Ecuador

5. Protection of Property Rights

Real Property

Ecuador ranks 69 out of 190 in the 2016 World Bank’s Doing Business Report’s category for Ease of Registering Property. Foreign citizens are allowed to own land.

Intellectual Property Rights

Enforcement against intellectual property infringement remains a problem in Ecuador.

In April 2016, the United States Trade Representative moved Ecuador from Priority Watch List to Watch List to in its annual Special 301 Report on intellectual property and remains on the Watch List in 2017. This decision was in recognition of Ecuador’s passage of an amendment reinstating criminal procedures and penalties for intellectual property violations.

Piracy of computer software and counterfeit activity in brand name apparel is widespread. Pirated CDs and DVDs are readily available on many streets and in shopping malls. Weak copyright enforcement remains a significant problem.

The Ecuadorian Intellectual Property Institute (IEPI) was established in January 1999 to handle patent, trademark, and copyright registrations. IEPI reports information on its activities on its website at http://www.propiedadintelectual.gob.ec/ .

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

El Salvador

5. Protection of Property Rights

Real Property

Private property, both non-real estate and real estate, is recognized and protected in El Salvador. Companies that plan to buy land or other real estate are advised to hire competent local legal counsel to advise them on the property’s title prior to purchase.

No single natural or legal person-whether national or foreign-can own more than 245 hectares (605 acres) of land. Per the Constitution, a principle of reciprocity is applied regarding the ownership of rural land, meaning there are no restrictions on the ownership of rural land by foreigners in El Salvador, unless this restriction is applied to Salvadoran nationals in the corresponding states. If the rural land will be used for industrial purposes, however, the reciprocity requirement is lifted.

Real property can be transferred without government authorization. For title transfer to be valid vis-a-vis third parties, however, it needs to be properly registered. Real estate lease law tends to heavily protect the interests of tenants; the law allows tenants to remain on property after their lease expires, provided they continue to pay rent. Likewise, the law limits the amount of rent that can be charged and makes eviction processes extremely difficult.

Squatters occupying private property in good faith can eventually acquire title. If the owner of the property is unknown, squatters can acquire title after 20 years of good faith possession through a judicial procedure; if the owner is known, squatters can acquire title after 30 years.

Squatters may never acquire title to public land, although municipalities often grant the right of use to the squatter.

Zoning is regulated by municipal rules. Municipalities have broad power regarding the use of property within their jurisdiction. Zoning maps, if they exist, are generally not available to the public.

The ineffectiveness of the judicial system discourages investment in real estate and makes execution of real estate guarantees difficult. The real property lease law provides extensive protection to tenants, but landowners’ interests often go unprotected. Securitization of real estate guarantees or titles is legally permissible but does not occur frequently in practice.

In April 2012, the Legislative Assembly passed a constitutional reform recognizing the existence and the rights of indigenous peoples. However, there are no provisions for traditional use of lands or for indigenous peoples to share in revenue from exploitation of natural resources, as the government does not specifically demarcate any lands as belonging to indigenous communities.

According to the latest agricultural census (2007-2008), agricultural land in El Salvador totals 2,283,444.48 acres, of which 1,695,653.4 acres are owned and not rented out (74 percent), 478,127.32 acres are rented (21 percent), and 109,665.48 acres (five percent) are not clearly defined. For more information, please visit http://www.censos.gob.sv/ 

El Salvador ranks 71th of 190 economies on the World Bank’s Doing Business 2017 report in the Ease of Registering Property category. According to the collected data, registering a property takes on average of five steps over a period of 31 days, and costs 3.8 percent of the reported value of the property.

