Antimicrobial Resistance – “One Health” Approach

Foto de Bryan Yanzza más el nombre de su artículo más reciente

The purpose of antimicrobial drugs is to combat diseases that can be of bacterial, viral and parasitic origin.  But when they are misused or overused, these microorganisms can mutate genetically causing resistance to these drugs[1]. Antimicrobial Resistance (AMR) is a serious global threat to human and animal health, affecting food safety, food security and the economic well-being of millions of small and large-scale agricultural productions[2].

AMR is considered a multisectoral problem of great importance worldwide, which is why health organizations such as the Food and Agriculture Organization of the United Nations, the World Organization for Animal Health and the World Health Organization created the “One Health” approach. This approach is implemented to have a better coordination and elaboration of programs that comprise the interface between human and animal health, food production and agro-ecological environments, with the purpose of preventing and being prepared for future threats, such as zoonotic diseases, food safety and AMR.

AMR is considered a major threat to modern medicine and to the sustainability of an effective response to the threat of infectious diseases. For such reason the World Health Assembly, in May 2015, adopted the Global Action Plan on Antimicrobial Resistance, where five objectives were established : (i) to have better communication and education on antimicrobial resistance with the aim of creating understanding and awareness of the issue; (ii) to strengthen this knowledge through surveillance and research; (iii) to reduce the incidence of infections by implementing effective biosecurity, hygiene and infection prevention measures; (iv) to optimize the use of antimicrobial drugs in human and animal health; and (v) to intensify sustainable projects and investments for the development of new drugs, vaccines and diagnostic means[3]

This resolution commits the member countries to develop national and multisectoral action plans with a “One Health” approach, which is why in Ecuador the National Plan for the Prevention and Control of Antimicrobial Resistance was established to fight AMR and to have national action plans harmonized with the global action plan.

In order to establish a national plan, it is of vital importance to know the consumption data of antibiotics generally used in infectious diseases, both in humans and animals. Ecuador does not have this information, so it is hypothesized that the indiscriminate and inappropriate use of antibiotics has caused serious consequences such as increased morbidity and mortality of patients suffering from infectious processes, as well as an increase in the cost of health care due to the search for options that can combat infectious diseases with antibiotics that do not present resistance and that do not determine a high cost[4].

The Ecuadorian State has been working against AMR since 2017, through the Ministry of Health and the Ministry of Agriculture and Livestock, executing the National Plan for the Prevention and Control of Antimicrobial Resistance. The focus is the rational use of antimicrobials and effective sanitation measures to reduce the incidence of infections, involving health technicians from Health, Agriculture, Environment, Aquaculture and Fisheries, with the aim of integrating and working together to seek mechanisms to help mitigate AMR. This, through analysis and research work in the laboratory and in the field with activities that help to socialize and raise awareness of this problem to all those involved, especially those who are linked to food, animal health, environment and human health[5].

The Agency for Phytosanitary and Zoosanitary Regulation and Control AGROCALIDAD is responsible for regulating the registration of companies and products for veterinary use, for which it has issued Technical Manual 003. This manual makes special mention to the use of Colistin, as part of the formulation of products for veterinary use and consumption, since it represents a risk to public health as an antibiotic of restricted use in human medicine, which is generally used in multi-resistant diseases. For this reason, AGROCALIDAD prohibits the manufacture, formulation, importation and distribution of products containing Colistin[6].

AGROCALIDAD is also working on a proposal for the restriction of antimicrobials that are used as growth promoters. The aim is to eliminate the indiscriminate use of antibiotics by prohibiting the registration, importation, manufacture, formulation, and marketing of these active ingredients generally used in the animal production chain.

In conclusion, although advances in medical research are promising in the field of prevention and treatment of AMR, global actions are required to reduce the dissemination and mitigate the negative effects of resistant bacteria, viruses, fungi, and parasites that affect living beings in different ecosystems. The commitment of governments and the support they receive from the different actors in the commercialization chain (private companies, laboratories, distributors, users) play an important role in the fulfillment of actions to reduce the inappropriate prescription of antimicrobials, increase immunization against pathogens, disease prevention and control measures, and strengthen pharmacovigilance of resistant pathogens in human, agricultural and veterinary medicine.

