Ongoing Challenges and Concerns
Chile remains on the Priority Watch List in 2022.
The United States continues to have serious concerns regarding the implementation of certain intellectual property (IP) obligations under the United States-Chile Free Trade Agreement (FTA). Chile took a step forward in 2018 by passing legislation establishing criminal penalties for the importation, commercialization, and distribution of decoding devices used for the theft of encrypted program carrying satellite signals. The United States urges Chile to clarify the full scope of activities criminalized in the implementation of the law and provide remedies or penalties for willfully receiving or further distributing illegally decoded encrypted program-carrying satellite signals, as well as the ability for parties with an interest in stolen satellite signals to initiate a civil action. Concerns remain regarding the availability of effective administrative and judicial procedures, as well as deterrent-level remedies, to right holders and satellite service providers. In addition, Chile should improve its internet service provider liability framework to permit effective and expeditious action against online piracy.
Pharmaceutical stakeholders continue to raise concerns over the efficacy of Chile’s system for resolving patent issues expeditiously in connection with applications to market pharmaceutical products and over the provision of adequate protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test results or other data generated to obtain marketing approval for pharmaceutical products. Stakeholders also have expressed concerns over the vagueness of certain provisions of the Ley de Fármacos II (Medicines Legislation II), which has stalled in the Chilean legislature. The United States continues to urge Chile to ratify and implement the 1991 Act of the International Union for the Protection of New Varieties of Plants Convention (UPOV 91) and improve protection for plant varieties.With respect to the outstanding FTA implementation concerns noted above, the United States is closely monitoring potential legislation on Technological Protection Measures (TPMs). The Ministry of Culture and Arts drafted an amendment to Chile’s IP law covering TPMs, but the current administration has yet to sign on to sponsor it. Other areas for monitoring are an effective mechanism for the early resolution of potential patent disputes, and the implementation of UPOV 91.
Developments, Including Progress and Actions Taken
On February 7, 2022, the law that sanctions illegal trade and intellectual piracy, was enacted to strengthen control actions and provide the police with more efficient tools to enforce the law. The law will make it possible to identify and disrupt organized crime gangs dedicated to illegal trade, prosecuting the sale, reproduction, marketing, or receipt of counterfeit or unauthorized products. The law covers the following crimes: counterfeiting, reproduction, or unauthorized sale of literary, artistic, or scientific works protected by the intellectual property law; as well as phonograms, videograms, phonographic records, cassettes, videocassettes, films or motion pictures, and computer programs protected by intellectual property law. The police, municipal inspectors, and officials of the Chilean Internal Revenue Service are authorized to monitor the compliance with the regulations. They will be permitted to demand municipal or sanitary permits, as well as the documents that prove the origin of the goods. The new law also provides the Public Prosecutor’s Office with new mechanisms that facilitate investigative and inspection work.
Reform to the Industrial Property Law entered into force on May 9, 2022. Law 21,355, or also known as “INAPI Short Law,” modernizes the regulatory framework that dates to 1991 for trademark and patent prosecution. One of the most significant changes is the incorporation of provisional patents. Inventors, universities, research centers, and companies that file a patent application will have 12 months to gather all the necessary information. For the first time in Chile, this law gives the possibility to protect non-traditional trademarks, and includes a new conceptual definition that offers numerous possibilities, for instance, protecting tri-dimensional marks. The law removed the requirement to include a graphic representation.
Chile continues to carry out enforcement efforts to combat counterfeits. The National Customs Service reported that it had seized more than 10.8 million counterfeit products in 2021, (compared to 8.7 million in 2020), valued at $71 million (24 percent increase compared to 2020). By value, the main seized items were footwear ($15.9 million), clothing ($9.6 million), and cosmetics and hair items ($1.3 million).
The National Institute of Industrial Property continued its efforts to strengthen the climate for IP protection. The average processing time for patent applications moved down to 3.0 years versus 3.1 years in 2020, and Chile reduced its patent backlog by 5.5 percent in 2021 compared to the previous year. Chile currently seeks to accede to eight additional WIPO treaties/agreements, including the Singapore Treaty on the Law of Trademarks. On July 4, 2022, Chile completed the implementation of the Madrid Protocol.
The United States will continue to work closely with Chile to address IP issues. This year marks the 18th anniversary since the FTA entered into force, and the United States urges Chile to make additional tangible progress in these areas in 2022.
In any foreign market, companies should consider several general principles for effective protection of their intellectual property. For background, U.S. exporters are encouraged to review the information on Protecting Intellectual Property and Stopfakes.gov for more resources.
To access Chile’s ICS, which includes information on the protection and enforcement of intellectual property rights, visit the U.S. Department of State Investment Climate Statement website.
IP Legal Advisor for Chile and the Andean Region
U.S. Patent & Trademark Office – USPTO, U.S. Department of Commerce, ITA, U.S. Embassy Peru