Amendments to the Public Procurement Law Regulations

Boletín General de un edificio de cristal más el logo de CorralRosales

Through Executive Decree No. 451, issued on June 9, 2022, the Regulations to the Public Procurement Law were amended. The amendment covers the provisions applicable to the acquisition of medicines and strategic health goods for outpatient care (“Products“) by the Public Health Network (“PHN“) to private pharmacies qualified by the national health authority (“Pharmacies“). 
 
The main aspects of this amendment are:

  1. The prices of the Products, which the PHN shall pay to the Pharmacies, shall be those provided in the electronic catalog. In addition, the PHN shall pay each Pharmacy an additional amount for “operating costs” to be analyzed and fixed by the National Health Authority (“NHA“).
  2. If one of the Products is not in the electronic catalog, the price will be the one fixed within the referential budget for the Corporate Reverse Auction of the respective Product (“CRA“). Said price shall be applied until 90 days after the signing of the Framework Agreement resulting from the CRA, after which the provisions mentioned in point 1 shall apply.
  3. Until the NHA fixes the “operating costs“, the PHN shall pay each Pharmacy 5% of the total value of the Products it has dispensed under the adhesion contracts entered into or to be entered into with PHN.
  4. The “operating costs” fixed by the NHA shall only apply to the adhesion contracts entered into from such fixation. The previous contracts shall be subject to the provisions mentioned in point 3 until their expiration, and if they are renewed, the amount fixed by the NHA shall apply to such renewal.

Executive Decree No. 451 entered into force on June 14, 2022.

Mario Fernández - Boletín CorralRosales - Derecho Corporativo - Contratación Pública - Sector Eléctrico - Ecuador

Specialist in Corporate and Public Contracting Law
Mario Fernández, associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

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Protection period for Plant Varieties: Ecuador’s lack of compliance with community and international regulations

Edificio de cristal con el logo de CorralRosales más una foto de Andrea Miño, asociada de la firma

Intellectual property law protects plant varieties under the rights of the plant breeder, which grants legal protection to individuals or corporations that obtain a plant variety through plant breeding procedures. For this to be applicable, the plant variety must be new and adhere to the technical requirements of “distinction,uniformity, and stability” (DUS).

A plant breeder´s rightis a recognition by the State of individuals or corporations that have discovered or created a new plant variety; this new variety is then set out in a plant breeder certificate granting the plant breeder the exclusive right to use said plant variety for growth and cultivation during a fixed period. Once that period ends, the plant variety becomes public domain.

Provisions relating to the requirements of protection, rights, and limitations on new plant varieties are detailed in the International Convention for the Protection of New Varieties of Plants (UPOV Convention, 1978). In the Andean Community, such regulations are set out in the Common Regime on the Protection of the Rights of Breeders of New Plant Varieties (Decision 345). Ecuador also has a specific legal body to govern such matters, which is the Organic Law of the Social Economy of Knowledge, Creativity, and Innovation and its corresponding Regulation.

The protection period granted depends mainly  on the group to which the plant variety belongs to.  To this end, two groups have been established: the first group includes vines, forest trees, and fruit trees (including their rootstock); and the second group includes all other species. The UPOV Convention, ratified by Ecuador in May 1997, provides that the protection of plant varieties is granted beginning on the date of approval and lasts at least  eighteen (18) years for species in the first group and fifteen (15) years for species in the second group.[1] Decision 345, meanwhile, grants protection for a period of twenty (20) to twenty-five (25) years for species in the first group and fifteen (15) to twenty (20) years for all other species. These terms are always counted from the date the plant variety is approved.[2]

Ecuador’s legislation has certain discrepancies relating to the type of protection and the time at which it is granted. Its Intellectual Property Law, which was repealed in 2016 but is applicable to all requests presented before this date, allows for a period of protection equal to that set out in the community regulation. However, it contradictorily determined that the protection granted would begin from the date plant variety is requested.[3] Current legislation corrected this error, providing protection from the date the right is granted. Nevertheless, the period itself is more restrictive, establishing eighteen (18) years for varieties in the first group, and fifteen (15) years for the second.[4]

To this effect, a plant breeder that protects a plant variety in the first group in Peru, Bolivia, or Colombia, will obtain a minimum protection of twenty (20) years for a variety belonging to the first group, while in Ecuador, the same variety will not be protected for more than eighteen (18) years, thereby contradicting the supranational regulation.

