WTR World Trademark Review – Foreign Companies as Intellectual Property Holders in Ecuador

DETAILS

DATE: 14-07-2021

PROFESSIONALS IN THE NEWS:

Andrea Miño Moncayo

On July 14, 2021, World Trademark Review (WTR), the media specialized in Intellectual Property, published an article written by Andrea Miño Moncayo.  In her article, our associate comments on a pervasive problem in Ecuador regarding the appropriation of internationally recognized brands by third parties.

The appropriation is usually done through registration applications with the relevant authority and even by marketing products under these brands without proper authorization.

The arguments of the offenders are varied, and they particularly emphasize that the foreign companies in question are not domiciled in the country. Therefore, they could not carry out activities or defend their intellectual property rights in this particular case.

Miño Moncayo emphasizes in the article that, “to try to justify this (blatantly illegal) conduct, some lawyers have resorted to wrongly allege before the courts that the doctrine of the Superintendency of Companies will be applied, according to which a company established outside the country must be domiciled in Ecuador to be able to carry out activities in the country. “

Miño Moncayo then goes through international and local regulations applicable in this case, including the hierarchy of each of them, to demonstrate that the appropriation and use of these marks are illegal and are not justified within the Ecuadorian legal system.

She concludes by highlighting that “it is essential that the preliminary decisions issued by the Court of Justice of the Andean Community in these cases are specific and clear, to avoid erroneous arguments causing damage to the rights of foreign companies not domiciled in Ecuador.”

To see the full article (under registration), click here.

Latin Lawyer – Multiple Firms Help Dutch Paint Company Expand in Latin America.

DETAILS

DATE: 16-07-2021

PROFESSIONALS IN THE NEWS:

Partners: Xavier Rosales and Andrea Moya

Associates in Quito: Milton Carrera, Ana Samudio, Marta Villagómez, Rafael Serrano, Maria Isabel Torres, Jimmy Rodríguez, Darío Escobar and Sofía Rosales

Associates in Guayaquil: Ramón Paz y Miño and Edgar Bustamante 

MEDIA: Latin Lawyer

On July 16, 2021, Latin Lawyer, the international media dedicated to the legal sector, shared the transaction involving the Dutch company AkzoNobel; this company specializes in decorative and industrial paint and chemical products. CorralRosales acted as a legal advisor in Ecuador.

Through this multinational transaction closed on June 29, AkzoNobel acquired the Orbis Group, a Colombian business conglomerate with several subsidiary companies dedicated to manufacturing paint and derived chemical products. This conglomerate operates in 16 Latin American countries.

The transaction is still pending regulatory approval in several countries and is expected to be finalized by the end of this year.

In addition to having the advice of CorralRosales in Ecuador, the following firms also contributed to the transaction:

AkzoNobel advisers: Baker McKenzie in Colombia, Arias in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

Grupo Orbis Advisors: Posse Herrera Ruiz in Colombia, BLP in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and Robalino Law in Ecuador.

If you want to see the full article (under registration), click here.

Intellectual Property regulatory corrections; border measures and penalization

Intellectual Property regulatory corrections; border measures and penalization - CorralRosales - Lawyers Ecuador

The National Assembly gave way to the partial objection issued by the Executive Branch, thus approving the “Law that Reforms Various Legal Bodies to Reinforce the Prevention and Combat of Illicit Commerce to Strengthen the National Industry and Promote Electronic Commerce.” In addition, the law foresees reforms in the matter of intellectual property.

In particular, this reform includes provisions regarding (i) intellectual property crimes, their punishment and handling, expanding the punishable acts, and (ii) the border measures process.

I. Intellectual Property Crimes

The Executive Branch veto sought to correct certain inconsistencies and drafting errors in the text approved by the Assembly. As a result, it details criminal conduct in a much better way, the conditions that must be taken into account to assess the existence of the crime and how these crimes are to be treated and judged.

The reform of the criminal law, if it refers to the COIP then it should be named. It establishes that, for these behaviors to be considered crimes, they must include several elements that would differentiate it from a “simple” infringement of intellectual property rights since its sanction is conditioned to the knowledge of the violation, a lucrative purpose, and the commercial scale.

