New Public Contracting Law protects IP rights


Paraguay's new Public Contracting Law (Law 2051/2003) has come into force today. The law protects exclusive intellectual property (IP) rights by establishing, in two specific provisions, that only IP rights owners and their licensees may participate in public contracts with the government or its agencies.

Article 33(a) establishes that the government or its agencies may sign a contract without going through a bidding process whenever the contract may only be entered into with a particular party (eg, the owner of a specific work of art).

Article 40(j) excludes certain parties from bidding for or signing public contracts. Natural and legal persons that are not entitled to the use of the IP rights in the goods or services involved in a particular public contract are prohibited from bidding.

These provisions give rights owners a more competitive edge and fairer access to public contracts. They are particularly beneficial to trademark owners as they prevent parallel importers (accepted in Paraguay under the principle of international exhaustion of rights) from entering public contracts. They also prevent patent infringers from winning a public bid. Under the previous law, patent infringers were eligible for a public contract provided that (i) they met all other qualifications, and (ii) their price offer was lower than that of the patent owner.

Adriana Casati, Berkemeyer Attorneys and Counselors, Asuncion

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