By Mariano Municoy, Guest Blogger
Here, and in a series of upcoming blog posts, I’ll be summarizing the reasons why business owners and managers interested in Latin America, along with their trademark advisors, should consider conducting a trademark clearance/search, as well as when and how to do it.
Based on my experience, trademark searches are not only important to determine if anyone is already claiming trademark rights to a particular mark before filing, but also to have an idea of eventual trademark obstacles before launching a new product or rendering a new service, especially when no trademark protection has been sought due to particular business factors and the like.
I have seen cases where, just after starting to import into Latin America, international companies (usually those without a local presence through subsidiaries, branches, etc.) find out that their marks (or confusingly similar ones) have been registered by third parties. Purposefully or not, these third parties may have acquired better rights or may claim to have done so in order to require payments from the international brand owner. Most of the time, such situations are privately solved before reaching major administrative or judicial venues but, at a minimum, they delay sales and alter the normal development of new products and/or services.
Why are international businesses increasing their focus on Latin America?
There are multiple factors explaining the increasing importance of Latin America for international business. First, let’s look at the main reasons for this, focusing on the importance of the region for North American businesses.
1) Positive Economic Reasons (New Markets) Interacting With “Legal” Reasons (Free Trade Agreements)
As it has been recently reported, this is a unique time for Latin America. Most local economies are expected to continue growing steadily and the regional GDP is predicted to expand on average by 4% during 2010 (while growth in specific countries may be even bigger). This fact positions the region in a very special place, which attracts international companies looking for new markets and also gives local business a very important chance to flourish.
There are three important features to bear in mind when analyzing the business prospects of the region:
-It is composed of approximately 45 countries (around 20, excluding the Caribbean);
-Spanish is the official language in most of the region, except for Brazil and some other Caribbean countries, and
-There are around 600 million inhabitants; close to 200 million just in Brazil.
Moreover, North American companies have the advantage that the United States has signed free trade agreements with several countries or sub-regions, which have diminished tariffs, limited the use of quotas, improved standards of labor and, importantly, strengthened the scope of trademark protection.
2) The Negative: Counterfeiting
Counterfeiting is a major problem in Latin America where many legal and non-legal instruments and/or strategies have been implemented to deal with this serious and ongoing problem.
Criminal procedures punishing trademark infringement and counterfeiting, which require having a registered trademark in most countries, are available and can be initiated by public officials and/or by private individuals and companies. However, the effectiveness of their enforcement is not the same in every country of the region and also depends on the type of product. Moreover, it is currently possible to record registered trademarks and other intellectual property rights with local Customs in some countries (in those where such mechanisms are not available local Customs can act ex officio) so the closer trademark owners work with them, the better the results expected will be.
New posts in this 4-part series on trademarks in Latin America will appear on consecutive Mondays. Next week we’ll take a look at the basic differences between United States and Latin American trademark laws.
Mariano Municoy works for the Latin American IP law firm Moeller IP Advisors where he advises and designs legal strategies related to patents, trademarks and domain names protection as well as anti-counterfeiting and transfer of technology issues. Mr. Municoy is also a founding member of Moeller’s Regional Department of Regulatory Affairs and serves as a liaison between Moeller and numerous U.S. companies and law firms.
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