Veterinarians, as the main actors in animal health, have a fundamental role to play in the fight against antimicrobial resistance, for which they must encourage their proper use under prescription, promote good hygiene, biosafety, and vaccination practices, and promote the correct diagnosis of infectious diseases in animals.

[1] Resistencia a Los Antimicrobianos. OPS/OMS | Organización Panamericana de la Salud. (n.d.). Retrieved January 31, 2023, from https://www.paho.org/es/temas/resistencia-antimicrobianos.

[2] CCNASWP / Fiji calls for closer collaboration as FAO/WHO regional meeting gets underway in Nadi. Home | CODEXALIMENTARIUS FAO-WHO. (n.d.). Retrieved January 31, 2023, from https://www.fao.org/fao-who-codexalimentarius/en/

[3] Publications. Food and Agriculture Organization of the United Nations. (2016). Retrieved December 22, 2022, from http://www.fao.org/publications

[4] Ministerio de Salud Pública del Ecuador, Plan Nacional para la prevención y control de la resistencia antimicrobiana; Quito, Viceministerio de Gobernanza y Vigilancia de la Salud,, 2019, Disponible en: . (2019, November 18). Retrieved from https://www.salud.gob.ec/msp-presento-plan-nacional-para-la-prevencion-y-control-de-la-resistencia-antimicrobiana-ram-2019-2023/.

[5] Agrocalidad prohíbe El Uso del Antibiótico Colistina en animales. AGROCALIDAD. (2019, February 25). Retrieved December 25, 2022, from https://www.agrocalidad.gob.ec/agrocalidad-prohibe-el-uso-del-antibiotico-colistina-en-animales/

[6] Resistencia Antimicrobiana en producción animal. OPS/OMS | Organización Panamericana de la Salud. (n.d.). Retrieved December 20, 2022, from https://www.paho.org/es/panaftosa/resistencia-antimicrobiana-produccion-animal .

Bryan Yanzza
Technicians at CorralRosales
veterinarios@corralrosales.com

Amendments to the law on companies

Boletín societario de CorralRosales - Foto edificio con cristalera
In the supplement to the Official Gazette No. 269 of March 15, 2023, the amendments to the Law on Companies for the Optimization and Promotion of Business and for the Promotion of Corporate Governance were published, the most relevant aspects are as follows:

a) Sole shareholder/member:  Corporations and the limited liability companies may be incorporated by unilateral act by a single shareholder/member. 

b) Transfer of units: Units issued by limited liability companies are freely transferable, provided the transfer is between members of the company, and may be carried out by means of a private document. 

c) Pledge over units: Units issued by limited liability companies may be pledged with the unanimous consent of the members.  

d) Suspension of dividend distribution: Foreign members/shareholders who do not disclose their chain of ownership until the corresponding beneficial owner is identified, in addition to the prohibition to attend, intervene and vote in the ordinary shareholders’ meetings, may not receive the corresponding dividends declared by the company until such information is provided.

e) Right of accretion: The bylaws of a corporation may recognize the right of accretion, i.e., a shareholder will have the possibility of subscribing the shares resulting from a capital increase that are not assumed by another shareholder, with priority to third parties. If there are several shareholders interested in assuming the shares offered, these will be allotted in proportion to the participation of each one of them in the capital of the company. In the event of silence in the bylaws, the general shareholders’ meeting, at the time of establishing the basis for the capital increase, may grant the shareholders the aforementioned right of accretion.
f) Enforceability of shareholders’ agreements vis-à-vis third parties: As a general rule, shareholders’ agreements concerning any lawful matter shall be binding among the shareholders, but not enforceable against third parties. However, the agreement will become enforceable against a third party when it is proven that such third party knew of its existence and provisions. The breach of a shareholders’ agreement will give rise to the aggrieved counterparty’s right to request, at its discretion, the performance or termination of the agreement, and in both cases, compensation for damages.

