Economic Crime and Intellectual Property Law

Sep 22, 2023

“Economic crime and intellectual property law”, is the topic proposed by Esteban Orhanovic, Associate of the IP, Tech and Data Group.

The entry into force of the new Economic Crimes Law, among the broad regulatory changes it introduces, includes important changes in the area of intellectual property (IP). In this regard, although the new law does not create new IP crimes, it grants a special regulatory framework when these crimes are committed under certain circumstances. Specifically, when the act constituting the crime is perpetrated in the exercise of an office, function or position in a company, it will be considered an “economic crime”.

Among the consequences of IP crimes, a different graduation and determination of the penalty will be applied, according to the mechanisms contained in the new law, which in general is more severe than in normal cases, the same with the new mechanisms of extenuating and aggravating circumstances. Also, the offense will always carry a fine and other penalties contemplated by the regulatory bodies, and the convicted person may be disqualified from holding public office or as a director or chief executive in companies supervised by the Financial Market Commission. The confiscation of profits is imposed as an accessory to any conviction.

It should be specified that the crime committed by the legal entity is independent of the crime that may or may not be committed by the natural person and what is penalized is the legal entity that has not been able to implement an effective prevention model. In view of this, companies should implement effective crime prevention models that address how to prevent the commission of crimes against IP within their organizations.

In order to have an effective prevention model, it is necessary to raise the standard and oversight of the contracting of licenses of use, permits/authorizations of the holders, among other aspects, increasing the threshold of compliance in IP matters. This is due to the fact that in the past, intellectual property protection was not expressly contemplated in the prevention models, which now radically changes the panorama.

Also, depending on the industry in which the companies operate and the type of IP they regularly use, it will be necessary to strengthen the mechanisms for licensing trademarks, copyrights, invention patents, among others. In addition, it will be essential to increase the level of due diligence when closing business deals or commercial agreements involving technology transfer to ensure that the counterparty actually has all the permissions/rights to transfer such assets, among other aspects.

To make progress in this regard, it is important for companies to carry out an inventory or analysis of how many and which IP assets they use in their operations, and to check that they have all the permits or authorizations (their own or from third parties) to be able to use them legally in their commercial operations. It is also very important to train workers, suppliers and managers to foster a culture of compliance and thus avoid at all costs any intellectual property crime.

Source: America Retail, September 07, 2023.

Read column here.

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