E-News No.47

E-News No.47

Andean Community Ruling on Patent Fees in Ecuador

by Maria Cecilia Romoleroux and Ian Wall (Corral Rosales – Ecuador)

The Andean Community Secretariat has issued a resolution rejecting the action brought by Carlos Olarte, on behalf of the Bolivarian University of Medellin, Colombia, seeking to lower patent official fees as being considered to be discriminatory and excessively high.

In the action brought, it was argued that patent fees had increased significantly in recent years, and that the current fees were not justified in accordance with the cost of providing the services. The plaintiff further referred to the fact that the basis for the fees is centered on the idea of reciprocity, that is based on the cost to an Ecuadorian for obtaining a patent in other countries, but that the countries which formed part of this analysis were all developed states, thereby ignoring the actual cost of providing the service in a developing state. It was also argued that the fees were higher than those of other Andean Member states, and that the discount of 90% to locally established universities was discriminatory against foreign universities, and in the case of universities from other Andean countries, contrary to Article 1 of Community Decision 486 which provides for equal treatment of nationals of Andean Member States.

In its decision, the Community Secretariat found that the University had no right in bringing the action, or rather no legitimate interest, since no evidence was found to show that the University had applied for a patent in Ecuador, and therefore it could not be said that that its rights had been adversely affected. It is interesting to note that prior to issuing the decision, when asked whether the University had filed for a patent in Ecuador, the plaintiff stated “it is not known exactly, but very likely no, since the costs would have been prohibitive”. On the face of it this would seem to be a legitimate argument, but ultimately of no use.

In addition, the Community Secretariat went on to say that since the University is registered with the Ministry of Education, it would be entitled to the 90% discount, but having not actually applied for a patent in Ecuador, had therefore not actually tried to obtain the discount, and therefore there was no evidence to suggest that there had been any different treatment of Andean nationals. The court also stated the requirement that a university is “locally established”, in particular being on an approved list, is perfectly reasonable.

It is disappointing that in this particular case the plaintiff had not in fact applied for a patent in Ecuador, nor tried to obtain the 90% discount as a foreigner; the ruling suggests that if a given University is on the Ministry of Education list of recognized universities, then it will be able to obtain the discounted rate. However, until now this discount has not in fact been applied to any foreign university, the authorities claiming that they are not locally established, even if on the Ministry of Education’s list. With a different set of circumstances the issue of the availability of the 90% discount could have been explored further by the court, but as it stands the issue remains unclear.

Also interestingly as to the exorbitant fees generally, the Community Secretariat referred to Article 277 of Community Decision 486, which says that national competent offices can fix fees in relation to intellectual property matters, and also given that there is no criteria in said decision as to such fees, the setting of IP fees is unequivocally a national right.