Intellectual Property Rights

El Salvador revised several laws to comply with CAFTA-DR’s provisions on intellectual property rights (IPR). The Intellectual Property Promotion and Protection Law (1993, revised in 2005), Law of Trademarks and Other Distinctive Signs (2002, revised in 2005), and Penal Code establish the legal framework to protect IPR. Investors can register trademarks, patents, copyrights, and other forms of intellectual property with the National Registry Center’s Intellectual Property Office. Reforms extended the copyright term from 50 to 70 years. In 2008, the government enacted test data exclusivity regulations for pharmaceuticals and agrochemicals, which will be protected for five and 10 years respectively, and ratified an international agreement extending protection to satellite signals.On February 15, 2017, the Legislative Assembly approved amendments to El Salvador’s Intellectual Property Law. USTR expressed concerns that it had not had an opportunity to review the draft legislation and noted that the CAFTA-DR contains transparency provisions. USTR indicated it would seek bilateral discussion of the proposed legislation and is engaging with the GOES to explore substantive issues with the proposed amendments.

The National Directorate of Medicines (NDM) has registered 60 products for data protection since 2008, including seven in 2016. The NDM protects the confidentiality of relevant test data and the list of such protected medications is available at the NDM’s website: http://www.medicamentos.gob.sv/index.php/es/servicios-m/informes/unidad-de-registro-y-visado/listado-de-productos-farmaceuticos-con-proteccion-de-datos-de-prueba .

Salvadoran authorities have limited resources to dedicate to IPR issues and enforcement of existing laws. The Salvadoran Intellectual Property Association (Asociacion Salvadoreña de Propiedad Intelectual, ASPI) notes that piracy is common in El Salvador because the police focus on investigating criminal networks rather than points of sale. The contraband and piracy of medicines and software also remain a problem, as well as the purchase of drugs online, whereby unlicensed or counterfeit products are imported to El Salvador. The National Civil Police (PNC) has an Intellectual Property Section with eight investigators. According to ASPI, the PNC section coordinates well with other government and private entities. Nevertheless, the PNC admits that a lack of resources and expertise, e.g., regarding information technology, hinders its effectiveness in combatting IPR crimes. Most PNC operations focused on copyright infringement, and there were only 19 arrests in 2016. During the year, the police seized a total of 56,919 pirated optical media discs (CDs and DVDs), along with six DVD/CD burners and 15 burner towers used to make pirated discs. The police also seized tens of thousands of counterfeit products, including 56,919 fake Disney toys and purported Casio brand wristwatches (9,980) and clocks (7,700). Other commonly counterfeited brands included Tommy Hilfiger, Calvin Klein, Levis, Polo Ralph Lauren, Sony, Dell, HP, Converse, Puma, and Hello Kitty. Both ASPI and the PNC would like the Attorney General’s Office to do more to prosecute IPR cases; only two or three prosecutors are dedicated to such work.

Contraband and counterfeit products, especially cigarettes, liquor, toothpaste and cooking oil, remain widespread. The Distributors Association of El Salvador (ADES) estimates that around 50 percent of the liquor consumed in El Salvador is smuggled. Most contraband cigarettes come in from China, Panama, and Paraguay and undercut legitimately-imported cigarettes, which are subject to a 39 percent tariff. According to ADES, most contraband cigarettes are smuggled in by gangs, with the complicity of Salvadoran authorities. A February 2017 study by CID Gallup Latin America, noting the link between contraband cigarettes and gang finances, estimated that 32 percent of the 940 million cigarettes consumed annually in El Salvador are contraband. Gallup estimated that, during 2014, the GOES lost USD 15 million in tax revenue due to cigarette smuggling.

The national Intellectual Property Registry has two registered geographical indications for El Salvador: “Balsamo de El Salvador” (balm for medicinal, cosmetic and gastronomic uses – registered since 1935) and “Café Ilamatepec” (coffee – registered in 2010). Salvadoran hard liquor “Chaparro” is in the process of registration.

El Salvador is not listed in the U.S. Trade Representative’s notorious market report nor on the Special 301 list.

