Andean Community - New Intellectual Property Law

Newsletters and Bulletins / February 2002 / Andean Community

The Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela) adopted a new harmonized intellectual property law, under Decision 486 of the Cartagena Agreement, which took effect on December 1, 2000. It is intended to bring the laws of the member countries into compliance with the GATT-TRIPs Agreement and to take cognizance of the Rio Convention on Biodiversity. The main features are set out below.

Patents

Patentable Subject Matter

Decision 486 provides that patents shall be granted for inventions in all areas of technology if they are new, involve an inventive step and are industrially applicable. However, the law specifically provides that the following shall not be considered as inventions:

(1) discoveries, scientific theories and mathematical methods;

(2) any living thing, either complete or partial, as found in nature, natural biological processes, and biological material, as existing in nature, or able to be separated, including the genome or germ plasm of any living thing;

(3) literary and artistic works or any other aesthetic creation protected by copyright;

(4) plans, rules and methods for the pursuit of intellectual activities, playing of games or economic or business activities;

(5) computer programs and software; and

(6) methods of presenting information.

Additionally, although qualifying as inventions, patents shall not be granted on inventions:

(1) whose commercial exploitation should be prevented to protect public order or morality;

(2) whose commercial exploitation should be prevented to protect human or animal life or health or to avoid serious prejudice to plant life and the environment;

(3) which are plants, animals and essentially biological processes for the production of plants or animals, other than non-biological or microbiological processes; or

(4) which are diagnostic, therapeutic or surgical methods for treatment of humans or animals.

According to the Secretary General of the Andean Community, the wording is apparently intended to exclude any form of patent protection for second medical uses. The issue is, however, currently before the Andean Community Court of Justice, although on the basis of the prohibitions of the prior law.

Decision 486 also imposes certain limitations on intellectual property rights and, in particular, patent rights in relation to inventions relating to "biological heritage and traditional knowledge", requiring that intellectual property rights safeguard and respect a country's biological and genetic heritage, together with traditional knowledge of their indigenous, African-American or local communities. As a result, the granting of patents on inventions that have been developed on the basis of material obtained from that heritage or that knowledge shall be subordinated to the acquisition of that material in accordance with international, Andean Community and national law.

The effect of this is that, if laws or treaties relating to the removal or payment for use of natural products from a country have not been complied with and a patent based on work with that product is applied for, any such patent will be "subordinated" to the biodiversity laws. It is understood that such "subordination" means at least compliance with the requirements of the 1993 Rio Convention on Biodiversity (which has not been ratified by the United States). This Convention provides, inter alia, that a country may control access to its genetic resources and require transfer of technology which makes use of those resources, on "mutually agreed terms", which may include terms relating to technology protected by patents and other intellectual property rights.

Degree of Protection Provided by Patent Rights

Decision 486 provides that patent protection extends not only to patented products and patented processes, but also to the sale, use or importation of products obtained by patented processes. Additionally, there is reversal of the burden of proof in the terms set out in TRIPs in respect of infringement of process patents. Those who had used the invention in good faith or who had made real and effective preparations for such use before the filing or, where claimed, the priority date of the patent will not be liable as infringers. Additionally, the patent right does not extend to experimental use, or teaching, academic or scientific research or to private use of a patented invention for non-commercial purposes; nor is a patent effective to prevent importation into an Andean Community country of any product put on the market by the patentee or with his consent in any country of the world. Limitations also exist on the extent of protection afforded to biological materials that are themselves capable of reproduction. The law makes no direct provision for action against contributory infringement, but does provide that action may be taken against "persons performing acts that are extremely likely to result in infringement".