These conditions include criminal offense and penalizing whoever manufactures, commercializes, or stores labels, stamps, or containers containing trademarks or denominations registered in the country.

It also sanctions whoever separates, starts, replaces, or uses labels, stamps, or containers that contain registered trademarks in the country to use them in products of different origin, fills containers identified with a foreign brand with spurious products, stores, manufactures, uses, offers for sale, sells, imports or exports products covered by an invention patent, utility model, industrial design, a plant variety (including its material for reproduction, propagation or multiplication) or a layout design.

It also includes possible infractions -which from our experience, will make up the vast majority of intellectual property criminal actions- against whoever stores, manufactures, uses, offers for sale, sells, imports or exports a product or service that uses an unregistered distinctive trademark identical or similar to one registered in the country; the competitive connection between the infringing products or services and those identified by the registered trademarks must be clear.

Additionally, the law eliminates the condition of a minimum amount to constitute a crime, clarifying that to consider the offending conduct a crime (on a commercial scale), the magnitude, economic value, quantity, and impact on the market must be considered. It also specifies that in foreign trade cases, it is regarded as a crime when the goods are valued at more than 50 unified basic salaries (SBU) – US $ 20,000 to date – stipulating that the cost of the original product must be taken into account for this valuation.

Regarding the sanctions, the law establishes an incarceration sentence of 6 months to 1 year, confiscation (of the seized products), and a fine of 8 to 300 SBU (US $ 3,200 to US $ 120,000 to date). In addition, the following are reinstated as an aggravating factor for the criminal offense: (i) having received a warning of the offense; (ii) that health-related objects cause damage to health; and (iii) that the crime is committed concerning unpublished works.

Regarding copyright, the same conditions described before apply. In addition, the following actions are sanctioned with the penalty indicated in the previous paragraph: alteration or mutilation of a piece of work; the registration, publication, distribution, communication, or reproduction of a foreign work as one’s own; unauthorized reproduction or in a number greater than the authorized number of the work, provided that the damage is greater than 50 SBU (US $ 20,000 to date); public communication of works or phonograms; introduction to the country, storage, offering for sale, sale, lease or circulation of illicit reproductions of works, by any means; unauthorized retransmission of radio broadcasting, television and in general any signal that is transmitted through the radioelectric spectrum; manufacture, import, export, sale or lease of devices, systems or software that allow deciphering an encrypted satellite signal carrying programs or telecommunications in general.

The reform makes an essential clarification about certain conditions on the crime, such as the precise meaning of the term “commercial scale” and how to assess the value of the products.

The law also includes provisions on the destination of the seized products, which may be considered free of charge to cover social needs by the State or destroyed. They must have the report of an expert duly accredited by the Judicial Council. He has to clarify whether the products must be destroyed or render useless “the aspects of the same that violate or transgress the intellectual property, as long as this action does not harm the nature or the functionality of the merchandise.”

Finally, the law includes conciliation is as a dispute resolution mechanism.

In conclusion, the reform is positive because it seeks greater agility in processing and prosecuting intellectual property crimes.

II. Border Measures

After almost five years of a legal vacuum in this matter, the Executive Branch veto, accepted by the Assembly, also corrected the inadequate text approved by the Legislature returning the “mixed” system to the country for the execution of measures on the border. It allows the National Customs Service of Ecuador (SENAE) to be the first filter of infringing products entering or exiting the country, suspending the customs process provisionally, which has to be confirmed by the local intellectual property office.

The reform empowers SENAE to: (i) suspend the customs procedure for products that, in any way, violate intellectual property rights, (ii) alert the holders of these rights, and (iii) provide adequate information to act in these cases.

The suspension of the customs process will initially be five days. During these five days, this suspension must be communicated to the importer, the right holder, and the local intellectual property office. After that, it will have three days to decide on a resolution.

The law maintains the obligation to provide sufficient information to the intellectual property authority about the infringing products and the conditions of the infringement, and the possibility of inspecting the products involved.

The authority may sanction the offender with a cash penalty ranging between 1.5 and 142 SBU (US $ 600 to 56,800 to date).

