Argentina: Enforcement Of IP Rights In Argentina

Last Updated: 8 January 2009
Article by Andres Moncayo Von Hase

As a result of the entry into force of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") within the framework of the World Trade Organization (WTO) in 1995, Argentina began to amend its legislation on enforcement of intellectual property rights (IPR) in order to adapt them to the standards therein contained.

With regard to the enforcement of rights three recent developments deserves attention, namely: I) the custom surveillance system for trademarks and copyrights that started to operate in 2007; II) the amendment of the Argentine Patent Act in 2004 that regulates preliminary injunctions in the field of patents; and, (III) the proceedings initiated against downloaders of music on the Internet.

I) Custom surveillance system for trademarks and copyright

Article 51 of TRIPS requires WTO Members to adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application with competent authorities (administrative or judicial), for the suspension by the customs authorities of the release into free circulation of such goods. Members may extend such procedure to: (i) goods which involve infringements of other IP rights like patents, and; (ii) infringing goods destined for exportation from their territories.

Articles 52 to 60 of the TRIPS establish different procedural standards to be followed by the relevant authorities within the importation country and some procedural guarantees both with regards to the rights of the IP owner and the importer or consignee of the goods that are suspected to infringe IPR (e.g., right to inspect the goods by the parties, security to be provided by the applicant to prevent any abuse, etc.)

As a consequence of the above mentioned obligations, a special provision was incorporated to the Argentine Custom Code in 2004 prohibiting any import or export through any custom destination within Argentina if upon simple verification of the products it follows that the goods bear a counterfeit trademark, are pirated copies or violate any other intellectual or industrial property right acknowledged under Argentine law1. Since then, no further procedural rules implementing article 51 to 60 of TRIPS were enacted. Due to Congress passivity, on February 26, 2007, Argentina's Custom authority took the lead and issued Resolution Nr 2216 (the "Regulation") that entered into force in April 2007. The Regulation created a Warning Registry in which trademark and copyright owners can voluntarily register their ownership interests in IP rights at no cost. The Warning Registry is confined to registered trademarks and copyrights for the time being.

The registration is valid for two years and can be renewed for similar periods upon request of the right holder. According to the Regulation all importations reached or detected by the Warning Registry, will be stopped at the border by Customs for three working days. Upon request of the right holder or its representatives and within the three-day term, the challenged importation will be physically verified by official Customs agents in the presence of the right holder or its authorized representative in order to determine the goods authenticity or, as the case may be, the existence of an infringement.

If an infringement may be presumably inferred, both Customs and the right holder will be free to initiate the appropriate administrative or judicial proceedings. In case that right holders or their representatives do not participate in the procedure or do not take any action therein, the Customs may equally decide on taking preventive measures that it may consider applicable depending on the particular circumstances of the case no matter the amount of products involved. Even in cases where IP holders decide not to initiate proceedings, the Custom Office may do so or report the existence of an IP violation to the competent courts in circumstances in which it is prima facie clear that an IP right violation took place.

It is important to note that there are no regulations allocating expenses or costs related to the warning procedure or providing for a security to prevent any abuse or compensation in case of misuse of the procedure. In fact, regardless of the actual existence of an infringement, all expenses related to the deposit or blockade of goods are currently charged to the importer/exporter. In any case, loopholes or omissions in the Regulations may be filled by the application of some of the general principles arising out of the National Civil and Commercial Code of Procedure.

II) Preliminary Injunctions to defend patents exclusive rights

At the United States request, Argentina and the United States held various rounds of consultations between June 1999 and April 2002 within the framework of the WTO on 9 matters related to the Argentine Patent Law (Law n° 24.481) (the "APL") that were considered inconsistent with TRIPS by the United States. In such context, both countries reached a Mutually Agreed Solution2 ("MAS") whereby the Government of Argentina committed itself, among other, to submit a bill to the National Congress containing the following text to be incorporated into the current article 83 of the APL in order to put such law in line with article 50 of TRIPS:

"The judicial authorities shall have the authority to order provisional measures in relation to a patent granted [...], in order to:

(1) prevent an infringement of the patent and, in particular, to prevent the entry into channels of commerce of goods, including imported goods, immediately after customs clearance;

(2) preserve relevant evidence in regard to the alleged infringement,
whenever the following conditions are met:

(a) there is a reasonable likelihood that the patent, if challenged by the defendant as being invalid, shall be declared valid;

(b) it is summarily proven that any delay in granting such measures will cause an irreparable harm to the patent holder;

(c) the harm that may be caused to the title holder exceeds the harm that the alleged infringer will suffer in case the measure was wrongly granted;

(d) there is a reasonable likelihood that the patent is infringed.

