Stricter sanctions for industrial property violations in force at last

The law modifying the Criminal and Judicial Codes, and Industrial Property Law 35 of 1996 has come into force. The Legislative Assembly amended the bill at the request of the president of Panama, who had found the original draft contrary to constitutional principles and the interests of the law (see Bill linking Criminal Code and IP law goes back to the drawing board).

Law 1 of 2004 modifies Articles 382, 383, 384 and 389 of Chapter IV (renamed 'Crimes against Industrial Property Rights') of Title XII of the Criminal Code. It also provides more severe punishments for the infringement of industrial property rights, with pirates and counterfeiters facing prison sentences of two to four years instead of the previous six months to one year.

The law creates a correlation between industrial property law and the Criminal Code so that criminal sanctions can be brought against industrial property rights infringers. Industrial Property Law 35 has been amended accordingly to make the administrative penalties imposed by the General Directorate of industrial property equivalent to the new criminal penalties. Civil courts may now impose fines of $10,000 on industrial property violators and those who aided and/or protected them, up to $500,000 if public health was compromised. If the crime is committed by a travelling salesman, the penalty is $500 to $5,000. Criminal courts can impose additional penalties, such as (i) suspending the right to execute business for a period of three months, and/or (ii) suspending for a minimum of three months or cancelling a licence issued by the Colon Free Zone (the Atlantic gateway to the Panama Canal, dedicated to re-exports of merchandise to Latin America and the Caribbean), an Export Processing Zone (duty free zone established in a former US military base) or any other Special Tax Zone.

As a consequence of the increased sentences for industrial property crimes, the hierarchy of the courts deciding industrial property matters has been re-evaluated. Article 159(13) of the Judicial Procedure Code has been amended accordingly to bring industrial property infringement cases under the jurisdiction of circuit courts instead of municipal courts.

Gilda Berman de Vilar, Pardini & Associates, Panama