Bill linking Criminal Code and IP law goes back to the drawing board

The president of Panama has vetoed a bill that was set to amend the Criminal Code and make the punishment for infringing intellectual property (IP) rights more severe. She found that the bill contained elements that were contrary to the interests of the law and constitutional principles, and should therefore be amended by the Legislative Assembly.

The bill provides for the modification of Articles 382, 383, 384 and 389 of Chapter IV (to be renamed 'Crimes against Industrial Property Rights') of Title XII of the Criminal Code. It also provides more severe punishments for the infringement of IP rights, with pirates and counterfeiters facing sentences of two to four years in prison instead of the current six months to one year.

The bill created a correlation between the Criminal Code and IP law. This was to enable criminal sanctions to be brought against infringers of all IP rights. IP Law 35 was to be amended accordingly to make the administrative penalties imposed by the General Directorate of Industrial Property equivalent to the new criminal penalties. Fines were to range from $10,000 for violators and those who aided and/or protected them, to up to $500,000 if public health was compromised. These penalties were to be imposed by either civil or criminal courts.

The bill also provided for amendments to the Judicial Procedure Code. As a consequence of the increased sentences for IP crimes, the hierarchy of the courts deciding IP matters was also re-evaluated. Article 159(13) of the Judicial Procedure Code was to be amended accordingly so that IP rights infringement cases were under the jurisdiction of circuit courts instead of municipal courts.

However, the president considered that administrative penalties ought not to be as severe as criminal punishments and thus, making the administrative penalties imposed by the General Directorate of Industrial Property equivalent to the new criminal penalties would unbalance the legal system. She also found that allowing the registration of IP in any language, as provided by the bill, would be contrary to the constitutional principle that all documents must be registered in Spanish to guarantee transparency and understanding. She therefore requested that the Legislative Assembly amend the bill.

Once approved, the new law will become part of the effort to modernize the legal framework regulating IP rights in Panama and will help strengthen the enforcement of IP rights in that country. In the meantime, a committee is studying further amendments to IP Law 35.

Gilda Berman de Vilar, Pardini & Associates, Panama