Latin America: a region of opportunities and challenges in the fight against piracy

27 February 2020

Once the rights have been granted, it is always highly advisable to register them with the customs authorities, with whom you should try to maintain constant, fluid and proactive communication.

27 February 2020

After the severe recession of 2015 and 2016 that affected all of Latin America, recovery was a reality until 2019, when the price of raw materials exported by several countries in the region fell, leading countries such as Venezuela to sink, Argentina to contract and others such as Mexico and Brazil to stagnate.

Although some economic indicators in 2019 were negative, it is true that some of these are largely due to the drop in oil and gas prices and the uncertainty caused by “trade tension” with the United States, in addition to the harsh measures taken to clean up the accounts and contain inflation, with tax hikes, devaluations and reductions in public spending. By 2020, however, except for Argentina and Venezuela, all countries in the region are expected to grow. In any case, the weight of Latin America continues to represent 5% of the entire world economy, with more than 600 million inhabitants and a market of enormous importance for any company.

Brazil

Although the Brazilian economy has contracted by 8 points in the last five years, all forecasts expect it to return to 2% growth in 2020, which is not insignificant in a country with a national GDP of more than USD 2 trillion. The measures that the Brazilian government has begun to take regarding privatizations, tax cuts, debt reduction, trade liberalization and a major reform of the pension system, among others, give room for optimism.

Since the creation of the National Council for Combating Piracy in 2004, there have been many regulatory, police and social initiatives to combat trafficking in counterfeit goods. In addition to the CNCP, institutions such as the Senate, the Attorney General’s Office and the National Health Surveillance Agency (ANVISA) have been involved in this war, both with regulatory initiatives and executive measures. To cite an example, Law 6759 of 2009 allows Brazilian customs authorities to seize goods ex officio, which is not very common on the continent.

Brazil faces difficult problems such as its vast borders and countless ports of entry, as well as the fact that the economic crisis is driving thousands of national workshops to manufacture counterfeit products, and millions of Brazilians to buy them outright. Regions such as Apucarana, Minas Gerais or Sao Paulo itself are renowned centres for the manufacture of tons of counterfeit goods.

Trademark owners have multiple options: starting with registering their trademarks in the customs authorities files, informing the same authorities of suspicious goods ready to enter, and collaborating with the public prosecutor’s office and police in training courses, seizures, raids and arrests. The role of lawyers in this whole web of actions is indisputably fundamental.

Mexico

With almost 2 million km2 and more than 130 million inhabitants, Mexico is the second largest economy in Latin America and globally represents almost 1.7% of the world’s GDP.

Piracy in Mexico is reaching truly outrageous levels. The Federal Government estimates the losses to the regular economy at more than USD 2.5 billion per year, about 1.25% of the national GDP. More than half of the clothing, footwear, music, films, tobacco and hardware distributed in Mexico is counterfeit.

Since most counterfeit products come from abroad (China, Brazil, etc.), the most efficient way to fight offline piracy is through customs intervention. Aware of the growing importance of customs in the control of incoming goods, the Administration has taken several measures in recent years. The most important among these is, without a doubt, the creation of a trademark registry, like the Brazilian one, which allows companies to inform the network of customs offices of the existence of their trademarks in advance, thus facilitating the work of the authorities. The fact that officials have the information “a priori” is of vital importance, since it gives them greater security when seizing goods; it provides them with contact details of the owners of the infringed trademarks and their legal representatives. Once the products have been detained, the holders can decide whether to request the intervention of the public prosecutor’s office (by means of a criminal action) or prefer the administrative route before the IMPI (by means of an infringement action that can later lead to a civil judicial action for damages).

Argentina

With one of the highest inflation rates in the region and an external debt in USD close to 100% of the national GDP, Argentina is going through a difficult economic time. Political instability and the ineffectiveness of Macri’s timid measures, coupled with economic indicators, have caused Argentina to enter recession, although some experts predict a recovery from 2021. However, it should not be forgotten that Argentina, with 45 million inhabitants, is the third largest economy in Latin America, which requires that companies intending to offer their products and services there ensure that their rights are protected in this country.

For this purpose, the Argentine Customs Authority has implemented the Alert Seats System that works as a registry of trademarks and copyrights (unfortunately, it does not include patents or designs) with which legitimate owners can keep the administrative and police authorities informed of the trademarks and copyrights that they may find in their surveillance work.

Although the intervention of the incumbents is not indispensable, since the Prosecutor’s Office can initiate ex officio actions – unlike in Mexico – it is true that the intervention of those affected encourages the authorities to be aggressive, increases the chances of success and puts greater pressure on the offenders. While civil proceedings are the most effective way to recover losses, out-of-court injunctions are less tedious for trademark owners and often achieve satisfactory results in a very short time, almost always consisting of the destruction of the counterfeit goods.

Conclusions

It is essential to register the trademarks and copyrights that you wish to enforce in the future in each of the jurisdictions of interest discussed here. Once the rights have been granted, it is always highly advisable to register them with the customs authorities, with whom you should try to maintain constant, fluid and proactive communication. Representation by a trusted local lawyer is essential to be able to react in time to incidents that occur.

In addition to the various administrative and judicial channels for enforcing intellectual property rights against infringers, out-of-court injunctions are an effective and recommendable tool.

If you would like to receive more information on this and related issues, please contact us at asaban@herrero.es

Alfonso Sabán

Alfonso Sabán

Abogado. Departamentos Relaciones Internacionales. Departamento Marcas.

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