Exclusivity in the commercialization of products, solutions from an Intellectual Property perspective

articulo propiedad intelectual

Most client’s questions that are commonly addressed by Intellectual Property department attorneys refer to product’s protection; thus, certain queries such as “How do I patent my product?” “Can I protect my trademark through a patent?” “How do I protect it to prevent someone else from doing the same?” are highly usual in our premises.

Unfortunately, the existing confusion between brand and product usually makes clients believe that if they register the trademark they are effectively protecting the product and that upon trademark registration no one is allowed to do what clients can. This is a misconception, not because there is no protection at all but because the brand exclusively protects the name given to a product rather than the product, service or process per se.

Thus, this article intends to briefly analyze all intellectual property resources available to protect the product as such. Particularly, patents, trade secrets and health registrations are three tools which are related in one way or the other to the product per se.

Patents are by definition a direct and exclusive protection on products or procedures. Specifically, article 1 of the Patents Act sets forth a basic definition of patent-protected inventions, as follows “any creation of the human intellect capable of being applied to the industry, which meets the patentability conditions set forth by this law. Such creation may consist of a product, a machine, a tool or a manufacturing procedure”.

However, non-patentable inventions and the characteristics of patentability conditions as defined by the Law are a misleading part of patent regulations. These conditions are not usually known by people, but if known they would prevent them from patenting their products.

The first element is a regulatory development categorizing a number of products as non invention or “patentability-excluded”. The first of these include discoveries, computer software, books or aesthetic works, economic or business methods, and the simple combination of well-known inventions, among others. As for the second ones, the Law excludes a number of items from patent protection, including diagnosis methods, plants and animal species (except for microorganisms) and essentially biological procedures other than non-biological or micro-biological procedures.

The second element, i.e. patentability conditions, consists of high-level requirements that are specific to patent regulations enacted in accordance with international standards. Article 2 of the Patents Act sets forth that an invention may be patented only if it is new, has an inventive level, and is likely to be applied in the industry.

Inventions are new if they do not exist in the so-called “state of the art”, meaning anything disclosed or made available to the public anywhere within the country or abroad by physical or electronic means, and until the patent filing date with the Industrial Property Register Office. Thus, this would require to conduct a search in connection with the product you are willing to patent; if this product already exists, such search may be conducted through patent databases (e.g. PatentScope, the European Patent Office, the USPTO, among others), scientific and non-scientific journals, websites of similar companies, even a search in Google (especially through its Google patents search tool) may be extremely useful to determine its novelty quality.

Moreover, the invention has an inventive level if “for an average person educated in the corresponding matter, the invention is not obvious nor evidently derives from the relevant state of the art”. The analysis of this requirement is complicated, as it is no accident that most inventions get lost in the process of assessing such requirement and also that opposing parties usually claim that such requirement is unmet. Some of the particulars of this requirement include the fact that the invention must lead to a qualitative leap in terms of the state of the art, should be an unexpected outcome from what would usually happen; in words of the Administrative Registration Court (Ruling 110-2016) inventions “should entail […] an improvement, breakthrough or contribution to the state of the art, which would allow us to understand that it involves a non evident inventive effort or that is conspicuously derived from the state of the art in terms of conferring an inventive level to the application”.

On top of this, inventions must have an industrial application, meaning that they should have a specific, substantial and reliable usefulness.

Based on this, unless your product or procedure is actually a technical solution to an unsolved technical problem, or such solution does not cover your method, the truth is that this would probably not qualify as a patentable item.

However, not everything is lost. If your product does not seem to meet these requirements but it is difficult that someone else might be able to come up with your product through reverse engineering (for instance, think about a chemical formula or a recipe of any food product), perhaps the most advisable thing to do is protecting it as a trade secret.

In this case, the provisions of the Non-Disclosed Information Act would apply. This legal instrument sets forth the protection of any information containing trade and industrial secrets kept as confidential by any person to prevent any information under its legitimate control from being disclosed, obtained or used by third parties without his consent and in violation of fair trade practices, provided that such information is (i) secret and therefore not easily known or accessible by people, (ii) lawfully under the control of any person who has adopted reasonable and proportional measures to keep such information secret; and (iii) to the extent that said information has trade value.

This same Law sets forth that this non-disclosed information specially refers to the nature, characteristics or purposes of products and production methods or processes. In these cases, no further application must be submitted before administrative entities for their protection; however, taking measures to protect the confidentiality of said information is still of the essence.

Among the measures to be adopted, the most important of them involves the execution of confidentiality agreements with any persons that in one way or the other might be in contact with said information. Also, classifying any documents that should be effectively kept in secret as confidential is extremely important, as obligations should always refer to determined or at least determinable objects.

The use of confidentiality agreements in business relationships is mandatory in case of any information that is not intended for disclosure; on the contrary, this is not necessarily mandatory in case of employment relationships, as the law has established the obligation to keep such information confidential. However, it does establish that the specific employee should be expressly warned about the confidential nature of the information; thus, having appropriate contracts and labeling is important for these purposes.

Lastly, and even though health registrations are not a protection resource for intangible assets (unlike intellectual property), the truth is that they still are a diluted protection instrument in commercial activities. Health registrations are permits issued by the Ministry of Health (or by other entities of the Ministry of Agriculture or the Ministry of Security, among others) for the importation and commercialization of products in the country.

Regardless of the technical conceptualization of health registrations, the fact is that a regulated product may not be marketed in the country if it lacks this permit. Furthermore, in some cases, products (e.g. medications, cosmetics or locally manufactured food products) may not be registered with the Ministry of Health if they lack a specific authorization from the manufacturer, which creates some sort of diluted protection, given that although it does not prevent third parties from making similar products or even reselling them, it does allow to control who is authorized to register the product with the Ministry of Health and, consequently, to somehow limit the commercialization of the specific product.

Based on the above, the most important thing is to determine the type of product we are dealing with, what kind of protection it may enjoy, and how this protection may be used in the best interest of its owner. I would recommend you to assess your product and ask your intellectual property attorney for advice.

By: Guillermo Rodríguez, BLP Attorney

Guillermo has extensive experience in the legal profession. He specializes in Intellectual Property assisting organizations in all aspects regarding the registration, protection and defense of their intellectual property rights, as well as in Regulatory Law advising companies in product registration issues before the Ministry of Health and the Ministry of Agriculture.

Article published in La República on December 9, 2016.