A conversation with Maria Cecilia Romoleroux, partner at CorralRosales

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DATE: 01-12-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

“My law degree and specialization in Intellectual Property were not choices I made, but rather a destiny that chose me.”

It was with these words that María Cecilia Romoleroux —recognized through multiple international awards and appointments, including the Chambers Women in Law Awards— dove into an exclusive conversation with Ekos Violeta Magazine.

Her journey in the legal world began when a family member, surprisingly and without consulting with her, enrolled her in law school. At the time, she could never have imagined that she would become a distinguished attorney with a career spanning more than three decades.

Maria Cecilia’s story begins in the 1990s when, at the age of 20, started an intellectual property practice with a friend and fell in love with intellectual property. However, as so often happens in life, challenges arose, and Maria Cecilia experienced difficult times that included harassment and discrimination, which ended up triggering her decision to find her way in the profession. Although it was a rocky path, she never doubted that her potential would lead her to break glass ceilings.

“At the age of 24, young and afraid, I decided to seek my independence and not stand idly by in a world that often resists women having prominent roles,” she said. Although some people frowned at her way forward, Maria Cecilia leaped into the unknown, not knowing what awaited her, but always confident of herself.

More than two decades ago, María Cecilia first began working at the CorralRosales law firm and contributed to its growth, demonstrating that women can reach high positions in the legal world.

Impactful Strategies

From her position as a firm partner, she has implemented programs and workshops to promote gender equality and empower women. One of them is the Entrepreneur Program, which seeks to support new ideas and business models, launched by entrepreneurs, that contribute to the dynamization of the Ecuadorian business ecosystem. The program pays special attention to initiatives generated by female talent, minority groups, and the LGTBQ+ community. Support is provided to them through the firm’s pro-bono program and specialized legal counsel with preferential conditions.

Maria Cecilia has not only achieved her own personal success, but also advocates to empower future generations. “I have always had a special focus on social facets because for me, the right thing to do is pave the way and work to make things easier for other young women and future generations, generating a new reality, one with fewer obstacles to overcome,” she says.

She concludes with a powerful piece of advice: “The world has evolved, and there is no turning back. We need to educate and train ourselves, trust ourselves, and change our mentality. We women are not victims, and we can be the protagonists of our lives.

Maria Cecilia’s story reminds us that, with determination and self-confidence, it is possible to reach heights and positions traditionally thought to be reserved for.

If you want to read the complete article, click here (pages 34 and 35).

Extension of the validity term of the disability card

By Resolution No. 002-CONADIS-2023 signed on December 28, 2023, the National Council for the Equality of Disabilities (CONADIS) determined:

1.      To extend the validity of the species “CONADIS disability card” until December 31, 2024.

2.      To extend the validity of the species “Ministry of Public Health (MSP) disability card” until December 31, 2024.

The Resolution has not been published in the Official Gazette yet.

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Does Mickey Mouse belong to everyone? NO

On January 1st, Mickey Mouse, the most famous mouse in the world, made headlines worldwide, mentioning he entered the public domain as the copyright protection term on STEAMBOAT WILLIE expired. Many people believed anyone could use the iconic character without authorization from its owner, Disney.

First, we must define the term “public domain”. The World Intellectual Property Organization, WIPO, has defined it as:

“As far as intellectual property (IP) law is concerned, “public domain” is generally understood as any intangible asset that is not subject to exclusive IP rights and can therefore be freely used or exploited by anyone.”[1].

This means that all intangible assets that do not have a holder of rights entitled to prevent their exploitation or to demand the payment of compensation are in the public domain.

Does this open the door for anyone to use the Mickey Mouse figure? No, not at all.

It is important to clarify that the most famous work that entered the public domain is STEAMBOAT WILLIE, which many of us will not identify by its name, but by its iconic scene: Mickey Mouse captaining a boat while whistling. This scene is included at the beginning of many Disney productions. Other less famous scenes, henceforth, can also be reproduced and exploited by anyone[2].

