By Marcela Mancia Dada and Jose Roberto Romero
Romero Pineda & Asociados, El Salvador

DR-CAFTA (Dominican Republic-Central America Free Trade Agreement with the U.S.) provides provisions relating to intellectual property law and requests implementation from its signatories: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. El Salvador led the group by being the first to submit amendments for USTR’s (United States Trade Representative) approval. El Salvador submitted fourteen new and amended laws in total, including provisions relating to its trademark law. The new and amended laws apply to signatory and non-signatory nations as of January 20, 2006. On the other hand, CAFTA applies only among signatory countries and came into effect on March 1, 2006, for the U.S. and El Salvador.

The intellectual property provisions as outlined in CAFTA relate to both substantive and procedural issues and in sum broaden the scope of protection for trademark owners in El Salvador.

SUBSTANTIVE ISSUES

The following include changes under the new law:

· The sound marks, smell marks and certification marks are now protectable in El Salvador

· ‘Likelihood of olfactory confusion’ has been introduced as a new rule to be applied when examining applications or search results

· The existing rule of ‘likelihood of ideological confusion’ will now be applied when examining sound marks

· The registration for sound and smell marks is for 10 years, at which time the mark may be renewed for another 10-year term

· Registration of certification marks is for an indefinite period of time when mark is owned by a public entity, subject only to the existence of such entity

· Certification marks are subject to a “bullet proof” protection in that they cannot be seized or embargoed, subject to preliminary injunction or judicial execution

· Should a certification mark not be renewed, or is abandoned or a public entity owning it ceases to exist, the same mark cannot be registered or used by another for 10 years

· The recordal of license agreements is no longer mandatory. The license agreements are enforceable before a third party, including infringers and authorities, as long as an agreement is duly legalized and translated into Spanish

· Coexistence agreements will be approved as signed by the parties without the Registrar’s challenge relating to the issue of a likelihood of confusion

· Notice of publications, in both the Official Gazette and major newspapers, are now required to outline the list of goods and services applied

PROCEDURAL ISSUES

Trademark cancellation for non-use

Cancellation for non-use was abolished in 2002 and has now been reintroduced to allow full or partial cancellation of a mark not used in a 5-year period. Partial cancellation will affect only those goods or services that are not being used. The mark will therefore remain registered only for those goods or services which were not cancelled.

Cancellation can be filed 5 years after the registration date. The prevailing party’s right to the mark counts as early as the cancellation filing date or no later than 3 months following the court’s decision.

According to the new law, a trademark is in use when (i) the goods or services are found in commerce or (ii) the goods are exported from El Salvador or (iii) the services are provided abroad but originated in El Salvador. Additionally, “advertising of the mark through any means” will be considered use, “even if the goods or services covered are not actually traded” in El Salvador. This particular provision is useful to foreign trademark owners who can rely on advertising in magazines, newspapers, via satellite, cable TV and the Internet to help prove use of the trademark. To prove the use, trademark owners should couple advertising evidence with commercial invoices, accounting documents or auditor’s certifications that show the amounts and regularity of the goods or services used in commerce. Defenses to non-use include circumstances beyond the power of a trademark owner, such as import restrictions or any other official requirements imposed on products or services protected by the mark.

The amended law does not require filing of a proof of use on a regular basis.

Enforcement

Preliminary injunctions are now being granted against goods in transit and seizures at the borders. Permanent injunctions can include the destruction of goods seized at the border, as well as destruction of materials used in manufacturing and creating the infringing goods. To discourage infringement, the infringers are not being compensated for any losses in the procedure. Besides destruction, the infringing goods could also be donated to charity, subject to the removal of all labels displaying the infringing mark.

Rules relating to the damages have been substantially modified. According to new CAFTA influenced provisions, the plaintiff could base his claim on one or more of the following: a) Damages caused to the trademark owner as result of the infringement. b) Benefits that the trademark owner would have obtained, if the infringement had not occurred. In this case, the court shall consider the value of the goods or services infringed based on the retail price or through other means that prove value of the goods or services. c) The price or royalty that the infringer would have paid if he had a license, considering the commercial value of the infringed right and other licenses granted. Additionally, the infringer must pay the profits he gained from infringing, if those have not been considered in the foregoing options.

The statute of limitations is 5 years from the date of the last infringement.

Intellectual Property Court System

While Special Intellectual Property Courts are created, the competent courts will be those with jurisdiction in commercial matters, as well as the criminal courts if the infringer has committed a felony.

Domain Names

The paragraphs on the domain names have been added for the first time, specifically authorizing SVNET, the registration entity, to adopt dispute resolution procedures based on the WIPO Uniform Policy for Solving Domain Names Disputes for the ccTLD “.sv”.

Overall, the new provisions relating to the trademark law have raised the standards of intellectual property protection in El Salvador.