Author Archives: SOPORTE PUBLITEK

CorralRosales > Articles by: SOPORTE PUBLITEK

Counterfeiting and contraband

Posted on
contraband-counterfeiting-eduardo-rios-corralrosales

The National Customs Service of Ecuador has recently created the Specific Task Force and the Customs Surveillance Corps to combat counterfeiting and smuggling, which seriously affect legitimate business activities as well as the Treasury.

A large majority of the counterfeit goods in Ecuador and in other countries of the region are imported, so those who introduce such items in the marketplace are in the majority of cases are committing the offence of dealing in contraband.

The local production of counterfeits in Ecuador, especially luxury brands and electronic products, is low. Therefore, most of the counterfeit products of recognized or luxury brands (wallets, watches, clothing, electronics, cell phone accessories, etc.) are manufactured outside Ecuador and their entry into the country is almost always illegal.

The illicit entry into the country of counterfeit products prompts the direct action of special Customs groups responsible for control and seizure, and destruction when appropriate. All this is done in order to remove from the market those products that, in addition to being illegal due to their origin, defraud the Treasury of tariffs and other taxes corresponding to imports.

Article 301 of the Criminal Code classifies the crime of contraband punishable by imprisonment for three to five years, and a fine of up to three times the customs value of seized products if said value is equal to or exceeds ten basic unified wages. (Currently US $ 3,940.00)

The same code establishes counterfeiting as an aggravating circumstance of the offence, in which case the maximum penalty will be imposed.

In an astute move, the National Customs Service of Ecuador created the “Specific Task Force”, made up of inspectors of the highest rank and proven reputation inside and outside the institution. This task force was also assigned auxiliary personnel that share the same characteristics and have demonstrated absolute honesty and dedication to their job.

A personal experience confirms what was stated above. On one occasion when the group had to wait approximately two hours to proceed with a seizure, members of the mentioned group decided to make good use of that time carrying out a fieldwork in the surrounding areas; this allowed them to seize more than 15,000 smuggled cigarettes that had entered the country. Having done that, they proceeded with the scheduled seizure.

In each counterfeiting case that we have worked on, we collaborated with Customs authorities providing information and identifying possible seizure targets. Also, when appropriate, the formal complaint was filed, and to prevent the counterfeit products from returning to the market, their condition was corroborated.

With our presence in the operations, offenders see their options to hinder the seizure procedure limited, because when the representatives of the brand owner certify that the seized products are counterfeit, there is no doubt or speculation about their origin.

Local industry and formal commerce in general have made a great effort to comply with mandatory technical regulations, especially labeling. This aspect is very helpful in prosecuting these offences because if the products do not meet the mandatory labeling requirements, they can be considered contraband. Therefore, their seizure is ordered, regardless of whether or not they are counterfeit.

We have decided to continue supporting Customs’ work in the fight against counterfeiting and smuggling, providing the tools to make their work more and more efficient. The constant training of personnel carrying out legitimate activities affected by these offences is another way of supporting the authorities in this work.

 

Eduardo Ríos
Senior Associate at CorralRosales
eduardo@corralrosales.com

Gestión Digital – Draft Law for Fiscal Transparency

Posted on
fiscal-transparency-gestion-digital-Andrea-Moya

DETAILS

DATE: 7-11-19

CORRALROSALES IN THE NEWS: 

-Andrea Moya

MEDIA: Gestión Digital

The following is a summary of the main amendments proposed in the draft of the “Draft Law for Fiscal Transparency, Optimization of Tax Expenditure, Encouragement of Job Creation, Strengthening of the Monetary and Financial Systems and Responsible Management of Public Finance”

Income tax

Dividends:

  • The taxable income will be 40% of the dividend effectively distributed. The concept of global dividend is eliminated (dividend distributed plus taxes paid by the company) and consequently the tax credit for taxes paid by the company.
  • The exemption for dividends paid to companies and for individuals residing abroad is eliminated. The applicable withholding percentage will be 25%.
  • In the case of dividends distributed in favor of individuals residing in Ecuador, the Tax Authority will establish the withholding percentage.
  • If the company that distributes the dividends fails to report its corporate structure, the withholding percentage applicable to the dividend paid abroad will be 35%.
  • It is ratified that the capital increase with retained earnings (stock dividend) will not be taxed.

