LexLatin – It is now possible to cancel commercial names due to lack of use in Ecuador

DETAILS

DATE: 20-08-2020

CORRALROSALES IN THE NEWS: 

-Katherine González

MEDIA: Lex Latin

The LexLatin communication medium publishes an article by our associate Katherine González detailing the modification regarding the possibility of canceling commercial names due to lack of use in Ecuador. Previously, the National Service for Intellectual Rights (also known as SENADI) did not process this type of cancellation request since “the authority considered that the rights were acquired with their use.”

After having studied the possibility of carrying it out, the Court of Justice of the Andean Community has determined that trade names may be canceled if they have ceased to be used at a certain time and provided that a series of requirements are met.

Before this new ruling was published, if you applied for a trademark similar to a registered trade name but in disuse, the owner of said trademark had to oppose this fact. Likewise, having filed an opposition or not, the refusal of the trademark was considered due to the similarity to one already registered and, therefore, there was no option to register this new trademark.

As our associate explains, before taking any action it is necessary to bear in mind “that trade names are independent of the business name or determination of the companies and may be the same or different”.

“One of the solutions provided by the users to counteract this type of inconvenience was the presentation of cancellation actions for lack of use against registered trade names. For these matters, SENADI had no maintained a uniform criterion, in most cases these actions were inadmissible because it considered that the registration of a commercial name loses its validity and effectiveness as soon as use ceases, therefore, the cancellation was not legally appropriate, ”González points out.

Now, the criteria have changed and trade names may be canceled due to lack of use in Ecuador.

Ahora, los criterios han cambiado y se podrán cancelar nombres comerciales por falta de uso en Ecuador.

If you want to read the full article, click here

The use of cannabis has been approved in Ecuador

cannabis-regulatory-approved

In the 1st Supplement of the Official Gazette No. 107 of December 24, 2019, the Reform of the Criminal Law was published, which will enter into force in June 21, 2020.

Included among the reforms, is the decriminalization of possession of drugs that contain cannabis or derivatives as their active ingredient for therapeutic, palliative or medicinal ends, or for the practice of alternative medicine. In addition, the Law of  Control and  Prevention of the use of  Drugs   has been amended, excluding non-psychoactive or hemp cannabis from control, extended to the cannabis plant or any part of the plant, whose delta-9-tetrahydrocannabinol (THC) content is less than 1%.

The Ministry of Agriculture will have 120 days from the entry into force of this law to issue the regulations to control the import, planting, cultivation, harvest, sale, industrialization and exportation of industrial hemp. Furthermore, shortly the National Assembly must approve the Health Law, in which cannabis and its derivatives for medicinal and therapeutic use will be regulated.

CORRALROSALES

Revista Ekos – Between lawyer and woman: María Cecilia Romoleroux

woman-lawyer-maria-cecilia-romoleroux

DETAILS

DATE: 3-01-2020

CORRALROSALES IN THE NEWS: 

-María Cecilia Romoleroux

MEDIA: Revista Ekos

María Cecilia Romoleroux is a career lawyer and has excelled in various fields at a national and international level. Her passion for the law has allowed her to be a pioneer in areas where women were not easily accepted.

Her career is marked by gender inequality, but this was not an impediment to being the first Ecuadorian woman to be part of the board of directors of the International Trademark Association (INTA) or of the Programming Committee of the International Association for Protection of Intellectual Property (AIPPI).

In an interview with Ekos Magazine, María Cecilia shared her experiences on the empowerment of women and the work that must be done in Ecuador to achieve gender parity. Her history began in the classrooms of the Pontifical Catholic University of Ecuador where only a small group of women could complete their studies, one by one they started to drop out due to various circumstances.

“For two years I worked in a free clinic for abused women. A situation that humanizes you and allows you to understand the need to empower women”, said Maria Cecilia, who stressed that no person should be an “appendix ”of anyone.

