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



DATE: 2-11-19


-Francisco Gallegos


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.

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Gestión Digital – Forms of associations in Ecuadorian Public Procurement



DATE: 2-10-19


-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

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



DATE: 23-09-19


-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.

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



DATE: 30-08-19


-Ian Wall


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.

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Evolution of the Legal Sector in Ecuador 2008-2018



DATE: 10-08-19


Francisco Corrales

MEDIA: Idealex

To better understand the legislative evolution in this decade, it is necessary to take into account that the presidency of the Republic was exercised by a single character from 2007 to 2017: Rafael Correa, an unprecedented case in Ecuadorian history. There have been presidents who have exercised the presidency for a total of more than 10 years, but not continuously.

In 2008 a new Constitution, the twenty-second, was issued for which a Constituent Assembly was convoked. Its mission was to draft a political letter which to enter into effect required the favorable vote of the majority of citizens expressed in a referendum convoked for the effect. President Correa had an absolute majority in the Assembly and managed to have the 2008 Constitution built to suit his political project: The Ecuadorian version of the so-called 21st Century Socialism. The main ideologues of this movement who played the same role in the constitutions of Venezuela and Bolivia were two Spanish professors belonging to the extremist group “Podemos”.

The 2008 Constitution that currently governs the country, with 23 modifications introduced in three separate occasions, consists of 444 articles, 30 transitional provisions and a transition regime developed in 30 additional articles. The constitution has 52,831 words, compared to that of 1998 with only 29,162 words. It is a convoluted, contradictory, incoherent, and regulatory political letter which strengthens the presidential power to the extreme. In addition, it was shielded in such a way that its reform requires long procedures along with qualified majorities and for certain matters even the convocation of a new Constituent Assembly.

To consolidate the indefinite political power of the XXI Century Socialism sought in Ecuador during the period under review, large numbers of codes and laws were dictated; most of them penned by the presidency of the Republic. There is hardly any law whose initiative came from the Legislative Assembly itself. The assembly members of the political group led by President Correa were an absolute majority which allowed them, without the need for agreements or alliances, to approve as many laws as they considered necessary to suit their interests.

Among others, the following laws were issued: Organic Monetary and Financial Code, Commercial Code, Organic Code of Territorial Organization, Autonomy and Decentralization, Organic Code of Judicial Function, Administrative Organic Code, General Organic Code of Processes, Code of “Ingenios” (Organic Code of the Social Economy of Knowledge, Creativity and Innovation), Organic Law of the Legislative Function, Law of Jurisdictional Guarantees and Constitutional Control, Organic Law of the Council of Citizen Participation and Social Control, Organic Law of Higher Education, Organic Electoral Law and Political Organizations, Organic Law of Ombudsman, Organic Law of Land Transportation, Traffic and Road Safety, Organic Law of the National Public Procurement System; To this extravagant number of codes and laws, we must also add reforms of all kinds due to the fact that 11 reforms were issued in the period under review only with regard to tax laws.

Therefore, it is correct to affirm that between 2007 and 2017 Ecuador endured a legislative incontinence of new laws, reforms and counter reforms that have thwarted the institutional and legal structure of the Republic. The vast majority of members from this movement in the government have had the sole goal of strengthening the presidential power and facilitating the fulfillment of the political objectives of the group that held power, that is, its indefinite command of the Republic. This situation has become such a problem that several private and public sectors have suggested that the least traumatic way to end the current legal chaos would be to convoke a referendum in which the people would repeal the 2008 Constitution replacing it with the 1998’s. Therefore, the legislature would adapt the current secondary laws to the constitutional norms of 1998.

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EKOS – Personal data protection: legitimate means for handling data



DATE: 16-08-19


-Rafael Serrano
-Michael Wollman

MEDIO: Ekos Magazine

With the forthcoming issuance of the Personal Data Protection Law, companies must adapt their procedures to collect and carry out the appropriate handling of the personal data of their consumers or customers.

The correct handling of personal data is one of the main tools for companies to adequately market their products; not only to protect the personal information of their customers, but also to benefit their businesses.

The main purpose of the draft Law is to regulate the exercise of the right to protection of personal data, self-determination information, and circulation of this type of data (Article 1).

The legitimacy principle (Article 9) establishes the conditions or situations in which the collection and processing 1 of personal data by companies is legitimate and lawful:

  1. Consent of the personal data owner to the sharing of his information for a specific purpose.

The consent must be free, specific, unequivocal, prior and informed. A company may share someone’s personal data when he authorizes or gives consent knowing the purpose of the use of his information.

  1. Legal obligation for the sharing of personal data.

In this case, the law orders the company to share the personal data of an individual.

Example: The Labor Code requires employers to have certain personal information of their workers such as address, marital status, number of children, and some other relevant information. In this case the will of the data owner is irrelevant since it is the law that orders the sharing of this information.

  1. Contractual relationship.

A company can use the data of an individual with whom they have a contractual relationship. The limitation to this use is related to the data necessary for compliance with contractual obligations and may not exceed the limits established in the contract.

