IP in business transactions: Argentina overview

A guide to intellectual property law in Argentina. The IP in business transactions Q&A gives an overview of maintaining an IP portfolio, exploiting an IP portfolio through assignment and licensing, taking security over IPRs, IP and M&A transactions, and the impact of IP on key areas such as competition law, employees and tax.

To compare answers across multiple jurisdictions, visit the IP in Business Transactions Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to IP law. For a full list of jurisdictional Q&As visit www.practicallaw.com/ip-mjg.

Gloria Montaron Estrada, María Luisa Santa Maria and Verónica M Canese, Marval, O'Farrell & Mairal
Contents

Overview of main IPRs

1. What are the main IPRs in your jurisdiction? How are they protected?

Patents

Patents can be granted for any invention that complies with the following requirements (Patent Law No. 24.481):

  • Novelty.

  • Inventive activity (that is, the invention is not obvious).

  • Industrial applicability (that is, it has utility).

In addition, for a patent to be granted, the Patent Law also requires sufficient disclosure and disclosure of the best mode of the invention.

Patent applications must be filed with the Patent Office of the National Institute of Industrial Property (Instituto Nacional de la Propiedad Industrial) (INPI) (www.inpi.gov.ar). Patents are granted for 20 years from the filing date. Only one independent claim is allowed.

Patent term extensions or supplementary protection certificates are not available in Argentina.

Trade marks

In principle, exclusive rights in a trade mark are acquired through registration, irrespective of whether or not it has been used in business. A trade mark registration provides evidence of the registered mark's ownership and validity and of its owner's exclusive right to use it.

To be granted registration, a trade mark:

  • Must be a word or sign that is distinctive in relation to the particular product or service it identifies.

  • Must not be identical or confusingly similar to others already registered or applied for by third parties for the same or overlapping products or services.

  • Must not be generic, descriptive, deceptive or otherwise fall within the prohibitions of sections 2 and 3 of the Trade Mark Law No. 22362.

Trade mark applications must be filed with the Trade Mark Office of INPI. A trade mark registration lasts for ten years from registration and can be renewed indefinitely for a further ten years, provided it has been used within the five years prior to the expiration date.

Non-registered marks can be granted legal protection on an exceptional basis, provided they have been peacefully, publicly and continuously used during a period of time long enough for them to be known in the local market.

Copyright

Copyright is available for any work that is:

  • An intellectual product.

  • Original.

  • Capable of being perceived (for example, literary works).

  • Reproducible.

Argentina has ratified a number of IP treaties concerning copyright (see Question 26).

Copyright exists from the moment the work is created. However, works can be recorded with the National Register of Intellectual Property (Dirección Nacional de Derecho de Autor) (DNDA). Its website (www.jus.gob.ar/derecho-de-autor.aspx) contains all the necessary forms to comply with the different forms of protection available. Deposit with the DNDA grants:

  • A property right in the work.

  • A rebuttable presumption of authorship.

  • A definite creation date for the work.

However, registration is not obligatory for copyright protection to arise. Registration is only mandatory in the case of national published work (works edited with copies available to the public). Failure to register such published works suspends the author's economic rights until registration is made, without prejudice to the validity of the reproductions, editions, or performance.

Foreign works need not register with DNDA and need only prove that they have complied with all the formalities required in the home country.

Design rights

Industrial models or design registrations are granted to protect a design concerning the appearance or shape of an industrial product, which provides an ornamental character to the product. Functional designs are not considered to be industrial designs.

Industrial model and design applications are also filed with the Patent Office of INPI (www.inpi.gov.ar) (see above, Patents). A single application can cover up to 50 different examples of a single model or design, provided that all of them are related. Design rights are granted for a term of five years, and are renewable for two additional terms of five years each.

The Patent Office only examines compliance with formal requirements.

Unregistered designs are not recognised under Argentine law.

Confidential information

Any information recorded in documents, electronic or magnetic media, optical disks, microfilms, films or other similar elements is protected against use and disclosure, provided that (Confidentiality Law No. 24.766):

  • The information is secret (that is, it is not a mere collection of components generally known or easily accessible to a person working in a place where the information is, or should be used).

  • The information has a commercial value as a result of being secret.

  • Reasonable efforts and security measures have been taken to keep the information secret.

Confidential information is protected against "unfair commercial use", including use as are result of:

  • Breach of contract.

  • Abuse of trust.

