Bermeolaw is proud to contribute the Ecuador chapter to LATIN LAWYER Reference - Intellectual Property 2016. This chapter addresses key points of Intellectual Property regulation including: enforcement proceedings, structural remedies involving IP rights, trademark rights and protection, licenses, counterfeit, data protection, copyright, among other topics.

1.What are the novelty or inventiveness requirements for a patent to be granted?

An invention is novel when it is not in the state of the art as defined by article 16 of the Andean Decision 486 which regulates intellectual property in the Andean Community: Ecuador, Colombia, Peru and Bolivia.

Inventiveness is regulated by article 18 of the Andean Decision 486, stating that an invention has an inventive step or is non-obvious if it does not appear obvious nor is evidently derived from the state to any person skilled in the art, being normally conversant with the corresponding technical matter.

2.What are the criteria for considering whether an invention is obvious in view of prior art?

The problem-solution method is used to check whether an invention is obvious in view of prior art:

identification of the closest state of the art;
identification of the technical features of the invention that are different with respect of the previous; and
definition of the technical problem to be solved based on the closest state of the art.
The question is, what problem is solved by the technical differences between the invention and the prior art?

The problem must be defined without including elements of the solution, because in that case the solution would be considered obvious.

3.What are the different types of patent protection that can be obtained in your country, for example, utility, design database? How do these types of patent protection differ?

The different patent levels in Ecuador are patents of invention, utility models and industrial designs. They differ in the term of duration of the protection and the level of novelty required. A similar protection system is used for semiconductors. Databases are usually protected via copyright if they meet the requirements.

4.What is the duration of patent rights protection?

Patents are protected for a period of 20 years from the filing date, utility models and industrial designs for 10 years. Patents and utility models are required to pay annual maintenance fees.

5.If an invention is conceived in your country, does the first filing have to be made there?


6.What are the foreign filing licence requirements if an application conceived in your country is filed first in another?

There is no special procedure for filing licences of applications conceived in our country when first filed in another.

7.Are business and computer methods patentable? If yes, what are the standards for determining this? If no, are other technological areas that are not eligible for patent protection?

No, according to article 20 of the Andean Decision 486, the following are not patentable: plants, animals and essentially biological processes for production of plants or animals except non-biological or microbiological processes; and therapeutical or surgical methods for human or animal treatment, as well as diagnostic methods applied to human beings or to animals.

8.Summarise the current level and nature of patent litigation in your country? Are there particular litigation trends related to specific industries, such as the pharmaceutical, payments, data analytics?

Yes, most of our pending litigations are related to the pharmaceutical industry, which has strong opponents against their patentability.

9.What remedies are available for patent holders? For example, are monetary damages and injunctive relief available? If monetary damages are available, are such damages based on a reasonable royalty, lost profits or other provisions?

Monetary damages are calculated based on lost profits, the profits obtained by the infringer, reasonable royalties and consequential damages, among others. Because monetary damages require a long-lasting civil suit, patent holders are mainly interested in getting the infringer to cease violation. There is injunctive relief, in which a judge can request the immediate cease or suspensions of the illegal activity, and others to stop the infringement such as seizure of counterfeit goods or equipment used to produce the goods.

10.Is your country considering major changes to its patent system?

The government issued new regulations regarding compulsory licensing. The first compulsory licenses have now been issued. The president announced a new Science and Technology Law, which is still a work in project.

Recently, the government increased the official fees related to patent matters. The fees were substantially increased, turning Ecuador into one of the most expensive countries to file and maintain a patent.

11.Does your country recognise the "patent exhaustion" doctrine, and, if so, how does the application of the doctrine compare with those in other jurisdictions?

Article 54 of Andean Decision 486 states that a patent does not grant its owner the right to impede a third party from undergoing acts of commerce, after such product has been introduced in commerce in any country by the patent’s titleholder, or by someone else with his approval, or somebody who is economically tied to the patent owner.

12.Is your country a signatory to or likely to join the Madrid Protocol and if so, when? Is it a signatory to the TRIPs agreement?

Ecuador is not a signatory and is not likely to join the Madrid Protocol. Ecuador has been a signatory to the TRIPs agreement since 1996.

13.Do your trademark clients make use of the Andean Community’s or Mercosur’s regional trademark systems and if so, how?

The Andean Community Law provides for a trademark owner in one member country to file an Andean Opposition against a trademark application in another member country. In that sense, many of our clients file oppositions in other countries based on their Ecuadorian registrations, and as required by Community Law, then they need to file an application in the new country to acknowledge real interest in that market.