Per the regulations of the Andean Community, the reform provides that the right holder initiates at their discretion an administrative, civil, or criminal action when the adoption of the border measure has been confirmed. Although there is a contradiction with the supranational norm regarding the term to present it (10 days), it prevails. The holders of intellectual property rights will have a predominant performance in these cases since they must participate actively, both in the criminal proceedings and in the cases of border measures, accompanying the authorities through all the steps.

The law maintains the possibility of requiring the person requesting the adoption of a border measure to provide a guarantee or surety that will be proportional to the possible economic and commercial impact generated by the suspension, to protect the importer or exporter from a possible case of abuse of rights.

This reform corrects elements that have caused a notable increase in intellectual property infringements in Ecuador and led to actions against retailers or small merchants. Unfortunately, these elements have left importers or wholesalers who are the primary beneficiaries of the illicit trade unpunished.

The reforms will come into force after its publication in the Official Registry.

Eduardo Ríos
Asocciate at CorralRosales
eduardo@corralrosales.com

Industria Legal – The Cannabis and Hemp Industry Generates Expectations in Ecuador

DETAILS

DATE: 02-07-2021

CORRALROSALES IN THE NEWS:

Felipe Samaniego

December 2019 was a month of legal changes in Ecuador. First, the Organic Law Reforming the Comprehensive Organic Criminal Code was published. Still, it was not until June 2020 that it came into force, reforming the Organic Law for the Comprehensive Prevention of the Socioeconomic Phenomenon of Drugs and the Regulation and Control of the Use of Listed Substances Subject to Control. The magazine Industria Legal dedicates a page to the information offered about this matter by our expert partner in Regulatory Law, Felipe Samaniego since this reform gave way to Ecuador’s new cannabis and hemp industry.

The exclusion of substances subject to control to cannabis and hemp with less than 1% THC in dry weight and a term of 120 days for the Ministry of Agriculture and Livestock to issue the corresponding regulation are among the new reforms.

Not only that, but also, through this agreement, new guidelines are established applicable to the regime of seven licenses, different for each activity allowed in the non-psychoactive cannabis industry, hemp and hemp for industrial use, “from the import and production of seeds to the production and export of derivatives, biomass and/or flowers,” according to Samaniego.

Our expert ends his article stating that “the rapid development of the regulatory framework that regulates the activities of agroindustrial activities, by the Ministry of Agriculture and Livestock, caused that both the Ministry of Health and the National Agency for Regulation, Control, and Sanitary Surveillance (ARCSA) as well as the Agency for the Regulation and Control of Phytosanitary and Zoosanitary (AGROCALIDAD) issue the normative bodies that regulate finished products destined for human and veterinary use and consumption that have derivatives of non-psychoactive cannabis or hemp in their composition ”.

If you want to see the article, click here

PharmaBoardroom – Emerging cannabis and hemp industry in Ecuador

PharmaBoardroom - Emerging cannabis and hemp industry in Ecuador - CorralRosales - Lawyers Ecuador

DETAILS

DATE: 28-06-2021

CORRALROSALES IN THE NEWS:

Felipe Samaniego

With the Criminal Law Reform enacted a year ago, the cannabis and industrial hemp industry has become an emerging industry in Ecuador. Our partner Felipe Samaniego writes about it for Pharma Boardroom.

Samaniego begins the article by writing about what’s new since the reforms now include decriminalizing the possession of drugs that contain cannabis or derivatives as an active ingredient for therapeutic, palliative, medicinal use, or alternative medicine.

The Law for Drug Use, Prevention, and Control is also modified with the change, which now excludes the control of non-psychoactive cannabis or hemp.

On October 19, 2020, the Ministry of Agriculture issued Ministerial Agreement No. 109-2020, which regulates the Import, Sowing, Cultivation, Harvest, Post-harvest, Storage, Transportation, Processing, Marketing, and Export of non-psychoactive cannabis or hemp and hemp for industrial use.

