/ Latin Lawyer Magazine: Survival of the fittest

Wednesday, 3rd November 2010

As part of our region-wide IP survey, Amy Stillman talks to IP lawyers in Latin America about staying ahead of the game in a fast-changing environment

The group of girls clad in orange dresses cheering their nation on in the match between Holland and Denmark in Johannesburg’s Soccer City this year will have looked like any other group of enthusiastic fans to many, but for FIFA they presented a problem. So much so that the 36 female fans were thrown out of the game, amid accusations that their outfits were designed to promote a beer brand with no licence to market at the World Cup.

Bavaria, the Dutch beer company in question, denied any influence in their choice of clothing that day, but FIFA treated the incident as a case of ambush marketing – a relatively new concept that sees companies hijacking events to market their goods without paying the host. Brazil doesn’t have legislation to combat ambush marketing, but with the World Cup, and FIFA, arriving in 2014, there is a bill under review in Congress. FIFA is fiercely protective of its brand. Like many other brand-driven companies it is fighting hard to control the use of its protected trademarks. Its official 2006 FIFA World Cup TM emblem, for example, has been protected in a record 153 countries and in several hundred product categories.

Fortunately for FIFA, Brazil is considered one of the strictest countries worldwide when it comes to copyright infringement. Public libraries are not allowed to copy rare works that are out of print, and copying music from a CD to your iPod could potentially land you in a litigation battle. But Brazil is actually looking to reform its copyright law in some areas to fit into a world of new technology and greater access to information.

In today’s information society, access to information has spiralled out of governments’ and companies’ control – they are now in a race to keep up. Brazil is not alone in seeking to strike a balance between protecting the work of artists, authors and companies and embracing the brave new world of information technology. Across Latin America, countries are shifting gears, and the region’s IP lawyers need to keep on top of developments.

While opening a Pandora’s box on copyright infringement matters, technology has also made patent and trademark filings easier

The internet has a lot to do with how the work of an IP lawyer has changed; it has forced lawyers to re-examine how they use IP legislation. “Web 2.0 activity is increasing a lot,” says The Coca-Cola Company’s head trademark counsel for Latin America, Mercedes Rodriguez Candeo, who is based in Argentina. “Websites are constantly changing, so we are using a lot of copyright protection, because if you wait for registration, it demands too much time. Before, in television or print, you would use a claim for years and years, but today you use a trademark or slogan on your website, and tomorrow you no longer need it.”

Alessandri & Cía partner Rodrigo Velasco Santelices says that in Chile domain names have become “a hot issue”: “Some years ago the IP practice was restricted to trademarks and patents – that was it. Now we have many clients dealing with internet problems and copyright.”

New technology has not only altered the content of an IP lawyers’ work, it has also affected the way it is carried out and how firms can charge. While opening a Pandora’s box on copyright infringement matters, technology has also made patent and trademark filings easier. Modern software programs enable lawyers to reduce much of the administrative work, leaving more room for them to focus on legal work.

“In Latin America there was always a very formalised practice for applications, what I would call ‘the ribbons and seals’ – you needed a seal for this, an authorisation for that, it was full of formalities, while having very little to do with the practice of law,” says US-based independent IP consultant Robin Rolfe.

This is also down to international trade agreements that have required Latin American countries to tighten up their IP legislation. Most are now members of the United Nation’s international IP system, World Intellectual Property Organisation (WIPO), and signatories of WIPO treaties, such as the Patent Cooperation Treaty (PCT). Central America is expected to join the Madrid Protocol and adhere to a singular filing system internationally; Chile amended its IP and Copyright Law in April to “update the law to a modern standard in accordance with the free-trade agreements Chile has signed”, according to Velsaco; and patent applications and infringement filings in Mexico have been reformed.

“There is a move to bring all the Latin American countries under the international regime,” explains Rolfe, who, like some IP lawyers in the region, sees internationalisation as a positive step for IP protection.

Rolfe points out that international pressure has also encouraged governments in the region to cut down on bureaucratic red tape. But there is a downside to that, as a large portion of firms’ fees had been generated by application work. “If you look at the revenue side there has been an impact there,” says Rolfe. “With these international treaties and international pressure, all of this revenue has been stripped away from IP firms.”

Hugo Berkemeyer, of Paraguayan firm Berkemeyer Attorneys & Counselors, says that his firm has got around this problem by decreasing fees for clients on administrative filings, while charging more for sophisticated services. However, all of the lawyers that spoke with Latin Lawyer admitted that fees for IP lawyers had reached a hiatus in light of the global recession and increased competition.

