The Pacific Alliance

Latin America has yet another project for regional integration under way. However, unlike many of its predecessors, this new project seems to have a rather good chance of succeding in impacting its member countries and actually integrating their economies. As a region with a defined common identity, significant potential for positioning itself as a strong player in the world economy and a long lasting yearning for european-like international cooperation; the Pacific Alliance comes as a new opportunity to compensate for the numerous failed attemps at regional integration. Our firm finds the Alliance to be an interesting project, and has created two new products to allow its clients to prepare for the integration to come and the impact it will surely have on the region’s intellectual property market.

The Pacific Alliance

The Pacific Alliance is a commercial alliance created by the Lima Declaration on April 28, 2011, with Chile, Colombia, Peru and Mexico as members countries and with Costa Rica in the process of joining the alliance to become a full member. Its declared purpose is to “deepen the integration of these economies” and to “define joint actions for commercial entailment with Asia-Pacific”. Furthermore, the Alliance is set to move towards free circulation of goods, services, capital and people. Its non-official purpose is to balance the regional power of Mercosur and the dominance of Brazil in the region’s economy.

Current members of the Pacific Alliance. Source: Colombian Ministry for Foreign Relations.

From April 2011 to May 2013, the Alliance members have had 7 summits. The last one, held in Colombia, approved Costa Rica’s union to the Alliance. Costa Rica will become a full member once it has approved the Alliance’s constitution, which is expected to be done before this year’s end.

The four current members gather 40% of Latin America’s GDP, having four of the strongest economies in the region (but for Brazil and Argentina) and economic policies that have embraced globalization and relatively liberal economies. This makes the Alliance a powerful player and a effort for integration that makes economic sense, given the relative economic affinity of these countries.

Not like the others

Latin America is a region that has played with projects for integration in many ocasions with very disappointing results. As we noted in our book The State of Intellectual Property in Latin America, two of the most promising projects for integration, Mercosur and the CAN (the Andean Community) have failed to acomplish a substantial level of integration with virtually the sole exception of the Intellectual Property regulation of the Andean Community.

One big reason for this failure is the political instability and protectionist policies of several countries in the region, and their failure in adopting coherent and smart policies that actually would allow integration to happen. International forums for cooperation have often turned into arenas for political confrontation (Mr. Alvaro Uribe and Mr. Chavez’ confrontations, to name a notable example) or have lacked loyalty from members in enforcing the agreements that bound them (the unilateral negotiations of the CAN’s members with other economies and integration projects is a good example of this issue).

The Pacific Alliance, so far, seems to have dealed with these issues in a smart way. Only integrating economies that are already following a common path to development, the union will more easily avoid confrontation between its members. And integrating four of the leading regional economies, the member countries will have a strong incentive to enforce the agreements in an effort to have a more relevant role in the world economy. In other words: Integration based on economic affinity rather than geography or idelogy is the stronghold of the Pacific Alliance.

Adapting for the integration to come

As our Research Department has previously noted, Mexico and Chile are already two of the strongest players in Latin American intellectual property. Peru and Colombia are on the  way of also becoming important players in the regional IP market.

Source: The State of Intellectual Property in Latin America - B&R Latin America IP LLC

Increasing integration will impact these countries in two major ways:

• There will be an increase in technology transfer between these countries, most likely coming from Chile and Mexico to the other members of the Alliance; and owners of IP assets will prefer other members of the Alliance for their regional expansion projects, given the ease of business that will exist within the Alliance.

• Foreign businesses (that is, countries outside the Alliance) will be increasingly tempted to regard the Alliance as a single market for their expansion plans in Latin America. With a population of more than 200’000.000 and citizens with a good purchasing power -if compared to the regional standards, that is- the Alliance’s members will become an even more attractive place for foreign investment.

It is in response to these changes to come that at B&R Latin America IP we have adapted our services portofolio to suit the needs of our foreign clients when investing in the newborn Pacific Alliance. Our services for “Pacific Alliance Trademark Application” and “Pacific Alliance Patent Application” will allow foreign businesses to protect their IP assets in the 5 full members of the new integrated market, with reduced professional fees and one contact point.

This is also our firm’s way to vouch for the Pacific Alliance’s new approach to regional integration. We firmly believe that Latin America should not face the international marketplace as separate -and powerless- economies. Integration will not only increase competitiveness when Latin America reaches markets beyond its own borders, but it will also allow foreign investors to more easily and cheaply enter the region.

The Heads of INTA and the IMPI sign the MoU.