Deductions:

  • Interest paid on loans granted by related or independent parties may not exceed 20% of the entity’s profit. Interest paid in excess of this ratio will be considered non-deductible.
  • Indirect expenses allocated from abroad by related parties will be considered non-deductible expenses.
  • The following additional deductions are reduced from 100 to 50%: (i) net increase in employment, (ii) medical insurance and / or prepaid medicine expenses granted to employees; (iii) depreciation of assets that reduce the environmental impact; and, (iv) certain expenses incurred by micro, small and medium businesses, such as: research and development expenses, expenses to improve productivity, and travel and promotion expenses for accessing international markets.
  • The deductibility of advertising and promotion costs and expenses will not be limited.

Others:

  • Payment of the advance income tax is no longer mandatory.
  • The reduction of the income tax rate for exporting entities that reinvest their profits goes from 10 to 8 percentage points.
  • Income obtained abroad that has been subject to tax in the country of origin will no longer be exempted from paying income tax in Ecuador. The tax paid abroad will be considered as tax credit.

Value Added Tax (VAT)

  1. The following goods will be subject to 0%VAT:
    • Flowers.
    • Test strips for glucose.
    • Newsprint.
  1. Digital services:

Digital services will be subject to 12% VAT. Digital services are those provided and / or contracted through the Internet that are automated and require minimal human intervention.

In the case of import of digital services, VAT will be paid by the importer of the service. Credit card issuing entities will withhold the VAT when the digital service provider is not registered in Ecuador.

Excise Tax

  1. Taxable base: The presumptive minimum profit margin to be applied on the ex-customs or ex-factory price is increased from 25 to 30% based.
  2. Taxed goods: The following goods are taxed at the rates described below:
    • Liquids containing nicotine to be administered through nicotine administration systems (electronic cigarettes): 50%
    • Soft drinks with sugar content less than or equal to 25 grams per liter and energy drinks: 11%
    • Soft drinks with sugar content greater than 25 grams per liter: US$0.20 per 100 grams of sugar.
    • Vehicles: the calculation formula is modified according to the sale price of the vehicle to avoid leaps in the rates.
    • Post-paid mobile phone service provided to individuals: 10%
    • Craft beer: The rate is reduced from US $ 2.00 per liter to US $ 1.5 per liter.
    • Industrial beer: The rate is increased according to market share.
    • Plastic bags: US$ 0.10 per bag

Currency Exit Tax

Exemptions:

  • Loans granted abroad: (i) there is no longer required that term of the credit is at least 360 days, and, (ii) the loan may be used to invest in shares issued by Ecuadorian entites.
  • Dividends: Dividends paid to entities or individuals residing in tax havens is exempted.

The tax rate applicable to the import of raw materials and capital goods, is reduced from 5 to 2.5%; however, the right to tax credit for such imports is eliminated.

Single and Temporary Tax

Who are obliged to pay? Companies whose gross income in fiscal year 2018 exceeded one million dollars.

How much should be paid? The amount to be paid is shown in the following table. The amount shall not exceed 25% of the generated, declared or determined income tax of fiscal year 2018.

Gross taxable income from (USD $) Gross taxable income up to (USD $) Rate 1,000,000 5,000,000 0.10% 5,000,001 10,000,000 0.15% 10,000,001 Onwards 0.20%

When should it be paid? Until March 31 of fiscal years 2020, 2021 and 2022.

Capital Repatriation Regime

The tax residents of Ecuador can benefit from this regime if as of December 31, 2018:

  • They have maintained abroad revenues subject to income tax in Ecuador or, have made monetary transactions subject to outflow tax (ISD), which have not been declared or if the tax has not been paid.
  • Have kept assets abroad which have been acquired with these revenues and, that have not been registered in the equity declaration.

If taxpayers decide to repatriate and invest the income in Ecuador, they will be subject to the following rules:

  • If the income is declared until March 31, 2020, it will be subject to pay a tax rate equal to 1%;
  • If the income is declared from April 1, 2020 until June 30, 2020, it will be subject to pay a tax rate equal to 2%; and
  • If the income is declared from July 1, 2020 until December 31, 2020, it will be subject to pay a tax rate equal to 4%
  • If taxpayers decide to declare their income, assets or investments abroad, but not repatriate and reinvest in Ecuador, it will be subject to pay a tax rate equal to 8%.

