Safeguarding Intellectual Property in the Republic of Panama

Panamanian Intellectual Property Law No. 35 of May 10, 1996, replaced the obsolete legal provisions on Intellectual Property, which were in existence for more than sixty years. This law simplifies the process of registering trademarks and allows for renewal of a trademark for ten-year periods. The law’s most important feature is the granting of ex-officio authority to government agencies to conduct investigations and to seize materials suspected of being counterfeited.

This new legislation introduced modem concepts recommended by the World Intellectual Property Organization (WIPO), consistent with the policies of the World Trade Organization (WTO), thus bringing Panama into line with international developments on industrial property, which has reduced the infringement of foreign trademark rights in Panama.

In addition, Panama is party to the following international agreements:

(a) The Trade Related Intellectual Property Rights (TRIPS) contained in the Marrakech Treaty, approved by means of Law No. 23 of 1997;
(b) The Berna Convention approved by means of Law No. 3 of January 3 1996;
(c) World Intellectual Property Organisation (WIPO) Treaty approved by means of Law No. 93 of 15 December 1998;
(d) The General Inter-American Convention for Trademark and Commercial Protection approved by means of Law No. 64 of 1934; and
(e) The Paris Convention, approved by means of Law No. 41 of 1995.

In Panama, differing from other jurisdictions where cases of industrial property are of administrative nature, since 1997, the IP jurisdiction has been removed from the Ministry of Commerce and Industry and given to special courts with exclusive competence to handle IP conflicts (ie, oppositions, cancellations, infringement of trademarks and copyrights, etc). Also, the District Attorneys’ office is specialized in the prosecution of IP rights. Since the creation of this specialized jurisdiction within the court system, the proceedings regarding these subjects have been more expedite and owners are allowed to get a better protection of their IP rights in Panama.

The creation of specialized prosecutors for intellectual property-related cases has strengthened the protection and enforcement of intellectual property rights (IPR) in Panama.

Panamanian Intellectual Property Law also includes criminal enforcement and criminal penalties such as prison, which are the most effective methods and procedures in the fight against infringement of intellectual property rights.

Another major difference from foreign jurisdictions is that in Panama custom authorities and administrative authorities from the Colon Free Zone, which have their own special brand register, are empowered by law to retain, inspect and even seize counterfeit goods; in some cases, these institutions may proceed even without the need of a claim or process in case of suspicion of counterfeited goods.

On the other hand, Panama’s 1994 copyright law modernized copyright protection and its 2004 update created a special Copyright Office with anti-piracy enforcement powers.

The Republic of Panama is signatory to the WIPO Copyright Treaty and the WIPO Performances and Phonographs Treaty. The copyright office has enhanced border measures and established new punishable offenses, such as for Internet-based copyright violations which have significantly reduced the rate of VHS piracy.

Panama worked through the FTA negotiations with the United States of America to establish a legal regime to combat piracy of audiovisual products over the Internet, including notice and take down provisions and clearly defined Internet Service Provider (ISP) liabilities and copy protection measures.

At the international level, Panamanian government has reinforced the legal framework and institutional arrangements to comply with the existing international treaties, including more effective methods and procedures to all intellectual property matters, such as:

• Administrative enforcement, such as seizure of infringing goods by a customs office;

• Criminal enforcement against the infringer;

• Civil enforcement, in which the right holder, or someone in possession of valid rights, such as an assignee or licensee, takes prescribed legal action, such as in court by filing a civil action against an infringer, and perhaps seeking an injunction;

• Technological enforcement, in which producers of products and services employ technological means to protect IP rights against infringement (for example, encryption of digital copyright works).

• Border measures before the Customs Office and the Colon Free Zone Authority. In order to enforce IP rights, Panamanian Intellectual Property Law grants discretionary powers and faculties to Customs and The Colon Free Zone authorities to conduct investigations and retain any goods suspected of being imitations, including the confiscation of equipment used to manufacture fake goods.
The Attorney General’s Office and the Customs Bureau are officially empowered to initiate investigations on Intellectual Property matters.

The Customs Bureau and the Free Zone Administration are duly empowered to keep records of the Panamanian Intellectual Property Registrations for companies willing to protect their intellectual property through barrier measures. GALINDO, ARIAS & LOPEZ offers the service of registering a Panamanian Trademark Registration before the Customs Bureau and the Colon Free Zone.

With the information in the register, the authorities can control and even seize merchandise more effectively at the Colon Free Zone and Customs. These measures take importance because allowing an infringing product to remain on the market will hurt the right-holder’s sales and lead to a risk of market confusion.