  • A third party acting to acquire non-disclosed information where that third party knew (or was grossly negligent in not knowing) that the acquisition was contrary to the law.

It is not possible to register confidential information. Protection will continue for as long as the confidentiality requirements are met.

Other

There are no other main IPRs in Argentina.

For further information about the main IPRs, see Main IPRs: Argentina.

 

Maintaining IPRs

2. What facilities are available to conduct IP searches and obtain IP information on registered IP rights?

Patents

INPI publishes the abstracts of each application in the Patents Gazette. INPI holds the only available complete database on patents and patent applications, which is available online (www.inpi.gov.ar). This database provides information on the following in relation to patents':

  • Bibliographic data.

  • Details of annuity payments.

  • The wording of the main claim.

  • Office actions received and briefs filed.

This information is still available online after registration. Businesses can also subscribe to "watch" services from law firms. If the business wishes to find prior art before an application, it is recommended that it use a specialist firm for this purpose.

Trade marks

Trade marks can be searched on the INPI's Trade Mark Office database by:

  • Application number.

  • Status (such as registration, denial and abandonment).

  • Resolution number.

  • Owner.

  • International class.

  • Mark.

  • Ranges of filing and registration dates.

The Trade Mark Gazette publishes the details concern new applications once a week. It also publishes oppositions filed against trade mark applications and renewals of trade marks, although on an irregular basis.

Watch services are available to monitor the filing of new applications. Some law firms have their own databases, which provide surveillance services to clients.

Copyright

The DNDA holds a complete database on Argentine copyright works (see Question 1, Copyright).

It is not possible to search this database online. On receiving an application, the DNDA issues a formal reply in writing within seven to ten working days.

Design rights

Before and after registration, designs can be searched online at www.inpi.gov.ar by:

  • Proprietor.

  • Product.

  • Number.

  • Class.

Information can be obtained online on drawings, renewal payments and wording of the claim.

Businesses can also subscribe to watch services.

Confidential information

Not applicable.

 
3. What steps must a business take to maintain the registration and status of its main IPRs?

Patents

The first three years of protection (from the filing date) are free of charge. The first annuity payment, payable on the grant of the patent, covers the period from the third year to the date of grant. (For example, if the patent was granted seven years after the filing date, the first cumulative annuity payment will cover four years.) Subsequent annuity payments are payable annually until 20 years after the filing date when the patent expires. If an annuity is not paid in time, late payment can be made within 180 days, subject to a fine of 30% of the basic fee. After 180 days, the patent will lapse, unless it can be shown that the lack of payment was due to force majeure.

Trade marks

A registered trade mark can be renewed every ten years, provided it has been used within the five years prior to the expiry date in either of the following ways:

  • For the sale of a product or the provision of a service identified with the trade mark, even if used for goods or services different from those covered by the registration. This requirement is flexible, and includes any act which causes the distinctive sign to appear in the market. However, the use must be clear, serious and unequivocal as to the trade mark owner's intention to market the product or provide the services identified with the mark.

  • As part of a trade name.

Registered trade marks may be subject to cancellation on grounds of non-use if they have not been used during the five years prior to the commencement of the cancellation action.

Copyright

Copyright exists from the moment the work is created (see Question 1, Copyright). Depending on the type of protection obtained with the DNDA, it will be necessary to comply with different formalities to renew the deposit to maintain the copyright registration.

Design rights

Design rights are granted for a term of five years, and are renewable for two additional terms of five years each. Renewals must be applied for no later than six months prior to the expiration of the relevant period.

Confidential information

Not applicable.

 
4. What steps can a business take to avoid committing an infringement of another party's IPRs and to monitor whether a competitor is infringing its IPRs?

Patents

Businesses must carry out patent searches at www.inpi.gov.ar to ensure that the launching of a new product will not infringe a prior patent registration (see Question 2, Patents).

Trade marks

A business can conduct availability searches before using or applying for registration of a new trade mark to verify that there are no prior identical or confusingly similar trade marks owned by third parties.

Watch services are available to monitor the filing of new applications that may be confusingly similar to a registered trade mark. Some law firms also have their own databases to provide watch services to clients.

To monitor trade mark infringements, businesses can use:

  • Market surveillance.

  • Online monitoring, especially of online auction and e-commerce websites.

Copyright

To avoid committing an infringement, a business should carry out copyright searches with the DNDA, to ensure that the new work will not infringe a prior copyright registration (see Question 2, Copyright).