The income will be regarded as invested in Ecuador if it remains in Ecuador for a minimum period of 12 consecutive months counted from the date on which the investment is made and if it’s purpose is one of those established in the law, such as: investments and financial products provided by financial institutions, stock exchanges and stock brokerage houses, acquisition of real estate and other assets necessary to carry out economic activities in the country or, investments destined to research and development of technology.

If you want to read de article in Gestión Digital, click here

IPWatchdog – Ecuador May Soon Reap the Benefits of the Patent Prosecution Highway

Posted on
prosecution-highway-patents-ipwatchdog-Francisco-Gallegos

DETAILS

DATE: 2-11-19

TEAM MEMBERS IN THE NEWS:

-Francisco Gallegos

MEDIA: IPWatchDog

Ecuador has been participating in a pilot program of the Patent Prosecution Highway (PPH) since 2016 but has as of yet failed to implement the system for a number of reasons. However, with the announcement in July that Ecuador may join the Pacific Alliance next year under its new President, Lenin Moreno, and a general market-friendly shift in government, it is expected that the PPH could soon become effective.

If you want to read more, press here

The suspension of the administrative act on Intellectual Property

Posted on
administrative-act-intellectual-property-ruth-holguin

The suspension of the execution of an administrative act is an exceptional provision that can be issued by an administrative or judicial authority. It is a precautionary measure that proceeds only when the execution of the administrative act produces unrecoverable or very difficult remediation losses due to the violation of the rights of the entity being administered. The suspension means that the administrative act does not apply until there is a final resolution.

This figure has limited application in the area of ​​Intellectual Property, since to obtain the suspension of the administrative act in judicial headquarters; the entities being administered must demonstrate that, for example, the registration of a trademark or patent violates their rights; or, that the registration of a trademark was improperly canceled due to lack of use.

A more detailed analysis:

  1. An opposition to a trademark or patent application might be provided by law for the following reasons: lack of distinctiveness, risk of confusion or association, not meeting the requirements of patentability, etc.
  2. The Ecuadorian Intellectual Property Office denies the opposition and gives way to registration, so that the affected party can challenge that decision before the Contentious Administrative Court, requesting, in addition, the suspension of the act, because the affected party considers that its execution would violate its rights in an irreparable way.
  3. If the request is granted, registration of the trademark or patent is suspended. After the judicial process, which has a minimum duration of three years, the sentence is issued. For the purpose of this analysis, we assume that the administrative resolution is ratified, granting the registration and denying the opposition.

In this scenario, did leaving the applicant without the ownership of his registration for three years violate his rights?

This would be the main conflict that could cause the suspension of the execution of an administrative act in Intellectual Property.

What happens in practice?

The judicial authority generally does not accept the request for suspension of the administrative act because, although the existence of irremediable loss caused by the execution of the act can be demonstrated, the rights of the person who obtained the registration of the trademark or the patent are also at risk.

It must be considered that most conflicts over Intellectual Property derive from trilateral administrative procedures, in which the administrative authority and two interested or administered parties intervene. Therefore, the suspension of the administrative act in this branch is especially controversial and unusual.

In summary, the substance of the dispute is that the contentious-administrative judge must assess whether or not the suspension of the decision of the administrative authority applies, taking into account the losses that could be suffered by both; the party that achieved the registration of the trademark or patent and the other party that considers their rights affected by that registration as well. There will always be an important degree of subjectivity, but the judge must receive comprehensive and true information from the parties in conflict to form his or her judgment.

Additionally, the judge that resolves the suspension of the administrative act, until there is a final decision on the conflict, should have the possibility of requiring sufficient guarantees to respond for the losses that may arise from the suspension if the final decision ratifies the resolution of the administrative authority. A reform to improve the application of the law would be to demand that enough guarantee´s be determined – the judge himself should set its amount – to grant the suspension of the administrative act.

Ruth Holguín
Asociada Senior en CorralRosales
ruth@corralrosales.com

Gestión Digital – Forms of associations in Ecuadorian Public Procurement

Posted on
public-procurement-ricardo-mancheno

DETAILS

DATE: 2-10-19

CORRALROSALES IN THE NEWS: 

-Ricardo Mancheno

MEDIA: Gestión Digital

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

Posted on
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?

Posted on
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

Posted on
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.

Posted on
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

Posted on
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.

1 … 32 33 34 35 36