El Salvador is a signatory of the Berne Convention for the Protection of Literary and Artistic Works; the Paris Convention for the Protection of Industrial Property; the Geneva Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication; the World Intellectual Property Organization (WIPO) Copyright Treaty; the WIPO Performance and Phonograms Treaty; the Rome Convention for the Protection of Performers, Phonogram Producers, and Broadcasting Organizations; and the Beijing Treaty on Audiovisual Performances (2012), which grants performing artists certain economic rights (such as rights over broadcast, reproduction, and distribution) of live and recorded works.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/details.jsp?country_code=SV 

Guatemala

5. Protection of Property Rights

Real Property

Guatemala follows the real property registry system. Defects in the titles and ownership gaps in the public record can lead to conflicting claims of land ownership, especially in rural areas. The government stepped up efforts to enforce property rights by helping to provide a clear property title. Nevertheless, when rightful ownership is in dispute, it can be difficult to obtain and subsequently enforce eviction notices.

Mortgages are available to finance homes and businesses. Approximately half of the banks offer mortgage loans with terms as long as 15-20 years for residential real estate. Mortgages and liens are recorded at the real estate property registry. According to the 2017 World Bank’s Doing Business Report, registering property in Guatemala takes 24 days, and it costs 3.7 percent of the property value. In 2017, Guatemala ranked 74 out of 190 countries in the category of Registering Property.

The legal system is readily accessible to foreigners. Foreign investors are advised to seek reliable local counsel early in the investment process.

Intellectual Property Rights

Guatemala has been a member of the WTO since 1995 and the World Intellectual Property Organization (WIPO) since 1983. It is also a signatory to the Paris Convention, Berne Convention, Rome Convention, Phonograms Convention, and the Nairobi Treaty. Guatemala has ratified the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). In June 2006, as part of CAFTA-DR implementation, Guatemala ratified the Patent Cooperation Treaty and the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure. Also in June 2006, the Guatemalan Congress approved the International Convention for the Protection of New Varieties of Plants (UPOV Convention). Implementing legislation that would allow Guatemala to become a party to the convention, however, is still pending. The Guatemalan Congress approved the Trademark Law Treaty in February 2016.

Guatemala has a registry for intellectual property. Trademarks, copyrights, patents rights, industrial designs, and other forms of intellectual property must be registered in Guatemala to obtain protection in the country.

Guatemala has a sound IPR legal framework. The Guatemalan Congress passed an industrial property law in August 2000, bringing the country’s intellectual property rights laws into compliance with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. The legislation was modified in 2003 to provide pharmaceutical test data protection consistent with international practice and again in 2005 to comply with IPR protection requirements in CAFTA-DR. CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of IPR, which are consistent with U.S. standards of protection and enforcement as well as emerging international standards. Congress approved a law to prohibit the production and sale of counterfeit medicine in November 2011. It approved amendments to the Industrial Property Law in June 2013 to allow the registration of geographical indications (GI), as required under the Association Agreement with the European Union. Guatemalan administrative authorities issued rulings on applications to register GIs that appear sound and well-reasoned for compound GI names, but U.S. exporters are concerned that 2014 rulings on single-name GIs will effectively prohibit new U.S. exporters to the Guatemalan market from using what appear to be generic or common names when identifying their goods locally.

Enforcement of IPR laws has been inconsistent. A number of raids, cases, and prosecutions have been pursued, but resource constraints and lack of coordinated government action impede efficient enforcement efforts. Piracy of works protected by copyright and infringement of other forms of intellectual property, such as trademarks, including those of some major U.S. food and pharmaceutical brands, remains problematic in Guatemala.

Guatemala has been included on the Watch List in USTR’s Special 301 Report for more than 10 years, including 2017.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Honduras

5. Protection of Property Rights

Real Property

Secured interests in property, both movable and real, are recognized under Honduran law. The Chamber of Commerce and Industry of Tegucigalpa (CCIT) manages the national property registry. Honduras’ secured transactions law gives a concession to the CCIT to administer the registry.