Design rights

To avoid committing an infringement, a business should carry out designs searches at www.inpi.gov.ar to ensure that the launch of the new product will not infringe a prior patent registration (see Question 2, Design rights).

Confidential information

Not applicable.

 

Exploiting IPRs

5. What are the main steps in an IP audit in your jurisdiction to determine the content of an IP portfolio?

To determine the content of an IP portfolio within an IP audit, it is necessary to examine the:

  • A list of all IPRs owned by the company and their names.

  • A list of oppositions filed by the company against applications by third parties.

  • Descriptions of trade marks, trade names, business signs and logos used by the company during the last five years that are not registered.

  • Copies of trade mark or patent licences granted by or to the company.

  • Descriptions of technology, know-how and confidential information used by the company, whether created in-house by the company or owned by a third party.

  • Assignments of:

    • know-how and technology agreements entered into by the company;

    • any agreement under which the company provides or receives services which involve the use of certain know-how or technology that has already been licensed or assigned.

  • A list of copyright works that are the property of the company and of third parties, which could be subject to registration or protection in Argentina.

  • Descriptions of the software and hardware used by the company, indicating the author and the copyright owner of rights. If the software or hardware is owned by third parties, the auditor should examine copies of the authorisation of use, licence, and so on.

  • Assignment and licence agreements and any other material agreement concluded by the company concerning company works and company property that are protected by IP law.

  • Certificates of registration issued by the DNDA.

  • Information on charges or encumbrances over IPRs owned by the company.

  • Administrative, judicial or legal opinions relating to disputes, claims, or legal proceedings which have arisen or could arise in the future in connection with IPRs.

  • A list of domain names registered by the company.

This information will help to determine whether the company's IPRs are protected, used, maintained and enforced effectively and appropriately.

 

Assignment

6. How can main IPRs be assigned?

Patents

Patents and patent applications can be assigned in whole or in part.

Trade marks

Trade marks can be assigned in whole or in part without reference to the goodwill (goodwill is not a concept that is recognised under Argentinean law).

Copyright

Copyright can be assigned totally or partially. The assignment only extends to the economic or exploitation aspects of the copyright and not to the author's moral rights. This means that:

  • The author retains the right to have his:

    • work properly reproduced; and

    • name mentioned.

  • Any assignees are not allowed to change the title, form or contents.

Moral rights cannot be assigned.

For a copyright assignment to be fully effective and valid against third parties, it must be in writing and registered with DNDA. Otherwise, it will be valid only between the parties.

Design rights

Design rights and applications can be assigned in whole or in part.

Confidential information

Not applicable.

 
7. What formalities are required to assign each of the main IPRs?

Patents

Patent assignments must be made in writing and signed by both assignee and assignor. The assignment document must:

  • Be notarised. In the case of a foreign document, it must be legalised by apostille under the HCCH Convention Abolishing the Requirement of Legalisation for Foreign Public Documents 1961 (Apostille Convention) or by the Argentine Consulate.

  • In the case of a document in a foreign language, include a sworn translation in Spanish.

The assignment is effective against third parties if it is recorded with the Patent Office of INPI. If the assignment is recorded within ten business days after its execution, it will be effective against third parties as from the filing date. Otherwise, the assignment is effective after it is officially recorded.

The original letters patent document must also be filed with INPI for endorsement. If the original document is no longer available, it is possible to obtain certified copies from INPI.

Trade marks

Trade mark assignments must be:

  • Executed in writing.

  • Signed by both the assignee and assignor.

The signature of the assignor must be certified by a notary public who must attest as to the identity and legal capacity of the assignor, indicating that he has authority to execute the assignment document on the assignor's behalf. In the case of foreign documents, the assignor's signature must be legalised by an apostille under the Apostille Convention, or by the Argentine Consulate. The assignee's signature does not require notarisation or legalisation. In the case of documents in foreign languages, a sworn translation in Spanish is also necessary.

The assignee must apply for registration of the assignment with INPI. The assignment is effective against third parties once it is officially recorded.

Certificates of registration can be submitted for endorsement purposes along with the application for registration of the assignment, although this is no longer mandatory.

Copyright

Copyright assignments must be executed in writing and signed by both the assignee and assignor. To record the assignment document with the DNDA, it is necessary to file the:

  • Original contract or a notarised and legalised copy, together with a sworn translation of the document into Spanish, if necessary (see above, Patents).

  • Relevant form.