Thus, she decided to enter a more technical niche; the world of intellectual property. After a successful performance she joined a local association where she became vice president. However, when she was ready to be promoted to the presidency, they closed the doors for her because “they were not ready for a woman to be president much less on such a specific field”

“They took me out of the local sphere but I started working internationally. I joined various associations and tried to make a name of myself”, she said.

Some time later, María Cecilia joined CorralRosales as a partner and also has had an extensive career as a mediator and judge / judicial assistant. She is one of the few professionals who holds a partnership in a national law firm. According to Romoleroux, this is due to the fact that “women do not give themselves the opportunity to go far. It is necessary to work from dawn to dusk, travel and possibly miss many family-related activities.”

“You have to combine the roles between mother and lawyer.”

“Many times society does not help professional woman reach high positions”, says Maria Cecilia; an issue that was ratified by the Ekos Group Research Unit who conducted a survey to find out the number of women who hold CEO and management positions. The result shows that only 37.3% of women have such positions in contrast to that of men 62.7%.

“This reality is not very far from the realm of law. In such sexist communities it is difficult to be a mother, wife and professional at the same time”, said the expert. That is why there are countries – like Italy – that have limited spaces for women to be partners or directors of consortia or legal groups. On the other hand, factors such as the Ecuadorian work environment causes men to have an advantage above women at time of selection or hiring for new positions.

In spite of all the social obstacles, last year María Cecilia was recognized as “Women Chambers in Law 2018 for Ecuador” in the annual awards ceremony for Chambers and Partners Legal Directory within the Diversity and Inclusion Awards category, where her career, achievements and especially her legacy were analyzed; that is, the projects she is taking on to leave a mark or a way forward in the country.

Finally, María Cecilia Romoleroux shared what her motivation to dedicate herself to this legal field was and her answer was a simple: “life gave me this”.

Education:

1990: Doctor of Jurisprudence at the Catholic University of Ecuador

1991: Paralegal program at Georgetown University, United States of America

1993: International Relations – Ship for the World Youth, Japan

1997: Master Lucentinus in Copyright at the University of Alicante

Experience:

2000-2014: Mediator of the Ecuadorian-American Chamber

2002-present: Partner in intellectual property and regulation, CorralRosales

1999-2000: Secretary of the Ecuadorian Association of Industrial Property Agents

2001-2003: Vice President of the Ecuadorian Association of Industrial Property Agents

2003-2019: International Intellectual Property mediator for International Trademark Association

2009-2012: Judicial Assistant of the Administrative Contentious Court

2012-present: Mediator and arbitrator for ASIPI

2017-2019: INTA board member

2019-2021: Member of the Programming Committee at the Association Internationale pour la Protection de la Propriété intellectualle

2019-2021: ASIPI President of the Committee of Counterfeiting

Achievements:

2017: President of the first Latin American INTA conference in Cartagena

2018: Winner of the Chambers “Lawyer of the Year” award

2019: Nominated International Program Leader for INTA Boston

2020: Chairman of the Host Committee for ASIPI Quito

If you want to read the interview in spanish, press here

Gestión Digital – Forms of associations in Ecuadorian Public Procurement

public-procurement-ricardo-mancheno

DETAILS

DATE: 2-10-19

CORRALROSALES IN THE NEWS: 

-Ricardo Mancheno

Ecuadorian legislation regulates the use of the association or joint accounts and the consortium as forms of associations for public procurement, which facilitates the participation of the private sector in business with the State.

As part of the development of commercial activities, it is common for natural and legal persons to use forms of associations that allows them to jointly and efficiently conduct businesses in the private and public sectors. A summary of the legal framework applicable to these forms for public procurement is presented below.

The law establishes as forms of association: the association or joint accounts, the consortium or consortium agreement; and, joint venture.

In the area of public procurement, the legislation only admits the use of the association and the consortium. The latter is the most widely used in practice.

The association or joint accounts defines the Corporate Law as a contract whereby a merchant gives one or more persons participation in the results of one or more operations or of all their commercial activity, in exchange for a certain participation or contribution. The management and accountability of the business is the responsibility of the person in whose business third party participation occurs; the law grants the participants ample freedom to agree on the terms of the association.