Inadequate land title procedures have led to numerous investment disputes involving U.S. nationals who are landowners. Title insurance is not widely available in Honduras and approximately 80 percent of the privately-held land in the country is either untitled or improperly titled. Resolution of disputes in court often takes years. There have been claims of widespread corruption in land sales, deed filing, and dispute resolution, including claims against attorneys, real estate companies, judges, and local officials. Although some progress has been achieved, particularly in the Bay Islands, the property registration system remains unreliable and represents a major constraint on investment. In addition, a lack of implementing regulations leads to long delays in the awarding of titles in some regions

Intellectual Property Rights

The legislative framework for protection of intellectual property rights (IPR), which includes the Honduran copyright law and its industrial property law, is generally adequate, but laws are often not effectively implemented. In these areas, Honduras largely complies with the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organization (WTO). Honduran law protects data exclusivity for a period of five years, and protects process patents, but it does not recognize second-use patents. The Property Institute (IP) and Public Ministry handle protection and enforcement of intellectual property rights.

CAFTA-DR Chapter 15 on Intellectual Property Rights further provides for the protection and enforcement of a range of intellectual property rights, which are consistent with U.S. and international standards as well as with emerging international standards of IPR protection and enforcement. There are also provisions on deterrence of piracy and counterfeiting. Additionally, CAFTA-DR provides authorities the ability to confiscate pirated goods and investigate intellectual property cases on their own initiative.

The Honduran legal framework provides deterrence against piracy and counterfeiting by, for example, requiring the seizure, forfeiture, and destruction of counterfeit and pirated goods and the equipment used to produce them. The law also provides for statutory damages for copyright and trademark infringement, to ensure that monetary damages can be awarded even when losses associated with an infringement are difficult to assign.

Resources for Rights Holders

A list of local attorneys is available at https://hn.usembassy.gov/u-s-citizen-services/local-resources-of-u-s-citizens/attorneys/.

The Honduran-American Chamber of Commerce works with U.S. and Honduran companies that encounter commercial challenges, including intellectual property rights issues. AmCham can be contacted through its Web site: http://www.amchamhonduras.org/ .

Mexico

5. Protection of Property Rights

Real Property

Mexico ranked 101 out of 190 countries for ease of registering property in the World Bank’s 2017 Doing Business report, an improvement of five places versus 2016. Article 27 of the Mexican Constitution guarantees the inviolable right to private property. Expropriation can only occur for public use and with due compensation. Mexico has four categories of land tenure: private ownership, communal tenure (ejido), publicly owned, and ineligible for sale or transfer.

Mexico prohibits foreigners from acquiring title to residential real estate in so-called “restricted zones” within 50 kilometers (approximately 30 miles) of the nation’s coast and 100 kilometers (approximately 60 miles) of the borders. In all, “restricted zones” cover roughly 40 percent of Mexico’s territory. Foreigners may acquire the effective use of residential property in “restricted zones” through the establishment of an extendable trust (fideicomiso) arranged through a Mexican financial institution. Under this trust, the foreign investor obtains all property use rights, including the right to develop, sell, and transfer the property. Real estate investors should, however, be careful in performing due diligence to ensure that there are no other claimants to the property being purchased. In some cases, fideicomiso arrangements have led to legal challenges. U.S.-issued title insurance is available in Mexico and U.S. title insurers operate here.

Additionally, U.S. lending institutions have begun issuing mortgages to U.S. citizens purchasing real estate in Mexico. The Public Register for Business and Property (Registro Publico de la Propiedad y de Comercio) maintains publically available information online regarding land ownership, liens, mortgages, restrictions, etc.

Tenants and squatters are protected under Mexican law. Property owners who encounter problems with tenants or squatters are advised to seek professional legal advice, as the legal process of eviction is complex.

