Venezuela: the current licensing regime for IP assets
In Venezuela, as in other jurisdictions, the granting of exclusive rights over IP assets is subject to their use within the country, and IP licences have been the best instruments to justify the granting of those exclusive rights.
During the 1970s, Venezuela joined the Andean Pact, incorporating the common treatment regimen for foreign capital known as the Andean Subregional Integration Agreement (Cartagena Agreement). As a result, in accordance with Article 43 (Decree No. 2095) dated February 12, 1992, which regulates the Regime for the Common Treatment of Foreign Capital and Trademarks, Patents, Licensing Agreements and Royalties (based on Decision 291 of the Andean Pact), the contracts for licensing trademarks that belong to a foreign company are subject to registration at the Venezuelan Superintendencia de Inversiones Extranjeras (SIEX).
In addition, as established in the same article, the main consequence of not registering this kind of contract at the SIEX is that the patent and trademark office (SAPI) would not proceed with the registration of the licensees as rightful trademark users in Venezuela.
"due to Venezuela’s official withdrawal from the Andean Community, the decisions, which were originally part of Venezuela’s legal system, are no longer valid in the country."
In accordance with the Industrial Property Act, trademarks and patents are subject to cancellation on the grounds of non-use if their owners or registered licensees at SAPI do not use them during a two-year period after obtaining their registration. However, the pre-requisite that the licensing contracts had to be previously registered at the SIEX in order to be submitted to SAPI, established by Decision 486 of the Andean Community, which covered a common regime of industrial property, is no longer valid within Venezuela’s legal framework.
Since Venezuela’s withdrawal from the Andean Community in 2006, there has been much uncertainty about the validity of the decisions announced, and whether these would still be applied.
Valid or not?
There are two currents of opinion. One considers that under Article 153 of the Constitution these decisions are now part of the legal system and, therefore, still valid unless they are annulled or abolished. The second considers that the withdrawal from the Andean Community has led to an automatic elimination of the decisions from the country’s legal system and that they are therefore invalid within the local system.
During 2006, the Venezuelan Association of Exporters (AVEX) lodged a complaint against the interpretation of Article 153 before the Supreme Court of Justice, which was directly related to the validity of the decisions rendered by the Andean Community.
On July 4, 2012, the court finally reached a decision about the case brought about the interpretation requested of Article 153 of the Constitution. The decision stated that due to Venezuela’s official withdrawal from the Andean Community, the decisions, which were originally part of Venezuela’s legal system, are no longer valid in the country. Based on these facts, the SIEX is acting without a legal foundation as Decision 291, as well as the rest of the Andean Community legal bodies, is no longer valid in Venezuela.
Following this decision, on May 12, 2014 SIEX issued an administrative ruling exonerating the obligation for registering those contracts related to licences to use software, technical assistance for software, licensed telecommunications, technical assistance in telecommunications equipment, licence distribution and sale of films, videos and related licences for television productions, plays, operas, music and arts in general.
In any case, based on these considerations, licensing contracts regarding trademarks and patents should be submitted to SAPI in order to prevent any cancellation actions of the trademarks on the grounds of non-use by their owners or by the licensees registered at SAPI.
Matías Pérez-Irazábal is a junior partner at Hoet Peláez Castillo & Duque. He can be contacted at: mperez@hpcd.com