The consortium or consortium agreement is a contract provided in the Commercial Code, whereby two or more people, natural or legal, are associated with the purpose of participating in a contest, project or contract, or in several at the same time. Associates do not lose their independence and autonomy. Participants in a consortium respond jointly and severally for the obligations acquired by the consortium. In other laws the consortium is usually called “temporary union.”

For contracting with public entities, the law provides that the consortium agreement must be constituted by public deed and that, therein, regardless of other provisions or regulations of the relations between the participants, the declaration of their joint and several liability for the fulfillment of its obligations derived from the contract with the public entity. In addition, you must obtain the Unique Registry of Suppliers, RUP.

To participate as an offeror in the pre-contractual stage of a public procurement procedure, the law allows the presentation of a partnership or consortium commitment, which must also meet specific requirements such as the declaration of the obligation to constitute the consortium previous to the subscription of the respective contract.

The association and the consortium have no legal status of their own. However, for tax purposes they are considered as independent subjects of their members. As such, they must obtain their own unique taxpayers registry or RUC and keep their accounts as if they were a company.

Each of the participants is jointly and indivisibly responsible for fulfilling the obligations arising from the contract. In this sense, public procurement regulations explicitly ratify that the participation in an association or a consortium does not make up for the loss of the legal status of each of the participating suppliers, since the association or consortium does not constitute a different legal entity. In this way, the same regulations provide that the responsibility for the execution of the contract is indivisible and complete for the associates. In order to determine the experience and compliance of the consortiums in previous contracts with the public sector, the contracting entities must consider the sum of the experiences of the participants when evaluating the offers.

The association or consortium cannot be dissolved or terminated by the will of the contracting parties, nor may it change its conformation until the end of the contract, unless expressly authorized by the contracting entity

If you want to read the full article, press here

The distribution contract: competition issues and its regulation in the new Code of Commerce

distribution-contract-ana-samudio

From 1997 and until the Code of Commerce came into effect last May 29, 2019, the distribution contract did not have a specific regulation. It was governed by the general rules applicable to trade acts, contracts and regulations on jurisdiction.

On December 31, 1976, the Law for the Protection of Agents or Distributors of Foreign Companies (Distributors Law) was enacted, which regulated the commercial relationship between an entity not based in Ecuador and a person – be it natural or legal- designated as representative, agent or distributor. This Law mainly provided a special protection regime for the distributor / agent. Thus, among the most relevant provisions included, the grantor was not authorized to unilaterally terminate the contract even by expiration of the term established in the contract itself, save for specific causes established in the Distributors Law, which in turn had to be qualified by the competent judge, and established a method of calculating large compensation for damages.

On July 5, 1996, the Distributors Law was amended, fundamentally limiting the compensation amount, and on September 19, 1997, it was repealed. Even so, the rights and obligations born while the Distributors Law was in force were maintained. The Antitrust Law, enacted on October 2011, introduced concepts such as exclusivity – of products, territories, customers or types of customers – that a priori seemed to be in conflict with the free competition regime, which required a robust support – from the economic and market techniques – that would legitimize its stipulation.

Since May 29, 2019 the new Code of Commerce (Code) clarified the picture, clearly tracing the rules governing the distribution contract. The most prominent are:

  • The distribution contract is the authorization in which a party called the grantor or principal confers on another party called concessionaire or distributor the possibility of selling products, providing services, or a combination of both, in a given territory.
  • In general, it leaves to the will of the parties the conditions of these contracts, such as: exclusivity of territory, exclusivity of product, minimum volumes and periodicity in purchases, among others; and establishes rules that will be applied in the absence of stipulation by the parties or that are contrary to the Antitrust Law.
  • Establishes the obligation of the supplier to deliver commercial and technical information necessary for the best distribution of the goods or services stipulated in the contract.
  • Allows the supplier to make direct sales without the participation of the distributor, unless otherwise agreed.
  • Prohibits the supplier from limiting the possibility of the distributor to make sales, through the internet, except for reasons of public health, consumer safety or legal prohibition.
  • Determines that, if a term of validity is not established, distribution contracts are considered as indefinite and may be terminated by either party, prior a 90-day notice. The Antitrust Law states that termination without a cause with no prior 30-day notice, could be considered as abuse of market power in an economic dependency relationship.
  • The serious or repeated breach of the contract that is not remedied within 15 days from the notification of the breach, will result in its termination, and the compliant party will be entitled to compensation for damages.

Ana Samudio
Senior Associate at CorralRosales
asamudio@corralrosales.com

El Economista – What do companies seek in their legal service provider?

legal-service-rafael-rosales-el-economista

DETAILS

DATE: 23-09-19

CORRALROSALES IN THE NEWS: 

-Rafael Rosales

MEDIA: El Economista

Our Partner Rafael Rosales published a detailed article in the Spanish specialized medium El Economista, in which he analyzes the characteristics and needs of companies when they seek a legal service provider. The development of technological tools has led to everything going faster, and therefore, decision making by executives must be at full speed. Moreover, the advice should provide that speed.

“Far is the time when the responses of the offices to the inquiries of their clients were broad legal disquisitions. Executives have no interest in knowing the legal texts and the respective doctrine, nor the time to review extensive documents. Therefore, concise and easy-to-read reports and responses, without excessive citations from authors and jurisprudence, are highly valued,” says Rosales in his article.

One of the key points highlighted by our Partner is the communication between the two parties. Companies expect a constant flow of communication with their legal advice, and in addition to that, they must be proactive. “It is very important to participate in the development of the client’s business and even help in the execution and generation of new projects, in short, to be an active part of the company,” he adds in the article.

Rosales also points to billing as one of the factors to consider. Legal advice is not exempt from the tight budgets that companies manage and therefore, they must have an added value to offer their clients. “Beyond the high quality of the advice and the recognition of the client, receiving an unexpected invoice will cause discomfort in the consultant, who may even find other alternatives for later occasions,” says our Partner Rafael Rosales.

If you want to read the full article, click here

Delayed or Canceled Flight? What the passenger does not know

flight-delayed-canceled

Your luggage was checked, you boarding pass is at hand, you pass through the security filters, waiting for the call to board, and suddenly, you look at the information panel in the waiting room and see the message nobody likes to get: “delayed or canceled flight”.

Although the passenger does not know the causes of flight delays and cancellations and everything is in apparent normality at the airport, the operation of a flight implies the existence of several factors that must be perfectly aligned.

The following are the most common causes of flight delay or cancellation.

1.- Weather conditions

Heavy rains and snowfall during the winter months are well known; these can delay ground operations and hinder landing or take off maneuvers. The sunny summer arrives and the season of greatest passenger traffic begins: family vacations, meetings with friends, sunny days to enjoy, and a climate that would seem pleasant to fly. However, the combination of high temperatures and summer winds can surprisingly result in a storm that may result imperceptible at ground level.

During the summer months, the hot air rises and interacts with the cold air that is in the upper atmosphere. This mixture causes water vapor to condense and storm clouds with lightning to form at great heights; the lighting cannot be seen from the surface.

In general, airlines coordinate with Air Traffic Control if a change in landing or take-off routes is needed to avoid these thunderstorm clouds. But the operation could continue to represent a risk for ground workers who are on the platform carrying out activities prior to the departure or arrival of flights, such as aircraft fueling, luggage transfer, inspection and cleaning of aircrafts, etc.

Then, due to weather changes, delays or cancellations of scheduled itineraries occur. In these cases, the airline is exempt from the obligation to compensate passengers for the damages that they could have suffered as established in the regulations of “Provisions for Compensation to Users for Flight Delays”, because the facts are not attributable to the company.

