This first newsletter for 2020 will inform you about recent developments in Venezuelan IP practice.
INTRODUCTION OF A DRAFT FOR A POTENTIAL NEW VENEZUELAN INDUSTRIAL PROPERTY LAW
First, we are pleased to inform that on November 20, 2019, a draft for an Industrial Property Law reform was presented before the Deputy Chamber of our National Legislative Assembly by initiative of the Science and Technology Commission of that Institution.
The Commission led by Dip. Gian Luis Lippa appointed and organized a team of qualified professional practitioners and academics both with specialization in Industrial Property Law with the purpose of designing a new, appropriate and updated legal framework involving Patent, Utility Model, Trademark, Design, Geographical Indications, Denominations of Origin, Unfair Competition and modern enforcement regulations among other aspects.
The draft bill is comprised of THREE HUNDRED FORTY-EIGHT (348) articles and SEVEN (07) transitional dispositions that have received an initial approval before the Commission and is expecting a first discussion in the National Legislative Assembly.
These are preliminary and early stages towards the completion of a final draft which still must undergo a public presentation to gather participation of interested parties and a second discussion prior to approval.
Corrections and amendments are still to be made since the text is not available to the public until the first official discussion approves the initial proposal.
We are honored to announce that, SEBASTIÁN GONZÁLEZ YANES who is a member of our firm was called by the National Legislative Assembly as part of the team working on this proposal and, for the past two years, has been actively participating and involved in the project.
MODIFICATION AND AMENDMENTS OF PRACTICE GUIDELINES AND PROCEDURES
In the past days, several changes are taking place in our local practice due to General Notice No. DG-001-2020 of February 07, 2020 issued by the Venezuelan Patent and Trademarks Office (VPTO) consisting of diverse announcements that are of interest to all practitioners and right’s owners.
First, we would like to say that, in our opinion, the mechanism under which the VPTO has issued these decisions, exceeds the legal capacity of that administrative agency to generate legal provisions regulating most of the specific areas that have been treated in the cited official communication.
There are many reasons to support the statement above, among them, legislating on topics where there is a legal reserve, creating official fees made payable to cover for enforcement activities such as an administrative opposition against a published application, for which the Office has no legal competence, violations of the principle of legality and declaring the inapplicability of a provision that is legally enforceable.
In this particular case, some decisions will generate positive results in certain matters, were users had increasing expectations of change, however, our concern is related to the way this practical modifications have been proposed and put into place by the Office, wondering about feasible scenarios associated to potential changes that could be made in the future, whereas, the VPTO could act in the same manner but the outcome is, for example offensive or contrary to the Law or are against the owners of Intellectual Property rights.
Having expressed our opinion above, we present a summary of these resolutions as follows:
1) Adoption of the International Classification of Goods and Services according to the Nice Convention as a sole and unique trademark prosecution guideline.
Twelve years ago, the VPTO decided to completely revive our Industrial Property Law of 1955 in substitution to the Andean Community’s Decision 486 which would no longer be recognized as applicable law by the Office, as a consequence of the Government of Venezuela denouncing the Cartagena Agreement in 2006.
In turn, that legislation has a local classification system in place which had to be adopted jointly with the international classification as a dual system. This brought many complications and problems the most characteristic being, having to prosecute in some cases, more than one Venezuelan trademark application to replicate the coverage of a single foreign trademark application under International Classification according to the Nice Convention.
During the last months, formalities examination stage had become a hassle due to a non-consolidated equivalence classification criteria in practice by the examiners, resulting in an important group of applications been declared abandoned after response to these office actions amendments were held insufficient or incorrect due to this inconsistent classification criteria that had become very challenging to anticipate and without adequate explanations by the examiners.
The VPTO has decided to eliminate the compulsory applicant statement invoking the corresponding national class for organizing goods and service according to Article 106 of the Industrial Property Law and allowing now all new trademark applications to be proposed and prosecuted exclusively under the 11th edition of the International Classification of Goods and Service for the purpose of trademark prosecution of the Nice Convention. This will be as of February 10, 2020 and thereafter.
This a positive effort towards harmonization with international legal standards leaving behind the reclassification process which generated unnecessary delays in the workflow towards achieving a filing date and also producing additional costs needed to be invested for the purpose of obtaining the same coverage as equivalent family trademark applications in other jurisdictions.
