Geographical Indications

The most significant changes introduced by the Agreement center on geographical indications (GIs), according to Natalia Paladino, Senior Partner at Cervieri Monsuárez (Uruguay). Parties to the Agreement will reciprocally recognize a list of GIs and help prevent the circulation of products that use the name of a GI without having the characteristics of the protected product.

“In this regard, it is expected that the registration of GIs and denominations of origin, both national and foreign, will grow in Uruguay,” Ms. Paladino predicted. Uruguay has more than 50 wines protected by GIs, which the EU will recognize under the Agreement.

Mr. Taelman agreed that the “biggest win” for IP owners is the mutual recognition of many GIs: a total of 355 EU GIs, such as “Gorgonzola” and “Champagne,” will be protected in Mercosur countries.

In return, the EU will protect 220 Mercosur GIs, including “Cachaça” liquor and “Mendoza” wine. In comparison, in the EU-Japan Agreement, which entered into force in February 2019, Japan agreed to protect 211 EU GIs and the EU, to protect 56 Japanese GIs.

“The EU-Mercosur Agreement protects twice as many GIs as the EU-Japan Agreement does,” he said. “This will have a major impact on the food and wine industry.”

However, the Agreement is by no means perfect, according to some IP professionals.

Mercedes Durlach and Mingo Palacio, Partners at Palacio & Asociados (Argentina), would have preferred the Agreement to impose a duty for the signatories to enter into the Patent Cooperation Treaty (PCT).

Instead, the Agreement states that Mercosur members "shall make best efforts to comply with the protocol related to the Madrid Agreement concerning the international registration of marks,” and encourages members “that are not yet party to the Patent Cooperation Treaty to do so to speed up international patent applications and to provide more legal certainty to the process.”

While Brazil is a member of the PCT as well as a signatory to the Madrid Protocol, Argentina, Paraguay, and Uruguay are not, and none of the Mercosur countries is party to the Hague Agreement.

A Missed Opportunity?

Similarly, Mr. Taelman cited this aspect of the Agreement as a “missed opportunity.” If all four Mercosur countries were members of the PCT, the Madrid Protocol, and the Hague Agreement, it would become significantly easier to register trademarks, patents, and design rights in them, he said.

While the negotiations were concluded last year, the Agreement itself is still awaiting signatures and the subsequent incorporation of its provisions into the regulatory framework of the parties.

“Only the general lines of the Agreement have been confirmed, and there is still a long internal process of verification, translation, and approval by the local parliaments to be undergone,” Ms. Palacio explained.

Although only time will tell whether the Agreement in its current form is realized, IP owners are already positive about its impact. As Mr. Taelman surmised, it represents “a fantastic opportunity to create strong, harmonized, and effective IP protection.”

The CPTPP: A Challenge Overcome?

IP has been one of the most controversial issues during negotiations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the free trade agreement (FTA) between Canada and 10 countries in Asia-Pacific and Latin America, said Victor Vila, Managing Partner at Vila (Mexico).

The CPTPP replaced the Trans-Pacific Partnership (TPP) after the United States withdrew from the agreement in early 2017. On December 30, 2018, the CPTPP entered into force among the first six countries to ratify the FTA, namely Canada, Australia, Japan, Mexico, New Zealand, and Singapore. On January 14, 2019, the CPTPP entered into force for Vietnam.

However, Brunei, Malaysia, and Peru have yet to ratify the Agreement. While Chile started the ratification process, the country’s Senate suspended it on November 11, 2019 so it could address civil unrest and protests within the country.

“The first obstacle has been the different processes in each jurisdiction when it comes to amending and/or adapting their local legislations,” Mr. Vila said. He pointed out that the signatories agreed to suspend 11 IP provisions from the original agreement to address concerns expressed by the remaining four countries which have yet to ratify it.