g) Financial solvency report for capital reduction processes: When the general shareholders’ meeting resolves to reduce capital, it must simultaneously approve a solvency report of the company, prepared, and signed by its legal representative. This report must demonstrate, based on the company’s projected financial indicators, that after the capital reduction the company will continue to be able to meet its obligations and finance its operational activities. The legal representative who prepares a solvency report that is unfounded or does not accurately reflect the company’s financial situation shall be jointly and severally liable for the company’s obligations.

h) Suspension of the effects of the resolutions adopted by the general shareholders’ meeting: If upon a request of any shareholder, the Superintendence of Companies, Securities and Insurance establishes that: (i) the general shareholders’ meeting or any other body of the company approved one or more resolutions in contravention of the Law on Companies, its implementing regulations or the bylaws of the company; or that (ii)  in their approval, the shareholders or managers incurred in abuse of their majority, minority or parity voting rights, the Superintendent shall issue a reasoned resolution in which he/she shall order the suspension of all the effects of the respective resolution. The suspension does not proceed if the resolution has been implemented when the petition was received. 

i) Addition of items to the agenda: Shareholders who individually hold at least 5% of the capital stock are entitled to have an additional item included on the agenda of a duly called shareholders’ meeting. However, no more than five additional items may be included in addition to those included in the call to the meeting. If there are several requests, they will be dealt with in the order of their submission. 

j) Shareholders’ non-compete obligation: The bylaws of a corporation may prohibit its shareholders from participating in acts or operations that imply competition with the company, or from taking business opportunities that correspond to the company, unless expressly authorized by the shareholders’ meeting. This non-compete obligation may also be included in a shareholder’s agreement. 

k) Limits on the provision of services by external auditors: The external auditor may not provide any other service or collaboration to the audited company, through individuals or entities, directly or indirectly related, as long as it continues to be hired as external auditor. An individual or entity who has rendered services other than external auditing services to the audited company in the immediately preceding year may not be an external auditor of a company. Likewise, the external auditor may not, within the year following the termination of its agreement, render any other service to the audited company. No person or auditing firm may perform external audits for more than five consecutive years for the same company. 

l) Effects of the merger and subrogation of operating permits: In cases of merger, the absorbing company shall automatically subrogate the contractual and non-contractual rights and obligations of the absorbed companies in the exercise of their business activity. It will also be subrogated over any operating licenses, permits, property titles, or other authorizations that may have been granted to the absorbed company in the exercise of its operational activity, provided that the absorbing company has all the necessary powers or capacity to exercise rights with respect to such operating licenses, permits, property titles, authorizations, etc.

m) Effects of the change of domicile of a foreign company to Ecuador with respect to its branch: If a foreign company decides to transfer its corporate domicile to Ecuador and it already has a branch in the country, the Superintendence of Companies, Securities and Insurance will provide, at the time of approving the change of domicile, the revocation of the operating permit granted to the foreign company, without liquidation, and the cancellation of the documents related to the branch in the country. The company domiciled in Ecuador will be responsible for the obligations previously acquired by its branch.

n) Corporate acts by private instrument: Limited liability companies and corporations may be incorporated either by public deed or by means of a private document, which shall not be subject to any notarial process. Likewise, any corporate act subsequent to the incorporation of the aforementioned companies may be executed in a private document, without being subject to any notarial process. The public deed or the private document must be registered in the corresponding registries. When the assets contributed include assets whose transfer requires a public deed, the incorporation of the aforementioned companies and the amendments to the by-laws must observe said formality. The companies that carry out activities related to financial, stock market and insurance operations must be incorporated and their bylaws must be amended by public deed.

o) Elimination of grounds for dissolution due to losses: The grounds for dissolution due to losses are eliminated as well as the grounds for revocation of the operating permit of branches of foreign companies due to losses.

p) Term for the issuance of the taxpayer number: The Internal Revenue Service, upon request of a party, shall issue the taxpayer number (RUC) within a non-extendable term of 24 hours from the registration of a simplified stock corporation in the Superintendence of Company’s Company Registry, and of any other type of company in the Commercial Registry.

q) Joint and several liability of the legal representative: The company’s legal representatives will not be liable for labor obligations or of any other nature incurred by the company. However, Article 36 of the Labor Code establishes that the employer and its representatives will be jointly and severally liable in their relations with the employee.

r) Sole shareholders and wholly-owned companies: In corporations in which a an individual or an entity is the sole shareholder, it will not be mandatory to hold shareholders’ meetings. In these cases, the shareholder will record the resolutions approved in minutes signed by him. 