Are there people taking advantage of this opportunity? Of course, we can already find on YouTube uploads of the scene which, because of what we have just explained, cannot be removed from this platform based on copyright infringement. On the contrary, they would be able to benefit commercially from the number of views, which are not few, largely due to the publicity given to this event.

One example is a video uploaded to this platform on January 1st by CORRIDOR, which in less than 48 hours was close to reaching one million views.

https://www.youtube.com/watch?v=hmzO–ox7X0

To sum up, can STEAMBOAT WILLIE be used freely, without any authorization, or without having to pay or retribute in any way to Disney? The answer is YES.

Can Mickey or Minnie Mouse be used freely? The answer is NO. Their protection extends far beyond this short scene. All works created subsequently are still protected and maintain rights around the world.

This iconic character’s presence in the market makes its isolated and indiscriminate use impossible without proper authorization from Disney. Its notoriety is evident and will be protected by the legislation of each country for a very long time.

Mickey is the boss in the Disney world and will continue to be for many years to come.

 

[1] Comité Intergubernamental sobre Propiedad Intelectual y Recursos Genéticos, Conocimientos Tradicionales y Folclore – WIPO/GRTKF/IC/17/INF/8 (24/11/2010) https://www.wipo.int/edocs/mdocs/tk/es/wipo_grtkf_ic_17/wipo_grtkf_ic_17_inf_8.pdf

[2] Plane Crazy, The Gallopin Gaucho

 

 

Eduardo Rios
Partner at CorralRosales
eduardo@corralrosales.com

Outflow tax rate and other tax amendments

On December 29, 2023, the President of the Republic issued two Executive Decrees with tax amendments:
  1. The Executive Decree 98 by which it is established that the outflow tax (ISD) rate will remain at 3.50% until December 31, 2024.
  2. The Executive Decree 99 which amended the following regulations:
a.    The Internal Tax Regime Law Regulations.
  • The voluntary income tax advance payment may be performed until January 31 of each year. Before the reform, such payment was allowed until December 31.
  • Veterinary services are included as health services subject to 0% Value Added Tax (VAT).
  • It is clarified that taxpayers must keep the documents that support the accounting for 7 years.
b.    Regulation of Invoices, Withholding Certificates, and Complementary Documents.
  • Taxpayers classified as Large Taxpayers must include the legend “Large Taxpayer” in their invoices.

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Update – Income Tax Rate

On December 21, 2023, the Internal Revenue Service issued the Regulation NAC-DGERCGC23-00000036 whereby:

1.    The chart establishing the income tax rates applicable to individuals for the fiscal year 2024 is updated, as follows:

Basic Fraction Excess up to (USD) Tax over the Basic Fraction (USD) Tax over the Excess (%) 0 11.902 – 0% 11.902 15.159 – 5% 15.159 19.682 163 10% 19.682 26.031 615 12% 26.031 34.255 1.377 15% 34.255 45.407 2.611 20% 45.407 60.450 4.841 25% 60.450 80.605 8.602 30% 80.605 107.199 14.648 35% 107.199 Onwards 23.956 37%

2.    The chart establishing the inheritance, and gift tax rates applicable for the fiscal year 2024 is updated, as follows:

Basic Fraction Excess up to (USD) Tax over the Basic Fraction (USD) Tax over the Excess (%) 0 76.558 – 0% 76.558 153.115 – 5% 153.115 306.231 3.828 10% 306.231 459.379 19.139 15% 459.379 612.515 42.112 20% 612.515 765.630 72.739 25% 765.630 918.725 111.018 30% 918.725 Onwards 156.946 35%
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Ministry Agreement No. MDT-2023-056 “Suspend terms and deadlines on procedures established by the Ministry of Labour corresponding to the Regional Labour and Public Service Management and its delegations

On November 14, 2023, the Labor Ministry by means of the Ministry Agreement No. MDT-2023-056 order:

–    To suspend and interrupt all terms and deadlines related to the registration of employment contracts, termination minutes, sanction resolutions, inspection files, inspection receipts, and thirteenth and fourteenth registries for the year 2023, as of 15 December 2023. This suspension includes any procedures that depend on the computer systems of the Labor Ministry.