Intellectual Property Rights

Intellectual Property Rights in Mexico are covered by the Industrial Property Law (Ley de la Propiedad Industrial) and the Federal Copyright Law (Ley Federal del Derecho de Autor). Responsibility for the protection of IPR is spread across several government authorities. The Office of the Attorney General (PGR) oversees a specialized unit which prosecutes IPR crimes. The Mexican Institute of Industrial Property (IMPI), the equivalent to the U.S. Patent and Trademark Office, administers patent and trademark registrations, and handles administrative enforcement cases of IPR infringement. The National Institute of Copyright (INDAUTOR) handles copyright registrations and mediates certain types of copyright disputes, while the Federal Commission for the Prevention from Sanitary Risks (COFEPRIS) regulates pharmaceuticals, medical devices and processed foods. The Mexican Customs Service’s mandate includes ensuring illegal goods do not cross Mexico’s borders.

The process for trademark registration in Mexico normally takes six to eight months. The registration process begins by filing an application with IMPI, which is published in the Official Gazette. IMPI first undertakes a formalities examination, followed by a substantive examination to determine if the application and supporting documentation fulfills the requirements established by law and regulation to grant the trademark registration. Once the determination is made, IMPI then publishes the registration in the Official Gazette. A trademark registration in Mexico is valid for ten years from the filing date, and is renewable for 10-year periods. Any party can challenge a trademark registration through the new opposition system, or post-grant through a cancellation proceeding. IMPI employs the following administrative procedures: nullity, expiration, opposition (new in 2016- see below), cancellation, trademark, patent and copyright (trade-based) infringement. Once IMPI issues a decision, the affected party may challenge it through an internal reconsideration process or go directly to the Specialized IP Court for a nullity trial. An aggrieved party can then file an appeal with a Federal Appeal Court based on the Specialized IP Court’s decision. In cases with an identifiable constitutional challenge, the plaintiff may file an appeal before the Supreme Court of Justice.

The USPTO has a Patent Prosecution Highway (PPH) agreement with IMPI. Under the PPH, an applicant receiving a ruling from either IMPI or the USPTO that at least one claim in an application is patentable may request that the other office expedite examination of the corresponding application. The PPH leverages fast-track patent examination procedures already available in both offices to allow applicants in both countries to obtain corresponding patents faster and more efficiently. The PPH permits USPTO and IMPI to benefit from work previously done by the other office, which reduces the examination workload and improves patent quality.

IMPI published in the Official Gazette June 1, 2016 the framework for the new trademark opposition system, which went into effect on August 30, 2016. With this opposition system, rights holders have the opportunity to oppose trademark registrations pre-grant, thus reducing the number of cancellation proceedings.

After four full years in office, the administration of President Enrique Peña Nieto (EPN) has expended considerable time and political capital overhauling multiple industry sectors in Mexico, but has not focused on similar reforms on the intellectual property front. Legislative reform long identified by USG and others–such as granting customs effective ex-officio authority and providing the authority to seize suspected counterfeit and piratical merchandise in-transit–have been dormant, and there is reluctance on the part of the GoM to seriously address these issues sua sponte.

The Mexican government created the Digital IP Crime Unit in October 2015, and its prosecutors’ competency levels improved throughout 2016, but the Unit was effectively dismantled in December 2016 with 80 percent of its personnel reassigned or terminated. The Digital IP Crime Unit was created in part to overcome Mexico’s lack of: (1) a legal framework to address IP crimes in the digital environment; (2) expertise by law enforcement to investigate and prosecute digital crimes; (3) importance/priority placed on these types of crimes; and (4) judicial specialty and expertise to adequately address these cases. Mexico has still not implemented the World Intellectual Property Organization (WIPO) Internet Treaties (WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT)), even though it ratified both in 2002. Current laws do not adequately address new digital-based distribution methods such as streaming and the transfer of files via peer-to-peer networks. Industry has highlighted the failure of Mexican authorities to properly investigate these crimes and criticized the judiciary for their lack of technical expertise in these highly complex cases. Some experts note the Mexican government sees a political “cost” to combatting this type of crime while violent crimes go unsolved. Finally, the limited resources that are expended by the Government of Mexico on IP crimes are concentrated on hard goods and not online crimes. As broadband access increases, digital IP crimes will be at the forefront of IP violations.