In the case of a merger, if the absorbing company is the holder of all the shares or equity interests issued by the absorbed company or companies, or when the absorbed and absorbing companies are owned, directly or indirectly, by the same partner or shareholder, the operation may be carried out by a resolution adopted by the legal representatives or by the boards of directors of the absorbing company and without the approval of the merger by the shareholders’ meeting of the absorbed company or companies.

Foto cuadrada de Milton Carrera, socio junior de CorralRosales

Specialist in Corporate
Milton Carrera, junior partner at CorralRosales
mcarrera@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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Extension of deadlines for the filing of tax obligations

Boletín tributario de CorralRosales - Foto edificio con cristalera

By Regulation NAC-DGERCGC23-00000008 issued on March 13, 2023, the General Director of the Internal Revenue Service extended the deadlines for the filing of the following obligations, without generating fines and interest.

Individuals, undivided estates, and entities subject to the general income tax regime may file and pay their income tax return until the following dates:



 Taxpayers obliged to file the tax return for the contribution for financing integral cancer care on March 13 and 14 will be able to file the return and make the payment until March 28, 2023.

Taxpayers subject to the RIMPE regime, whose ninth digit of the RUC is 1, 2, 5, 8 and 9, may file and pay Income Tax according to the following schedule:

 

Andrea Moya - CorralRosales - Lawyer Ecuador

Specialist in Tax
Andrea Moya, partner at CorralRosales
amoya@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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Trademark Infringement and Breach of a Franchise Agreement: Court of Justice of the Andean Community issues prejudicial interpretation – WTR

Recorte del artículo de Katherine González en WTR sobre "Infracción de marca e incumplimiento de un contrato de franquicia: Tribunal de Justicia de la Comunidad Andina emite interpretación prejudicial"

DETAILS

DATE: 07-03-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Katherine González

MEDIA:

– WTR

“The Court of Justice of the Andean Community, through prejudicial interpretation 45-IP-2020, published in Official Gazette No 5100 dated January 18, 2023, has established criteria to determine the existence of trademark infringement in the context of the breach of a franchise contract -which, in general, applies to any contract authorizing the use of a trademark-. The court made it clear that, when analyzing a possible trademark infringement, the validity of the contractual relationship must be assessed as the main criterion, in compliance with the principle of free will”. This is how the latest article by our associate Katherine González for World Trademark Review begins.

To understand the origin of Prejudicial Interpretation 45-IP-2020, Gonzalez explains that there is a request filed by the Civil Chamber of the Superior Court of Bogota with the following questions:

  • “Is there trademark infringement for the use of a word or figurative mark, when the parties in conflict have signed a franchise agreement and the franchisor has unilaterally terminated it?
  • In resolving the dispute, can the Intellectual Property office interpret the franchise agreement that gave rise to the defendant’s use of a word or figurative mark to determine whether the unilateral termination by the franchisor was valid?
  • Can the Intellectual Property office or the judge hearing a trademark infringement case rule on the validity of a franchise contract, when the parties, by mutual agreement, have stipulated that contractual disputes would be resolved by a foreign court?”

As our associate explains, the Court of Justice considered several options to issue its interpretation. These are: hypothetical scenarios in which A (the owner of the trademark in question) and B (alleged infringer) had entered into a franchise agreement. In this case, A alleged that “the contractual relationship had been unilaterally terminated”. Therefore, there was infringement, since the use of the trademark continued: “B claimed that the contractual relationship was still in force”.

Gonzalez mentions that “in this case, the validity of the contractual relationship -a key point to determine the existence of trademark infringement- will depend on the conflict resolution mechanisms agreed upon. Thus, if the competent authority concludes that the contractual relationship is still in force (or was when the trademark was used), it is not possible for the administrative authority -or any other authority other than the one designated in the contract- to rule on infringement. On the contrary, if the termination of the contractual relationship is declared, the competent authority on Intellectual Property may rule on the infringement of the trademark”.