Samaniego adds that “this regulation establishes the requirements that must be met to obtain the seven types of licenses, which authorize the following activities only concerning cannabis or hemp with a THC concentration of less than 1%:

  1. License for Import and Marketing of Non-Psychoactive Cannabis or Hemp Seeds or Cuttings, or Hemp Seeds for Industrial Use.
  2. License for the Import and Commercialization of Non-Psychoactive Cannabis or Hemp Seeds, or Non-Psychoactive Cannabis or Hemp Cuttings or Hemp Seeds for Industrial Use.
  3. License for the cultivation of cannabis or non-psychoactive hemp.
  4. License to grow hemp for industrial use.
  5. License for the processing of non-psychoactive cannabis or hemp and production of non-psychoactive cannabis or hemp derivatives.
  6. License for Banks and Research of Plant Improvement and/or Germplasm.
  7. License for the Acquisition of Non-Psychoactive Cannabis or Hemp Derivatives and/or Biomass or Flowers, or Hemp Biomass for Industrial Use for Export.

As soon as this came into effect, the Ministry of Health and the Agency for Health Regulation, Control, and Surveillance had to develop regulations applicable to finished products. This happened because the Criminal Law “also opened the door to producing and importing finished products,” according to our partner.

Samaniego also adds that at the end of February of this year 2020, “the Health Regulation, Control, and Surveillance Agency issued a resolution with the ‘Sanitary Technical Regulations for the regulation and control of products for human use and consumption that contain cannabis non-psychoactive or hemp, or its derivatives.” This resolution makes it possible to legally produce, import, and commercialize the following finished products with the THC concentration specified in each category:

  • Less than 1% THC: general, natural pharmaceutical products processed for medicinal use and homeopathic. Also cosmetic products and medical devices; hygienic products for industrial use; pesticides for domestic use, for public health or for industrial use; household hygiene products and absorbents for personal hygiene.
  • Less than 0.3% THC: processed foods and food supplements.

On February 26, Ministerial Agreement No. 148-2021 was also issued after a meeting of experts developed regulations for the prescription, provision, and therapeutic use of medicinal cannabis and pharmaceutical products containing cannabinoids.

Samaniego concludes by pointing out that “the regulatory framework for cannabis / hemp has moved relatively quickly in Ecuador and has opened the eyes of many local and international investors. The authorities are aware of what this industry can generate for the country regarding research and investment. Ecuador is the only country in the region that has shown such openness; the players will be able to develop a myriad of producs as long as they abide by all the rules. As a result, this area is expected to become a research and development group for cannabis and hemp products to be sold worldwide.”

If you want to see the article, click here

LexLatin – Change of Government in Ecuador: investment opportunities

LexLatin - Change of Government in Ecuador: investment opportunities - CorralRosales - Lawyers Ecuador

DETAILS

DATE: 23-06-2021

CORRALROSALES IN THE NEWS:

Andrea Moya

MEDIA: LexLatin

Ecuador has gone through the first month of Guillermo Lasso’s presidency and, as our partner specialist in Tax Law, Andrea Moya, says for LexLatin, “the basis of his administration have been established”. If we consider the benefits that were created during the last two governments with the proposals of the new president, and the return to ICSID, the outlook is very interesting for foreign investors.

CorralRosales is going through a moment in which a large number of foreign companies are requesting advice on investments in Ecuador and on Mergers and Acquisitions. It is important to know the incentives available if you want to invest in Ecuador and the different mechanisms to protect such investment.

Andrea points out that the most important tax benefits are the exemption from income tax (25%), which can be for 8 years or even 12 years, depending on the location of the investment, and the exemption from outflow tax on the import of commodities and capital goods necessary for the project.

It is also essential to know the scope of the investment contracts that may be entered into with the Ecuadorian government. These instruments allow to protect the investment, agree arbitration, and maintain immovable the applicable benefits, despite any subsequent legal reform.

In order to sign this contract, there is a fundamental requirement: the investment must be at least US$1 million and US$250,000 of this amount must be executed in the first year.

However, the most important thing to attract investments to Ecuador is to undertake a comprehensive reform to the tax and labor regimes.

If you want to see the article, click here

Revista Gestión – Legal mayhem

revista-gestion-legal-mayhem - Lawyers Ecuador - CorralRosales

DETAILS

DATE: 22-06-2021

CORRALROSALES IN THE NEWS:

Francisco Rosales

“A great number of laws does not make a nation better. On the contrary, the proliferation of laws is a symptom of disorder and underdevelopment. There is a good need for a legislative moratorium so that the National Assembly can fix the legal chaos by codifying the fundamental laws for social coexistence, among which, without a doubt, are the tax laws”.