2.- Operational modifications

For the optimization of operations and greater efficiency in fuel consumption, an aircraft may be scheduled to fly to several destinations. In this case, a delay in another station could cause what is called “drag delay”; that is, a problem in another airport could result in a delay in the operation of the next flight in some other point.

Likewise, there are operating conditions that must be met to ensure flight safety, such as checking that the crew has complied with the mandatory rest time stated in the aviation technical regulations or ensuring that the members responsible for the flight operation are fit to embark. It is uncommon, but there have been cases in which there is an unforeseen health problem in an officer or senior cabin crewmember, which represents a decrease in the crew that is impossible to cover immediately.

Ecuadorian aeronautical regulations control the operation in cases of early departure or delays in the time of takeoff / landing. Resolution 120/2017 determines the obligation for the airline to notify, with due justification, any change in the time of departure and arrival, applying international processes and standards.

Unscheduled Maintenance:

The airlines comply with an aircraft maintenance schedule, previously approved by the local Aeronautical Authority, who, as the controlling body, will verify compliance. These are called scheduled maintenance. But aircrafts are machines and therefore susceptible to unforeseen damage, which may cause inevitable delays in the operation of a flight. Each technical problem must be documented and recorded in accordance with the protocol established in the manuals of each company; this is done to ensure the safety of passengers, crew and ground personnel.

The airlines that operate in Ecuador have programs, policies and manuals that govern each operational process of their flights. In the case of international airlines, these procedures are subject to a certification process carried out by the Directorate General of Civil Aviation based on the Technical Aviation Regulations, known as RDAC. For international operators it is the RDCAC 129 and for domestic airlines the RDAC 121.

Airlines publish constant and first-hand information in their social networks when events like these happen, and seek to offer the passenger immediate solutions, to the extent possible, so that they arrive safely at their destination.

Finally, for airlines, the security of their operations will always come first. Therefore, when conditions are not safe for a flight, delays and cancellations, even if they are annoying for users, are unavoidable for the benefit of the passengers themselves, crew, and the ground workers.

Verónica Olivo
Associate en CorralRosales
volivo@corralrosales.com

Ecuadorian Intellectual Property office upholds the distinctiveness of the three-dimensional trademark registered by Crocs, INC.

three-dimensional-crocs

Through Resolution No. OCDI-2019-0618[1], the Ecuadorian Intellectual Property Office confirmed that the design of CROCS footwear is capable of being recognized by consumers, and also allows consumers to differentiate it from the products of competitors, since it has its own special elements that give the product a different appearance, and is not common or ordinary.

With this decision, the distinctiveness of the three-dimensional design of CROCS footwear in Ecuador was upheld, and it is confirmed that only CROCS, INC. may market goods under such design, having the exclusive right to prevent third parties from using and marketing the same or similar goods.

In 2015, CROCS, INC. obtained the registration of the mark THREE-DIMENSIONAL DESIGN (3D BAYA SHOE DESIGN) to protect “footwear”.

The three-dimensional mark has its own characteristics, which differentiate it from the traditional denominative, figurative and mixed mark, since with this specific type of marks, an object that occupies a volume in space is protected; that is, it is the shape of a product or its packaging. Therefore, the distinctiveness of this type of marks rests in the shape and relief as a whole, among other distinctive elements that are added into its configuration.

In 2017, JHON ALBERTO FIGUEROA VIVANCO applied to the Ecuadorian Intellectual Property Office for the nullity of the mentioned registration, claiming that it was a generic shape for footwear and therefore not for exclusive appropriation by one entity. Additionally, the claimant pointed out that the design granted a functional or technical advantage to the product, and so could not be protected as a trademark according to the law.

Article 135 of Decision 486 of the Andean Community establishes that the following signs cannot be registered as trademark:

“(…)

  1. those that lack distinctiveness;
  2. those that consist exclusively of usual forms of the products or their packaging, or of shapes or characteristics imposed by the nature or the function of the product or service in question;
  3. those that consist exclusively of a shape or other elements that give a functional or technical advantage to the product or service to which they apply; (…) ”

During the proceedings, CROCS, INC. was able to show that the contested registration did meet the requirements to be considered a three-dimensional design, even filing evidence of registrations obtained over the same design in several other countries, in which, as in Ecuador, the distinctiveness of their unique designs had been recognized.

