Playing safe: how to strategise in Latin America

But there are other tips that can help form a good strategy for protecting IP assets in Latin America. Here are some of them:

1. Plan your IP strategy by country instead of by region. Even though regional alliances (for example, ALCA, ALBA, the Andean Pact, Mercosur and Unasur) exist, Latin American countries maintain their own identities and traditions. Consequently, they keep their own national laws, which causes unharmonised legal systems and uncertainty.

2. Implement your IP strategy in due time. The processes for registering IP vary greatly from country to country.

3. Don’t presume protection for pending IP rights, such as patents and trademarks. It is rare in Latin America.

4. Piracy and the misuse of trademarks by unscrupulous traders, dealers and manufacturers is a common scourge. If you are entering into negotiations for licensing, franchising or distribution, play it safe by making sure that your IP rights are secured and registered. The golden rule is this: do not enter into negotiations with prospective partners without your IP rights being registered.

5. Do not limit your trademark applications to the class or classes that correspond to your main products. Put some thought into related classes and broaden the protection that your mark can enjoy by extending your use of the mark in trade and advertising.

6. Protect your business from corrupt practices. After the massive increase in corruption prosecutions that involve acts committed outside of the US, and in application of the Foreign Corrupt Practices Act of 1976, many US clients are contacting foreign law firms to insist that they must receive assurances that the foreign law firms will not make corrupt payments when conducting business on their behalf. UK clients are demanding the same assurances, as new provisions of the UK Bribery Act entered into effect on July 1, 2011. This law generates liability not only for the clients but also for the actions of their agents. Company and firm policies are changing to reflect the harsher penalties being legislated in corruption laws. Clients are making sure that their own staff instruct and seek assurances from company and firm associates to ensure that they receive high quality and ethical legal representation.

7. Competition is becoming more important in the IP profession. Latin America is not the exception. Cheaper fees are not the only factor when selecting an IP attorney. Acting as a proxy in IP matters is a complex affair, and, if you decide to choose one, respectability, credibility, tradition, expertise and experience are decisive factors in what should be a delicate choice.

8. Beware of so-called ‘IP agents’. Make sure that IP assets are in the hands of qualified lawyers who are admitted to practise before a country’s administrative authorities and courts of law, including the supreme courts of justice.

9. Dual and even triple protection of certain artistic creations (eg, designs) is possible in some countries. Copyright protection is generally available, quicker to obtain than trademarks, and is covered by global treaties and other multilateral agreements.

10. Special privileges that are granted by international treaties are valid instruments that should be taken into consideration before applying for IP rights.

11. Latin America is a region, but it is also part of a huge continent that is made up of 22 South American countries, six Central American countries and a large number of Caribbean islands, all with individual IP laws. In some Caribbean cases, national regulations remit to the IP laws of European countries, such as the UK, The Netherlands and France. Local advice from specialised law firms, country by country, is essential.

12. When dealing with patents, especially those that cover pharmaceuticals, some authorities look at them with reluctance due to populist policies and, as a result, patent applications, without being denied since they are specifically permitted by law, are simply held in abeyance. However, it should be taken into account that, traditionally, Latin American governments have fluctuated politically, from the extreme left to the extreme right. Therefore, it is difficult to predict how they will react to patenting in the future. The existence of an application or a granted patent may be of little de facto value in some jurisdictions, but shifts in policies can always be expected. When faced with an infringement in a jurisdiction that is unsupportive towards IP, a cease and desist letter can have the desired effect. Counsel advice in each particular case is strongly recommended before making a decision.

13. IP systems are generally slow. This is sometimes due to transitory reasons and sometimes to more permanent reasons, such as structural instabilities at local trademark and patent offices. A two- to three-year wait for a trademark certificate is not unusual. Eventually, this generates impatience in applicants that are not accustomed to such delays, and it can tempt unscrupulous agents to offer services that, they say, can speed up painfully slow processes. Prudence indicates that these services are not always legitimate and that unexpected and unnecessary risks can be incurred.

14. Simultaneous trademark or patent filings can provide access to special discounts. However, this is not a practice that is generally accepted in all countries. The common, single tariff that is chargeable by all agents is not possible in certain countries due to unfair competition regulations. Generally, it is not considered to be unethical to request, and to be granted, exceptional fees by local agents in view of the importance of a client or the volume of filings being passed on.

15. The anti-piracy fight is a continuous one, especially in counterfeits of well-known trademarks. Nevertheless, before litigation is considered, it is advisable to begin with a cease and desist process, unless there is an obvious bad faith fact, or when the ex officio intervention of public authorities such as customs is available. In general, judicial processes are costly, unpredictable and in many cases the administration of justice is not as reliable or as fast as it is in other industrialised countries. A detailed opinion, from the lawyer who is responsible for the client’s account, about timing, cost and realistic solutions is recommendable.

16. The Latin American market is important and attractive. It deserves to be considered very carefully to ensure the adequate protection of your IP, from application and registration to the end of the IP’s life cycle.

Today, as they are affected by the global economic crisis, IP owners are very concerned about costs and this is forcing them to make difficult choices. Take the following example. Cost reduction is probably a good reason not to apply too often for marks that are similar to the ones that IP holders already own in order to broaden protection.

However, trademark piracy is rife in certain industries and countries, so this kind of protection is an important tool for protecting a brand, especially when dealing with a family of trademarks that have a common root.

IP owners need to approach every situation without prejudice, so that they can evaluate different scenarios and decide on the course of action that is best for both their portfolios and their pockets.