Contentious competency of the Chilean Industrial Property Department


Marcos Morales Andrade


Artículo publicado en AsipInforma (1998)


Summary:
1. Nature and Characteristics of the Industrial Property Department
a) Nature.- b) Characteristics as a court.- c) Characteristics of its jurisdictional competency
2. Contentious Procedures
a) Regulations governing Industrial Property litigation.- b) Procedure initiated by filing an opposition.-
c) Procedure initiated by filing an application for annulment.- d) Procedure initiated by another form of jurisdictional action falling within the authority of the IPD
3. Recourses.-

 

The direct administration of industrial property in Chile has been entrusted basically to two authorities: the Industrial Property Department (hereinafter IPD) and the Industrial Property Court of Appeals. The link between these agencies is not of a subordinated dependency but is strictly a matter of legal-procedural hierarchy, a relationship that exists through the jurisdictional remedy of the appeal.

This document refers to only one of these agencies, the Industrial Property Department, and its contentious jurisdictional competency of the first instance.

 

1. NATURE AND CHARACTERISTICS OF THE INDUSTRIAL PROPERTY DEPARTMENT

a) Nature

The Industrial Property Department, hereinafter IPD, is a unit coming under the authority of the Chilean Ministry of Economy, Development and Reconstruction, which forms part of the State?s centralized administration, which is to say that it has no existence as a legal entity on its own.

Law Nº 19,039 on Industrial Property[1], hereinafter IPL, defines the Industrial Property Department as the public service in charge of handling applications, issuing titles and other services associated with this matter (article 3 paragraph 1 IPL). In application of article 17 paragraph 1 of the IPL, we may add that this agency is also in charge of the handling of the proceedings related to any claim associated with industrial property rights.

The IPD’s structure is divided into three “subdepartments” or areas with the same number of functions: a) Trademark Registry; b) Patent, Utility Model and Industrial Design Registry; and c) Legal Subdepartment.

The IPD’s powers can be divided into two major areas: strictly administrative powers and jurisdictional powers.

The IPD acts as a merely administrative organ in all matters associated with the handling of applications for industrial privileges (patents, utility models, industrial designs, trademarks and slogans), where it not only participates as the public agency acting as registrar of these privileges, but also as guardian of previously filed or registered privileges. Generally speaking, these are the functions that characterize all public offices in charge of the registration of trademarks and patents.

On the other hand, the jurisdictional capacity originates in the attributes of the IPD to take cognizance and decide all legal conflicts associated with industrial property (opposition procedures, annulment procedures, among others). In this sense, one can say that the IPD is an agency of primary importance as it is in fact a special court and although the law does not expressly acknowledge the latter character or nature, this conclusion is evident in face of a systematic interpretation of Law N? 19,039, particularly with regard to the jurisdictional authority of the IPD in procedures of opposition to or annulment of industrial privileges[2].



b) Characteristics as a Court

The IPD as a jurisdictional body is a one- judge court, as it consists of a single judge who is the Head of the Department. Also, according to the extent of its jurisdictional authority, as we said before, it is a special court. Also, it is a permanent court, as it functions continuously and regularly, and a court of law because all matters brought to trial before it are conducted and decided according to the law.



c) Characteristics of the IPD’s Jurisdictional Competency

The IPD’s contentious jurisdictional authority is absolute, because it has been established for reasons of public interest and, therefore, it cannot be waived. The only factor of competence that has been taken into account by the lawmakers is the subject matter of the controversy (nature of the matter brought before the court). The IPD has jurisdiction throughout the Chilean territory and, therefore, delegated (formal requests from one court to another) or extended jurisdictional capacities are not applicable. Also, its competency is special (applicable only in certain matters according to its nature), of the first instance (investigates the facts themselves as well as the legal implications thereof) and exclusive, as it belongs only to the IPD and excludes every other court.

 

2.  CONTENTIOUS PROCEEDINGS



a) Regulations applicable to Industrial
Property litigation procedures

The IPD’s contentious proceedings are governed by the special regulations of the Industrial Property Law and its regulations. In lieu of the above, the ordinary procedural law applies. This law is contained in the Regulations Common to all Procedures and the rules governing Non Expedited Trials (contained in Sections I and II, respectively, of the Chilean Civil Procedure Code).

In matters of supplemental procedural law, custom has caused widespread application of the rules governing the appearance in court (particularly as regards unofficial appearance), formation of the file, serving of notice, deadlines, resolutions and questions to be settled before the trial can proceed.

