Update IP Law in Ecuador

Update IP Law in Ecuador

An amendment to the laws on Intellectual Property in Ecuador will come into force in the next days after its publication in the Official Registry. The new law includes provisions regarding:

• The border measures process, and
• Intellectual Property crimes and their punishment

 Below a summary of the main changes.

Border Measures

The “mixed” system has been reinstated for the execution of border measures. It allows the National Customs Service of Ecuador (SENAE) to retain infringing products entering or exiting the country.

The suspension of the customs proceeding, which lasts 5 days, must be communicated to the importer, the right holder, and the IP Office, providing sufficient information concerning the infringing goods, the circumstances of the infringement, and the possibility of inspecting the merchandise. Then, the IP office will have 3 days to issue a resolution at its own discretion. It it highly recommended that the IP holder files the border measure before such deadline to confirm the illicit character of the merchandise.

Once the border measure is confirmed, the right holder must initiate the substantive administrative, civil, or criminal action to avoid the release of the merchandise (there is a 5-day deadline to do so, which can be extended 5 more days).

The law keeps the possibility of requesting a bond along with the adoption of the border measure, proportional to the commercial impact caused by the suspension, to protect the importer or exporter from a possible abuse of rights.

 Finally, a fine ranging between US $ 600 to 56,800 is established as a sanction.

Intellectual Property Crimes

The new law includes certain elements for the IP infringements to be considered a criminal offence, i.e., knowledge of the violation, lucrative purpose, and the commercial impact.

Not only the manufacturing and commercialization are sanctioned by the law but also the storage, use, refilling, offer for sale, sale, importation, exportation of products that infringe a registered trademark, patent, utility model, industrial design, plant variety, or a layout design as well as an unregistered distinctive trademark identical or similar to one registered in the country (the connection between the infringing goods or services and those identified by the registered trademarks must be clear); among other acts of commercialization.

The sentences for these crimes include

• 6 months to 1 year of imprisonment
• confiscation of the seized products: they may be destroyed or donated by the State for social needs
• and a fine of US $ 3,200 to US $ 120,000

In addition, the following are aggravating factors: (i) a prior warning; (ii) risk to public health, etc.

Additionally, the law removes the condition that a minimum amount must be met to constitute a crime: this means that to determine the commission of a crime, the magnitude, economic value, quantity, and impact on the market must be considered. Also, in foreign trade cases (importation and exportation), it is regarded as a crime when the goods are valued at more than US $ 20,000– the cost of the genuine goods must be considered for this valuation.

Finally, the law includes conciliation as means to resolve disputes.

For any inquiries or doubts about this matter, please feel free to contact us at edeluca@react.org.

Note: this new legislation only applies to future proceedings. Current proceedings will not be affected by the amendment (in some cases, due to the principle of the “most favorable criminal law”, a lesser fine could be imposed in current proceedings, when applicable).