The Treaty Creating the Court of Justice of the Andean Community imposes upon member states the obligation to adopt measures to enforce the laws in its legal system and the commitment to avoid adopting measures that are contradictory or that could create obstacles to its application.[5] The bylaws of said Court considers infringing conduct to be the enactment of internal norms that contradict the Andean legal system.[6]

For this reason, the provisions of the Organic Law of Social Economy of Knowledge, Creativity, and Innovation, which contradict the community regulation, constitute an infringing conduct which could be considered lack of compliance by Ecuador. Consequently, the National Intellectual Rights Service should draft a bill to correct the aforementioned inconsistencies and send it to the National Assembly via Ecuador’s president for processing.

[1] International Convention for the Protection of New Varieties of Plants Varieties, Article 8 Duration of Protection, 1962

[2] Common Provisions on the Protection of the Rights of Breeders of New Plant Varieties; Chapter IV, Registration, Article 21.  

[3] Intellectual Property Law, Book III, Section II, Registration Procedure, Article 268.)

[4] Organic Law of the Social Economy of Knowledge, Creativity, and Innovation, Title IV; Plant Varieties; Section V, Rights and limitations, Article 485.

[5] The Andean Community Treaty Creating the Court of Justice, Article 4.

[6] Bylaws of the Andean Community Justice Tribunal, article 107, second paragraph.

Andrea Miño
Associate at CorralRosales
andrea@corralrosales.com

Effects of the derogation of the Regulations for the Application of the Organic Law of Communication in advertisement production

Effects of the derogation of the Regulations for the Application of the Organic Law of Communication in advertisement production - Lawyers Ecuador - CorralRosales
The President, Guillermo Lasso Mendoza, issued the Executive Decree No. 32 on May 24th, 2021, which ordered the derogation of the Regulations for the Application of the Organic Law of Communication.

The Organic Law of Communication (“LOC”) determines, in article 98, the rules of nationality for the production of advertisement to be disseminated through social communication media (“Rules of Nationality of Production”) which establish that advertisements transmitted through the social communication media:

Art. 98. – Production of National Advertising. – Advertising that is disseminated in Ecuadorian territory through the communication media must be produced in Ecuadorian territory by Ecuadorian natural persons or foreigners residing in Ecuador or produced abroad by Ecuadorian persons residing abroad or foreign legal entities whose ownership of the majority of the shares in said entity is held by Ecuadorian persons and whose payroll for its realization and production is made up of at least 80% of people of Ecuadorian nationality.

This payroll percentage will include the hiring of professional services.

The import of advertising pieces produced outside the country by foreign companies is prohibited, with the exception set forth in the first paragraph regarding foreign legal entities with a majority of the share package held by Ecuadorian persons.

For the purposes of this law, advertising production is understood to be television and film commercials, radio sports, photographs for static advertising, or any other audiovisual piece used for advertising purposes.

The advertising of international campaigns designed to promote respect and the exercise of human rights, peace, solidarity and human development is exempt from what is established in this article.

Social communication media are defined in the LOC as: “… public and private entities and community organizations, as well as the concessionaires of radio and television frequencies, who provide the public service of mass communication that utilize print media o radio services, television and audio and video subscription services, whose contents can be generated or replicated by the media through the internet.”