As regards the rules governing Non Expedited Trials, all rules concerning dilatory pleas, indications contained in the order to submit evidence, formalities to produce evidence and the time when this evidence must be requested or produced and proceedings after the summons to hear the final judgement, are applicable.

All these referrals to ordinary procedural law are not expressly required by the regulations governing industrial property. They are the result of legal practice and industrial property jurisprudence, ratified by the jurisprudence of Chile’s Supreme Court.



b) Procedure initiated by filing an opposition

This procedure takes place whenever any interested party files an opposition to an application for industrial privilege. The deadline to file this opposition is shorter in the case of trademarks and longer in the case of patents, utility models and industrial designs. This period is counted from the date the application is published in the Official Gazette. The opposing party must appoint a sponsoring attorney and establish a proxy for appearing in court.

The court decision concerning the opposition is forwarded and the applicant is served notice by registered letter. The latter is considered a defendant and therefore is subject to the procedural burden of answering the opposition that was filed (for which purpose the defendant must also appoint a sponsoring attorney and establish a proxy for appearing in court).

After the deadline to file oppositions has expired, an expert’s report is requested in cases of oppositions to patent, utility model or industrial design applications and an expert is appointed by the Head of the IPD. After this expert testimony has been delivered, the parties have a period in which to comment on the report. This period may be extended upon request from the interested party. The expert also has a deadline within which to submit his testimony, and this period can also be extended if the Head of the IPD feels that it is necessary.

Next comes the discovery period, which begins with the corresponding instruction to present evidence and ends with the summons to hear final judgement. In matters of evidence, all means of proof contained in the ordinary procedural laws are admitted, with the exception of the testimony of witnesses. Also, the IPL establishes that means of proof  “characteristic in this type of matter” are also equally valid, although the law does not say what must be understood as such. Nevertheless, in practice, videotapes, the articles bearing the trademarks, various types of advertising material, the same devices or instruments that are the invention, utility model or industrial design, etc., are acceptable as means of evidence.

The final judgement has a double nature, or to put it another way, it contains two decisions: a) on the one hand it solves the conflict of interest between the opposing party and the applicant, and b) second, besides the above, it decides on the definite granting or refusal of the privilege requested.

The final judgement of the Head of the IPD is subject to appeal before the Industrial Property Court of Appeals, that can confirm or revoke the IPD’s judgement. This decision may be subject to an appeal before the Supreme Court in case there is any violation or abuse by the former.



c) Procedure initiated by filing an application for annulment

According to the Industrial Property Law, the registration of an industrial privilege may be annulled when it has been granted in violation of certain specific registration rules contained in the said IPL.

In the case of trademarks, an annulment may be requested when the distinctive sign incurs in any of the causes listed as grounds for refusal of registration of trademarks (Articles 20 and 26 of the Industrial Property Law). Therefore, trademarks are subject to negative requirements. On the other hand, in the case of patents, utility models and industrial designs, the registration may be annulled when it does not comply with the requirements for registration (positive requirements) or else when the it incurs in a cause listed as grounds for refusal of registration of said privileges (negative requirements).

Unlike the opposition (whose period of prescription is very short), the period of time to file an application for the annulment of a registered privilege is much longer. In the specific case of trademarks, the deadline is 5 years counted from the date of registration[3]. For patents, utility models and industrial designs, the deadline is 10 years.[4]

In every other aspect, the annulment procedure is similar to the opposition trial (period of allegations, presenting of evidence and judgment), with the exception that notice of the application for the annulment must be personally served to the defendant or else using the subsidiary means of serving notice if applicable. Another aspect that is different in the annulment of patents, models and designs is that the expert is not appointed by the Head of the IPD, and instead the said expert is appointed according to ordinary procedural rules, with the corresponding summons to a hearing for the appointment of the expert.

The final judgment, which solves the conflict of interests brought before the IPD may decide totally or partially in favor of the plaintiff (in which case the total or partial cancellation of the impugned registration will be ordered, as applicable) or else it will be rejected (in which case the registration object of the controversy will remain firm).

The final judgement of the Head of the IPD is subject to appeal before the Industrial Property Court of Appeals, which can confirm or revoke the IPD’s judgement once it has studied it. This decision may be appealed before the Supreme Court in case there is any violation or abuse by the former.



d) Procedure initiated by another form of jurisdictional action falling within the authority of the IPD

According to Article 17 of the Industrial Property Law, the IPD must also investigate and judge petitions to annul transfers and any claim concerning the validity or effects of the registration of an industrial privilege or industrial property rights in general.

