Argentina has a long and poor image as a country that
disregards IP rights and does not enforce them when trade mark
owners take action in court. This image is not totally true and
is now changing with the new political winds blowing in
Argentina. Positive developments are on the way and that brand
owners should be able to feel the changes soon.
Argentina has a host of good lawyers that are deeply
involved in IP, excellent universities that are renowned in
Latin America and solid legislation, so what is missing?
Politics were the great problem that made most of the good
legislation inapplicable and placed obstacles to improvements
in areas where new laws were required. Populism played a role
in creating and maintaining obstacles to any judicial measures
against sellers of counterfeits, who usually involve the poorer
class of people as fronts for their illegal activities and who
are first to get caught in criminal procedures. This has been
documented in a recent study made by the Office of Trade
of the United States Embassy.
New political winds
But new political winds began to blow across Argentina. In
June this year, the largest black market in South America, La Salada, suffered a setback that ended
in the arrest of its chief operator. La Salada is
run without any normal business procedures which makes the sale
of counterfeit goods easy, and there is a high degree of tax
We would expect then that the same legal tools that most
developed countries normally have at their disposal for
fighting against piracy and crime, and exist in Argentina, will
begin to work normally, something that is beginning to happen
since the Macri administration took power at the end of
Our Customs law prohibits the import and
export of goods carrying falsified trade marks as well as
pirated goods. If it is unclear whether the goods are genuine,
Customs may retain them for up to seven working-days in which
Customs must contact the IP rights owner giving them the chance
to file a request for an injunction before the courts.
The tax agency AFIP is responsible for a Register where
trade mark owners may register their trade marks for up to two
years and renew them indefinitely. Based on this registration,
importation of goods carrying the registered trade marks will
be stopped for three days, during which the trade mark owner
may have access to the goods, before the goods are refused
entry or declared to be lawful.
If the importer contends that the goods are original, the
trade mark owner will be able to get the necessary injunctions
before the courts to stop the importation of goods within the
three-day suspension (or seven days depending on the
circumstances). Normally, the importer would abandon the goods
for destruction rather than risk being personally prosecuted
for a criminal offence (more information here, here and here).
Criminal actions as a means to stop the entry of falsified
goods into the country or as an action to investigate, stop and
later condemn criminals are a rapid and effective way to gather
all the evidence needed to get an injunction to stop the goods
being introduced into and circulate in the market.
The falsification of trade marks is only punishable by a
maximum of two years in prison, therefore no jail sentence
should be expected unless other criminal offences can be added.
But these normally occur, since trade mark falsification
usually involves tax evasion, money laundering and illicit
At present, some cases are being prosecuted for the
falsification of cigarette packages. In 2015, in Concordia,
Entre Ríos, La Tabacalera del Litoral was accused by
Massalin Particulares of falsifying its trade marks, illegally
manufacturing Philip Morris cigarettes and tax evasion of $1.5
million. Its owner had to suffer house arrest.
In a more recent case, known as "dragon" (for a dragon
looking safe containing huge amounts of money), Walter Carbone
and Daniel Tomeo, both very closely tied to the former
government conducted by Daniel Scioli, were prosecuted for
illegal cigarette production and trade, among other charges.
Two illegal factories were closed down, the machinery was taken
down by judicial authorities and the illegal goods and
packaging all destroyed.
When a trade mark owner wishes to stop counterfeit goods,
they must apply to the criminal courts. However companies
normally also want to be awarded damages to cover some of the
expenses, and this must be done at the civil courts. A civil
action must be filed, and if the damages are sufficiently high
it may serve as a deterrent to those who consider committing
In Argentina, as in many countries in Europe, there is a
discussion in the legal community on the awarding of damages
regarding the use of non-authorised trade mark rights. Is it
proper to award damages to trade mark owners when there is no
proof of damage but when non-authorised use of a trade mark is
established? The current state is that even if you manage to
prove financial gain by the counterfeiter, it does not
necessarily translate into a similar loss for the trade mark
owner. Therefore, courts have introduced a broader
interpretation of the law and have begun in the past 10 years
to accept an objective proof of damage when a non-authorised
use of a trade mark is established. They find in this
interpretation a useful deterrent for the counterfeiting of
trade marks. Courts usually set a high royalty to be paid by
the non-authorised trade mark user, to discourage such illegal
behaviour. In some other cases, they have established a fixed
amount of damages that seeks to remove any potential benefit to
the non-authorised user.
It seems that the courts are working to establish a
precedent of factual (not legal) punitive damages law rather
than setting damages based on financial loss. Although punitive
damages have not been formally accepted in civil procedures
regarding trade mark law in Argentina, punitive damages are
accepted in consumer rights law. Therefore, even if it does not
have a proper legal basis in the Trade Mark Law, it makes sense
for judges to sustain their damages decisions on the punitive
damages legislation contained in the Consumer Rights Law.
Argentina has the tools in its legislation to perform
enforcement through Customs, criminal courts and civil courts.
The existing practice today is not huge, but with the new
political and economic winds things may change rapidly. Brand
owners have reason to feel encouraged by these positive
© Carlos Castrillo. The author is a partner
of Castrillo & Castrillo in Buenos Aires