On Monday, May 5th 2013, during the first day of the 135th Annual Meeting of the International Trademark Association -INTA- a Memorandum of Understanding was signed between the INTA and the Mexican PTO, the Mexican Institute for Industrial Property -IMPI. The MoU was signed at a meeting between Mrs. Toe Su Aung, INTA’s President, and Mr. Miguel Ángel Margáin Gonzáles, IMPI’s Director General.

The main goal of the agreement is to assist Mexico in the implementation of the Madrid Protocol, which entered into force in this country on February 19th, 2013. Although neither the IMPI’s press release nor the INTA’s note on the agreement explain the details of such cooperation, it will most likely include an effort towards the implementation of an opposition procedure (which Mexico lacks, significantly increasing the volume of work the IMPI has to deal with in Madrid Protocol-related procedures). Althought the IMPI’s Director General, Mr. Miguel Ángel Margáin, has stated that the opposition system is not a requirement for the Protocol’s implementation, he has also been “talking to the industry associations about whether an opposition system is needed”. For most experts in trademark law, and from a regional perspective, it is our firm’s position that an opposition system would be highly beneficial for Mexico.

During the 3 months of Mexico’s membership to the Madrid Protocol, 12 international applications have been filed by Mexican applicants, and the country has been a designated country in around 100 international applications. These are relatively low numbers for an economy the size of Mexico’s, especially taking into account the high level of economic integration that the country has reached with the implementation of several free trade agreements, and its strong ties to the US economy.

Colombia, which implemented the protocol since August 2012, has been a designated country in 245 international applications, but only 1 application has been filed with Colombia as the country of origin (reportedly the first application was filed in late April). New Zealand, on the other hand, joined the Protocol on December 2012 but it has already been designated in 1400 international applications and has been the country of origin for 100 international applications.

Another feature that the IMPI has been working in, and that could receive significant assistance from the INTA’s members, is its online trademark application system -which is a required feature to the protocol’s members-. IMPI’s Director General has established 2014 as the year in which this system should be completely functional and should cover the entire process for trademark registration.

INTA Annual Meeting 2013 in Dallas, Texas

Our communications department is busy getting ready for this year’s INTA Annual Meeting 2013 in Dallas, Texas; the world’s biggest forum for trademark owners and experts on trademark law. As mentioned in previous posts, our firm will have a Booth (#216) at the Exhibition Hall of the Dallas Convention Center and several members of our staff will attend.

Our main purpose is to meet with our current clients and create new commercial relations. If you are interested in meeting with us, please contact Danny G. Pérez y Soto at comm@brlatina.com. For more information on our attendance to the Annual Meeting, and our schedules for meetings, click on the image below.

Delegates at the meeting will include 6 members of our Miami and Colombia offices, and 15 members of our international associate network, including our attorneys for Mexico, Bolivia, Venezuela, Dominican Republic, Guatemala, Costa Rica, Panamá and Ecuador. Additionally, both our CEO, Mr. Alvaro Ramirez Bonilla and our Vice-President for Consulting Services, Mr. Luis Carlos Pombo PhD will be there.

It is our goal to make the most out of the Annual Meeting and have the pleasure to meet with our clients face to face. In a market where such a large portion of business is conducted online it is even more important to create client-attorney trust, and to put a face and a name on the team that is assisting you in the management of your IP assets.

Strategic Management of IP

With almost 500.000 annual trademark applications and reaching 50.000 annual patent applications, Latin America is a region that is increasingly giving importance to the protection of its innovative industries through the systems for Intellectual Property protection. However, as our practice and careful analysis of the IP sector shows, few players in the region seem to have a defined strategy when it comes to managing and profiting from their IP assets.

It seems to be a widely spread assumption, especially among start-ups, that management of IP assets means the mere registration of their trademarks, patents, designs and copyrights. It doesn’t.

A company’s IP assets are some of the most valuable resources for a successful business operation. Well-positioned trademarks allow businesses to have higher prices than the market averages, while remaining competitive (Apple Inc. being a good example of this). Similarly, patents allow a business to gain significant heads-up (a 20 years heads up on most countries) in the exploitation of inventions before being subject to regular market competition. However, is it a common case that trademarks and patents are registered just to be left unexploited or underexploited. In order to avoid this waste of investment in marketing and R&D, any company must have a defined IP strategy. And what do we mean by this?:

- An IP asset ultimate goal is one and one only: profits. With the sole exception of NGO’s and government authorities, any investment in marketing (trademarks) or R&D (patents) should result in a competitive advantage and an increase in revenue. If your investment in IP assets is not being directly reflected on your business’ income, you are doing something wrong.

