A new patent law was promulgated in Paraguay on November 29, 2000 and came into effect on January 29, 2001. The new law makes significant changes to the standards of novelty, priority, duration, licensing, infringement and patentable subject matter.

The new law establishes a system for protection by granting both invention patents and utility models. The major changes are set out below.

Patents shall be granted for inventions which are new, possess an inventive step and are industrially useful in any field of technology. However, patents will not be granted for:

Under the old law, pharmaceutical compositions were unpatentable. However, the new law, will allow patenting of pharmaceutical compositions after January 1, 2003 . Until that time, patent applications for pharmaceutical compositions will be handled in accordance with the requirements and provisions of the current law. However, Paraguay has taken advantage of its rights as a developing country under TRIPS and patents for pharmaceuticals will not be granted before January 1, 2003. During this transition period, holders of rights on pharmaceutical products will be entitled to apply for exclusive rights for commercialization. If the application is granted, a holder of the right shall be granted the "exclusive right for commercialization in Paraguay" for a term of five years, which will prevent third parties from offering for sale, distributing, or commercializing the product.

An invention is considered to have novelty when the invention does not form part of the technical state any where in the world. "Technical state" is defined as all that which has been divulged at any place, through publication, commercialization, use or any other way, before the date of submission of the application for patent in Paraguay, or in a given case, before its priority date.

Whenever the invention refers to a product or process relating to a biological material, such material must be deposited in an institution approved by the Industrial Property Office or have been deposited in certain foreign depositories.

Effective January 29, 2001, the term of a patent is twenty years from the date of the application giving rise to it. Patents granted under the pervious law will continue to have a term of fifteen years.

A holder of a patent will have to pay annual rates in ascending order to keep the patent in force. If the holder of the patent does not pay the annual rates, the lack of payment shall automatically cancel the full right of the patent.

Paraguay is now a member of the Paris Convention and therefore convention priority may be claimed.

An unusual feature of the new law provides that for thirty days prior to the date of expiration of the patent, the invention may be used for experimental purposes with the object of gathering information for the commercialization of the product after the date of expiration of the patent without this being an infringement of the patent.

The new law addresses the issue of patent infringement and foresees different actions a holder of a patent can use in order to protect its rights, which are:

The new law has a provision directed to calculating damages and losses based on patent infringement. Besides monetary relief, the new law state that the judicial authority may also proscribe equitable relief, such as the immediate cessation of the acts forming the infringement; the attachment or seizing of infringed products; and the suspension of the import or export of the products and the taking of measures at the border.

Any person interested in obtaining a license shall be able to apply to the administrative authority of the Industrial Property Office for an obligatory license. Compulsory licenses shall be granted for supplying the internal market and shall not be exclusive.

Compulsory licenses will also be granted by the Executive Branch without the authorization of the patent holder when the invention relates to national defense or security, emergency, or is of national interest.

The holder of a patent subject to a compulsory license shall receive compensation. In cases where there is a lack of agreement, the compensation shall be determined by the administrative authority.

Protection by way of a utility model is available for new shapes, configurations or dispositions of elements of an artifact, tool, instrument, mechanism or other object, or part therefore which permits improved or different functions of the object to which it pertains. There is no need for an inventive step. The duration for utility model protection is ten years from its filing date.