extra costs and even loosing your rights.

8. Communicate with public Intellectual Property-related authorities

A fluent relationship and communication with the IP authorities, such as the police or customs agents, will allow more agile decision-making and obtaining more detailed information in order to defend and enforce your rights. It is also recommended to send a representative to police raids and seizures.

9. Communicate with other IPR owners

Take into account that counterfeiters tend to use the same distribution channels, storage points and routes of entry. Joining efforts with other IPR owners could be beneficial for all parties.

10. Consider other alternatives before claim before courts

Sometimes sending a «Cease-and-Desist Letter» is sufficient to stop the infringement, especially in cases where the infringer is a small retailer.

11. Follow good practices from industries’ associations

Joining industries´ associations may be useful in order to join efforts and develop good practices based on the experience of each member. They are also used to develop joint awareness campaigns addressed to users and clients.

12. Off-shoring anti-counterfeiting support

Detecting the country of origin of counterfeited products may help you to block the goods in a very early stage of the distribution channels and can help you to save costs. This is particularly effective if your IPRs are also registered in the country of origin of the goods.

13. Monitor repeat offenders ( a counterfeit of machinery, parts, and tools)

In the case of repeat offenders a close monitoring could provide information regarding their distribution channels, suppliers, and clients.

14. Enforce your IPR before courts: combine criminal and civil actions

Even in the case of clear criminal behaviors, combine such criminal actions with civil actions (e.g against the most creditworthy of the infringers) to obtain as many damages as possible.

15. Sign Non-Disclosure Agreements, non-competence and other agreements in force after you leave the market

Check the legal force of agreements related to intellectual property, keeping in mind that trade secrets may not last for a specific term of years, according to as agreed.

For further information on the Machinery sector, you can check our Factsheet Machinery and IP in MERCOSUR and Chile or ask our experts.