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Custom Recordal of IPRs in Panama


Custom Recordal of IPRs
The following laws deal with border control measures in Panama:-
  • The Industrial Property Law (Law 35/1996);
  • The Copyright Law (Law 64/2012);
  • The Penal Code;
  • The IP Customs Regulations (Executive Decree 123/1996, modified by the Executive Order 466/2015); and
  • The IP Colon Fee Zone Regulations (Executive Decree 79/1997).
Customs Recordal of IPRs is effective on the import, export, and goods in transit.
The customs authorities are empowered to inspect and seize merchandise that is subject to the customs procedures and which may violate Panama’s IP laws, regardless of its final destination. This means that even the in-transit goods can be inspected and seized. It is, therefore, their duty to intercept counterfeit goods or goods that might infringe upon the rights of an IP rights holder.
The procedure requires the filing of a formal denunciation before Customs or the CFZ (Colon Fee Zone) providing as much information as possible to allow the authorities to locate the suspected counterfeit merchandise.
Along with the denunciation, the rights holder must submit certified copies of the local registrations for the trademarks that are being infringed, as well as a bond to guarantee the potential damages.
Yes - The resolution setting the amount of the bond is served on the rights holder’s counsel by posting a notice at the customs/CFZ office for 01 day. The rights holder then has 03 business days to post the bond.
There is no time limitation set for notifying the applicant about the said information; however, any information of such nature shall be intimated at the earliest.
It is a centralized system.
There is no online system due to which a written request has to be lodged.
There is no such fee; however, there is a bond that has to be submitted as well as an inspection fee to enforce the IPRs at the instance of the customs.
Where goods forming a part of a certain merchandise are suspected of infringing upon the IPRs of a legitimate proprietor protected under the laws of Panama, the customs authority/department suspends the clearance of imported goods until the inspection is conducted after the payment is made as well as the payment of the bond is received.
It is the applicant or the interested party that pays the required expenses and liabilities related to the suspension of the release of infringing goods.
As an expert witness will examine the seized products and confirm whether they are counterfeits or imitations during the investigative stage at the IPDA, the customs and CFZ authorities are not empowered to dispose of the merchandise. The powers of these authorities are limited to conducting inspections and provisionally seizing the suspected goods. Following this, a criminal proceeding to determine the IP rights crime will commence. It is, therefore, necessary to take an inspection fee of $300 per case before the search and seizure is conducted.
It is not the IP rights holder who confirms whether the goods are counterfeit or not rather, it is the inspection authorities that conduct a neutral inspection of the same and report the findings concerning the case.
No - Where the inspection authorities find that the goods are of infringing nature, the case is then transferred to the IP district attorney’s office, i.e., the IPDA, for the initiation of corresponding criminal action.
This bond is initially set at $2,000, and must be increased if the percentage of the value assigned to the detained goods as the bond amount is higher than the initial bond. Thus, if the definitive bond is set at more than $2,000, the rights holder must deposit an additional bond to cover the difference. Once the rights holder is notified of the appraisal and the amount of the bond, he has 03 business days to post it.
In the scenario where the goods detained or seized are found to be infringing the IPRs of the IP rights holder in question, the rights holder is intimated about the same after which he or she is required to pay the cost of inspection. Thereafter, the case is transferred to the IP district attorney’s office whereby the case is decided as per its merits.
Yes, after the inspection is conducted, and it is discovered that the goods are infringing nature, either civil or criminal enforcement measures are undertaken. Even provisional remedies may be undertaken, which includes injunctive orders or preventive arrest of the defendant. Until then the procedure rules in Panama also allow the parties to settle their dispute through a settlement agreement, provided that the trademark owner declares before the criminal court that it has been redressed.
The court may require the submission of other documents in addition to the documents that have already been submitted.