14.What is the duration of trademark rights protection?

Trademarks are protected for 10 years after the date of allowance. Trademarks can be renewed six months prior to their expiration and during the six-month grace period after expiration.

15.What rules govern the use of the registered trademark symbol, ®, or the unregistered trademark symbol, ™ , in your country?

There are no rules that govern the use of the registered trademark symbol, ®, or the unregistered trademark symbol, ™, in our country. The use is merely informative and dissuasive.

16.What are the main problems affecting trademark owners in your country, and what strategies have successfully addressed these problems?

The main problems for international trademark owners are lack of registration of trademarks in our country. Some of the times, these companies find that third parties or even their local distributors have registered or are trying to obtain registrations. It is always advisable and cost-effective to file applications in Ecuador, rather than going through oppositions or litigations. Then, a licence agreement should be granted.

17.Does a trademark licence have to be recorded in your country to be effective?

Yes, all licences for trademark use shall be registered with the IP Office. Lack of registration renders the licence unenforceable against third parties.

18.What strategies have been successful in combating counterfeiting in your country?

Depending on the matter, the trademark and the infringer, administrative actions filed before the IP Office, civil actions, criminal actions (criminal actions have been suspended due to a change in law, there is a project to have them back in an amendment), and even border protection actions can be effective to combat counterfeiting.

19.Does a foreign company’s website infringing trademarks constitute use of a trademark in your country?

The content of the website must be analysed in order to establish if it is doing business or has any effects in our country, in order to establish use.

20.Do you recommend that companies register their domain name in your jurisdiction if they do business there?

It is highly advisable to protect domain names in our country. Even if doing business through a licensee or distributor, it is important to register the domain to the principal’s name. It is often seen that local distributors register the domains to their names or, worst of all, to the name of their website developer, which would raise domain name disputes.

21.Briefly highlight any particularities of your trademark law that is not well understood by foreigners doing business in your country.

The main differences with other countries are that there are no multiclass applications, and there is no use requirement to file an application. However, the most recurring issue is that in Ecuador, every document filed in an administrative or judicial procedure must be an original or a certified copy legalised with Apostille.

22.What are the key legal issues to be considered when registering a trademark in your country?

It’s very important to find a local agent with sufficient knowledge of Ecuadorian law, local practices and the common procedures among IP issues. Most of the issues that may come from prosecuting a trademark in our country can be solved beforehand. 

23.Can a multi-class trademark application be filed in your country?

No, however substantial discounts can be provided when applications are filed in several classes.

24.Does your country allow trademark opposition proceedings? Can the deadline to file an opposition be extended?

Yes, our country allows trademark opposition proceedings, but there is no extension to the deadline.

25.Does your country have a judicial or other governmental process to restrict the importation of counterfeit goods? If so, give details.

The Andean Community laws provide border protection measures that may be taken in coordination with the IP Office and the Customs Authority. However, since the enactment of a new criminal procedure code, there is uncertainty of the new procedure as the customs proceeding used to end before the public prosecutor in order to destroy the counterfeit goods and the code has eliminated certain criminal sanctions to IP violations. There are projects to have IP crimes regulated back into our Criminal Code.

26.What are the key issues to be considered when licensing trademark use rights in your country? Does your jurisdiction invalidate trademarks based on "naked licences" (ie, where the licensor does not impose quality standards on the goods and services associated with the licensed trademark)?

The main issue to decide is exclusivity and antitrust- related issues. It is highly recommended to record licence agreements in order to have the IP authorities review compliance of the agreement with competition laws, and for the agreements to be enforceable against third parties. Licensors also need to carefully state the forum and choice of law to avoid contracts being declared as against public policy. There are no standards regulating "naked licences" or the content of the agreement other than the compliance with antitrust and fair competition laws. A specific analysis is recommended on a case-by-case basis.

27.Are there any limits on the scope of licensee indemnification relating to workmanship, material, or design of any products, articles, logos, characters, etc, bearing the licensed trademark?

These limits should be provided in the licence agreements. In case they are not provided, general legal concepts apply in order to decide disputes.

28.Under what circumstances may a trademark licence be deemed a franchise arrangement under the laws of your country?

Although the agreements relate to very different matters, in practical terms, there are few differences as to the scope of the agreements. In fact, the law provides for licence agreements, and in practice the licence is just one part of the franchise agreement.

29.Are there any conditions or limitations on the ability of a trademark licensor to enforce or terminate a trademark license agreement?