The Regulation for the Application of the LOC, among other aspects, regulated the application of the Rules of Nationality of Production for advertisement through alternative channels other than social communication media; and clarified on its application for each type of advertising piece in the case of advertisements aimed at promoting tourist destinations or events abroad or those in which the images of famous people or animated fictional characters that are the image of the brands are used. The derogatory provided by Executive Decree 32 has the following relevant implications in terms of advertising:

– Advertisement to be disseminated through alternative media such as (i) billboards or photographs located in public space in commercial premises; (ii) catalogs; (iii) flyers is no longer subject to the Rules of Nationality of Production.

– Importing printed advertising materials such as diaries, notebooks and catalogs is allowed.

– There is no prohibition for advertisement photography to be disseminated by social communication media to be taken by a foreign photographer – that is not an Ecuadorian resident – as long as the Rules of Nationality of Production regarding the property of the producer is complied with and the production team is at least made up of 80% Ecuadorians.

– There are no guidelines that regulate the application of Rules of Nationality of Production in the case of advertising intended to promote touristic destinations or events located outside Ecuador, the use of images of famous people or animated characters that are the international image of a brand (the derogated Regulations for the application of the LOC allowed the use of these videos/images for up to 20% of the duration of the video or the composition of the piece).

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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.

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New technologies and the transformation of the legal sector

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The application of technologies in the field of law is increasing in the world. The legal technology landscape (legaltech) comprises different categories of technology solutions. This article describes the various technologies that are expected to generate significant changes in legal services in the coming years: (i) Big Data Analytics; (ii) Artificial Intelligence; and (iii) Blockchain.

Big Data Analytics is a technology that allows you to analyze large amounts of data. It applies particularly to judicial activity since time and resources are saved in processing and analyzing information. For example, in a trial in which it is necessary to review several years’ emails, these can be analyzed with programmed software, in much less time and at a reduced cost. Big Data Analytics significantly reduces legal processes document analysis.

Besides, this technology can locate patterns of behavior of judges, courts, and other lawyers allowing to establish the probabilities of success in a judicial process more efficiently, the arguments of the claim, the value of damages that can be claimed, among other aspects. Therefore, the implementation of legal analytics is expected to make judges, arbitrators, and lawyers more efficient. 

 Artificial Intelligence is a technology aimed to replicate the human thought process/analysis, allowing machines to delegate tasks or make decisions. Artificial intelligence algorithms feed on a massive amount of data, which is why they use other technologies, such as the Internet of Things and Big Data, to obtain the expected results. The automation and application of Artificial Intelligence systems mainly replace more routine, repetitive, or mechanized tasks.

Some services offered by companies that use Artificial Intelligence are (i) solutions that automate the drafting and comparison of contracts and other legal documents; (ii) analysis and prediction of trial results; (iii) automation of legal investigation processes.

Blockchain is a technology that allows the shared recording of information. This registry has specific characteristics such as immutability, transparency, traceability, decentralization, publicity, distribution. It allows to carry out transactions of any type transparently, reliably, and securely without the need for an intermediary.

This technology is being implemented to register information. Some areas that will experiment significant change are real estate titles, apostilles, and other documents that require registration and/or certification. Blockchain will most likely replace some of the work that notaries and registrars do.

Another application of this technology is smart contracts, which are blockchain technology-based agreements automatically executed when they meet the stipulated conditions. These contracts are not yet used on a large scale, but their implementation will transform business transactions.

Adopting these technologies will bring benefits such as reducing time, costs, and risks in providing legal services improving access to justice. Similarly, suppose these technologies are used for data analysis, along with artificial intelligence. In that case, it could lead to obtaining more consistent sentences in judicial processes, reducing the chances of bias and corruption, providing greater legal certainty.

Lawyers must be prepared to use these technologies, as their adoption implies a transformation in the way services are provided. It is difficult to visualize all the changes coming with the implementation of Big Data Analytics, Artificial Intelligence, and Blockchain. Law firms must reaffirm that their objective is to provide services efficiently and transparently to benefit all citizens.

María Isabel Torres
Associate at CorralRosales
mtorres@corralrosales.com