Design rights

Assignments of design rights must be made in writing and the agreement notarised. In the case of a foreign document, it must be legalised by an apostille or the Argentine Consulate.

The assignment is effective against third parties if it is officially recorded.

The original title document must also be filed with the Patent Office for endorsement purposes. If the original document is no longer available, it is possible to obtain certified copies from INPI.

Confidential information

Not applicable.

 
8. What main terms should be included in an assignment of IPRs?

The following terms should be included in an assignment of IPRs:

  • Identification of IPRs by their serial or registration numbers.

  • An assignment provision.

  • The consideration paid, or a statement that the assignment is free of charge.

  • A clause stating that the assigned IPRs are the sole and full property of the assignor and are not subject to encumbrances or liens.

  • In the case of trade marks, a clause stating that the:

    • transfer includes the right to continue oppositions filed by the assignor on the basis of those marks;

    • assignor has no further interest in those oppositions;

    • assignee has the right to confirm or withdraw all such oppositions in which the assignor will have no further interest.

 

Licensing

9. How can each of the main IPRs be licensed?

Patents

A licence can be granted under any patent, or patent application, to use, manufacture, or work the invention that is the subject of the patent. A sub-licence can also be granted under such a licence. A patent licence can be either:

  • Exclusive, giving the licensee the right to exploit the patent to the exclusion of all, except the patent holder. If the licensee also wants to exclude the patent holder from exploiting the patent, both the licensor and the licensee must mention that exclusion in the agreement.

  • Non-exclusive, where more than one licensee has the right to exploit the patent together with the patent owner.

It is possible to request a compulsory licence from the Patent Office to use the invention without the patent holder's consent if the invention has not been worked, or where work has been interrupted for more than a year, after either:

  • Three years from the grant of the patent.

  • Four years from the filing of the application.

This does not apply where the failure to work the patent has been due to force majeure, or effective and appropriate steps for the use of the invention have been taken.

To obtain a compulsory licence, the potential user must prove that:

  • He has attempted to obtain the grant of a licence from the patent holder under reasonable commercial terms.

  • Those attempts have not been successful after a term of 150 days from the date the licence was requested.

  • It is in accordance with technical and commercial conditions to supply the domestic market under reasonable commercial circumstances.

Trade marks

Licence agreements are a contractual matter that is not subject to specific legal provisions. Trade marks can be licensed:

  • In whole or in part.

  • Exclusively to a particular licensee.

  • Non-exclusively.

Sub-licence provisions must be expressly included in the agreement for the licensee to be able to sublicense a particular trade mark.

Copyright

There are no general legal provisions that specifically apply to copyright licences. There are two different types of provisions: provisions for specific types of copyright licences and general contract law rules that apply to all types of contracts. For example, under a publishing agreement, the:

  • Publisher acquires the right to reproduce, divulge and sell the work.

  • Copyright owner retains ownership unless specifically agreed.

  • Copyright owner retains rights to translate and modify the work and to file legal actions against infringers.

  • Contract states the consideration to be paid, number of authorised editions and size.

Design rights

The owner of the registered design can grant a general or limited licence to use their registered design. A licence of a registered design right can be exclusive or non-exclusive (see above, Patents). A sub-licence can also be granted under any such licence. There are no compulsory licences (see above, Patents).

Confidential information

Confidential information can be licensed in whole or in part. The licence should contain the following terms:

  • The receiving party must be the only party to use the confidential information, which must not be directly or indirectly disclosed to any third party, except for employees or agents of the receiving party that need to know. Those employees or agents must have agreed in writing, prior to receiving the confidential information, to be bound by the terms of the licence.

  • On termination of the licence, the receiving party will:

    • cease using the confidential information;

    • promptly return or destroy all confidential information and copies in the receiving party's possession.

  • The receiving party's obligations will survive termination of the licence for a period of time (for example, five years).

  • Appropriate indemnities.

 
10. What are the formalities to license each of the main IPRs?

Patents

A licence agreement is a non-formal agreement based on the parties' freedom to contract. Registration of a licence agreement is in principle not mandatory in Argentina, and is not required for the agreement to be valid or enforceable, although agreements have to be registered with INPI for statistical and tax purposes.

Technology transfer agreements executed by a person domiciled in Argentina as licensee and a person domiciled abroad as licensor fall under the provisions of Law No. 22,426, as amended. Technology is defined as any (Regulatory Decree No. 580/81):

  • Patent.