That’s how our partner Francisco Rosales begins his article for Gestión Magazine. He offers his opinion on the lack of a legal framework in Ecuador to provide confidence to the investor. From his point of view, “A fundamental element for the development of a country is its legal framework; it must be clear, orderly, stable and consistent. And, along with it, an enlightened, timely, autonomous and trustworthy administration of justice”. Unfortunately, Ecuador does not have it.

Tax laws become essential within the legal framework. Rosales adds that “in the last 14 years, between 2007 and 2021, 28 tax reforms have been enacted in Ecuador containing a plethora of laws and changes that have created monumental chaos complicating the already serious economic situation we are experiencing.”

Ecuador is currently in need of sustained economic growth of at least 5% per year for the next 20 years, but this projection does not seem to be happening today.

The Legislative Chaos

In the words of Rosales, on top of the norm that applies to dividends paid by companies domiciled in the country, “we have to add the regulations of the Internal Tax Regime Law and the hundreds of general resolutions issued by the Internal Revenues Service.

Legislative Failure

The Legislature Assembly of the country has failed to fulfill one of its fundamental functions, that is: “Mandatorily Issue, codify, reform and interpret laws.” “In turn, Article 31 of the Organic Law of the Legislative Function carries out its obligation to codify the laws by ruling that the Plenary of the Assembly may request that the Legislative Technical Unit carries out the obligation to codify the laws by ruling that the Plenary of the Assembly may request that the Legislative Technical Unit prepares the codification of certain laws, send it to the respective permanent commission, and that, with its report, the plenary, in a single debate, approve the codification and that the president of the plenary orders its publication in the Official Registry”, concludes Rosales.

If you want to see the article, click here

The acquisition of medicines through small amount

The acquisition of medicines through small amount - CorralRosales - Lawyers Ecuador

The small amount is a public procurement procedure regulated in the Organic Law of the National Public Procurement System (hereinafter, the “LOSNCP”), the Regulation to the LOSCNP (hereinafter, the “Regulation”), and the Codification and Updating of Resolutions issued by the National Public Procurement Service (hereinafter, the “Codification”).

Public entities[1] can make direct contracts with suppliers through the small amount as long as they meet the following requirements:

  • The object of the contract must be: (i) the acquisition of standardized goods or services[2], which do not appear in the electronic catalog[3]; (ii) the acquisition of non-standard goods or services; or (iii) the contracting of works, solely and exclusively for the repair, remodeling, adaptation, maintenance or improvement of an existing construction or infrastructure. In no case can consulting services be hired[4].
  • In the year, the amount of the contract must not exceed the value that results from multiplying the coefficient 0.0000002 by the Initial State Budget for the corresponding fiscal year. In 2021, this value is $ 6,416.07.

Article 332 of the Codification provides that, during the year, the contracting entities may consolidate their needs and carry out a single contract for a small amount or carry out several such amounts for the same good or service, but the amount of the consolidated contract or the total amount of individual contracts may not exceed the maximum value indicated. 

These contracts may or may not be part of the annual planning that public entities are obliged to carry out[5]. But, in any case, the “small amount” tool must be used within the COMPRAS PÚBLICAS Portal[6] (www.compraspublicas.gob.ec) to publish: the needs of goods, works or services, the information of the public servant responsible for the hiring, the email in which they will receive the offers of the interested suppliers, and the maximum delivery time of said offers.

To participate in a contract for a small amount, suppliers do not need to be registered in the RUP[7]. Suppliers will be selected under the following criteria[8]:

  1. In standardized goods and services, the supplier that offers the lowest price must be chosen.
  1. In non-standard works or goods and services, the supplier that offers the best technical, financial, and legal conditions must be chosen, without the lowest price being the only selection parameter.

Once the contracting has been carried out, the contracting entities must publish its relevant information on the COMPRASPUBLICAS Portal. This information and that which, at any time, is required by[9] the National Public Procurement Service (hereinafter, “SERCOP”), will serve for this body to identify if there are non-compliance with the requirements applicable to this figure or if it was used to circumvent[10] other hiring procedures. If there are non-compliances, SERCOP will inform the competent control bodies so that they can initiate the corresponding actions.  