The expert adds that, where such an infringement claim is made as a result of the use of a trademark following unilateral termination of the contract, the legality of the alleged unilateral termination must first be decided. This will determine whether or not the Intellectual Property authority can hear the infringement claim.

In conclusion, she states that “this interpretation ratifies the strict observance of the principle of free will, since this mechanism establishes which authority may hear disputes arising from the contractual relationship and the applicable law. The IP office will only be able to rule on a possible infringement of IP rights once this legal aspect has been decided by the competent authorities”. In summary, “unless provided for in the contract, the IP office is not allowed to rule on the validity or termination of the contractual relationship”.

If you want to read the complete article (under registration), press here

Global Legislative Predictions 2023 – IAPP

Recorte de la publicación de Rafael Serrano, Pablo Dent y Christian Razza para IAPP

DETAILS

DATE: 01-03-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Rafael Serrano

Pablo Dent

Christian Razza

MEDIA:

– IAPP

Our associates Rafael Serrano, Pablo Dent, and Christian Razza, are clear that 2023 will be a year of great importance for privacy and data protection in Ecuador, considering that a year and a half has already passed since the enactment of the Personal Data Protection Law, which they make known through the IAPP publication on the “Global Legislative Predictions for 2023“.

The presidency, as they indicate, is working on the regulation of the Data Protection Law, which is expected to be published shortly. “This regulation will include specific topics such as the headquarters of the Data Protection superintendence, the personal data protection delegate and its functions, the auxiliary control system, the control mechanisms, and the procedures for the exercise of the rights recognized in the Law.” In addition, it also foresees the creation of the Personal Data Protection Authority of Ecuador.

“The presidency will send to the Council of Citizen Participation (the body in charge of appointments) the shortlist of possible superintendents and once selected, the superintendent will be in charge of the organization and implementation of the superintendency. The delays in the creation of the superintendence have generated uncertainty regarding the application of the Law”, they add.

The penalty regime will not enter into force until May 26. Fines for minor infringements will range from 0.1% to 0.7% of turnover, and for serious infringements from 0.7% to 1% of the total turnover of the previous year. Corrective measures may also be imposed, such as the cessation of processing, the deletion of data, and the imposition of technical, legal, organizational, or administrative measures to ensure the correct processing of personal data.

The experts conclude that this year will be the first in which both the private and public sectors will have to apply a new regulatory system. “There is great uncertainty as to how the superintendency will act; doubts remain as to whether it will be an educating or sanctioning entity in its first months.”

If you want to read the complete article, press here

Defense and guarantee of employees´ individual and collective rights

Boletín laboral de CorralRosales - Foto edificio con cristalera

By  Official Supplement  Gazette No. 252 of February 1, 2023, it was published the Organic Reformatory Law to several Laws for the Defense and Guarantee of the Individual and Collective Rights of Employees  which amends some articles of the Labor Code, in the following terms:

1.    Numeral 25 of Article 42 of the Code was amended as follows:
In the case of replacements, when the replacing employee returns to his job, he shall return with the same remuneration he received and to the same occupation he performed. This return to the initial working conditions, shall not be considered a reduction in remuneration nor a change of occupation without consent.

2.    Article 57 of the Code was amended as follows:
By agreement of the parties the ordinary working day must be split in two parts. The resting time in-between workdays should be of minimum thirty (30) minutes and maximum of two (2) hours.

3.    Article 58 of the Code incorporates the power of the judicial authority to determine the legality of trust functions without the need of a petition by the employee. This implies that in a lawsuit in which the former employee claims the payment of not paid supplementary hours, the judge will have to decide whether or not said employee held trust functions and the corresponding consequences.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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Law to promote the violet economy

Boletín laboral de CorralRosales - Foto edificio con cristalera

Below, a summary of the most important matters regulated in the Law to Promote the Violet Economy enacted by the Official Gazette Supplement 234 dated January 20, 2023.

1.    LABOR Aspects:

–    The working week for women may be freely distributed in 5 days, without exceeding 40 hours a week or more than 10 hours a day.

–    Companies with 25 or more employees must promote plans and working conditions that prevent sexual harassment in the workplace.