Some complexities involved in establishing or enforcing IP rights on a cross border/international scale, are time factor and expertise on the part of the authorities. In view of the seriousness of the sanctions involved, which require that decisions be taken as quickly as possible, time is of the essence.

Demanding cessation of infringement only makes sense if a court order can be issued quickly. For this reason, preliminary injunctions play a major part in enforcing IP rights, since these measures are intended to prevent further infringement until the court has decided on the merits of the case.

On the other hand, the demand for a quick procedure, leading to a very tough sanction, requires expertise on the part of the judges. Only judges fully versed in intellectual property matters are prepared to make speedy use of this prohibitory instrument. It is also necessary to ensure the participation of well-trained legal practitioners and attorneys.

Finally, costs are an issue of major practical importance in establishing or enforcing IP rights on a cross border/international scale. With the complexity of these matters, retaining the services of experts, and of specialized legal practitioners in addition to attorneys, imposes a heavy financial burden on the parties. Measures such as taking evidence and carrying out tests and investigations on the infringing goods also involve further costs. In some cases, in Intellectual Property infringement proceedings, the financially weaker party is always in disadvantage.

The United States concluded free trade negotiations with Panama on 2006. This trade agreement will eliminate tariffs and other barriers to goods and services, promote economic growth, and enhance trade between the United States and Panama.

This trade agreement includes a chapter on Intellectual Property. Conventions such as the Madrid Arrangement concerning the International Registration of Marks, and the Patent Cooperation Treaty (PCT) will be mandatory in the Republic of Panama.

The agreement provides for improved standards for the protection and enforcement of a broad range of intellectual property rights, which are consistent with both U.S. standards of protection and enforcement, and with emerging international standards. Such improvements include protections for digital products such as U.S. software, music, text, and videos and; stronger protection for patents, trademarks and test data, including an electronic system for the registration and maintenance of trademarks.

Strengthening and improving Panama’s overall regime for the protection and enforcement of intellectual property rights in a broad range of areas was an important objective of the FTA negotiations.

In Panama’s climate, businesses are often looking for a way of putting themselves ahead of competitors; many companies lack a clear understanding of exactly what their intellectual property is or what it’s worth. Many businesses are unaware of the extent of their intellectual property and the consequences of failing to protect it properly.

Therefore, businesses are realizing the importance of an effective protection and use of intellectual property and companies are seeking expert legal advice to find out the best way to protect their intellectual property and also to understand how best to enforce it.

Some companies are tending to implement measures in order to have an inventory of their intellectual property to determine what the company’s intellectual property is, where it is, and what it is worth; and also to understand that managing the company’s intellectual property is more than just registering patents and trademarks.

Companies are starting to implement processes to identify intellectual property that belongs to others – such as knowledge and trade secrets of competitors that may accidentally come into their business with new personnel.

Between in-house resources and outside advisors, companies are making sure to cover intellectual property licensing, strategic alliance structuring, counterfeit and grey market tracking, due diligence on partners and employees, registration of patents, copyrights, trademarks and trade secrets, intellectual property valuation and royalty and revenue recovery.

REBECA HERRERA graduated in 1994 from Panama’s Universidad Santa María La Antigua (USMA) with a degree in Law and Political Sciences; she also holds a Master’s degree in Law with a focus on private law, earned from the University of Chile (with Honors, 1999).

Rebeca Herrera specializes in the areas of mercantile law, corporate law, mergers and acquisitions, unfair trade practices, public bids and contracts, intellectual and industrial property, and administrative law.

She has worked with a particular focus in the area of intellectual and industrial property, legally representing multinational companies-such as banks, commercial businesses, insurance companies-in judicial and administrative processes before the customs authority of Colon’s Free Zone, and legal representations regarding health where such matters have concerned violations of sanitary registry regulations. She has participated in the process of mergers and acquisitions involving the principal banking companies in Panama, as well as insurance companies, and also the execution of legal corporate audits. She is in charge of the firm’s intellectual property department.

Rebeca Herrera has held the position of Director of AFP Horizonte – Peru (1997 – 1998), Director and Secretary of Techolit, S.A. (1999 – 2001) and Director and secretary of Fibropan Inc. (1999 – 2001).

She has authored various publications, including “Judicial Intervention in Corporations”, “The Judicial and Administrative citation for shareholders’ meetings in corporations (comparative analysis of the Panamanian and Chilean legislation)”, “Modifications to the Code of Commerce”, “Important Issues Regarding Industrial Property in the Republic of Panama”, “Customs and Colon’s Free Zone Regime on Intellectual and Industrial Property Issues”, and “New Panamanian Legislation of Electronic Commerce”.