Mexico is plagued by widespread commercial-scale infringement that results in significant losses to Mexican, U.S., and other IPR owners. There are many issues that have made it difficult to improve IPR enforcement in Mexico, including legislative loopholes; lack of coordination between federal, state, and municipal authorities; a cumbersome and lengthy judicial process; and widespread cultural acceptance of piracy and counterfeiting. In addition, the involvement of Transnational Criminal Organizations, which control the piracy and counterfeiting markets in parts of Mexico, continue to impede federal government efforts to improve IPR enforcement. Their involvement has further illustrated the link between IPR crimes and illicit trafficking of other contraband, including arms and drugs.

Mexico still relies on arrests and prosecutions of counterfeiters and pirates in flagranti, as opposed to mounting proactive investigations that seek to dismantle pirating and counterfeiting networks. Seizure of counterfeit goods is tracked by PGR, IMPI, and Customs. During 2016, Mexican Customs initiated 406 cases resulting in the seizure of 1,946,722 confiscated articles. The types of goods seized included apparel, caps, shoes, toys, video game controls, electronic devices, jewelry, watches, cell phones, cosmetics, pens, batteries, labels, USB devices, sunglasses, headphones, speakers, and shaving blades. According to data received from PGR’s Specialized IP Unit, there were 643,845 counterfeit and piratical articles seized in 2016 (significantly down from 8,969,929 seized in 2015). In that same period, PGR dismantled three (down from 65 in 2015) laboratories producing pirated movies, videogames, and music, seizing 76 disk burners. PGR commenced only 338 (down from 1,513 in 2015) preliminary investigations and made only one arrest. In 2016, IMPI conducted 4,527 inspection visits (2,867 ex officio and 1,651 ex parte) and seized 2,412,693 counterfeit and pirated goods worth USD 2,685,277. In addition, IMPI levied USD 3,191,846 in fines for IPR violations.

Mexico was listed on the Watch List in the 2016 Special 301 report. Obstacles to U.S. trade include the wide availability of pirated and counterfeit goods in both physical and virtual notorious markets. The 2016 USTR Out-Of-Cycle Review of Notorious Markets, listed two Mexican markets: Tepito in Mexico City; and San Juan de Dios in Guadalajara.

Mexico is a signatory to numerous international IP treaties, including the Paris Convention for the Protection of Industrial Property, the Bern Convention for the Protection of Literary and Artistic Works, and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.

Resources for Rights Holders

J. Todd Reves
Intellectual Property Rights Attaché for Mexico, Central America and the Caribbean
U.S. Trade Center
Liverpool No. 31 Col. Juarez
C.P. 06600 Mexico City
Tel: (52) 55 5080 2189
E-mail: Todd.Reves@trade.gov

American Chamber of Commerce Mexico
Paseo de la Reforma 295, 3er piso
Col. Cuauhtemoc, 06500 Mexico City
Tel.: (52-55) 5141-3800
E-mail: amchammx@amcham.org.mx

National Institute of Copyright (INDAUTOR)
Puebla No. 143
Col. Roma, Del. Cuauhtemoc
06700 Mexico, D.F.
Tel: (52) 55 3601 8270
E-mail: mguerra@sep.gob.mx
http://www.indautor.gob.mx/ 

Mexican Institute of Industrial Property (IMPI)
Periferico Sur No. 3106
Piso 9, Col. Jardines del Pedregal
Mexico, D.F., C.P. 01900
Tel: (52 55) 56 24 04 01 / 04
(52 55) 53 34 07 00
E-mail: mmargain@impi.gob.mx
mvillelag@impi.gob.mx
http://www.impi.gob.mx/ 