Provisional remedies
The following provisional remedies are available:
  • Seizure of the infringing products and the equipment or machinery used in their manufacture or assembly;
  • Seizure of assets or moneys derived from the commission of the crime;
  • An injunction forbidding the defendant to leave the country without judicial approval;
  • An injunction ordering the defendant to appear before the IPDA or the criminal court periodically to verify his or her domicile or stay in the country; and
  • Preventive arrest of the defendant. This is the most serious provisional remedy that can be executed against a defendant in a criminal proceeding as it entails the arrest of the defendant while the criminal process is pending. The defendant is incarcerated while the case is decided. However, this remedy is rarely ordered for this type of crime. The arrest can be lifted by posting bail.
Criminal penalties
The following criminal penalties may be imposed:
  • Imprisonment from 04 to 06 years;
  • Impoundment and destruction of the infringing products and the equipment used in their manufacture;
  • A fine equivalent to twice the damages or patrimonial benefit;
  • Suspension of the right to do business or exploit industries; and
  • Regarding the legal entity used to commit the crime and which benefits from it:
  • Suspension of its commercial licence or registration for up to 05 years;
  • A fine of at least $5,000 and no more than twice the damages or patrimonial benefit;
  • Total or partial loss of tax benefits;
  • A prohibition against contracting with the state, directly or indirectly, for up to 05 years, which may be imposed together with any of the above; and
  • Dissolution of the company.
Civil enforcement
Panamanian IP laws entitle rights holders to seek monetary compensation through a civil action for damages sustained as a result of trademark counterfeiting or infringement.
Although the Trademark Law does not establish the type of damages for which the trademark owner should be redressed, it should be understood that they include economic as well as moral damages (i.e., damages to reputation or goodwill) based on civil law.
The statute of limitations for civil actions for trademark counterfeiting or infringement is 06 years as of the last time the violation occurred.
Notably, a civil action can be brought not only to obtain a damages award; it can also be aimed at obtaining:
  • A court ruling recognising the trademark counterfeiting or infringement;
  • An order directing the defendant to cease all infringing acts and enjoining it from engaging in those illegal activities in the future; and
  • The imposition of fines against the defendant.
Ex parte provisional remedies
The plaintiff can request the following provisional remedies, which are all processed as ex parte motions:
  • Immediate cessation of the infringing acts;
  • Seizure of the counterfeit or infringing products and the means exclusively used in the commission of the violation;
  • Immediate suspension of the import or export of the counterfeit or infringing products;
  • Suspension of the CFZ operation permit for companies doing business in that duty-free area;
  • The posting of a bond by the defendant to guarantee payment of damages;
  • Seizure of bank accounts or other assets of the defendant to guarantee payment of damages (this remedy is contemplated in the Civil Procedure Code for all types of civil action where monetary damages are claimed); and
  • Examination of the defendant’s business records to obtain evidence of the suspected trademark infringement in support of the future civil action.
To obtain the first five of these provisional remedies, the plaintiff must post a bond, which may be up to 50% of the appraised value of the seized merchandise. The bond must be deposited with the court within 03 business days of the date of seizure of the infringing products.
In the case of suspension of the operation permit of companies located in the CFZ, the calculation of the bond is left to the judge’s discretion.
Finally, in the case of seizure of bank accounts or other property of the defendant, the bond must be posted before the seizure and will correspond to a percentage of the sum indicated in the petition as the amount intended to be attached.
The ex parte examination of business records is also subject to the prior filing of a bond to guarantee potential damages. The civil procedure rules set the maximum amount of the bond required for this purpose at $1,000, which is usually the bond required by the courts to conduct the inspection.
Civil penalties
The following civil penalties may be imposed:
  • A fine ranging from $10,000 to $200,000 (for companies operating in the CFZ, fines equivalent to 25% of the company’s monthly business movement, but no less than $75,000, may be imposed);
  • Suspension of the right to do business or exploit industries for 03 months;
  • Suspension for a minimum period of 03 months or cancellation of the operation permit granted to operate in the CFZ;
  • Seizure and destruction of all infringing products and the equipment used in their manufacture;
  • Monetary compensation for damages suffered by the trademark owner, if claimed; and
  • Publication of the condemnatory ruling in the Official Gazette.