Intellectual Property Law

The U.S.-Peru Trade Promotional Agreement and its implication for E-commerce

By Martha L. Arias

The objective of the United States-Peru Trade Promotion Agreement (US/Peru TPA) is to promote trade and economic growth, eliminate some trade barriers between these two countries, and promote private investment in and between U.S. and Peru.  80 percent of U.S. exports of consumer and industrial goods to Peru will be duty-free immediately upon entry into force. The US/Peru TPA was signed on April 12, 2006. The U.S. House of Representatives ratified it on November 2, 2007, and the U.S. Senate on December 2007.  Ratification by the Peruvian Congress was completed on June 28, 2006.  Peru implemented this FTA through Legislative Decree No. 1075, on June 28, 2008.  The agreement is expected to enter into force in January 2009.  Several aspects of the US/Peru TPA such as intellectual property, telecommunications, customs duties, and digital age, are of particular relevance for e-commerce transactions.

The US/Peru TPA includes extensive provisions regarding intellectual property (IP) rights.  For instance, the agreement required Peru to improve intellectual property protection and enforcement according to the U.S. and emerging international standards.  These improvements embrace protection of software, music, videos, text, patents, trademarks, test data, and electronic systems for the registration and maintenance of trademarks.  Further, the agreement required Peru to establish mechanisms to deter piracy and counterfeiting; and criminalize these activities, including those performed by the end-user.  Legislative Decree No. 1075 of June 28, 2008 (LD 1075), implemented the US/Peru TPA.  It provisions include the following relevant changes, among others, to the Peruvian IP legislation,

 Trademarks

 LD 1075 introduced several changes to Peruvian trademark laws.  For example, (i) it established a multi-class trademark registry.  This means, applicants can divide their applications in two or more divisional applications that group the products or services covered by the original applications; (ii) licensees will be responsible for the quality and suitability of the products or services offered in Peru; (iii) collective trademarks are recognized; (iv) the trademark holder will retain its rights even if it is not using the mark or is being licensed to a third party; and (v) new procedures for the cancellation and nullity of trademarks were introduced. 
 

  Invention Patents

 LD 1075 recognizes adjustment of the patent validity period when the Peruvian authority unreasonably delays the processing of patent applications for more than 5 years from the submission date, or more than 3 years from application for complete evaluation.  The patent application process was adjusted to include steps followed by the U.S. Patent office, including those regarding publications, divulgation of the invention, request for modification of the initial application, rectifications to the description, claims, or drawings, etc.   

LD 1075 introduced many other changes to Peruvian IP rights such as those related to licenses, authorities in charge of appeals, imposition of fines in infringement cases, preference of rights, etc. Peruvian Indigenous, Agricultural, and Farmers Associations, however, have contended these changes to Peruvian IP laws.  They claim LD 1075, implementing the US/Peru TPA, violates IP rights established by Andean Community rules.  These organizations argued that Peru entered into this TPA ignoring existing IP rules imposed by Andean Community Decisions.  Peru had requested modification of Andean Decision 486 that would allow the signing of the US/Peru TPA and still comply with the Andean Community rules.  Yet, this proposal was denied by the opposition from the government of Bolivia. The official complaint from these associations was filed on August 2008 and its decision is still pending.

The US/Peru TPA also introduced specific measures regarding the telecommunication market.  Telecom users will be granted reasonable and non-discriminatory access to the network, local companies will not have ?first right? or access to telecom networks, US phone companies will interconnect with Peruvian networks at a non-discriminatory and cast-based rates.

Regarding customs duties, the US/Peru FTA will eliminate customs duties to 80 percent of the U.S. exports of consumer and industrial products, the other tariffs will be phased out over 10 years.  Also, Peru promised it will join the WTO information Technology Agreement.  Over 2/3 of US farm exports will become duty free; other farm tariffs will be phased out over 15 years; and a total duty-free regime for farm products will be implemented in 17 years.   Finally, textiles and apparel will be duty-free immediately provided that they meet the Agreement?s rule of origin.

The US/Peru TPA also addressed digital age matters; the agreement contains provisions specifically related to e-commerce co-operation between these two countries.  There will be no discriminatory treatment of digital products, there will be no customs duties on digital products, and both countries will continue cooperating to implement new policies regarding e-commerce.  Additionally, the agreement requires Peru to implement a dispute resolution mechanism to solve trademark disputes involving domain names.  The ?first-in-time,? ?first-in-right? principle was adopted to solve trademark disputes in Peru.  A very important accomplishment in this agreement was that copyright owners maintain rights over temporary copies of their works on computers.  Only authors, composers, and other copyright holders have the right to publish their works online.

This agreement is definitely a great commercial tool for both countries, and somehow, an improvement on IP laws by the Peruvian government.  This fact may place Peru in a more competitive advantage in the global market.   

Full post as published by IBLS Internet Law Blog on November 10, 2008 (boomark / email).