Novelty

The definition of what is new requires that the invention has not been disclosed to the public by any means (including oral disclosure or use) anywhere in the world before the filing of the application in question or, where priority is claimed, before the priority date. There is, however, a grace period for certain types of disclosure. This grace period runs back for one year from the actual filing date in an Andean Community country or from the priority date, if priority is claimed. Disclosures that may be excused under this provision are the following:

(1) disclosures by the inventor or his assignee, or those who have obtained information about the invention directly or indirectly from them, but apparently not including disclosures made in a properly published patent publication, even though this may ultimately derive from the inventor; or

(2) patent publications arising from applications by the inventor or his successor in title which are published as a result of Patent Office error.

Unpublished prior co-pending applications in the same country are relevant to questions of novelty, but cannot be used as the basis of an objection that the invention lacks an inventive step.

Patent Granting Procedure

Decision 486 contains a number of provisions aimed at harmonizing procedures used by the national offices in the prosecution of patent applications. These include:

(1) opening the file to public inspection eighteen months after filing or, where claimed, the priority date; the form of publication of the application however, will, be a matter for national law;

(2) third parties will be able to object to the grant of a patent for a period of sixty days after the file is opened to inspection;

(3) substantive examination will only take place if the applicant so requests within six months of the file being opened to the public; a fee may be charged for this. If no examination is requested, the application will lapse; and

(4) national offices may call for results of examination in other countries and, if they choose to use these results as the basis for a determination of patentability, they may alternatively obtain reports from outside experts or from scientific or technological bodies.

Colombia and Venezuela at least have adopted national legislation to provide for deferral of examination as permitted by the new Andean Community Decision so that examination in these countries will now be undertaken only if a request is made and a fee paid within six months of publication. Failure to make such a request and pay the fee results in the abandonment of the application.

Compulsory Licenses

Decision 486 imposes on a patent owner the obligation to exploit the invention in a member country of the Andean Community sufficient to satisfy the demands of the market; however this can, be accomplished by importation.

In addition to situations where a compulsory license may be ordered in cases in which there has been an abuse of a dominant position by a patentee, where required to deal with a public emergency, or in the interests of national security, patents may be the subject of compulsory licenses, if a) the invention is not exploited in a country that is a member of the Andean Community either by manufacture or use of the invention there or by importation in an amount sufficient to meet demand of the patented product, b) at least three years have elapsed since the patent was granted and four years have elapsed since the patent application was filed and c) the applicant for the compulsory license has been unable to obtain a contractual license on reasonable commercial terms. Any person seeking the grant of a compulsory license must prove that he has the technical and economic capacity to carry out industrial manufacture of the product in question and must pay "appropriate compensation" to the patent owner. Additionally, where the owner of a later patent, which is for an invention making "substantial technological progress" over the invention of an earlier patent that dominates it, has been unable to secure a voluntary license, a compulsory license may be ordered, subject to cross-licensing on reasonable terms.

Utility Models

Decision 486 also requires that all Andean Community countries provide for utility model protection for any "new shape, configuration or arrangement of components of any device, tool, implement, mechanism or other object, or any part thereof which makes for improved or different operation, use or manufacture of the object incorporating it, or which endows it with any usefulness, advantage or technical effect that it did not have previously". There is no requirement for an inventive step to obtain utility model protection. The maximum term of protection for a utility model is ten years from its filing date.

Designs

Design protection is available for new designs relating to the "particular appearance of a product that results from any arrangement of lines or combinations of colors or any two-dimensional or three-dimensional outward shape, line, outline, form, texture or material". Protection is not available for designs whose appearance is "dictated essentially by technical or functional considerations"; nor, except in the case of articles forming part of a modular system, is protection available for designs that are required to enable an article to fit with another element to form an article incorporating the article embodying the design in question.

Novelty is judged on the basis of whether the design was "made accessible to the public in any place or at any time by description, use or any other means" before the filing date or any validly claimed priority date. Although no substantive examination is to be carried out, national authorities have the right to refuse an application for registration if it is "glaringly obvious" that the design is not new.

Protection is by way of registration and is granted for a period of ten years.