Example: In a contract of sale of goods, the company cannot use the data of the individuals to send commercial promotions, except if there is a clause in the contract that expressly authorizes the sending of such promotions.

1 The Personal Data Protection Law project defines the handling as any operation performed on personal data; this includes collection, conservation, modification, transfer, among other actions.

  1. 4. Vital interests of the owner.

The sharing of data of a person may be carried out if through this process the vital interests of the owner are protected, such as the protection of fundamental rights.

Example: A company can share the personal data of a person if it helps to save the life of the individual, such as in a medical emergency.

  1. Order of a judicial authority or resolution of competent authority.

If through a ruling or a decision of the competent authority the delivery or processing of personal data is ordered, the company will be bound to do so without facing negative consequences.

The legitimacy of the sharing and use of personal data is not given only by the consent of his owner. Companies must analyze in each particular situation which of the above mentioned scenarios the handling of personal data applies, thus complying with the principle of legitimacy.

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LexLatin – CorralRosales promotes two partners and area leaders in Quito



DATE: 11-07-19


Andrea Moya
Felipe Samaniego

MEDIA: LexLatin

The Ecuadorian company CorralRosales announced the appointment of Felipe Samaniego and Andrea Moya as new partners in regulatory and tax practices respectively. The firm now has a total of nine partners.

Samaniego is the leader of the regulatory group. This group is comprised of professionals and specialists in different fields such as veterinary, pharmacology, food and additive. Moya is in charge of the tax area which is made up of three professionals.

Both specialists told LexLatin about their promotions. Andrea Moya said that in this new challenge, she is focused on continue being a leading team in the analysis of complex operations including cross-border transactions, trading of international production units, and tax planning for companies wishing to operate in Ecuador.

At the same time, Samaniego stressed that he accepts the challenge of consolidating the firm as a benchmark for regulatory matters in the country. To achieve his goal, he assured that he counts with a regulatory team that combines industrial experience and in-depth knowledge to advise foreign mass consumption companies seeking to enter the Ecuadorian market and local manufacturers too about the schemes that best suit their needs and allow them to have control over their products as well.

About our new partners

Felipe Samaniego has more than three years of experience in the area of regulatory law, with emphasis on matters related to food law, advertising, consumer goods, pharmaceuticals, chemicals, biologicals, agricultural, cosmetics, hygiene, food and beverages. He also handles issues of foreign trade and quality standards.

Some of the companies assisted in the regulatory area are Roquit Benckiser, Pacari, Clorox, Ferrero, Nestle Ecuador, and Grupo Familia.

Before joining Corral Rosales in 2009, Felipe was a legal assistant at Ernst & Young. He also worked at Tobar & Bustamante in 2006. He graduated from University of the Americas (Mexico).

Andrea Moya has specialized in the tax area for more than a decade. She has extensive experience in consultancy matters and in the representation of clients in administrative and judicial processes leading the definition of strategies and generation of tax structures both local and international.

The client portfolio of the tax area Andrea leads includes Panamanian Aviation Company (Copa Airlines), Ferrero, Marriot International Hotels Inc., General Motors, Terpel-Comercial Ecuador Cia. Ltda., Nestle Ecuador SA, among others.

Andrea graduated as an attorney from the Pontificia Universidad Católica del Ecuador and holds a Master’s Degree in Tax Law from the same university. She also holds a Master’s Degree in International Tax Law from New York University (NYU).

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LeadersLeague – CorralRosales Strengthens its Tax and Regulatory Practices



FECHA: 24-05-19


Andrea Moya
Felipe Samaniego

MEDIO: Leaders League

Leaders League publishes on its website the appointment of Andrea Moya and Felipe Samaniego as new Partners of CorralRosales.

“CorralRosales law firm, is betting on the growth of the legal market in Ecuador and more generally LatAm, by promoting Andrea Moya and Felipe Samaniego to a partner level position, to lead the tax and regulatory areas respectively. This move takes the partner count to nine”, said in the news.

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LatinLawyer – Ecuador’s CorralRosales opens foreign trade practice with Gustavo García



DATE: 18-10-18


Gustavo García

MEDIA: Latin Lawyer

LatinLawyer publisehs that CorralRosales has hired the General Secretary of the Andean Tribunal of Justice (ATJ) Gustavo García to head its international trade practice, as a new trade agreement with the EU bears fruit. Gustavo García Brito, 35, joined the firm on 1 October as of counsel. He previously served at the ATJ for six years and brings experience in Andean Community law and integration. He also has knowledge of multilateral trade systems and the legal aspects of international economic relations through consulting for law firms in Bolivia and Brazil.

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LatinLawyer – Nestlé acquires Ecuador’s Terrafertil in landmark multijurisdictional deal



DATE: 27-09-18


Edmundo Ramos
-Xavier Rosales

MEDIA: LatinLawyer

White & Case LLP in New York and CorralRosales in Quito have helped Nestlé acquire a majority stake in Ecuadorean organic foods producer Terrafertil, in what is thought to be the largest M&A in Ecuador and the largest transaction in Latin America’s health foods industry in 2018.

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