- In order to know how much are you winning or losing with your investment on IP assets, you first need to know: 1. How much are your IP assets worth, which can only be achieved through an adequate valuation of those. 2. How much and how are you investing on these assets. 3. How does their value change over time.

It is only when IP assets are reflected in figures and a company’s managers are aware that investment on R&D and marketing are reflected on the value of the company’s assets that you can start discussing strategies for managing them. For the most part, it is the lack of knowledge about the values of IP assets that has driven Latin American private-sector investment in R&D to such low levels.

- It is more than just legal work. In order to have a successful IP-management strategy, financial, creative and legal considerations must be taken.

Our firm is increasingly extending its services portfolio on Consulting Services, which include services such as the creation of IP Dashboards (for measuring the relative value of IP assets over time), the design of strategies for IP Management and accurate valuation of IP assets. It is for the purpose of providing these specialized services that our firm had the pleasure to include Mr. Luis Carlos Pombo PhD as a permanent member of our staff, as vice-president for consulting services. Mr. Pombo may be contacted at consulting@brlatina.com

With an ever greater conviction that the boom of Latin American IP is soon to come, at B&R Latin America we are making sure that we are ready to provide not only cross-border management of IP assets, but also comprehensive and inter-disciplinary advisory on how to turn a protected IP asset into a profitable one.

B&R Be Green Program for Promoting Enviromentally Sound IP

As a firm with an active practice in Latin American countries, we can’t turn a blind eye on the enviromental challenges of the region. The region’s is one of the richest worldwide in natural resources, and is home to a diversity in flora and fauna unmatched by any other region of comparable size in the world. Not in vain it is home to the Amazon rain forest, and some of the biggest sources of fresh water in the world. On the other hand, Latin America is also home to some of the biggest oil reserves in the world, vast amounts of valuable minerals -including emeralds and gold- and a growing agricultural and strockbreeding industry.

This richness in natural resources -as anywhere else is the world- is threatened by climate change, and by the un-regulated extraction of natural resources. Necessary as it is, the use of natural resources must always be conducted in a manner that causes the least amount of damage possible to the enviroment and the local communities. For this efficiency in the use of natural resources and enviroment protection to be achieved, we have two options:

1. Demand tighter regulation of enviroment-damaging industries, and a fair repartition of the costs of the negative externalities resulting from these industries.

2. Actively promote enviromentally-sound business practices and technologies.

Given the notable defficiency of the region’s governments in making use of the first option, at B&R Latin America we believe that the second option will be the most effective for the region. It is for this reason that we have implemented a program for promotion of IP protection of enviromentally-sound technologies and business practices.

The B&R Be Green Program

The B&R Be Green Program is the firm’s response to the region’s necessity of eco-friendly trademarks (namely, trademarks that promote enviromentally-conciouss products or that identify eco-friendly practices) and Green Patents that address issues of energy-efficiency, alternative fuels, agricultural efficiency, energy storage, waste disposal and wind, solar, tidal/wave and nuclear energy.

For clients who want to file applications for this kind of trademarks or patents, we will provide a discount on our professional fees, and we will apply for all available discounts in official fees and special programs that the local PTOs have for these green IP assets. Several PTOs have started implementing Green Patents programs that reduce the time for a patent registration procedure and fasten patentability exams.

If you wish to learn more about promotion of Green IP and learn about the possibilities you have as an owner of green IP Assets, we highly recommend the Paper published on the subject by our Research Department in the Journal of the Public Interest Intellectual Property Advisors -PIIPA- available here:

The Green Patents as a way of Addressing Enviromental Issues | PIIPA Journal

(Click on this image to read the articles)

Contact our sales department at info@brlatina.com for requesting this discount and learning more about the extent of the program in each country.

The Mexican PTO (the IMPI) has released a web page spreading information on the implementation of the Madrid Protocol in this country. Although only available in Spanish, the page is a useful tool for getting first-hand information on this valuable new tool.

Here it is: Madrid Protocol for the International Registration of Trademarks | Mexico

However, if you desire in-deep information or just information in English language, just go to any of our previous posts on the Protocol’s implementation in Mexico or contact us.

Here are our posts on the subject:

• Mexico: Yet another Latin American country to approve the Madrid Protocol.
• How much for an international trademark registration? | Mexico
• Head on to the Madrid Protocol | Mexico