With regard to the functional advantage claimed by the plaintiff, the IP Office determined that the arbitrary elements of the design are not dictated by function, since the exclusion of such shapes, reliefs, crevices and holes does not prevent the natural use of the product.

Katherine González H.
Associate at CorralRosales
katherine@corralrosales.com


[1] Proceeding No. 17-1679-RV-2S dated 18 July 2019.

WTR Dialy – Ecuadorian IP Office deals blow to parasitic trademark applications

parasitic-trademark-wtr-ian-wall

DETAILS

DATE: 30-08-19

CORRALROSALES IN THE NEWS: 

-Ian Wall

MEDIA: WTR Dialy

Our Associate Ian Wall has published an article in WTR Daily explaining and reflecting on the resolution of the Ecuadorian IP Office in which they accepted the opposition filed by the cosmetic brand Huda Beauty against the application for an identical mark. As explained by Ian, in addition to the rejection of the application, the Ecuadorian IP Office was responsible for reviewing the WIPO online trademark database to verify the right in the opponent’s country of origin, and to accept the aforementioned online results as evidence of such right.

“Ecuador’s trademark system is based on the rst-to-le principle. This means that simply using a mark in Ecuador confers few or no rights. The problems faced by brand owners in Ecuador that fail to secure registration of their trademark rights is compounded by the fact that the authorities have been slow to recognise even famous marks that are not yet in use in the country”, tops the article Wall..

This decision represents a relaxation of the evidentiary requirements and demonstrates a proactivity rarely seen from the Ecuadorian IP Office. This suggests the willingness of the Ecuadorian trademark authorities to protect large brands against applications for parasitic marks.

“The IP Oce incorrectly failed to acknowledge the priority claim and proceeded to reject the opportunistic application on the basis of Article 6 quinquies of the Paris Convention. More importantly, the IP Oce took it upon itself to review the online WIPO trademark database with regard to the opponent’s country of origin right and to accept the online entry as evidence of this right”, as explained by Ian.

If you want to read the full article, click here.

Recognitions: Chambers and Partners & LACCA

CorralRosales has been recognized once again as a leading firm in Ecuador according to the prestigious international legal directory Chambers and Partners and the Latin American Corporate Counsel Association (LACCA).

The English legal directory Chambers and Partners has recognized CorralRosales in the practice areas listed below:

  • Intellectual Property (Band 1)
  •  Corporate/Commercial Law (Band 2)
  •  Competition Law (Band 2)
  • Labour Law (Band 2)
  • Dispute Resolution (Band 3)

In this latest edition of Chambers and Partners, our Partner, María Cecilia Romoleroux renews her national leadership as an expert lawyer in the practice of Intellectual Property. On the other hand, our Partner Xavier Rosales, for the second year in a row is recognized as the only Ecuadorian lawyer to obtain Band 1 for the corporate practice. Also, he has been recognized as one of the best lawyers in competition law obtaining in this way Band 2 in this area. On the other hand, our Partners Edmundo Ramos and Santiago Palacios maintain their position as leading lawyers in the areas of labour law and dispute resolution, respectively. While our Partner, Andrea Moya, leader of the of the firm’s tax area, stands out on the board less than a year after of her appointment as a partner of the firm. Finally, our Senior Associate, Martha Villagomez, stands out as one of the best senior lawyers in Ecuador’s labour practice.

Finally , our Partners, Xavier Rosales and Maria Cecilia Romoleroux have been again highlighted as lawyers of reference in Ecuador, according to the latest edition of the prestigious Latin American Corporate Counsel Association. Once a year, the members of this Association (top general counsels of the region) nominate those who consider the best lawyers in their respective specialties.