There are special or exceptional cases[11]in relation to this type of contracting for a small amount, such as the acquisition of medicines.

The LOSCNP does not expressly foresee the acquisition of medicines for a small amount, however this is possible under numeral 2 of article 54.2. of the Law[12], since medicines can be classified as standard goods. 

The Regulation develops this figure as follows:

“Art. 85.4.- Application of small amounts.- In duly justified and exceptional cases, contracts for the acquisition of medicines and strategic goods, the amount of which is equal to or less than multiplying the coefficient 0.0000002 of the Initial State Budget, will be carried out for a very small amount , in accordance with the provisions issued by the SERCOP for this purpose, and provided that the good is not available in the virtual repertoire for direct purchases enabled in the PUBLIC SHOPPING Portal.

The acquisition of medicines by this procedure will be within the current National Basic Medications Table. “[13] (highlighted out of text)

Although the Regulation uses the name “virtual repertoire” and not “electronic catalog” as happens in small amounts for other standardized goods, the fundamental requirement is the same: the good must not be available on the COMPRASPUBLICAS Portal for direct purchases. Additionally, the Regulation clarifies that only the medicines that appear in the current National Basic Medicines Table may be purchased.

Therefore, the small amount of medicines comes when the good: (i) is not available in the virtual repertoire enabled in the COMPRASPUBLICAS Portal (hereinafter, the “Directory”); (ii) is included in the current National Basic Medicine Chart; and (iii) the amount of the contract does not exceed the established limit.   

Reforms[14] to the Regulation and Codification provide that the contracting entities of the Integrated Public Health Network[15] (hereinafter, “RPIS”) have the obligation to contract storage and distribution and delivery or dispensing services of medicines, prior to their acquisition (hereinafter, the “Services”).  

So far, the Services have not been contracted by the RPIS. However, when this happens and the SERCOP communicates it[16] on the COMPRASPUBLICAS Portal,  Chapter II of Section III of Chapter II of Title VIII of the Codification will come into force. It contemplates specific regulations that all public entities must comply with to acquire medicines for a small amount. Among the new provisions, the following stand out: 

  1. The circumstances are established for the small amount to proceed, according to the contracting entity: 
  1. For RPIS entities, it proceeds when the medicines are not available in the Directory. In this case, the contracting of the Services is not mandatory, so the cost of the delivery-receipt of the medicines must be included in the acquisition.
  • For other public entities, it is appropriate if the medicine has not been contemplated in the annual planning or, if it has been included, it does not constitute a constant and recurring requirement during the year, that can be consolidated in a contract whose amount exceeds the maximum allowed.
  1. The contracting entities, through electronic means, may invite various suppliers, whether natural or legal persons, national or foreign, as well as their associations or consortiums. In the invitation, the entities must include the technical specifications of the medicine and the delivery conditions.
  1. The entities must have at least three offers, prior to selecting the supplier. If this is not possible, the entity must justify that it carried out all the actions and requirements necessary for this purpose.
  1. Invited providers, who do not necessarily have to be registered in the RUP, must necessarily present the medicine’s marketing authorization.

Until these regulations come into force, the provisions developed at the beginning of this article must be applied. Notwithstanding this, the SERCOP has established that, during this transition period, the contracting entities of the RPIS may carry out various small amounts of medicines in the year and their total amount may exceed the maximum value, provided that“… due to external factors, outside of the contracting entity duly justified, the contracting cannot be consolidated to use a contracting procedure under a common or special regime, other than the Small Amount. “[17]

Additionally, as of August 10, 2021, according to the fifth[18]  and tenth[19] reformed provisions of the Organic Law Reform of the Organic Criminal Code on Anti-Corruption, all public entities must obtain a prior report of relevance and favorability from the State Comptroller General to celebrate the small amount and any other contract under the LOSCNP.  

In conclusion, the acquisition of medicines for a small amount is exceptional and is subject to specific requirements. However, the dispersion of the applicable norms and their constant reforms generate confusion and an inappropriate use of this figure. For this reason, suppliers must be duly informed to avoid risks in the conclusion or execution of contracts, as well as in subsequent controls by the competent bodies.

[1] When speaking of “public entities”, reference will be made to those provided for in article 1 of the LOSCNP.