–    The terms and deadlines will be resume when the computer systems of the Labor Ministry are enabled, which shall be communicated through the available electronic means, and the fines resulting from the failure to register information in these systems will not be imposed.

–    The following procedures may be submitted to the counters set up for this purpose by the Labor Ministry:

a)    Inspections request.
b)    Legal termination of the employment relationship (visto bueno) request.
c)    Legal termination of the employment relationship (visto bueno) response.
d)    Petitions.
e)    Collective bargaining agreement request.
f)    Employees associations notification.
g)    Unique ballot.
h)    Legal termination of the employment relationship (visto bueno) suspension consignation.
i)    Termination of the labor relationship consignations (provided that the minutes are registered in the SUT beforehand).

–    The termination minutes or employment contracts may be concluded or registered before the labor inspector of the respective jurisdiction. However, once the Labor Ministry computer services are regularized, registration may be formalized.

 

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Law for econonomic efficiency and job creation

The “Law for Economic Efficiency and Job Creation” was published on December 20, 2023, in the Supplement of the Official Gazette 461. Below, we detail the most important content regarding tax and customs matters:

1.    Temporary tax domicile: Non-tax residents who enter Ecuador can apply for a temporary tax regime. This regime allows the payment of income tax solely on Ecuadorian source income. The following individuals are eligible for applying this regime: (i) those who invest in real estate or productive activities of at least US$150,000; or (ii) those who have monthly earnings of at least US$2.500 over which social security contributions are paid.

2.    Income tax exemptions: Those taxpayers who invest in non-conventional renewable energy and the production, industrialization, transportation, supply, and commercialization of natural gas or green hydrogen, will be exempted from income tax for 10 years from the year in which income is generated. The exoneration will not exceed the total amount of investment.

3.    Benefits for the tourism sector: Those taxpayers who make new investments in tourism projects qualified by the Ministry of Tourism will be exempted from income tax for 7 years from the year in which income is generated. The investment projects must be of at least US$100,000.00 and 10% must be destined for rural tourism.

Taxpayers registered in the Ministry of Tourism’s registry as tourism service providers will not be required to withhold income tax on payments made abroad for commissions paid to lodging platforms.

4.    Additional deduction for employment generation: Those who generate a net increase of jobs for:

a.    Young people between 18 and 29 years of age will be entitled to an additional deduction of 50% of the value of the salaries on which social security contributions have been made. The deduction will be an additional 75% if the young people are graduates of public institutions.
b.    Workers in the construction and agriculture sectors will be entitled to an additional deduction of 75% of the value of the wages.

5.    Tax stability: Taxpayers who pay 2 additional percentage points over the applicable income tax rate are entitled to tax stability over the tax regime.

6.    Self-withholding for large taxpayers: Large Taxpayers will not be subject to income tax withholding, except in those transactions carried out with the public sector.

However, they will be required to self-withhold income tax over their taxable income. The withholding percentage will be set by the Internal Revenue Service.7.    CFC Rules: The CFC (Controlled Foreign Corporation) regime is created to prevent the taxpayer from deferring the payment of income tax through structures incorporated abroad.

For such purpose, the tax resident in Ecuador is attributed, for the calculation of its income tax, the income of companies located abroad even if such income has not been distributed.

8.    VAT paid on real estate projects: There will be a right to obtain a refund of VAT paid on the acquisition of goods and services for the construction of real estate projects.

Real estate projects must be qualified by the Ministry of Urban Development and Housing. Projects intended for owner-occupied housing do not require qualification.

9.    Banking: The use of the financial system is mandatory for all transactions over US$100.00 (the currently value is US$1,000.00).

10.    Sports Betting Operators: The “Income Tax on Sports Betting Operators” was amended. The tax will be applicable as of July 2024.Both resident and non-resident operators are required to pay 15% of their total income minus the prizes paid in respect of which withholding tax has been applied. Non-resident operators will be required to appoint an agent in Ecuador and obtain a tax ID.

11.    Calculation of customs tariffs: The freight cost is reinstated for the calculation of the taxable base of customs duties.