There are not too many precedents in relation to termination or enforcement of licence agreements. These provisions should be included in the contract. In some cases, judges may order the continued enforcement of the agreement if they consider the provisions contrary to the public order. A case-by-case analysis is needed before entering into an agreement.

30.Under what circumstances may a trademark be legally deemed 'abandoned' under the laws of your country where there is no obvious decision by the trademark owner to abandon the trademark?

The mark may be abandoned if before registration, the requirements are not fulfilled. After registration, the mark is abandoned only if it is not renewed. However, third parties may apply for a cancellation based on lack of use, if the mark was not used for three years in at least one country of the Andean Community. Recorded licence agreements are very good evidence of use.

36.What are the criminal sanctions for intellectual property infringements?

Use, trade, production, storage sale, import or export of goods or services protected by intellectual property laws, used to be punished by prison up to three years, and fines up to US$13,000 approximately. The sanctions were calculated depending on the illegal action, and the Intellectual property right infringed. Although these provisions were removed from our Criminal Code, there is a project to reinstate them as crimes. Nevertheless, the Criminal Code provides for similar infringements which may now apply to IP rights violations.

37.Does your country recognise intellectual or industrial property protection in databases?

There is no sui generis protection for databases. To protect a database, there needs to be an element of creativity so it can be considered and protected as a compilation. Databases can also be protected as trade secrets.

38.Does your country recognise a right of publicity?

The right of publicity is protected by the Constitution especially by article 66(18), which grants the right to one’s honour, good name, voice and likeness. Furthermore, intellectual property laws regulate the use of someone’s name and prohibit registration of marks that violate a person’s identity. 

39.Is alternative dispute resolution used in your country to resolve intellectual property disputes? What are the benefits or dangers of using ADR for IP disputes?

Every time there are more disputes solved out of court or out of the administrative stage. The main benefits are that the time is shorter and it is not as expensive, while the danger of using ADR is that if one party breaks the agreement the other party must use the judicial procedures. In some cases, the IP Office would still reject agreements in defence of the consumers.

40.Can intellectual property rights be recorded with certain government agencies in your country, like Customs or the Border Control, to help prevent the import or export of counterfeit goods?

Intellectual property rights can be recorded before the Customs Agency in order to prevent the import or export of counterfeit goods. If there is notice of an infringing shipment, there are actions that can be started before the Customs Agency in order to stop the shipment. 

41.Describe any recent major developments or anticipated changes in your intellectual property law.

Recently the IP Office stopped granting extensions to the deadline to file oppositions. There are rumours about a new Science and Technology Law, but there is not yet enough information available on when it will be enacted. Ecuadorian IP law has been harmonised with international IP law for many years and in many areas.

42.Describe any significant recent court decisions in your country relating to intellectual property.

The IP Committee granted the registration of trademark ‘Chopin’ in class No. 33 to the Polish company Podlaska Witwornia Wodek ‘Polmos’ Spolka Akcyjna, which meant a precedent on trademark registration of personal names and likenesses in Ecuador. The appeal before the IP Committee was successfully handled by our firm.

43.Are there any licence agreement formalities for intellectual property that must be observed?

All documents filed before the administrative bodies need to be legalised by apostille or the Ecuadorian consulate. The documents need to be in Spanish; however, the translations are commonly done locally at minimum costs.

44.Has your country adopted a national legal framework for the protection of personal information in computerised form? If so, generally describe the scope of the framework, who must comply with its requirements, and the consequences of non-compliance. If not, describe how your country regulates personal data security and privacy.

There is no specific framework regarding protection of personal data other than the rights granted by the Constitution. The Constitution grants the right to the protection of personal data, including the access and information about these data. Collection, storage, processing, use, transfer or sharing of personal data needs the authorisation of the owner of the personal data or must be required by law. Furthermore, the constitution grants the right to privacy of a person’s convictions, parentage, political views, health and sexual life, unless required for medical attention.

These constitutional guarantees of privacy are still a broad concept. There are some scattered laws relating to various topics, but there is no specific legal framework regarding use of personal data. For example, some aspects are discussed in our e-commerce laws, which require the consent of the individual or an order of the competent authority to collect, use, share or export personal data.

45.Does your country’s data protection regime distinguish between sensitive and non-sensitive data?

See question 44.

46.Do special data protection rules apply to certain industries, such as financial services, health care, telecommunications? Give details.

See question 44.

