Case pending appeal could mark U-turn regarding representation

Ever since transnational commerce came into existence, trademarks have performed an essential function for such trading activities, and perfecting the relevant legislation has thus proved necessary. However, certain laws that facilitate trading in an ever-more connected world are beyond dispute. In Bolivia, it was undisputed that expansion into other markets necessarily meant that corporations cannot act on their own, so that the representation of a vendor, either for sales purposes or to exercise its rights, was the most natural and obvious solution. The capacity to act on behalf of another party, especially in the area of intellectual property, was of the essence - or so it seemed.

A recent decision of the Bolivian Patent and Trademark Office (Decision 165951), in first-instance opposition proceedings between the marks SMART FIT and SMART FIT, undermined this otherwise settled principle. The senior registrant had opposed an application for SMART FIT based on the obvious identity to its own SMART FIT registration; however, most unexpectedly, the Patent and Trademark Office rejected the opposition on the ground that the power of attorney given to the opponent's local agent had been issued after the opposition was filed and, therefore, the opponent had acted without representation.

The office’s failure to understand the spirit of the law, as well as the doctrine of representation, the nature of IP activities and past precedents, has shocked the Bolivian IP community, and has arguably sent the wrong signals to infringers and trademark squatters. 

News of this decision spread quickly and, recently, in a different opposition case, the defendant relied on the fact that the plaintiff’s local agent had not filed its power of attorney at the time of filing the claim, which allegedly constituted a clear showing that the agent was acting without representation and, therefore, that his actions were null.

In rejecting the opposition, the office cited Articles 62 of Administrative Law 2341, Article 67 of Bylaw 27113 and Article 1289 of the Civil Code, which essentially concern the formalities for representation. The only wording that is somewhat confusing can be found in Article 67 of Bylaw 27113, which states: “Any person being represented that makes a request to the government ought to file the power of attorney with the request”. Clearly the provision signifies that representation needs to be shown before the process is concluded, as Article 13 of Law 2341 states that “… in order for all acts carried out by the representative to be good and valid, the appointee must show a power of attorney before a resolution is passed”. 

It seems that the officers who issued these decisions took a very formalistic approach to the law, usually found in civil jurisdictions. There is no law that states that acts carried out without the existence of a power of attorney cannot be subsequently held to be valid. Moreover, a power of attorney is simply the materialisation and formalisation of the representation theory, which presupposes that an agent has been asked to act on behalf of the appointer. The power of attorney only formalises such capability of representation. 

Even if a forced interpretation of Article 67 of Bylaw 27113 were to be followed to demand that a power of attorney necessarily be submitted along with any type of IP claim, this statute does not have precedence over the legislation that deals specifically with intellectual property (ie, Decision 486), which gives 60 days to file any formal requirement including, especially, a power of attorney.

The SMART FIT decision, which broke away from settled jurisprudence, is thus creating uncertainty and nervousness amongst trademark owners and practitioners. The entities in charge of administering the IP rights of trademark owners cannot now change course and demand that, at the time of filing a claim, a power of attorney be submitted. For example, how can a trademark owner based in the United States take action in Bolivia if it has only a five-day time limit? Within such time limit, would a trademark owner have the time to prepare, execute, legalise and send over the power of attorney for further local legalisation and notarisation?

Certain senior officers at the Bolivian Patent and Trademark Office are nervous about this type of decisions, as acts issued by an administrative institution are deemed to be valid until they are overturned; however, by the time a decision is overturned, the original procedural terms may have already lapsed and the damage may have been consolidated. 

The SMART FIT case is currently undergoing appeal and the second opposition is awaiting resolution. The decisions in these cases are being nervously awaited, as they may mark a new trend regarding representation. There are other available recourses, such as constitutionality appeals, but in the meantime significant damage could be inflicted to the established order and to trademark owners’ vested rights. 

Juan Ignacio Zapata, Bolet & Terrero, La Paz