12.    Investment contracts: Job creation is required for applying tax incentives for new investments. The importation of capital goods and raw materials will be exempted from payment of outflow (ISD) and customs duties. The exemption of other import taxes is eliminated.

13.    Free Trade Zones: The Free Trade Zone regime is established under a multi-business modality. The activities that can be developed in a Free Trade Zone are:

a.    Production of goods, such as manufacturing, agriculture, aquaculture, and forestry.
b.    Provision of services, including tourism, auditing, consulting, professional services, telecommunications, healthcare, scientific research, and technical support.
c.    Commerce and logistics, such as transportation, storage, distribution, and handling.

The free trade zone regime will have the following characteristics:
a.    Tax regime: Tax benefits include:
–    Income tax rate of 0% for 5 years and 15% for the entire period of the regime.
–    Exemption of foreign trade taxes on the import of capital goods and raw materials, destined to the free trade zone.
–    Exemption from Value Added Tax (VAT), Outflow Tax (ISD), foreign trade taxes and other taxes that may be created in the future regarding the transactions carried out within the free trade zone.
–    Exemption of income tax on dividends paid by operators and users to their shareholders.

b.    Customs regime and foreign trade:
–    Goods that enter the free trade zone from the Ecuadorian territory shall be considered as exported.
–    Goods that enter the Ecuadorian territory from a free trade zone are considered imported. Up to a maximum of 20% of the goods produced in free trade zones can be allocated to the Ecuadorian territory.
–    Goods exported from a free trade zone to third parties are not subject to export customs formalities.

14.    Remission of interest, fines and surcharges: The remission of interest, fines and surcharges is established for the payment of tax obligations collected by the Internal Revenue Service. The payment must be made within 150 days from December 20, 2023.

The President of the Republic, the members of the National Assembly and their relatives up to the fourth degree of consanguinity and second degree of affinity are not eligible for this remission. This prohibition does not include the companies they control or participate in.

 

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Statutory minimun wage

The Ministry of Labor, through Ministerial Agreement MDT-2023-175 established that:

1.      Since January 1, 2024, the statutory minimum wage of the employee (“SMW”) is set at four hundred and sixty dollars of the United States of America (US$460.00); including the salary of small industry employees, agricultural employees, household employees, maquila employees, microenterprise collaborators and artisans.

2.      The percentage increase SMW of the employee for the year 2024 with respect to the year 2023 is 2.223 % (applicable for fixing sectorial minimum wages).

 

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Well-known and Renown trademarks; nullity actions for bad faith – new jurisprudential precedents-

DETAILS

DATE: 07-09-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Andrea Miño

MEDIA:

WTR Daily

Our associate Andrea Miño Moncayo published the following article in WTR Daily “Well-known and Renown trademarks; nullity actions for bad faith – new jurisprudential precedents-” and analyzed the Preliminary Interpretation 128-IP-2022, published in the Official Gazette of the Court of Justice of the Andean Community on October 11, 2023. This jurisprudence identified possible signs that could lead to the conclusion that there is bad faith in the registration of a well-known trademark that has not been registered in the Community territory.

How does the Community legislation address the issue of a trademark´s nullity within the Andean Community? The Andean Community legislation establishes that the Andean IP Offices may declare ex officio or at the request of a third party with a legitimate interest, the nullity of a trademark registration when it has been granted in contravention of the relative or absolute grounds established in the regulation or obtained in bad faith.

Miño stated that the relative grounds refer to whether the registration was granted in violation of third-party rights, bad faith, or unfair competition. On previous occasions, community jurisprudence established that in order to prove the existence of actions contrary to good faith, the plaintiff was obliged to prove that the applicant had prior knowledge of the registered trademark and to demonstrate, at least, the existence of a contractual relationship between the parties. Nevertheless, there were no jurisprudential precedents that developed nullity actions in relation to well-known trademarks.

The Court clarifies that, in the case of well-known or renowned trademarks, the IP Office must evaluate this prior knowledge. If the trademark is renowned abroad, it would not be necessary to prove the existence of a prior relationship between the applicant and the legitimate owner of the trademark. If this trademark is well-known, it would be sufficient to demonstrate that the applicant is part of the relevant segment that is aware of the notoriety of the applied for or registered trademark.