He believes that these countries were concerned that the Agreement was “conferring overly-broad protections to rights holders against the interests of developing countries.” The IP articles relating to patentable subject matter, patent term adjustments, and the protection of clinical test data would, if passed, have significantly raised healthcare costs in those countries, he said.

According to Benjamin Mitra-Kahn, General Manager, Policy and Governance Group at IP Australia, given the diversity of countries involved, it was always going to be a “challenging exercise” to finalize what turned out to be an “extensive” IP chapter.

“One of the biggest challenges was agreeing to rules that give greater certainty and consistency for businesses, while maintaining enough flexibility to ensure the IP system remains adaptable,” he explained.

Catherine Escobedo, Of-Counsel at Barrera & Asociados (Peru), believes that the CPTPP’s IP chapter will “definitely set a regional standard for the protection and enforcement of IP rights in the Asia-Pacific region, providing nationals of the member countries with a predictable and harmonized IP regimen which they can trust.”

According to Ms. Escobedo, despite not yet ratifying the CPTPP, Peru has continued to participate in all CPTPP-related meetings, in addition to reviewing its internal regulations in preparation for its implementation.

“The CPTPP’s IP regulations are key to this Agreement because they will consolidate Peru's efforts to meet international protection standards,” Ms. Escobedo said, adding that she believes this standardized level of IP protection also provides a boost to commerce as they will help to create a new level of trust in foreign investors.

However, while the Agreement was supposed to be ratified by Peru’s Congress in 2019, the country’s political climate has proved a stumbling block. And, currently, there is still no date set to discuss this matter.

Yen Vu, Principal and Country Manager at Rouse (Vietnam), believes that the CPTPP’s IP regulations will make a significant and positive difference in Vietnam: “Many of the parties are highly innovative and IP-intensive economies and therefore could greatly benefit from IP protection with their extensive IP exports,” she said.

For Ms. Vu, one particular benefit is that it will push Vietnam to upgrade its IP legislation and enforcement to a level equal to that of Malaysia or Singapore, providing greater security to IP owners.

Alexandra Howard, Partner at Saenz de Santa Maria Abogados (Chile), added that the CPTPP provides a common set of rules regarding IP protection and enforcement that aims to encourage investment in new ideas, promote innovation, and enhance creativity, while also preventing counterfeiting and piracy.

But she said: “There is an ongoing negotiation for some modifications on the trade agreement that Chile has with the EU that will affect IP, mainly regarding GIs and the need to harmonize the standard of protection.”

Patent Terms

However, one area that the CPTPP does not adequately address is patents, according to some practitioners.

The now-defunct TPP provided for patent terms to be extended in cases of unreasonable delays by the relevant patent office, but this provision was not included in the CPTPP.

Ms. Howard, for one, does not agree with the removal of this provision. “It is discouraging to inventors when there are unreasonable delays from the authorities in issuing patents, particularly as there is no compensation for the delay,” she said.

Ms. Vu agreed that a provision for patent term extension due to delays to the patent grant is “necessary.”

“In Vietnam, the substantive examination process is usually subject to long delays due to the heavy backlog at the IP Office,” she said.

Mr. Vila noted that patent terms have been a “sensitive topic” in the CPTPP negotiations. Regardless of the standard to be agreed, it is essential that a definitive direction is given on this matter, he observed.

However, some see the merits of the change. Vivian Zhang, Attorney-at-Law at Advance, China IP Law Office (China), noted that while the original provisions gave inventors a sufficient patent protection period, and enabled some countries to maintain a leading position in technology, it also created problems.

“The high level of protection in certain areas is not conducive to the spread of technology or an increase in human welfare,” she said. “Putting aside those provisions reflected the demands of the CPTPP contracting states for an increased balance of IP protection, technology dissemination, and human welfare, and a balance between technology-producing countries and technology users.”

She further suggested that as “the IP protection levels of the contracting states are very different,” shelving these provisions “undoubtedly reduced the difficulty” of the negotiations preceding the conclusion of the CPTPP.