  • Industrial model.

  • Industrial design.

  • Other technical knowledge necessary for the manufacturing of products or the rendering of services.

If the technology transfer agreement has been duly registered with INPI, the tax withholdings that the licensee would have to make on royalty payments to a foreign licensor would amount to an effective rate of:

  • 21% of such payments, if the agreement relates to the rendering of technical assistance, engineering or consulting services unavailable in Argentina in the relevant authorities' knowledge.

  • 28% of such payments, if the agreement relates to the assignment of rights or licences for the exploitation of trade marks, patents, or any technology services that fall within the scope of Law No. 22,426, other than the services referred to above.

The effective rate of income tax withholding may be lowered by the provisions of double taxation treaties.

As far as the licensee is concerned, if the technology transfer agreements are registered with INPI, the local licensee can deduct royalty payments to determine its taxable net income as follows (Income Tax Law):

  • If the royalties relate to the exploitation of patents and trade marks, the deduction is limited to 80% of the payments made.

  • If the royalties relate to technical and financial counselling agreements or any other agreement for the rendering of counselling services of any nature, the licensee is authorised to deduct the royalty payments, with certain limitations. The royalty payments must not exceed:

    • 3% of the sales considered in the contracts as the basis for the royalties;

    • 5% of the amount invested by the licensee (local company) in the development of the business related to the (technical or counselling) service agreement.

    Any amounts paid in excess of these limits cannot be deducted by the licensee.

Treaty regulations regarding royalty deductions may, however, override these limitations.

To register a licence agreement it is necessary to:

  • Complete the relevant form.

  • Submit the original licence agreement or copies of the agreement (including, if the agreement is in a foreign language, a sworn translation into Spanish).

  • Pay official fees of 0.1% of the amount for the registration.

Trade marks

Trade mark licence agreements are not subject to specific formalities. Registration is only required for statistical and tax purposes. The same registration requirements and tax treatment apply as for technology transfer agreements, except that the official fees are set at 0.2% of the total amount payable to the licensor (see above, Patents).

Copyright

Registration of a licence agreement is in principle not mandatory in Argentina and it does not bring about any tax benefit. To register, it is necessary to file:

  • The relevant form.

  • The original contract or a certified and legalised copy. If the original is in a foreign language, it is necessary to file a translation in Spanish.

Design rights

Registration of a licence agreement is not mandatory. The same formalities and fees apply for registration as for patents (see above, Patents).

Confidential information

Registration of confidential information is not mandatory. The same formalities and fees apply for registration as for patents (see above, Patents).

 
11. What main terms should be included in an IP licence?

The following terms should be included in an IP licence agreement:

  • A clear identification of the licensed IPRs.

  • A provision granting the licence.

  • Description of licence conditions (whether exclusive or non-exclusive or subject to sub-licence).

  • A provision concerning royalties.

  • Use and quality control provisions.

  • The duration of the licence and termination provisions.

  • Warranties regarding:

    • ownership and title;

    • an absence of claims and legal actions affecting the licensed IPRs.

  • Indemnity provisions.

Licences must meet the requirements of competition law (for example, they must not be restraint of trade agreements).

 

Taking security

12. Is security commonly taken over IPRs?

In theory, all types of IPRs may be the subject of security. In practice, the valuation of an IPR can be extremely difficult.

 
13. What are the main security interests taken over IPRs?

Security over IPRs can be taken by:

  • A pledge.

  • An attachment of lien as a result of a judicial order, for example, to secure the payment of a debt.

Pledges can be registered against intellectual property (Government Decree No. 897/95).

To make the pledge effective and enforceable against third parties, it is necessary to first record it with the Registry of Pledges. Once the pledge is recorded, a copy must be filed with the relevant administrative office (Patent Office, Trade Mark Office or the DNDA) for each IPR included in the security agreement. These rules are the same for every type of IP, except for authors' moral rights that cannot be subject to pledges.

Registered pledges do not require a public deed. They can be established through an authenticated private instrument, using the forms provided by the Registry of Pledges.

 

M&A

14. What IP-related due diligence is commonly carried out in both a share sale and an asset sale?

The same IP-related due diligence is commonly carried out for both share sales and asset sales. In all cases, the IP due diligence should include the information required to draw up an IT portfolio (see Question 5).

The purpose of the due diligence in the context of a share or asset acquisition is to:

  • Confirm that the target has good title to its IP assets.

  • Confirm the existence of IPRs.