These signs do not apply to non-well-known or non-renowned trademarks, i.e., ordinary trademarks and there is not, moreover, at least a competitive connection between the goods and services protected by the conflicting trademarks.

How to identify “opportunistic behavior and possible bad faith of a trademark applicant? The Court emphasizes that the “opportunistic behavior” of the applicant to determine a bad faith action, can be revealed when the applicant intends to appropriate several trademarks used and known abroad, without there being a real use on its part in the local market.  This would show that the applicant’s intention in obtaining this plurality of registrations could be to sell them to their original owners when they are interested in the community market.

Through this interpretation, the Court seeks to avoid the appropriation of well-known and internationally renowned trademarks by unauthorized third parties. This infringement of trademark rights has increased in our country through registration applications filed indiscriminately at the IP Office by third parties other than the original owners, as well as through the commercialization of goods not authorized to use these trademarks.

In this sense, the author concludes, the Court establishes a precedent against actions that may generate damage to the rights of foreign persons or companies, whose trademarks, due to the wide recognition acquired, were registered by third parties within the community territory looking for an unfair advantage, configuring actions contrary to good faith.

This article first appeared in WTR Daily, part of World Trademark Review, in October 2023. For more information, go here.

The 2023 Latin American and Caribbean Competition Forum was held in Ecuador

DETAILS

FECHA: 12-11-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

 –Christian Razza

On September 28-29, 2023, the Latin American and Caribbean Competition Forum (FLACC), promoted by the Organization for Economic Cooperation and Development (OECD) and the Inter-American Development Bank (IDB), was held in the city of Quito. Our associate, Christian Razza, writes a reflection on this event in an article for The Legal Industry Reviews (LIR).

Razza points out that the FLACC is an annual event in which international experts and competition authorities from around the world share experiences in the application of competition law.

He also notes that this year’s event, which Ecuador hosted for the first time, discussed the following topics: poverty, sports, and the Dominican Republic’s peer review.

1. Competition and poverty

In this regard, Razza points out that during the FLACC, the role of competition policy in poverty reduction was discussed, considering that poverty reduction continues to be a priority for Latin American and Caribbean countries. He adds that the event provided examples of how competition authorities can contribute through their actions to poverty reduction, both from the point of view of enforcement and advocacy.

In the same context, Razza stresses that Eleanor Fox, professor emeritus at New York University School of Law, explained that the lack of competition in food markets hurts the poorest households the most and that more competitive markets foster long-term employment growth.

2. Competition and sports

On this topic, Razza indicates that key competition issues related to the sports industry were discussed, including competition in the organization of sports leagues (e.g., the existence of a monopoly and possible abusive behavior by league organizers), sports broadcasting rights, the sale of tickets for sporting events, and sports labor markets.

He adds that the Spanish National Commission for Markets and Competition pointed out in its intervention that in Europe the process of interaction between competition and sport will be influenced by the rulings of the Court of Justice on the International Skating Union and the Super League, which will be handed down at the end of this year. These rulings will either intensify the trend towards greater application of competition law to sport or limit it.

3. Peer reviewed Dominican Republic’s competition regime 

In this regard, our partner specifies that this review is an instrument that allows evaluating the policies, strategies and activities of the country and its effectiveness, to achieve its social and economic objectives in accordance with international best practices in competition law. He adds that Ecuador was subjected to this review in 2021 and that the competition law and policy standards of the Dominican Republic were evaluated by its peer countries as follows: representatives of Costa Rica evaluated the institutional aspects, Chilean technicians reviewed the defense issues, and their Mexican peers oversaw the competition advocacy aspects.

To conclude, Razza emphasizes that the FLACC is one of the most important events for the international competition community and, therefore, the fact that Ecuador has hosted the FLACC will allow the Superintendence of Economic Competition and Ecuador to propose and participate in a leading role in the debates and dialogues that determine the progress of research in the field, as well as to facilitate the dissemination of knowledge and cutting-edge methodologies with the actors of the Ecuadorian regime in favor of the markets.

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