Integrated Circuits

Protection is given to original works that are not in common use in the integrated circuit industry by way of registration in a national office. To be original, the circuit design must be "the result of the creator's intellectual efforts". In order to secure protection, an application for registration of the design must be filed with the competent national authorities within two years of the first commercial exploitation of the design. If there has been no commercial exploitation, the application for registration must be filed within fifteen years of the creation of the design for the circuit. The duration of protection is a period of ten years from the last day of the year of first commercial exploitation or ten years from the filing date of the application for registration of the design, whichever is the earlier. It is in any case subject to a requirement that protection lasts for no more than fifteen years from the date of creation. Licenses to use registered integrated circuit rights must be recorded with the competent national authority to be effective against third parties.

Trademarks

(1) Decision 486 expressly provides that sound, olfactory and three-dimensional marks may be registered.

(2) Decision 486 expressly bars the registration as trademarks of generic and technical terms that designate goods and services.

(3) Decision 486 provides a number of new relative grounds for rejection. A mark referring to elements of the cultures of indigenous, Afro-American or local communities may not be registered without the community's express consent. Signs infringing any industrial property right or copyright are excluded from protection. Under the immediately preceding Decision 344, only natural persons could object to registration of their name without consent; Decision 486 allows legal persons to do the same, although for this ground to be applicable now it is necessary that the application could damage the identity or prestige of the person whereas, previously, no such element of damage was required.

(4) Decision 486 establishes that signs that contain an indication of origin for alcoholic beverages and geographical indications likely to mislead the public are excluded from protection. However, it is recognized that geographical names may be registrable as marks, although the sale of products under such marks must conspicuously indicate the place of production of the product to avoid misleading the public.

(5) Decision 344 barred registration of the name of plant varieties or derivative terms. Under Decision 486 such prohibition is restricted to applications in respect of the plant variety in question or that are likely to cause confusion or association with the same.

(6) Decision 486 broadens the protection of well-known marks to cover not only marks, but any sign that has the necessary notoriety. Protection is granted even if the well-known sign is not the subject of an application or registration, or in use in the country where the action is initiated and whether or not the sign is well-known on an international basis.

(7) The new Decision adds transliterations to the list of signs barred on the ground of notoriety and does not specify where the mark must be well-known.

(8) Decision 486 details with more specificity the factors to be considered in determining whether a sign is well-known and the relevant consumers and public in connection with which such factors are to be applied.

(9) The owner of a well-known mark may object to the registration and use of a domain name or e-mail address.

(10) Well-known marks are also protected against their unauthorized use where there is a risk of confusion, "unjust economic or commercial damage to the mark owner by reasons of the weakening of the distinctive force or commercial or advertising value of a mark", or unfair exploitation of the mark's prestige or fame.

(11) Non-distinctive, descriptive, generic, commonly used terms and color trademarks may be registered upon the filing of adequate evidence showing that the mark has become distinctive through use.

(12) The new Decision introduces the principle that bad faith is not subject to the statute of limitations, and therefore any action grounded in the bad faith of the applicant and/or registrant of a mark or trademark infringer can be initiated beyond the terms recognized for other grounds.

(13) Decision 486 expressly allows good faith use of a registered trademark for the purposes of comparative advertising.

(14) A specific description of the goods and services is now required for trademark applications.

(15) The term to file "oppositions", formerly known as observations, remains thirty days, but the opponent may request an additional thirty-day period to file evidence in support of the opposition.

(16) An opponent who does not have an application or registration for the mark which forms the basis for the opposition must demonstrate legitimate interest by applying for registration of the mark at the time of filing the opposition.

(17) The new Decision recognizes the possibility of licensing a trademark when the application for the same is still pending. Unrecorded licenses will not be enforceable against third parties.

(18) Decision 486 also introduces protection for certification marks, expands the rules on the protection of trade names, and introduces rules of protection for geographical indications and indications of origin.

Enforcement Procedures

The new Decision also provides for additional preliminary relief, as well as for intervention by Customs in the case of suspected infringements.

February 2002 Index

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