Nicaragua

5. Protection of Property Rights

Real Property

Many foreign investors in Nicaragua experience difficulties defending their property rights. The expropriation of 28,000 properties in Nicaragua from both Nicaraguans and foreign investors during the 1980s has resulted in a large number of claims and counter claims involving real estate. Property registries suffer from years of poor recordkeeping, making it difficult to establish a title history, although some improvements have ensued from World Bank-financed projects to modernize the land administration systems in certain regions. The Embassy recommends extensive due diligence and extreme caution before investing in property. Unscrupulous individuals have engaged in protracted confrontations with U.S. investors to wrest control of beachfront properties along the Pacific coast in the Departments of Carazo, Rivas, and Chinandega, as well as prime real estate in the cities of Managua, Granada, and Leon. Judges and municipal authorities have been known to collude with such individuals, and a cottage industry supplies false titles and other documents to those who scheme to steal land.

During the current administration, there are continued reports of land invasions. President Ortega declared on numerous occasions that the government will not act to evict those who have illegally taken possession of private property without discrimination for the nationality of the owner. Police often refuse to intervene in property invasion cases or assist in the enforcement of court orders to remove illegal occupants.

Those interested in purchasing property in Nicaragua should seek experienced legal counsel very early in the process.

The Capital Markets Law (2006/587) provides a legal framework for securitization of movable and real property. The banking system is expanding its loan programs for housing purchases and car purchases, but there is currently only a limited secondary market for mortgages.

Intellectual Property Rights

Nicaragua established standards for the protection and enforcement of intellectual property rights (IPR) through CAFTA-DR implementing legislation consistent with U.S. and emerging international intellectual property standards. While the legal regime for protection of IPR in Nicaragua is adequate, enforcement has been limited. Piracy of optical media and trademark violations are common. The United States also has concerns about the implementation of Nicaragua’s patent obligations under CAFTA-DR, including the mechanism through which patent owners receive notice of submissions from third parties, how the public can access lists of protected patents, and the treatment of undisclosed test data. The country does not publicly report on seizures of counterfeit goods. Nicaragua is not listed in the Office of the U.S. Trade Representative’s Special 301 Report or the Notorious Market report.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Peru

5. Protection of Property Rights

Real Property

The GOP recognizes and generally enforces secured interests in property, both movable and immovable. The GOP is working on improving the registry of those rights, which will further enable the government’s enforcement capabilities. The only regulation regarding foreign-ownership of land is the Constitution-decreed prohibition within 50 kilometers of international borders, but this prohibition can be waived. Mortgages are available in the local market.

Intellectual Property Rights

Peru is listed on the Watch List under the U.S. Trade Representative’s (USTR) Special 301 Report.

Peru’s legal framework provides for easy registration of trademarks and inventors have been able to patent their inventions since 1994. Peru’s 1996 Industrial Property Rights Law provides an effective term of protection for patents and prohibits devices that decode encrypted satellite signals, along with other improvements. Peruvian law does not provide pipeline protection for patents or protection from parallel imports. Peru’s Copyright Law is generally consistent with the TRIPS Agreement.

While the legal framework for protection of intellectual property (IP) in Peru has improved over the past decade, including a law enacted in 2011 to criminalize the sale of counterfeit medicines, enforcement remains weak. Peru published implementing regulations for biologic and biosimilar pharmaceutical products in 2016. Peru has remained on USTR’s Section 301 “Watch List” since 1992 because of continued high piracy rates, inadequate enforcement of IP laws, and weak or unenforced penalties for IP violators.

Peruvian law provides the same protections for U.S. companies as Peruvian companies in all intellectual property rights (IPR) categories under the U.S.-Peru Trade Promotion Agreement (PTPA) and other international commitments such as the World Intellectual Property Organization (WIPO) and the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).

Peru joined two new Patent Prosecution Highways (PPH) in 2017, the Prosur PPH and the Pacific Alliance PPH.