Provided that the above conditions are met, in exceptional cases such as when there is a demonstrable risk of evidence being destroyed, the judicial authorities can grant such measures inaudita altera parte.

In all cases, before granting a provisional measure, the judicial authority shall request that an expert appointed ex officio examine items (a) and( d) above within a maximum period of 15 days.

In the case of granting of any of the measures provided for under this article, the judicial authorities shall order the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent abuses."

The MAS also obliged the Government of Argentina to submit a bill to the National Congress amending article 87 of the APL, providing that in cases where provisional measures were not granted pursuant to article 83 (as described above), the plaintiff may demand security from the defendant not to interrupt the defendant's exploitation of the invention where he wishes to continue with such exploitation.

All the required amendments arising under the MAS were put into effect by law 25.859 as from January 2004. Prior to the 2004 amendment, the plaintiff could request the suspension of the exploitation of the alleged infringing product or process only if defendant failed to constitute a specific security. By contrast, after the 2004 amendment, it is the plaintiff that has the option to either require the suspension of the exploitation of the alleged infringing product or process by the defendant or let him to pursue the exploitation of the invention upon granting a satisfactory security. The amendment was aimed at submitting the grant of preliminary injunctions to certain previous tests, including a sort of "balance of hardship" analysis to assess the harm that a preliminary injunction of the like could have for both the patent holder and the defendant and whether the damage to be suffered by one party could be out weighted by the harm likely to be caused to the other. Despite the fact that new article 83 is the result of the MAS signed between the United States and Argentina, it has been challenged in several cases before domestic courts as being inconsistent with article 50 of TRIPS basically because article 83 of the APL adds new requirements that make preliminary injunctions more difficult to obtain. No such claim has succeeded until now.

III) Defending copyright in Internet

Although the Argentine Copyright Act (Law No. 11.723) dates back to year 1933, its broad definition of "protected works" permits today the extension of such legal concept to a wide range of works regardless the procedure employed for its reproduction. Section 2 grants copyright owners a variety of exclusive rights, such as to dispose, publish, perform, communicate, transfer, translate, adapt and reproduce such works in any manner. Distribution rights are inferred form the right to dispose of the work.

As regards music, record labels have traditionally been in charge of its retailing and distribution, along with the task of fixing it into different storage devices (such as CDs, etc.). Due to Internet's widespread popularity, the development of new technologies and peer-to-peer (P2P) software proliferation (which enables virtually unlimited file sharing among millions of users all around the world), many Internet users have replaced the old music work distributors, allowing worldwide access, storage, reproduction and distribution of such works without the right holders authorization.

In such context, Societies for the collective management of copyright and related rights that represent both national and foreign authors, composers, performers and phonogram producers in Argentina (i.e. AADI-CAPIF) began to prosecute infringers.

One of the first known cases involved CAPIF and the Internet Service Provider "Speedy" in 2005. Speedy was sued for including in its advertisements phrases such as: "download all your music and take it with you", in the intelligence that such behavior promoted illegal music file downloading.3

Thereafter, the music producers and collective management entities started to pursued Internet users, filing claims against those illegally downloading and sharing protected music works with other users through P2P software (such as Emulex and Kazan).

In this way, and following the strategies applied in the United States, main recording labels summoned a small number of Internet users, reaching non-judicial agreements on private mediations and forcing users to pay up to 4,800 dollars as damage compensation.

These campaigns' are aimed at letting users become aware that downloading copyright protected music files is a crime and trying to gain them as potential clients by means of educational programs.

According to CAPIF polls, 90% of Argentina's Internet music file transfers are illegal, and during year 2005 more than 412 millions of protected song files were illegally exchanged, while that number raised up to 608 millions in year 2006.

Although there is still much to be done in the field of enforcement of IPR, the three chosen examples show that Argentina is gradually moving to better standards of IPR enforcement and flowing into a more solid "IP culture".

Footnotes

1.Section 46 of Law 25.986. Furthermore, that Section establishes that in cases in which counterfeiting or infringement cannot be easily determined, the Custom Office may suspend the entrance of the product into Argentina up to seven (7) working days in order to consult with the IP owner or right holder and allow him or her to seek the adoption of any preventive measure to protect his or her rights before the competent judge. If IP owners remain passive and therefore products were finally dispatched, custom authorities shall nevertheless communicate this circumstance to the competent State agencies involved in the defense of consumers rights and interests.

2.World Trade Organization (WTO), WT/DS171/3, WT/DS196/4, IP/D/18/Add.1, IP/D/22/Add.1, 20 de junio de 2002, (02-3427).

3.La Nación, November 7, 2005.

Original source of publication: World Intellectual Property Review 2008 (WIPR 2008) Pages 127-129

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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