Argentina: Extension Of Transfer Of Technology Agreements

Last Updated: 14 December 2012
Article by Gustavo P. Giay and Diego Fernandez

The Federal Court confirmed that there is no need to register those subsequent documents which merely extend the term of validity of an agreement which has already been registered with the Argentine Trademarks Office, as long as they do not incorporate other technologies or other intellectual property rights.

In a recent decision from Division III of the Federal Court of Appeals in Administrative Matters, (in re: "Sodexho Pass S.A. c/EN-ÍNP I-Resol. 24/08 – Disp. 3/07 y 193/06", Case No. 7457/08) in which the obligation to register subsequent documents which merely extended the term of validity of an agreement which has already been registered with the Argentine Trademarks Office (INPI) was discussed, the Court held that it only required registration of new agreements or those documents which incorporate other technologies or the license of other intellectual property rights under the terms of the Transfer of Technology Law 22,426.

The Transfer of Technology Law No. 22,426 establishes the legal regime applicable to burdensome agreements that provide for technology transfer or licensing of trademarks, patents, or other intellectual property rights, executed between resident and non-resident companies, interrelated or not, by which the non-resident company transfers technology or licenses an intellectual property right to the resident company.

The Transfer of Technology Law requires the registration of these agreements before INPI in order to establish and analyze the flows of technology transfer. No sanction exists for non-compliance with this requirement. The registration has no effect with regards to the enforceability of the agreement, but the recording of the agreement may be advantageous for several reasons such as tax benefits.

In October 2005 INPI issued Resolution P328/05 that restricted the registration of these agreements. Particularly, article 2 of Annex 1 of Resolution P328/05 provides that agreements may not be filed for recordal after the term established in the agreement has expired.

The facts of the case are as follows.

In October 2003 Sodexho Pass S.A. ("Sodexho") entered into a trademark license agreement with Sodexho Pass International, agreeing to a term of validity of one year, with automatic annual renewals. In November 2003 Sodexho filed the agreement with INPI and requested the issuance of a tax certificate, which was issued for the period October 2003 – August 2004.

A few years later, in May 22, 2006, Sodexho requested the enlargement of the prior tax certificate for the period September 2004 - September 2008. INPI issued a new certificate but limited its effect to the period September 2005 - September 2006, considering that -under the terms of article 2 of Resolution P358/05- the period September 2004 - September 2005 had expired prior to the filing of this new petition. INPI did not make any reference to the period September 2006 - September 2008.

In turn, Sodexho counter-argued that the agreement had never lapsed as it had been automatically renewed every year. INPI maintained its criteria.

In these circumstances, Sodexho sued INPI and requested the Court to order INPI to issue a new tax certificate including the period September 2004 - September 2008.

Both the trial court and Division III of the Court of Appeals accepted Sodexho's claim.

The Court of Appeals also stated that the Transfer of Technology Law only requires registration of those agreements or documents which incorporate other technologies or the license of other trademarks, in which case a new transfer of technology agreement would exist.

In connection to that, the Court of Appeals added that INPI could not ignore that Sodexho filed an extension of the agreement which did not modify the substance of the original as it provided merely for an extension of its term and that such circumstance is not a valid ground for INPI to refuse the issuance of a tax certificate.

This decision is important since the Federal Court of Appeals sets out that there is no need to register those documents which merely extend the term of validity of a previous agreement which has been recorded before INPI. At the same time, it makes it clear that INPI cannot refuse to issue a tax certificate -in those cases in which the agreement set forth automatic annual renewals and the term is still in force at the time of the filing- arguing that certain periods of the term had lapsed before the extension of the agreement was filed for registration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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