INDECOPI has jurisdiction over the implementation of the geographical indications. Andean decision 486, which governs Peru’s IP system, provides grounds for refusing protection of a GI based on genericness, and as modified via the bilateral agreement with the U.S., protection for prior trademarks against subsequent geographical indications that are likely to cause confusion with the earlier trademark. However, the Consortium of Common Food Names notes that Peru has granted protection to terms that were considered the generic names for products in Peru and thus claims that Peru has violated WTO rules and impaired the value of the U.S. concessions flowing from the earlier PTPA.

Challenges include establishing clear conditions for U.S. exporters and enforcing intellectual property rights. Counterfeiting and piracy remain prevalent in Peru. Senior GOP officials recognize that the country will not achieve its full economic potential if IPR laws are not enforced more robustly to protect legitimate owners of trademarks, copyrights, and patents. As they become more aware of the threat of counterfeiting and piracy, Peruvian businesses are joining U.S. and foreign companies to engage the GOP on the economic costs of IPR violations; however, continued private sector engagement has yielded only modest results. The World Economic Forum ranked Peru as 67 out of 138 countries in its Global Competitiveness Index 2016-2017. While this is a significant improvement (it was ranked 119 out of 144 in 2014-2015), it is still behind fellow South American countries Colombia (61), Chile (33) and Mexico (51).

Peru is not listed in the 2016 notorious market report. However, INDECOPI continues to report that hundreds of millions of dollars-worth of pirated goods are sold with impunity in notorious markets like “Polvos Azules,” “El Hueco,” and “Fronteras Unidas” in Lima and border regions. Piracy is so common that specialized markets operate for different sectors. For instance, Lima’s “Capon Center Mall” specializes in counterfeit medicines. In spite of this flagrant IPR violation and periodic enforcement raids, the mall remains in operation. Counterfeit medicines are sold nationally in markets and pharmacies. DIGEMID, the Ministry of Health, and the police, on August 27, 2016, seized four tons of illegal medication from 34 stands at the “El Canchon” market in Lima. Gamarra, a district in Lima, is home to large notorious markets (“Galeria Azul,” “Galeria Santa Lucia,” “Galeria San Miguel,” “Galeria Markata,” and “Galeria Senor de Chacos”) that specialize in counterfeit clothing and textiles.

The International Intellectual Property Alliance (IIPA) is concerned about web piracy in Peru — it notes that, in the last 2 years, several illegal websites launched operations from Peru, offering thousands of music tracks for users in and out of the country for both downloads and streaming. IIPA points out that the online piracy website market doubled in the past year, impacting not only Peru but other countries in the region. This trend has extended to the online distribution and sale of counterfeit medicines.

Peru has pervasive piracy in software, music, video, and TV content. The IIPA also notes that Peru is one of the largest sources of unauthorized camcorders in the world. In 2015, the Business Software Alliance estimated that the piracy level for software is 65 percent , ten percent higher than the Latin America average, with a commercial value of USD 210 million annually. Pay-TV signal piracy constitutes an estimated 35 percent of the market. The market is so saturated with pirated movies that there is no legitimate rental market for movies and few legitimate venues to buy legal music and movie DVDs. Pirated movies sell for only USD 1.00-1.65 per DVD while pirated books sell for less than a third of the price of licensed editions.

For the Lima region, INDECOPI reported a total of USD 286.6 million in seizures of counterfeit and pirated goods from January through September 2016 (most recent data available), from over 4,300 operations. The breakdown of operations is as follows:

  • USD 88.5 million seized by SUNAT from over 3100 operations
  • USD 187.9 million seized by the national police in nearly 600 operations
  • USD 9.3 million seized by INDECOPI in over 600 operations.

INDECOPI reports that 35 interventions were carried out with cable operators in order to verify compliance with the copyright law. INDECOPI has developed The Manual of Inspections for Cable Operators in order to have a protocol of action and avoid procedural defects.

Contrary to the obligations of the PTPA, the GOP has yet to implement internet service provider (ISP) limited liability provisions and statutory damages for civil copyright and trademark infringement. Stakeholders are concerned that penalties are low and not deterrent.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Investment Climate Statements
Edit Your Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future