2) Creation of an official fee for an accelerated opposition decision highway and another official fee as a cost before the Office for lodging an opposition against a published trademark application.
The Venezuela Patent and Trademarks Office has an unfortunate and well-known backlog in deciding oppositions, administrative appeals of all kind, cancellations and revocation actions before that administrative instance.
Since 2016, local practice has undergone at least two -spring cleaning- campaigns promoted by the authorities, seeking to eliminate files that have been left awaiting a decision over a variety of procedural and substantive matters, by asking the interested parties to confirm the interest to wait for an official ruling from the Administration.
The VPTO has not been able to achieve any noticeable results in this matter yet, this due in part to the fact that most parties confirmed the interest in the ongoing incidences awaiting to be resolved and also because of lack of qualified personnel to take over and produce significant progress in this respect.
In this occasion the Office seeks generating additional revenue, earning new official fees for:
2.1) A new official fee to initiate an accelerated examination of the proceedings in order to produce an early first instance decision of the opposition.
The cost of the official fee is approximately ONE HUNDRED TWENTY (US$ 120.00) U.S. Dollars.
The interested party will need to pay for the official fee and file a brief requesting accelerated examination. The resolution does establish that the reduced timeline to deliver the decision will be ONE HUNDRED TWENTY (120) days, which are to be interpreted as working days. If no decision is rendered during the timeline calculated from the payment of the official fee, our legislation allows the interested party the opportunity to raise the matter to a judicial court.
By interested party we understand that applicant and/or opponent who may have a standing to request this proposed expedite examination.
The accelerated examination request can only be filed for and paid during a fixed timeline organized and divided by groups of cases differentiated by the number of Official Gazette on which the application was advertised for opposition purposes ranging from Gazette No. 462 until the ongoing Gazette No. 600.
The campaign will be available during year 2020.
We are available to advice on the corresponding timelines for each opposition case should you be interested in using this resource.
2.2) A new official fee as a mandatory substantive requirement for the opposition to be at least admitted and receive a filing date.
The cost of the official fee is approximately ONE HUNDRED TWENTY (US$ 120.00) U.S. Dollars.
From February 10, 2020, parties initiating opposition proceedings against a published application will have to include the official fee payment receipt as an annex to the opposition brief in order to receive a filing date.
Both official fees were not previously contemplated in our legislation nor as part of the organizational fee structure at the VPTO.
3) Reduction of official fees for the recording of applications for changes in ownership such as assignments, mergers, changes of address or name, licenses and attorney of records.
The aforementioned activities before the Office will experience a change of values over the applicable fees.
The price of the official fee prior to February 10, 2020 was approximately ONE HUNDRED SIXTY (US$ 160.00) U.S. Dollars per application / per registration;
The price of the official fee after February 10, 2020 is now approximately SIXTY (US$ 60.00) U.S. Dollars per application / per registration.
It is important to note that the resolution does make a distinction:
The reductions of fees will only be applicable for trademark applications still under prosecution and then to all granted rights including patents, utility models and designs.
This because the wording of the specification does not mention patents and designs under prosecution thus the price of the official fee in those cases should remain unchanged.
4) Creation of a procedural legal framework for the prosecution and / or recognition of Denominations of Origin and Collective Trademarks.
The VPTO is creating a prosecution procedure for the granting or recognition of each modality.
There is no prior provision in this respect in our current legislation, however, in our opinion, this prosecution process cannot be created and made enforceable as a sole independent decision from the Office because it does not have legal competence to this extent.
We will not comment on this announcement until carefully studying the text which we already can anticipate has important contradictions in our opinion, as well as evaluating the resulting outcome which can conduce any party to challenge the regulations on the basis of invalidity, illegality and/or unconstitutionality before the Courts.
5) Creation of a procedural legal framework for the resolution of cancellation actions due to lack of use.
Article 36 d) of the current Industrial Property law, states that a trademark registration can be declared lapsed if the trademark has not been used for TWO (02) consecutive years. No further regulation is made in this respect.
Among other problems that arise from such insufficient regulation, the main and most representative one is that the legislation does not establish the appropriate shift of burden of proof to the trademark owner.
In the absence of this necessary consideration, which has to be expressly defined in the Law, the burden to provide the necessary evidence to support the allegation falls into the party requesting the cancellation of the registration and NOT the title owner, who in turn, would be the most suitable party in the process to provide adequate proof of use.