47.Are there registration, notice, or official licence requirements with government entities in connection with the collection, use, storage, transfer or sharing of personal data? If so, what are they?

See question 44. 

48.Does your jurisdiction require notice to affected individuals or a governmental authority in the event of personal data compromise? If so, in what circumstances and are there any special notice requirements?

Please see question 44.

49.Is there any local law, regulation or guidance on the use of cookies in general or the use of tracking technologies and user data for marketing or commercial purposes?

See question 44. Additionally, these actions may fall within the regulation of the Consumer Protection Law.

50.Are there any data protection safe harbours when data are anonymised?

See question 44.

51.Does your country require companies doing business there to publish and distribute a statement or policy describing its personal data security and processing practices?

See question 44.

52.Does your country require that individuals are given notice and consent to the collection, use, sharing or exportation of personal data?

See question 44.

53.Does your country impose restrictions on the exportation of personal data to another jurisdiction? If so, what are they?

See question 44. 

54.What is the primary regulatory authority responsible for data protection? Describe the state of regulatory enforcement in your country, such as size of fines, enforcement priorities, and agency powers concerning compliance investigations and litigation. Do these vary by industry?

See question 44.

55.Are there any guidelines related to compliance with local data protection laws and regulations?

See question 44.

56.Does your country have a cybercrime law that provides for civil remedies in connection with either computer intrusions or theft of intellectual property? Are other causes of action or remedies available in your jurisdiction as regards unauthorised computer intrusion and misappropriation of electronic information?

These matters are regulated by common civil principles and not specially protected through a law. There are some principles in the Criminal Code, E-Commerce Law, and Intellectual Property Laws, however, a plaintiff must seek remedies through a civil lawsuit.

57.Briefly describe the tax considerations for intellectual property in your jurisdiction including any incentives.

Ecuador has signed several treaties to avoid double taxation. These bilateral treaties regulate the deductions for IP development, as well as taxation for royalties and their remittance to foreign jurisdictions. The Tax Agency will enforce transfer pricing policies for trades with large economic values.

There are strong regulations against exchanges of funds with companies located in tax heavens or low-taxed jurisdictions. A currently outflow tax of 5 per cent exists.

Given the complexity of tax matters related to IP, and the constant changes, it is advisable to study each matter on a case-by-case basis.

58.Briefly describe the intersection between intellectual property and competition law in your jurisdiction.

Competition and intellectual property are regulated in Ecuador by the recently enacted Regulation and Control of Market Power Law (Antitrust Law) and Andean Decision #291 regarding the Treatment of Foreign Investments in Relation to Trademarks, Patents, Licences and Royalties.

Competition and intellectual property

The Antitrust Law defines market power as the ability to significantly influence the market. Abuse of market power is defined as one or more economic partakers by any means restricting, obstructing, distorting competition or negatively affecting economic efficiency or general welfare.

In relation to intellectual property, the Competition Law states the following as unfair practices: acts of confusion, deceptive acts, imitations, acts of denigration, acts of comparison (including comparative advertising), misappropriation of good will and violation of trade secrets.

Technology transfer

Article 14 of Andean Decision #291 regulates the restrictive licence terms that may not be included in a technology transfer agreement. For example, these agreements may not provide for conditions in which the licensee has an obligation to purchase goods or services from a third party determined by the licensor or restrictions to use competing technology. Licensors may not set the pricing and may not restrict volumes or structure of production of the licensed products. One of the most important restrictions is that the agreement may not provide for any obligation for the licensee to assign rights back to the licensor for its own improvements or new applications of the licensed technology.

The IP Office is the entity required to assess the restrictiveness of the agreement’s terms in order to record the licensing agreement.

59.Briefly explain the implications of a bankruptcy filing under the laws of your jurisdiction on intellectual property licensed rights.

General bankruptcy provisions apply to intangible assets in the same terms as tangible assets. There is no specific law regulating bankruptcy in relation to IP rights.

If bankruptcy is declared, the assets fall under administration and control of the Companies’ Superintendency which is in charge of the final liquidation.

However, intellectual property licence agreements do not terminate automatically and all intellectual property license rights survive bankruptcy until the Companies’ Superintendency decides on the future of the assets or transfers them to creditors. Provisions related to bankruptcies in licence agreements are enforceable, and any kind of provision related to this topic could be incorporated on the agreements. If stated, provisions may be extended beyond bankruptcy and be enforceable to the new owner.


This article was first published in LATIN LAWYER Reference - Intellectual Property 2016
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Bermeo & Bermeo Law Firm

June 2016