  • Verify whether the IPRs are subject to encumbrances or liens.

  • Confirm that the target has all necessary licences to carry on the business.

  • Confirm that the target is in compliance with applicable laws related to IPRs.

  • Identify actual and threatened material actions, claims and disputes related to the IPRs.

  • Identify unusual or onerous terms in IP agreements.

  • Confirm that material contracts are properly executed and enforceable.

  • Ensure that the change of control or ownership of IP assets will not have a material adverse effect on the business.

 
15. What IP-related warranties and/or indemnities are commonly given by the seller to the buyer in both a share sale and an asset sale?

In both share and assets sales, the warranties and/or indemnities depend on the results of the due diligence process and the particular circumstances of the transaction. However, the following indemnities are commonly found in most share and asset purchase agreements:

  • The seller is the owner of all rights to, title over, and interests in the IPRs necessary to conduct the business.

  • The IPRs are free and clear of any encumbrances and liens or other restrictions or limitations regarding use or disclosure.

  • None of the IPRs infringes any third party's rights.

  • The seller has the full power to assign all IPRs without infringing any rights of others.

  • The seller has complied with all user requirements to maintain all IPRs in force.

  • None of the IPRs is subject to pending or threatened actions, whether judicial, administrative or otherwise, that challenge or affect the IPRs.

  • None of the IPRs is subject to outstanding injunctions, judgments, orders, decrees, rulings, or charges.

  • The seller has complied, and continues to comply, with all legislation applicable to the IPRs.

 
16. How are the main IPRs transferred in both a share sale and an asset sale?

Share sale

Generally, IPRs are not transferred in a share sale, but remain in the target's ownership. However, if an affiliated company owns the IPRs necessary to conduct the business, the buyer should try to ensure that those rights are assigned to the target. In the case of licensed IPRs, the buyer should specifically review change of control provisions.

Asset sale

In an asset sale, the title to each asset must be transferred under a written assignment. The purchase agreement can contain a specific clause regarding the assignment of IPRs, followed by either:

  • An exhibit identifying the assigned IPRs.

  • A separate assignment agreement, executed by the parties.

The transfer of Argentine patents, design rights and trade marks must be officially recorded to be effective against third parties.

 

Joint ventures

17. Is it common for companies to set up joint ventures in your jurisdiction to develop projects that heavily involve IPRs?

It is common for companies to set up joint ventures in Argentina to develop projects that heavily involve IPRs. The following are the key IP-related and general provisions used in a joint venture agreement where a joint venture vehicle is used:

  • An obligation to license certain of the parties' existing "background" IPRs to the joint venture. The parties should consider whether the license is to be royalty free, non-exclusive, non-transferable, irrevocable, and so on.

  • An obligation on the parties to disclose any know-how and other relevant IP-related information to each other and/or to the joint venture.

  • An obligation to license IPRs developed in the course of the parties' independent activities which are applicable to the joint venture.

  • A provision concerning the exploitation of the new rights, including who will exploit the new rights and in which technical fields.

  • Warranties and indemnities regarding the validity of IP transferred or licensed to the joint venture.

  • The ownership of IPRs resulting from the joint venture and after its termination, including whether the parties will be granted a licence to use the IP in their independent activities.

  • Responsibilities for prosecution, maintenance and protection of shared IPRs.

  • Obligations of each of the parties.

  • Service and consulting agreements to be executed by the joint venture vehicle.

  • Technical assistance to be provided by the parties.

  • Governance rules of the joint venture vehicle, including provisions related to the appointment of managers, first refusal rights, put and call options, rules and procedures to approve certain decisions, and so on.

  • Capitalisation and funding of the joint venture vehicle.

  • Provisions concerning revenue sharing, dividends, and royalties.

  • Confidentiality obligations, in particular, the applicable law and rules concerning dispute resolution.

  • Termination provisions, in particular, consequences for failure to perform contractual obligations.

Many of these provisions will also be found in a contractual joint venture agreement.

 

Competition law

18. What are the main provisions of your national competition law that can affect the exploitation of the main IPRs?

The Anti-trust Law regulates competition under the "rule of reason". It prohibits acts or conduct relating to the production and exchange of goods and services if they either:

  • Limit, restrict, falsify or distort competition.

  • Constitute an abuse of a dominant position in a market.

However, these acts or conduct are not unlawful in themselves; they are only unlawful if they are likely to cause harm to the general economic interest.