–    Companies with 50 or more employees must prepare and implement a plan for equal treatment, equal opportunities, and non-discrimination in the workplace. This equality plan must be registered with the Ministry of Labor. Equality plans must be submitted to the Ministry of Labor after 1 year, i.e., January 20, 2024.

–    The Ministry of Labor will award a badge to the companies that demonstrate:

i.    Balance in all jobs between women and men.
ii.    Adoption of the equality plan.
iii.    Issuance of non-sexist advertising of the company’s products or services.
iv.    Other measures aimed at achieving gender equality.

–    The breastfeeding period was modified and will last 12 months from the delivery date.

–    The working day of the nursing mother will last 6 hours according to the worker’s needs.

–    The 12 weeks paid maternity leave may be used exclusively by the mother, or shared with the father, up to 75% of the period. The modality will be determined by mutual agreement between the father and the mother, must be notified to the employer prior to the beginning of the leave and cannot be modified.

–    The percentage of insertion of interns will include students in dual training. If female individuals are included in this modality, the percentage of inclusion of interns may be increased by an additional 0.5 percentage points.

2.    TAX Aspects:

As a tax benefit, the taxpayers will be able to deduct up to an additional 140% of the remunerations and social benefits paid for the creation of new jobs for female workers, according to their time of permanence:


If the employment relationship is terminated, the benefit may continue to apply if the job vacancy is filled by another female worker under the same salary and contractual conditions.

The benefit may be applied up to 3 fiscal years if the number of new job openings for women exceeds the following percentages:

The benefit may not be accumulated with other additional deductions granted for the increase of employment contemplated in article 10 numeral 9 of the Internal Tax Regime Law.
3.    CORPORATE Aspects:

It is established that all entities subject to the Companies Law must integrate to their boards at least one woman for every three members of such corporate bodies.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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Ecuador: unfair competition will not be tolerated

Recorte del artículo de Francisco Gallegos, de CorralRosales, publicado en International Trademark Association

DETAILS

DATE: 24-02-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Francisco Gallegos

It is no secret that, in recent years, trademark infringement in Ecuador has intensified through bad faith trademark applications and registrations filed by third parties and counterfeiters. What is the reason for this increase? Our partner Francisco Gallegos explains in a new article written for the International Trademark Association (INTA) that it may be due to the fact that there is now a greater awareness of well-known trademarks in the market, especially with regard to foreign trademarks.

Francisco Gallegos explains in his article that in Ecuador unfair competition will no longer be tolerated and will be punished. To this end, he analyzes a specific case: on August 3rd of last year, “an appeal (file number OCDI-2019-055-AN), filed by Baldoré Cía. Ltda, the National Service of Intellectual Rights (SENADI), issued a groundbreaking pioneer decision by determining that the trademark DON CASTELÓ SPECIAL and the design granted in favor of Coello & Coello Coelcem Cía. Ltda. were null and void for having been obtained to perpetuate, facilitate, or consolidate an act of unfair competition, taking advantage of the prestige and position achieved by the legitimate owner”. It also adds that there were “reasonable grounds” to establish that this registration contravened the Common Regime on Intellectual Property of the Andean Community (Decision 486), as well as the principles of legal competition and good faith.

Baldoré Cía. Ltda. had not registered its trademark DON CASTELÓ in Ecuador; however, it did provide evidence of marketing authorizations and invoices that demonstrate the availability of DON CASTELÓ products in that market, as well as the sales made, and the market positioning achieved.

“Based on this evidence, SENADI concluded that the disputed registration constituted an act of unfair competition and that the improperly granted registration influenced the market by intentionally confusing the consuming public about the origin of the product, and harmed the true owner of the trademark,” Francisco explains.

It is important to keep in mind that, according to article 259 of Decision 486 of the Common Regime on Intellectual Property of the Andean Community, “any act that could create confusion among consumers in the market would be considered an act of unfair competition”. Therefore, since both parties are in direct competition, it would be a mistake to maintain the registration of the trademark since this would create confusion amongst consumers.

The author of the text concludes with the following perspective: “This decision is groundbreaking, as SENADI rarely deals with unfair competition issues and in limited cases has protected unregistered trademarks, as in this case (Ecuador has a first-filing jurisdiction). As one of the first decisions in Ecuador to address the issue and punish a bad-faith registration, SENADI sets an important precedent for trademark protection”.

