Venezuela – progress on patent protection and efforts to strengthen economic relations

20 February 2024

Venezuela's recent strides in intellectual property mark a significant shift in its economic landscape. With the resumption of patent granting after a 15-year hiatus and advancements in digitalization at the Patent and Trademark Office, the country is poised for a new era of innovation.

20 February 2024

Venezuela is expected to hold presidential elections in 2024, which have opened a new dialog with the USA. The country is also trying to strengthen economic relations with other nations (including the European Union), which have recently been characterized by strong sanctions, especially with the West.

Economy and IP – Historical Development

Venezuela was one of the most developed and aspiring countries in Latin America in the 1970s and 1980s.

The enormous wealth of natural resources (particularly oil, where the country is the world’s number one producer according to statistics from 2022) gave the already prosperous country a real boom during the years of the oil crisis and rising oil prices, which led, among other things, to foreign immigrants and investors increasingly focusing on the country.

However, the oil price crash from 1986 then ushered in a less successful phase for the country, which has faced a strong decline in its gross national product in recent years (75% from 2013 to 2021 according to the IMF), extreme inflation and a strong wave of emigration.

A similar development has also been seen on the Intellectual Property side, especially in the patent sector, and has been accelerated in recent years by the fact that no patents were granted between 2004 and 2020.

In the early 1980s, Venezuela recorded annual patent application numbers of 2.200 to 2.500 applications. This was not particularly far away from today’s major IP powers in Latin America, Mexico and Brazil. At the beginning of the 1980s, Mexico recorded annual patent application numbers of 4.000 – 5.000 and Brazil 6.000 – 8.000. While Mexico and Brazil have roughly quadrupled their patent applications since then (Mexico in recent years at 16.000 – 18.000 and Brazil at 25.000 – 30.000), in the last three years an average of only 275 patent applications have been filed annually in Venezuela, which corresponds approx. to a ninth of the number in the 1980s. At the same time, patent applications at the USPTO (six-fold increase) and EPO (ten-fold increase) have also risen significantly.

Venezuelan Patent Law

The Venezuelan law on the protection of Intellectual Property dates back to 1955 and provides for a prohibition of patent protection in various areas (beverages and foodstuffs, whether for man or animals; medicaments of all kinds; medicinal pharmaceutical preparations and chemical preparations, reactions and combinations, and other inventions).

On January 1, 1995, Venezuela ratified the TRIPS Agreement, which established binding minimum standards for the protection of Intellectual Property rights and permitted broader patenting options (e.g. including the area of medicines).

However, Venezuela respected the contents of the TRIPS Agreement only indirectly through its membership of the Andean Community of Colombia, Peru, Bolivia and Ecuador, which it left in 2006 for political and economic reasons.

Shortly before this (from 2004), the Venezuelan Patent and Trademark Office had already stopped granting any patents. No patents were granted for 16 years between 2004 and 2020. This is remarkable as innovation itself was considered to be very important and, according to government figures from 2013, Venezuela invested around 2.5% of its gross domestic product in research and investigation, which is comparable to Japan and France, which are known to be recognized patent leaders.

Venezuelan Patent and Trademark Offices restarts patent granting

The above scenario changed fundamentally on October 1, 2020.

On that date, the authorities of the Venezuelan Patent and Trademark Office decided (Official Notice NRO. DG- 09-2020), to directly apply the Agreement on trade-related Intellectual Property Rights (TRIPS) and recognize its validity since January 1995, overcoming legal interpretations that isolated the country from the international system on the matter.

Intellectual Property rights are integrated into global and regional human rights agreements and therefore both the ratified treaties of the TRIPS Agreement and the national IP law from 1995 are assigned to the regulations of the constitutional bloc. Against this background, the principle of favorability applies to conflicting provisions. This means that both legal bases are effective alongside each other and the one that is advantageous to the patent applicant applies.

The medially important starting signal occurred on May 24, 2021, when Sanofi Aventis was granted 2 pharmaceutical patents applied for in 2007.

Since that date, more than 2.000 patents have been granted in all fields of technology and for both foreign and local applicants. Most of the patents have been granted for applications in the oil industry and in the pharmaceutical sector.

This positive data is also accompanied by a wave of digitalization at the Venezuelan Patent and Trademark Office, which began during the Covid pandemic and has since then been affirmed and now enables the digital filing and consultation of patent applications, among other things.

Outlook for the future

It will be interesting to see how Venezuela will develop in 2024.

The steps taken at the Venezuelan Patent and Trademark Office will have to be consolidated which is key for its IP development. Apart from the resumption of granting patents itself, it will be important to guarantee a speedy process and stable examination criteria by experienced officials. In any case, the development in recent years is promising.

An improvement in the economic situation and the opening of the country to foreign investors, who are traditionally the largest patent applicants in Venezuela and the Latin American region (above all the North Americans as the top applicants), would give the Intellectual Property system new momentum and could revive the historical attractiveness of Venezuela.

In this respect, the presidential elections scheduled for the second half of 2024 and their influence on the West’s international sanctions policy will be very important.

While the current government and the largest opposition alliance for the 2018 elections were at odds over the conditions of the elections, which led to a boycott by the opposition, new elections with the participation of all political forces are now on the horizon, which has also found international resonance through the Barbados Agreement in October 2023.

The USA welcomed this development and temporarily lifted some of its sanctions, particularly in the oil sector, which would currently lead to economic growth of 9.4% for Venezuela in 2024. Though, it remains to be seen what impact the recent decision by the Venezuelan Constitutional Court of January 26 as to admissible election candidates will have on this process.

Venezuela is also on the verge of intensifying business relations with other nations, including its strategically important neighbor Colombia, with which it signed an agreement on the mutual recognition of inventions in February 2023. The European Union is also interested in improving the economic relationship, which has declined over the last decade, and has started bilateral talks with Venezuela in 2023, including on gas support, in which Venezuela is also a heavyweight and, according to EIA, has the world’s eighth largest reserves (and thus 80% of the reserves in Latin America).

In summary, one could say that the economic relations between Venezuela and the West are hopefully at a turning point, which, in addition to the positive measures taken by the Venezuelan Patent and Trademark Office, could lead to new momentum for Venezuela as an attractive IP location.

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