The Anti-trust Law applies to all individuals and entities that carry out:

  • Business activities within Argentina.

  • Business activities abroad, to the extent that such acts, activities or agreements may have any effects in the Argentine market.

 
19. What are the most common national competition law issues that arise in the exploitation of the main IPRs?

The exploitation of the main IPRs may give rise to breach of the prohibition on restrictive practices. The Anti-trust Law provides a non-exhaustive list of a number of acts that could be considered to be restrictive practices, if they involve harm to the general economic interest:

  • Price fixing.

  • Practices that limit or control:

    • technical development; or

    • the production of goods and services.

  • Practices that establish minimum quantities or the horizontal allocation of zones, markets, customers, and sources of supply.

  • Agreeing or co-ordinating bids in public bidding.

  • Excluding, impeding, or hindering one or more competitors from accessing a market.

  • Conditioning the:

    • sale of goods to the purchase of another good or to the use of a service; or

    • provision of a service to the use of another service or the purchase of goods.

  • Limiting the purchase or sale to a condition of not using, purchasing, selling or supplying goods or services produced, processed, distributed or commercially exploited by third parties.

  • Unwarranted refusal to fulfil purchase or sale orders of goods or services submitted in existing market conditions.

  • Imposition of discriminatory conditions for the purchase or sale of goods or services not based on existing commercial practices.

  • Suspending the provision of a dominant monopoly service in the market to a provider of public services or of services which are of public interest.

  • Predatory pricing.

However, these acts or conduct are not unlawful in themselves. They are only unlawful if they are likely to cause harm to the general economic interest.

To determine if there is a conduct that causes harm to the general economic interest, the Anti-trust Commission (Comisión Nacional de Defensa de la Competencia) takes the following into account:

  • If there is a substitute product in the relevant market.

  • If the licensee has competitors manufacturing the same product.

For example, if a licence agreement provides that the licensee must only sell the product acquired under the agreement to a special distributor in Argentina and South America, that clause could be considered to be a restraint on competition, unless the licensor proves that there are other similar or substitute products available in the market.

 
20. What exclusions or exemptions are available for national competition law issues involving the exploitation of the main IPRs?

The Anti-trust Law only applies when there is likely to be harm to a general economic interest (see Question 19). The analysis will be carried out on a case-by-case basis and there are no specific exemptions, such as the block exemptions under EU law.

 

Advertising

21. To what extent do advertising laws impact on the use of third party trade marks?

There are no specific advertising provisions regarding the use of third party trade marks on advertisements. The unauthorised use of a third party trade mark may be considered to infringe that trade mark, depending on the circumstances of the case. The courts consider that the use of a trade mark by third parties does not infringe the mark, provided that the parties do not:

  • Behave as the owner of the relevant trade mark.

  • Degrade or discredit the mark.

Merely referring to a third party trade mark is not prohibited in Argentina, provided it causes no damage to the owner of the sign.

 

Employees and consultants

22. Who owns each of the main IPRs created by an employee in the course of his employment? Is compensation payable in relation to employee IPRs? What main steps can an employer take to ensure it owns each of the main IPRs?

Inventions and design rights

Generally, there are three circumstances in which the employer is entitled to an invention created by his employee:

  • Ordinary invention. The invention is made by an employee during the life of his labour, work or service contract with the employer, the total or partial purpose of which is the performance of inventive activities. No compensation is payable.

  • Extraordinary invention. The invention is made by the employee, as with ordinary inventions above. In addition, the following exceed the explicit or implied content of the labour relation or contract:

    • the employee's personal contribution to the invention;

    • the importance of the invention to the employer.

    The employee is entitled to a supplementary payment.

  • Non-related invention. The employee makes an invention related to his professional activity within the company, where:

    • the total or partial purpose of his labour contract does not involve performing inventive activities;

    • the knowledge acquired within the company, or the use of its facilities, has been a predominant influence on the invention.

    In this case, the employee is entitled to the invention only if the employer refuses to either claim it, or reserve the right to use it. The compensation is established according to the industrial and commercial importance of the invention, taking into account the:

    • value of the means and knowledge facilitated by the enterprise;

    • contributions of the employee.

These three categories also apply to design rights.

Other IPRs

In relation to copyright, when an employee is hired specifically for the creation of a work, the rights to the work belong to the person who hired the employee for the work, unless the parties agree otherwise (Copyright Law No. 11723).