In view of the above, it is the party initiating the proceedings who is obliged to pursue the difficult task to show the evidence to support the allegation of nonuse, in order to reach the adequate standard to have the registration be declared cancelled or to be more precise under local laws, to be declared as lapsed.
Now, the procedure for cancellation proceedings based on lack of use of a trademark as created by the VPTO on this resolution is characterized by:
5.1) There is no specific qualification or standing needed to validly initiate the proceedings. The party does not need to evidence actual interest in succeeding in this action;
5.2) If the party requesting the cancellation is successful in the proceedings, the VPTO will not grant a preferred right to acquire the trademark that was challenged, therefore, a substantive examination will be practiced and if a third party has a previous right in the priority then, as it is currently proposed, the trademark should be granted to whom has a better right in the priority, including a third party.
If there is no specific statement on regards to a preferential rights awarded to the successful party, then there is no way on which the VPTO can grant the trademark passing over potential third parties with citable rights in the priority;
5.3) The regulation mentions that both the proponent of the cancellation and the trademark owner can promote evidence in official records to support their allegation, however, in the absence of an express provision shifting the burden of proof to the registrant, the title owner is still not technically obliged to produce evidence of use and could claim he has been discharged of that responsibility by relying on the general principle in evidence law, that the party that has the duty and responsibility to provide the evidence is the one alleging nonuse.
We do strongly advice trademark owners to include supporting evidence of use if challenged by a third party on a cancellation, however the scenario described above is adequate for misinterpretations that cannot be anticipated; and
5.4) The timeline, as proposed, is very short: FIFTEEN (15) days for the registration owner to gather the notification brief and then TEN (10) days to file a response with the inclusion of evidence, if any.
In our opinion, there is not enough time for gathering evidence at the time of filing a reply to the cancellation request.
While this newsletter is being prepared, there is an ongoing Cancellation Action notification undergoing the described timeline under 5.4).
Our firm is available to assist you should you have interest in a registration included in these notifications.
In our opinion, the VPTO’s new regulation did not amend adequately nor fix prior situations under the Industrial Property Law, by placing a proper proceeding for this otherwise useful legal resource. We also reproduce our preliminary opinion expressed above, in connection to this matter.
Patents, Designs and Trademarks
6) Creation of a new official fee in order to promote accelerated or expedited examination of post – grant patent, design and trademark recording of applications for changes of name, changes of address, mergers, assignments, trademark renewals.
The cost of the official fee is approximately ONE HUNDRED TWENTY (US$ 120.00) U.S. Dollars.
This petition for expedited examination makes it compulsory to the interested party to show evidence that there is an urgent matter where the outcome depends on the proposed expedited processing, an example of such urgent situation would be ongoing or preliminary litigation stages.
The proposed processing turnaround time is THIRTY (30) working days from the payment of the official fee and filing for accelerated examination.
If there are other pending recordings that are still also awaiting processing affecting the same record, the interested party should also pay the corresponding official fees and apply for accelerated examination over those as well.
The VPTO will not issue a recording certificate but will produce a certified copy of the newly changed entry in the official records.
Patents and Designs
7) A declaration affecting ONE THOUSAND THREE HUNDRED FIFTY-FIVE (1,355) granted or applications for patents and/or designs on which the state of Venezuela and / or governmental agencies / state owned companies have interest as applicants or assignees, declaring the records as “CONFIDENTIAL and UNDER RESERVE”.
The regulation in place does make any distinction in the listed rights over any specific technology fields such as military defense or pharmaceutical. The order involves every patent and design record owned by the Bolivarian Republic of Venezuela.
We have made an initial review of the specific list of records and a representative group involves lapsed applications and patents / designs that have exceeded the patent / design term which were originally granted.
The order invokes confidentiality for all the records which will not be open for inspection by third parties even though most patent / design title documents were already part of the state or the art or public domain. The regulation pretends to include all future patent and design applications applied for the country of Venezuela and / or country owned entities, which will not be publicly prosecuted thus, third parties will not have the opportunity to oppose or to inspect the scope of claims and specifications of these documents.
These particular provisions are based on article 40 of the Industrial Property Law which allows the Registrar the possibility to declare any patent file (granted or not) as “reserved” while not specifically establishing the limits, extent or definition of what a “Reserved Patent” is.
8) Creation of a new modality called Temporary Patent Protection Certificate.
