The Paraguayan environment for protecting and enforcing the rights of trademark owners has changed dramatically in the last five years. With the ratification of the Paris Convention for the Protection of Industrial Property and the adoption of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) Paraguay has begun to experience fundamental changes in its legal efforts to protect intellectual property.
According to the constitutional supremacy clause, which states that international treaties integrated into the Paraguayan legal system are superseded by the Constitution but take precedence over Congressional legislation, the regulations and remedies provided for by both treaties have become available to trademark owners. The Paraguayan governmental administrative agencies and courts have begun to implement the new regulations in resolving trademark conflicts.
Most recently, on May 28, 1998, the Paraguayan National Congress enacted a new Paraguayan Trademark Law, which incorporates important new features in full accordance with international legal standards.
Some of the most important revisions incorporated by the new law include the following:
a) Broader Protection of Well-Known Trademarks.
The law sets forth so-called “absolute prohibitions” for certain marks that can not be registered as new trademarks. Among them are marks constituting the reproduction, imitation, translation or total or partial transcription of distinctive marks.
Damages that illegal use or registration may cause the owner are the mark’s likelihood of confusion with other products or services; risk of association with the infringer, as well as the mark’s dilution of distinctiveness.
b) Acknowledgment of the Priority Right Based on Prior Application or Registration Made in Foreign Countries under the Rules of International Treaties.
This right is provided in accordance with provisions of the Paris Convention that state that any filing legally equivalent to the filing process in Paraguay shall be recognized as giving rise to the right of priority. This right must then be claimed within a six-month period from the date of the filing of the first application.
c) Free Circulation of Marked Products within the Country when Legally Introduced by the Owner or with the Owner’s Authorization.
According to the new law, parallel imports of genuine products are permitted, provided that the new products are legally introduced into the country by the owner or with authorization.
d) Compulsory Use of a Registered Trademark.
One of the most important changes in the law, with both substantive and procedural impact, is that the use of a registered mark is now mandatory. A mark is deemed in use when the products or services it represents are freely available in the marketplace.
Advertising and publicity may be defined as use when the effective use of the trademark commences within four months of the launching of the marketing campaign.
The law provides for the courts to rule in cancellation actions for lack of use over a five-year period after registration. Finally, burden of proof is placed on the trademark owner in that he/she must demonstrate the use of the trademark.
e) Simpler Opposition Process and Reallocation of Jurisdiction among Administrative Agencies.
The holder of a registered trademark has the right to oppose or intervene in the registration or use of any mark that may cause confusion to his/her trademark.
The office in charge, the Contentious Section of the Industrial Property Office, has 40-days to issue a resolution. There is the right of appeal with this decision through the final administrative resolution to be issued by the General Director of the Industrial Property Office. As a result of such changes, a trademark’s conflictive issues will now be resolved much more rapidly at the administrative level.
f) Broader Protection of Geographical Denominations Including a Specific Judicial Remedy in Cases of Infringement.
The law establishes a special chapter devoted to geographical indications. The legitimate producers, or manufacturers have a judicial remedy to prevent the use of a false geographical indication. This kind of conduct is considered an unfair practice; the statute of limitations for initiating a civil action is two years.
g) Stronger Enforcement Measures and Recovery of Damages Including Attorneys’ Fees.
The holder of trademark rights has recourse to judicial action in cases of civil or criminal infringement. Civil infringement includes activities such as: the use in commerce of a trademark identical to a third parties mark when such use causes the owner economic or commercial damage due to the dilution of distinctiveness or the exploitation of the trademark’s reputation or that of its owner.
Criminal infringement may include cases of the forfeiture or adulteration of a registered trademark and in cases of contributory infringement (i.e. when a person knowingly participates in the sale of counterfeit products or in their production).
Judicial measures against the aforementioned violations may include remedies such as: injunctive relief to terminate illegal activities; the seizure of infringing products; the prohibition of import or export of infringing products up to the destruction of infringing products and machines used in forfeiting trademarks. Finally, a judge may grant the recovery of damages and also may award attorney’s fees.
Both the civil infringement action and the criminal infringement action have a statute of limitations of two years.
h) Availability of Provisional Measures.
The trademark owner may request expeditious provisional measures before and after initiating an infringement action. These provisional measures may include the issuance of temporary injunction relief with the aim of suspending registration and use of an illegal trademark. The judge may additionally impose the posting of a bond.
These provisional measures may be lifted without effect if the appropriate infringement action is not initiated within 15 days.
i) Availability of Border Measures with Customs Authorities’ Participation, Related to the Importation or Exportation of Products that may Infringe on the Rights of a Trademark Owner.
This set of new measures is entirely consistent with Section 4 of the TRIPS Agreement related to “Special Requirements Related to Border Measures.” Available only to owners of registered trademarks, these measures may suspend either the import or the export of allegedly infringing products. Owners of registered trademarks may petition the customs service authorities to implement such actions.
The petitioner of such border measures must initiate an infringement action within 10 working-days after advising the customs service authorities. The holder of a registered trademark may file the trademark with the Customs Service in order that he/she be notified each time there is an import or export of such marked products.
j) Simpler Formalities for Power of Attorney’s Validity.
Intervention of an Agent of Industrial Property as legal advisor or attorney of record is required for all actions within the Industrial Property Office. The power of attorney shall be registered and is deemed valid only with notarization (unnecessary when it is granted in a foreign country).
Obviously, the adoption of the Paris Convention, the TRIPS Agreement and the enactment of a fairly well structured new law represent positive structural steps toward the establishment of better conditions for investment and business in Paraguay.
In summary, these significant new developments reached by Paraguay to combat the regional problem of piracy should cause foreign trademark owners and foreign countries to reconsider the Paraguay’s reputation in the area of intellectual property.