[2] According to Article 42 of the Regulation, standardized goods and services are “… those whose characteristics or technical specifications… are homogeneous and comparable under equal conditions”.

[3] In accordance with numeral 3 of article 6 of the LOSNCP, the electronic catalog is the registry of standardized goods and services published on the COMPRASPUBLICAS Portal for direct contracting.

[4] Codification and Updating of Resolutions issued by the National Public Procurement Service, Official Registry 245, January 29, 2018, Art. 330, no. 4.

[5] Organic Law of the National Public Procurement System, Official Registry 395, August 4, 2008, Art. 22.

[6] The COMPRASPUBLICAS Portal is the Official Computer System of Public Procurement of the Ecuadorian State, as provided in numeral 25 of article 6 of the LOSCNP.

[7] Numeral 29 of article 6 of the LOSCNP, defines the Unique Registry of Suppliers or RUP as “… the Database of the suppliers of works, goods and services, including consulting services, authorized to participate in the procedures established in this Law . “

[8] Codification and Updating of the Resolutions issued by the National Public Procurement Service, Official Registry 245, January 29, 2018, Art. 336.

[9] Regulation to the Organic Law of the National Public Procurement System, Official Registry 588, May 12, 2009, Art. 60.

[10] Numeral 2 of article 330 of the Codification provides that “Contracts for Small Amounts must not be used as a means of circumventing pre-contractual procedures.”.

[11] For example: leasing of goods, acquisition of fuels in operations of the entity, purchase of air tickets, contracting of travel agencies, acquisition of spare parts or accessories, among others.

[12]Art. 52.1.-Contracts of a small amount.- It may be contracted under this system in any of the following cases: […] 2.-Contracts for the acquisition of goods or provision of standardized services, except consulting, which do not appear in the electronic catalog and whose amount is less than multiplying the coefficient 0.0000002 of the initial budget of the State of the corresponding fiscal year… ”

[13] Regulation to the Organic Law of the National Public Procurement System, Official Registry 588, May 12, 2009, Art. 85.4.

[14] In this regard, Executive Decree No. 1033, published in Official Registry No. 208 of May 21, 2020, Section II of Chapter VII of Title III of the Regulations was amended; Resolution No. RE-SERCOP-2020-0111, published in the Official Registry Special Edition No. 1078 of September 28, 2020; and Resolution No. RE-SERCOP-2021-0114 published in Official Registry No. 432 of April 15, 2021.

[15] “… Made up of the set of public institutions that provide health services and which are known as << health subsystems >>, made up of the MSP, the IESS, the Social Security Institute of the National Police (ISSPOL) , ISSFA and the Complementary Health Network ”. Ecuador Constitutional Court of Ecuador, “Sentence No.: 679-18-JP / 20 and accumulated”, in Judgment No.: 679-18-JP and accumulated, August 5, 2020, 17.

[16] Codification and Updating of the Resolutions issued by the National Public Procurement Service, Official Registry 245, January 29, 2018, Twenty-fifth Transitory Provision.

[17] Codification and Updating of Resolutions issued by the National Public Procurement Service, Official Registry 245, January 29, 2018, Twenty-eighth Transitory Provision, no. 3.

[18] “… In the event of determining the relevance and favorability … the rest of the procedure established for this purpose in the law may be continued on a regular basis …”

[19] “… The Office of the Comptroller General of the State will issue a report of relevance, as a prerequisite for the signing of the public procurement processes determined in the law on the matter, by public sector entities and agencies …”

Mario Fernández García
Asocciate at CorralRosales
mfernandez@corralrosales.com

LexLatin – Ecuador brings its new personal data law to international standards

LexLatin - Ecuador brings its new personal data law to international standards - CorralRosales - Lawyers Ecuador

DETAILS

DATE: 27-05-2021

CORRALROSALES IN THE NEWS:

Rafael Serrano

MEDIA: LexLatin

Ecuador will publish in the coming days its first Personal Data Protection Law in the most European style after a long time working on it.  Our senior associate Rafael Serrano writes about it in LexLatin.

This great advance for Ecuador, although the right was guaranteed since 2008 but without a norm that would regulate it, will allow companies to have a refined database with globally homogenized standards and, above all, to have greater protection of the personal information.