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

Operation of economic concentration in the pharmaceutical market is denied by the Superintendence for the Control of Market Power – LIR

Recorte de "The Legal Industry Reviews", el artículo escrito por Christian Razza

DETAILS

DATE: 23-02-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Christian Razza

On August 9, 2022, the acquisition of Leterago del Ecuador S.A. (hereinafter, Leterago) was denied to Distribuidora Farmacéutica Ecuatoriana DIFARE S.A. (hereinafter, Difare) by the Superintendencia de Control del Poder de Mercado (SCPM). Our associate, Christian Razza, writes about it for The Legal Industry Reviews (LIR).

To understand the current situation, one must also know the context: Difare is an Ecuadorian company dedicated to the distribution and commercialization of pharmaceutical products that manages the Pharmacys pharmacy chains and the Cruz Azul and Comunitarias franchise systems. Leterago, on the other hand, is a national company that primarily markets and distributes all types of pharmaceutical products.

Razza, in order to explain why the operation was denied, states that “the economic concentration operation was denied by the authority when considering that it generates multiple risks for the competitive scheme of the following relevant markets: distribution of pharmaceutical products at national level and commercialization of pharmaceutical products at local level”.

The Superintendence for the Control of Market Power carried out an investigation in which it was determined that there were high levels of concentration resulting from the operation. This produced a joint share of more than 60% within the pharmaceutical distribution market, “due to the fact that the transaction involves the concentration of the two main distributors of pharmaceutical products in Ecuador, eliminating the independence of Difare’s main competitor”, he adds.

After the study, the authority determined that “there are no behavioral or structural measures that would mitigate the reduction of the competition schemes of the defined markets, without sacrificing the current efficiency levels of the sector, as well as the welfare of the clients of the operators involved”. It also adds that “the measures proposed by Difare did not solve the risks identified by the SCPM, since they would not have modified the structure of the market, nor the behavior of the participants to generate or make viable a dynamic competitive environment”.

This operation is not the first to be denied by the SCPM. It is the fourth economic concentration operation denied throughout its history, the three previous ones being: the merger between Holcim Ltd. and Lafarge S.A. (2014), the acquisition of Swissgas del Ecuador S.A. by Indura Ecuador S.A. (2014) and the acquisition of International Laboratories Services Interlab S.A. by Synlab Sociedad Anónima.

Razza, to conclude the article, also focuses on detailing how the first three cases were denied:

“The first case was denied since the merger between Lafarge and Holcim would result in a concentration in the Ecuadorian cement market with more than 95% share by the merged entity, thus there would be a serious risk of anticompetitive practices.

The second case was rejected on the basis of a highly concentrated market and regulators’ concerns about the potential for collusion.

The third case was denied since the parties opted not to proceed with the transaction, for which the withdrawal of the notification was requested, but the SCPM considered that Synlab failed to comply with the condition of subscribing a document of commitments within the 90-day term determined in the resolution of January 7, 2021 and therefore denied the authorization of the economic concentration operation”.

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

Suspension of working day on Monday, February 06, 2023

Edificio de cristal con el logo de CorralRosales

On January 27, 2023, by means of Executive Decree No. 655 (hereinafter the “Decree”), the President of the Republic, Guillermo Lasso, accepted the request of the National Electoral Council (CNE) to suspend the working day on Monday, February 6, alluding to the 2023 sectional elections, in the following terms:

•    The President of the Republic, Guillermo Lasso, suspended the regular working day on Monday, February 06, 2023, for the public and private sector. The decision responds to the request sent by the National Electoral Council (CNE).
•    According to the presidential disposition, the suspended working day will be recovered, in the public sector through an additional hour during the following eight working days. While in the private sector, the recovery will be established by mutual agreement between employers and workers.
•    Likewise, for Monday, February 6, the provision of basic public health services, firefighters, airports, air, land, maritime and river terminals, and banking services must be guaranteed. Therefore, the competent authorities must have the minimum personnel available to serve the public.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@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.

CORRALROSALES