“At Brigard & Castro we have not increased our fees for the last three years,” says Martín Torres, partner of what is the sister firm to Colombia’s Brigard & Urrutia Abogados. “Colombia is one of the Latin American countries with higher official fees, and clients take this condition into account when they invest in our country. So we have tried to balance this with our service portfolio expansion.”

“In view of the financial crisis in Europe and the US, we are facing a lot of pressure from our clients to charge less,” adds Jacques Labrunie of IP boutique Gusmão & Labrunie in Brazil. “Even the companies that work in Brazil are facing a lot of competition from Asia, so we have been pressured to work more and earn less.”

More competition

The IP manager for the bakery Grupo Bimbo in Mexico, Inti Alva, explains that reduced fees in Mexico are in large part due to more firms competing in the same market. A similar trend can be found in countries across the region – as the need for IP services is growing. “From 2000, IP matters have increased in Central America,” says Mónica Machuca, who heads the IP practice for Central American law firm Aczalaw, from its office in El Salvador. “Companies are more confident, and more and more are coming to the region, not only to protect their rights, but to invest in products and services.”

Brazil has seen some of the biggest growth in IP work in the region. “The IP firms in Brazil are doing nicely because there is a growing awareness of export opportunities – it is probably the hottest IP jurisdiction right now,” says Rolfe.Labrunie agrees: “In Brazil we have a much stronger economy and the industry is developing, technology is developing. We are facing more questions, more requests for IP advice and more litigation cases. Even medium-sized and small companies in Brazil are now taking care of their trademarks and patents.”

In the past few years, the rise in importance of IP for companies has prompted full-service firms across the region to sit up and take note. Many of those not yet practising IP law quickly saw it made no sense to pass on what was becoming a regular stream of work to boutiques. To bring the work in-house they either built their own team or incorporated a boutique, the latter being far more effective given the brand boutiques have developed and the army of non-legal specialists required. But even with the increased competition from full-service firms, boutiques have more than held their ground, meaning companies have their pick of a wide choice of service styles.

Rolfe describes today’s IP environment in Latin America as one of “experimentation”. She sees some commercial firms expanding their IP practice areas, while others are joining up with boutique firms. In many jurisdictions, boutiques are expanding outward, while in others, like Mexico, they are splitting. IP lawyers have a lot to balance, what with the rapidly changing industry they serve, a growing number of lawyers in the market and pressure to keep fees down. Establishing an identity in such a climate cannot always be easy. The growth of more complicated IP regulations and expansion of the industry has spurred some specialists to become all-rounders. As business needs have grown, prosecution practices are becoming more essential, but according to Rolfe, focusing on prosecution alone is no longer a good career move – IP lawyers need to know how to do IP litigation, transactional work and franchising as well. “All of those areas are natural extrapolations on the IP practice, which are more grounded in business,” she says. In Central America, Machuca agrees: “Lawyers have to be more competitive and act in other matters besides just IP or trademark registration, such as litigation, anti-counterfeiting, patents and even corporate matters.

But even as the Latin American IP industry branches out, there are still some old challenges. Labrunie says that in Brazil, timings for court proceedings is a concern, and one that is difficult to explain to international clients that are used to a quicker procedure at home. In some cases it can take five years to receive a final decision for an appeal in Brazil. “It’s hard for our clients to understand this because the US system is faster, and the European courts are also much faster,” he says.

Even with the increased competition from full-service firms,boutiques have more than held their ground, meaningcompanies have their pick of a wide choice of service styles

Alessandri y Cia’s Velasco notes that piracy is still a major concern in the border zone of Brazil, Argentina and Paraguay, known as the “tri-border”. This is also a problem in Chile’s tax-free zones in the northern part of the country, where containers of counterfeit products coming from Asia are re-exported to other South American countries. “Although in Latin America the problem of piracy is not as bad as in Asia, for instance, we still have some areas in which there are very big problems,” says Velasco. “We have a lot of smuggling and all kinds of counterfeit goods coming in from China. Multinational companies are really concerned about this problem, so enforcement is one of the most important things for our practice at the moment.”

But despite the challenges facing IP lawyers, veterans of the profession say that the hard work is worth it for the international opportunities. IP has always had an international edge, and as Velasco reveals, many of his attorneys have come from all over the world. New associates are expected to have studied abroad, in countries like Spain and the US. Moreover, working with international clients allows IP lawyers to develop connections across the globe. “I think that the most exciting thing about being an IP lawyer is the opportunities you have to work with people all over the world,” explains Machuca.

When asked what draws him to IP law, Berkemeyer pauses. “Sometimes it’s very difficult, but it can be very rewarding,” he says, before mirroring Machuca’s comments on the international appeal of the job. “I have been in practice for 25 years now, and I couldn’t do anything else other than being an IP attorney.”