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ANTI-COUNTERFEITING ACTIONS
Trademark
infringements or counterfeiting in Panama can
be pursued through criminal, administrative and
civil actions.
Criminal
actions
Under
our Penal Code and IP Law (Law No. 35 of 1996),
trademark infringements and counterfeiting are
considered criminal offenses.
The
IP Law grants powers to public prosecutors to
initiate ex officio criminal actions against trademark
counterfeiters whenever they learn from any source
about the commission of this crime. The prosecutors
are also empowered to order provisional remedies,
such as, the seizure of pirated products and the
machines or equipment used in the manufacture
or assembly of these goods. This type of criminal
action does not require the filing of any bond
nor does it require quantification of damages.
The
intellectual property rights owner just needs
to file a criminal denunciation before the National
IP District Attorney’s Office, which will
order the search of the premises of the subject
company and the seizure of all the counterfeit
goods. Additionally, the law affords the trademark
owner the opportunity to cooperate with the DA’s
Office in the gathering of evidence, including
participation in the seizure, by becoming a “collaborating
party”.
The
sanctions that can be imposed to the defendant
if he is found guilty are:
Imprisonment for 2-4 years (this sanction
is set forth in the Penal Code)
Fines ranging from US$10,000.00 to 200,000.00.
Seizure and destruction of the infringing
products and the equipment used in the manufacture
of same
Suspension of the commercial license
For companies located in the CFZ: fines
equivalent to 25% of the monthly commercial movement
of the company, but never less than US$75,000.00,
and the provisional or definitive revocation of
the CFZ operation permit.
In
spite of the ex officio nature of the criminal
action, the law allows the termination of the
process by means of a settlement agreement between
the parties, which can take place any time before
the rendering of the trial court’s decision.
Administrative
actions
They
include Customs and CFZ procedures of inspection
and retention of suspected counterfeit or infringing
goods.
Customs
authorities are empowered to inspect and retain
merchandise undergoing customs procedures, regardless
of its final destination, that might be violating
Panama’s IP laws. This means that even in-transit
goods can be inspected and retained.
CFZ
authorities have the same powers in respect of
merchandise located or stored within the duty-free
territory.
These
procedures can be initiated ex officio, upon request
of the intellectual property right owner or licensee
or through a court order.
Ex officio procedure: The authorities
may proceed on their own motion whenever they
learn from any source about possible counterfeit
or infringing merchandise or if they have reasons
to believe that the goods are violating Panama’s
IP laws. Under this procedure, both the trademark
owner and the merchandise consignee must be
notified of the retention of the goods.
Once
the IP right owner is notified, he has the right
to request samples of the products to examine
them and determine whether they are counterfeit
or infringing products. If they are indeed pirated
goods, the IP right owner is entitled to file
an opposition brief against the release and
traffic of the merchandise. The opposition must
be submitted within 5 working days after the
receipt of the samples. Subsequently, the seized
goods are appraised and the IP right owner must
post a bond to guarantee potential damages,
the amount of which could be up to 50% of the
appraisal value of the retained goods. The bond
must be filed within 3 working days following
the notification of the appraisal.
Upon request of the IP right owner or its licensee:
This procedure requires the posting of a bond
to guarantee potential damages. This bond is
originally fixed in US$2,000 and must be increased
if the percentage of the appraisal value of
the retained goods determined by the authority
is higher than the original bond.
In
the case of the CFZ, it is necessary to pay
an inspection fee of US$300.00 per inspection.
Through a court order: The trademark
owner can request a civil court to order Customs
or CFZ authorities to conduct the inspection
and retention. In this case, the bond is also
originally fixed in US$2,000 and must be increased
if the percentage of the appraisal value of
the retained goods determined by the authority
is higher than the original bond. The petitioner
must deposit the bond with the court.
Once
the administrative procedure is completed, the
case is transferred to the competent DA’s
Office for the initiation of the criminal proceeding.
Civil
actions
The
law also entitles IP rights owners to seek money
compensation for material and moral damages sustained
as a result of the infringement or counterfeiting
through a civil action.
As
provisional remedies, the plaintiff can request,
among others, the following actions:
[1].The
seizure of the counterfeit or infringing products.
[2].The immediate suspension
of the importation, exportation, distribution
and circulation of the counterfeit or infringing
products.
[3].The suspension of the CFZ
operation permit for companies doing business
in that area.
[4].The posting of a bond by
the defendant to guarantee payment of damages.
To obtain the granting of any of these provisional
remedies it is necessary to post a bond the amount
of which could be up to 50% of the appraisal value
of the seized merchandise.
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