On this particularity, we would, again, like to reproduce our preliminary opinion as stated above related to the Venezuelan Patent and Trademarks Office’s, legal capacity or standing to legislate, as manifested, in these commented new regulations by means of an official notification and thus create new modes of protection of rights for inventive results such as this new proposal of a Temporary Patent Protection Right which resembles the figure under U.S. legislation for provisional patents.
The Temporary Patent Protection application is reserved solely to Venezuelan entities and individuals. The priority right subject to this modality cannot be transferred.
As part of the formal requirements, applicant must disclose the precise and complete description of the invention as well as to the set of claims in order to gain the certificate of Temporary Patent Protection which will grant a twelve (12) months national priority in order to “deposit the full and final disclosure” by means of a National Patent Application.
On the above, we note the obligation to make a complete and precise disclosure of the invention and claims to gain the right of the temporary protection certificate, but then it appears in our opinion that the VPTO has not understood the nature of a temporary patent protection.
Temporary patent protection is conceived and made available to benefit inventors who at a certain moment have, for example, an incomplete description of the invention including drawings that can both support the understanding of the subject matter which will be then sought for patent protection when formally applied for afterwards, but the inventor cannot determine with precision a set of claims that can limit the scope of the invention.
Therefore, the inventor can apply for a Temporary Patent Protection Certificate by submitting the INCOMPLETE description of the invention in order to gain an earlier national priority date in its benefit that will allow time (12 months) to file for a final patent application with the complete specifications and this time with the obligation to disclose a set of claims.
In our opinion, by imposing an obligation to the inventor to disclose complete and precise specifications and a set of claims as the basis for a Temporary Patent Protection Certificate application, the VPTO is distorting the nature and purpose of the institution by intending to create an incompatible and improper modality that is not harmonized with basic principles and conceptions of patent law.
A NEW PRESIDENTIAL DECREE REVISITS THE “PETRO” CRYPTOCURRENCY ISSUE THREATENING THE PAYMENT OF OFFICIAL FEES BEFORE THE VENEZUELAN PATENT AND TRADEMARKS OFFICE.
Patents, Designs and Trademarks
A presidential decree dated January 14, 2020 came into force establishing the PETRO Cryptocurrency as a mandatory means of payment before several Administrative Agencies that are part of the Government, including, the Venezuelan Patent and Trademarks Office.
On this occasion, the decree forces foreign entities -leaving no alternatives- to process any kind of transactions before the Agencies using Petro Cryptocurrency, which has been sanctioned by the Office of Asset Control of the Treasury of the United States of America, according to executive order No. 13827.
The order bans or prohibits
to process any kind of transactions using the Petro Cryptocurrency.
A General License dated August 05th, 2019 was then issued by OFAC allowing for the payments of official fees before the VPTO if destined for the purpose of prosecution and maintenance of IP rights and that the payment was not processed using Petro.
The VPTO has established an alternative payment method allowing the receipt of deposits with the value of corresponding Official Fees in U.S. Dollars and Euros in cash at a non-sanctioned governmental bank. This has been an adequate course of action to proceed in compliance while continuing to complete payments for activities on behalf of U.S. and other foreign entities and individuals at the VPTO.
Despite the Presidential Decree of January 14, 2020, the Venezuelan IP office continues to consent and approve the payment process through deposits in cash at the same banking institution that has not been sanctioned. Therefore, and for the time being the Official fee payments remain, in practice, the same, allowing us as a firm to continue acting in compliance to national and foreign regulations without putting our clients, representatives and law firm at risks of any kind.
We will inform immediately if any changes arise in this respect that could represent any kind of risk.
Finally, we remain available to provide additional information about the topics we have gone through this newsletter or any other in connection to Intellectual Property and Regulatory Affairs in Venezuela and our region. We are always delighted to assist.
We can be reached at the following mailbox: email@example.com
Please do take the time to read our disclaimer below.
Citemark International IP
Patent and Trademark Attorneys
Av. Eugenio Mendoza
Torre Banco Lara – Piso 10
P: +58 (212) 263-9158
F: +1 (305) 675-2342
Disclaimer: The information expressed in this newsletter does not represent our former or actual clients’ opinions nor does constitute in any way or form legal advice of any kind, therefore, we advise that you formally retain adequate local counsel for representation or to receive a legal opinion or guidance that will be adequate for each particular situation.