Therefore, the law gives the DPI a wide ranging and somewhat vague framework of powers. Nevertheless, it can also be said that said jurisdictional competency is limited by the general rules of law. Thus, the broad powers of the reference exclude: a) the investigation and judgment of crimes related to industrial privileges and b) the civil law processes whose purpose is to prosecute extra contractual civil liability and obtain the corresponding indemnity for damages. The above assumptions lie within the jurisdiction of the ordinary courts of law in compliance with the general laws of Chile.

Neither the IPL nor its regulations include a procedure for the investigation of this type of  “residual” lawsuits. This silence of the law has been substituted in practice by recurring to the rules set forth for the annulment of privileges, thus giving that procedure the character of “ordinary industrial property trial.”


3.  RECOURSES


Industrial property laws consider three ways of challenging resolutions passed on occasion of administrative or jurisdictional processes in this field.

The first of these remedies is by nature extraordinary and characterizes purely administrative processes. It is known as Recourse of Reclamation, and may be filed with the purpose of challenging any resolutions passed by the Trademark Registrar (Chief Examiner) refusing the processing of a trademark application.

The other two ways to impugn resolutions are the so-called Recourse of Rectification and Recourse of Appeal. Given the wording of the law that contains them (Articles 17, paragraph 3 and 4 IPL), both remedies are applicable against resolutions passed during merely administrative processes as well as contentious cases.

The Recourse of Rectification applies whenever the resolution challenged contains or is based on a manifest error of fact and has a deadline of five days to bring action. Given the fact that the law is not specific, the remedy applies against any type of resolution, be it the definite resolution whereby the Head of the IPD accepts or rejects the registration of a privilege or else another different resolution —whatever its nature may be– passed during an administrative or contentious process.

For its part, the appeal, whose filing is subject to the payment of a tax, has a narrower scope of application because, unlike the remedy of rectification analyzed above, this remedy only applies against definite resolutions passed by the Head of the IPD. The problem lies in the interpretation of the phrase “definite resolutions”, which is not adequate for our ordinary legal-procedural nomenclature. There is a consensus that the phrase includes the resolution whereby the Head of the IPD accepts or rejects the inscription of an industrial privilege, be it on occasion of a contentious or a non-contentious process. Also, the jurisdictional industrial property entities coincide in the fact that interlocutory resolutions passed during a jurisdictional process, without providing a solution to the conflict of interests decided by the IPD, are also definite resolutions inasmuch as they put an end to the trial or make it impossible to continue. Lately, the IPD’s position has been to make the appeal widely admissible, whatever the nature of the challenged resolution may be, even though this position has not always been standardized.

Aside from the recourses that characterize industrial property laws, the means of impugnment contained in the ordinary procedural laws are also fully applicable. These include the Recourse of Reposition and the Petition for Clarification, Rectification or Amendment, contained in the Chilean Civil Procedure Code.

Finally, given the fact that the IPD is a government agency, the decisions of the administrative authority may be impugned within the same hierarchical administrative structure, provided other special or ordinary remedies are not applicable.


NOTES:

[1] Law Nº 19,039 was published in the Official Gazette on January 25, 1991 and was in force as of September 30, 1991.

[2]  For example, the laws governing this matter use the following terms: parties (articles 8 and 12 of the Industrial Property Law), Discovery Period (Article 8, Industrial Property Law); Means of Proof (Article 12, Industrial Property Law); Trademark Trials (Article 8 Industrial Property Law); Trials (Article 17, Industrial Property Law); Due Process (Article 22, Industrial Property Law Regulations); Contentious Proceedings (Article 74, paragraph 4 Industrial Property Law Regulations), etc.

[3]  In this case, the Industrial Property Law (Article 27) includes an exception to the general rules, as it stipulates that the Head of the IPD must declare the prescription ex officio, refusing to accept the request for the annulment. After this period has passed, it must be understood that Article 6 bis of the Paris Convention, according to which it is not possible to establish a deadline for prescription against trademarks registered in bad faith, applies. Nevertheless, national jurisprudence is not clear on this matter yet.

[4]  In the case of patents of inventions, the deadline is counted from the date of the registration, whereas with regard to utility models and industrial designs, this term is counted from the date the application is filed (Articles 50, 57 and 65 of the Industrial Property Law).

 

© 1998, Marcos Morales