ECUADOR: An Introduction to Intellectual Property
Current Economic Conditions
Ecuador has emerged as a tower of economic resilience and growth in Latin America. With its strategic location, the country offers a promising landscape for investors and businesses seeking to expand their operations. Ecuador boasts a diverse economic base, with sectors such as agriculture, manufacturing, tourism, and services. Moreover, it is a gateway to both the Pacific and the Andean regions, which enhances its attractiveness in terms of international trade and investment.
According to the Central Bank of Ecuador, during the last semester of 2023, the Ecuadorian economy experienced growth of 2.5%, thanks to the increase in gross fixed capital formation (GFCF) by 7.6%, public expenditure by 3.5%, exports by 3.3% and imports by 2.1%; percentages that show the steady growth of the economy, which is still recovering from the long-term effects of the COVID-19 pandemic.
Ecuador has shown remarkable strength, despite political and security conflicts. The government has committed to economic stability and legal reforms, building alliances to achieve good governance. The president has implemented prudent fiscal policies to maintain macroeconomic security. Measures such as fiscal consolidation, expenditure rationalisation and debt management have helped mitigate the impact of economic volatility.
From an international point of view, Ecuador’s participation in regional trade agreements, such as the Andean Community of Nations and the Pacific Alliance, has facilitated market access. By fostering greater economic integration with neighbouring countries, Ecuador has diversified its export markets. Likewise, the current government has focused its efforts on signing trade and security agreements, channelling the country’s growth by entering new markets. It should be noted that Ecuador also finally approved the Free Trade Agreement with China, which is the country’s second-most important trading partner. This will result in increased activity in Ecuadorian industries related to oil, mining, timber, shrimps, bananas, roses, flowers, cocoa, coffee, chocolate and fish, and, in turn, it translates into new opportunities for the legal sector in Ecuador.
On the other hand, maintaining effective diplomatic representation abroad and engaging with international organisations such as the United Nations, the Organization of American States (OAS) and the Community of Latin American and Caribbean States (“CELAC”) is essential to advance Ecuador’s foreign policy objectives and to address global challenges collectively.
IP Framework
Ecuador has a robust legal framework to protect the rights of innovators, creators and businesses that are aligned with international treaties. The country offers a high standard of protection and is a signatory to various international treaties and agreements, including the Paris Convention, the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the Patent Cooperation Treaty (PCT). Ecuador also recently signed a trade agreement with the EU, which not only means access to a considerable market for Ecuadorian products, but also ratifies the ranges of protection for traditional property rights such as trade marks and patents, as well as other forms of intellectual property, such as test data of medicines and agrochemicals.
Local regulations have incorporated the supranational legislation with almost identical wording, which is a guarantee for the protection and surveillance of rights, thereby increasing legal certainty in Ecuador.
SENADI’s role in local developments
Fortunately, under the previous governments, the authorities in Ecuador adopted a broad business vision, in favour of foreign investment, so their actions have been respectful of intellectual property rights. This has allowed the National Service of Intellectual Rights (“SENADI”) to solve cases in a technical manner in accordance with local and international regulations.
Consequently, previous rulings that were controversial and widely criticised at the time, such as the granting of compulsory licences for medicines without a declaration of public interest, were reviewed by the Courts of Appeal, where the highest authority could verify whether the requirements established by law had been met, and where they had not, could order the ruling’s revocation. This has served as support for the subsequent rejection of compulsory license requests without the need for this extraordinary measure. These decisions were based on the first and only Prejudicial Interpretation of the Andean Court of Justice on the matter, which set a precedent in the region, and which was issued for an Ecuadorian case.
Likewise, the local authority has ruled in complex cases related to the protection of test data of medicines, where SENADI has stated that said rights were protected as a commercial secret and were an important tool for the industry. A minimum standard of protection that prevents unfair commercial use has therefore been established. In the particular case mentioned, precautionary measures were adopted to prevent the marketing, sale and import of a chemical entity protected by test data; measures that were ratified in a final decision. This case has not only been noteworthy in Ecuador, it also constitutes a milestone in the region by recognising the protection of test data, through effective measures that ended the infringement.
At the same time, SENADI, aware of its technological limitations that result in delays in the processing of cases, has worked hand in hand with the World Intellectual Property Organization (WIPO) to improve its IT structure, using tools provided by this organisation and developing systems that will improve the quality of its services.
The only problem that persists, which lies in the judicial branch and still does not seem to have an end in sight, is the lack of judges in Ecuador specialised in intellectual property. This is due to the fact that IP cases are heard by judges specialised in civil matters, even in the Supreme Court of Justice, which represents an additional difficulty due to the complexity that may be involved in IP cases.