In the words of Rafael Serrano, “it is about establishing a framework of parameters to process correct information”.

All those people who store information that identifies or makes any individual identifiable, directly or indirectly, and in any type of support, will be affected by this rule.

To review whether the law is being complied with, a personal data protection authority has been created. “If the president does not veto the project, this authority, the Superintendency, will be independent and with overseeing power in both the private and the public sectors,” adds Serrano.

In addition, this law has established parameters for international communications and transfers with personal data. It has also stablished rights so that consultation, digital education, and girls, boys and adolescents would not be the subject of a decision based solely or partially on automated valuations.

Serrano points out, “one of the most discussed issues was whether or not there was a need to create a record of the databases in the possession of those responsible. This does not mean that this information is delivered to the Superintendency to create a large database, but rather that what is delivered responds to statistical purposes: for example, what data is being processed and how many databases are there”.

The law establishes that the consent for a person to be registered in a database will only be valid when it is manifested freely, specifically, informed and unequivocally.

Information from companies to the owner of personal data

As Serrano explains, the information required by companies is “the purpose of the data treatment, the legal basis, the types of treatment that exist, the time of their conservation, the existence of a database , the purposes, a contact person in charge, the transfers that are intended to be made and the existence of automated evaluations and decisions, among others”.

“Those responsible for the processing of personal data are obliged to sign confidentiality contracts and proper handling of personal data with the person in charge and the staff in charge of the processing of such personal data or whoever has knowledge of the personal data, in addition to using technologies to mitigate and evaluate the performance or the violations that their protection mechanisms may have ”, concludes Serrano.

If you want to see the article, click here

AIPPI – Mandatory licensing of pharmaceutical patents in Andean countries

AIPPI - Mandatory licensing of pharmaceutical patents in Andean countries - CorralRosales - Lawyers Ecuador

DETAILS

DATE: 25-05-2021

CORRALROSALES IN THE NEWS:

María Cecilia Romoleroux

Gabriel Kuri

MEDIA: AIPPI

Pharmaceutical patent licenses are generally granted by means of agreements freely executed between the patent holder and the person authorized to exploit the invention. However, this is not always the case, since in some exceptional cases, they are granted by order of the authority under the conditions set forth in the Law. Our partner, María Cecilia Romoleroux, and our professional technician, Gabriel Kuri, write about this for AIPPI Ecuador.

The Commission of the Andean Community of Nations -CAN- provides for the granting of compulsory licenses for reasons of public interest, emergency or national security, if there are practices that affect free competition, and when requested by the holder of a patent, provided that it necessarily requires the use of another patent. This requires the prior notice to the licensee, whenever possible, and a specification of the period for which it is granted, the object of the license, the amount, and the conditions of the financial consideration. 

In 2009, the Ecuadorian Government declared access to medicines used in the treatment of certain diseases that affect the population and that are a priority for public health, as a matter of public interest. As a consequence, it declared the possibility of granting compulsory licenses. “In addition, it declared that, in principle, all medicines and agrochemicals would be subject to compulsory licensing as there are basic concepts that prevail over commercial interests,” add our experts.

For this reason, while recognizing the right of each country to order compulsory licenses for patent-based medicines under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Ecuador declared access to medicines used in the treatment of priority diseases to be in the public interest.

Last March 2021, the Andean Court of Justice issued a preliminary ruling (interpretación prejudicial) stating that ” among the situations in which the competent national offices have the power to grant compulsory licenses, are those related to reasons of public interest, emergency, or national security “, they add. Therefore, the granting of a compulsory license does not affect the right of the patent holder to continue exploiting the patent.

Our experts, based on their experience, state that “the granting of a compulsory license requires that the competent authority of the Member Country evidences, explains and adequately and sufficiently substantiates the reasons of public interest, emergency or national security, as well as the need to adopt such measure, which must meet three reasonableness requirements”. “It must also substantiate the reasons that justify that, under these circumstances, it is essential to grant a compulsory license.”

“The preliminary ruling clearly establishes that it is not enough to simply state one or more  conditions included in Article 65 of Decision 486, but that these must be explained, detailed and even individualized for each case,” they conclude.

If you want to see the article, click here