For all other IPRs, the general rules under the Labour Contract Law No. 20,744 apply, which set out that the employer is the owner of any work made by any of its employees during the labour relationship, when the employee was hired for the purposes of producing that work.

Any other work made by the employee, even using the employer's tools, belongs to the worker. However, if the employee intends to assign his ownership of that invention, the employer has a right of first refusal.

Argentine labour law is a matter of public order, and any agreement amending the above rules is considered void.

Authors retain moral rights, which are not subject to any time limits, cannot be assigned, and are inalienable.

Agreements

To reduce the likelihood of dispute, agreements between the employer and the employee regarding the assignment of employees' inventions or patents to their employers are commonly entered into at the start of the labour relationship.

In any case, as employees cannot waive their rights in advance, the text of the employment agreements should be drafted carefully, to ensure that the purpose of the employees' duties are, at least partially, the performance of inventive activities.

 
23. Who owns each of the main IPRs created by an external consultant? What main steps can a business take to ensure it owns each of the main IPRs?

IPRs developed by a consultant (provided he is not an employee), pursuant to an agreement under which he is paid for his work, will be owned by the consultant. However, if a business commissions the consultant to perform inventive activities (including works protected by the Copyright Law), the business will be the owner.

A business can set out in its commissioning agreements that the:

  • Consultant's job is the performance of inventive activities.

  • Business will be the owner of all developed IP.

The commissioning agreement should include an assignment clause under which the consultant is required to assign to the business all IP rights developed by the consultant in the course of his inventive duties.

 

Tax

24. What are the main taxes payable by a licensor on the licensing of the main IPRs?

Income tax

Payments received from licensing IPRs by a company or an individual that is tax resident in Argentina, or trading through a permanent establishment, are generally subject to income tax. If the company licenses IPRs, it should pay income tax under the general regime set out in Law No. 20,628, as amended. This means that the amount received under the licence will be included in the annual tax return, and subject to the rate of 35%.

An obligation to withhold tax may arise if the licensing of IPRs is made by a foreign tax resident. The extent of the withholding obligation will vary depending on whether:

  • The foreign tax-resident seller is entitled to relief under a double tax treaty.

  • The patent, trade mark and registered design licences have been duly registered with the Patent Office.

If the licences are not registered for tax purposes, the licensors' royalty earnings will be subject to a 35% rate of withholding income tax.

Currently, Argentina has signed double tax treaties with Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, The Netherlands, Norway, Spain, Sweden and the UK.

Value added tax (VAT)

IPR licences are not subject to VAT, unless they are combined with taxable services or are part of franchises or commercial concessions.

Stamp tax

Stamp tax applies to IPR licences. Generally, the rate of the stamp tax is 1% of the economic value of the agreement, although in the City of Buenos Aires the applicable rate is 0.8%. However, each case should be assessed individually to determine whether the exemptions apply.

 
25. What are the main taxes payable by a seller on the disposal of the main IPRs?

Generally, the tax treatment for the disposal of IPRs is the same as that as for licences, and they are subject to income tax (see Question 24, Income tax). However, each transaction must be analysed on a case-by-case basis.

 

Cross-border issues

26. What international IP treaties is your jurisdiction party to?

Argentina is a party to the following international IP treaties, among others:

  • WIPO Berne Convention for the Protection of Literary and Artistic Works 1971 (Berne Convention).

  • Universal Copyright Convention 1952.

  • WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS).

  • WIPO Copyright Treaty 1996.

  • WIPO Paris Convention for the Protection of Industrial Property 1883.

 
27. Are foreign IPRs recognised in your jurisdiction?

Patents

The Argentinean Senate approved the Patent Cooperation Treaty 1970 (PCT) in 1998. However, it has yet to be passed by the House of Representatives. Therefore, it is not possible to file a unified procedure to protect patent rights in Argentina as a party to the PCT.

Trade marks

Argentine trade mark law is territorial. The registration of a trade mark in a foreign country will not provide rights over that mark in Argentina.

Copyright

The Copyright Law extends protection to foreign works that are protected under foreign law, as long as the authors can prove their rights to the works are recognised in their home countries. Argentina is a member of several international copyright conventions, including the Berne Convention and the Universal Copyright Convention (see Question 26).

Design rights

Argentine industrial designs law is territorial. The registration of a industrial designs in a foreign country will not provide rights over that mark in Argentina.

 

Reform

28. Are there any proposals for reform?

There are no proposals for reform.

 
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