ARGENTINA: An introduction to Intellectual Property
Economic and Political Scenario in Argentina Concerning the Intellectual Property Scene under Javier Milei
The current administration of President Javier Milei introduced critical economic reforms, including aggressive deregulation and reduced public spending, restoring Argentina´s position in foreign policy with the US and Europe. The financial measures aim to tackle high inflation and fiscal deficits, stimulate business activity, increase market efficiency, and attract foreign investment by reducing bureaucratic red tape and simplifying regulatory processes. They intend to streamline bureaucracy, reform labour laws, reduce subsidies and controls, and promote privatisation and outsourcing.
One of the most promising measures is enacting the Incentive Scheme for Large Investments (RIGI, for its Spanish acronym), a crucial component of this administration.This system,designed to attract and facilitate large-scale infrastructure investments, offers incentives, simplifies processes, and promotes public-private partnerships (PPPs). With its tax breaks, expedited approvals, transparent regulatory framework, project selection criteria, and legal and financial support, the RIGI system has the potential to boost economic growth and improve infrastructure quality significantly. This could lead to job creation, increased business opportunities, and a more competitive market despite the challenges it may face.
Main issues related to Intellectual Property
Today's obligatory path is economic growth based on innovation and creating intangible goods. In this regard, according to the ranking prepared annually by the World Intellectual Property Organization (WIPO), Switzerland is turning out to be the most innovative economy in the world in 2022 for the 12th consecutive year, followed by the United States, Sweden, the United Kingdom, the Netherlands, Denmark, South Korea, Finland, and Singapore. China approaches the top ten, with Turkey and India entering the top 40 for the first time, according to the 2022 index.
The ranking also reflects that, within the top ten most innovative countries, there are small countries such as Denmark, Singapore, and South Korea. This fact should motivate us to support this sector in Argentina, with a substantial innovative capacity, as reflected in the unicorns MELI, GLOBANT, DESPEGAR, OLX, VERCEL, ALEPH, MURAL, AUTH0 among other very successful companies such as SATELOGIC, TECHNISYS, ETERMAX and, recently, TRAVELX, which allows the endorsement and sale of airline tickets through blockchain technology, revolutionizing the travel industry.
Argentina's exports of intangible intellectual goods, the fruit of the knowledge economy, have already become the third largest export complex in the country, behind the oilseed and grain sectors.
Much has been done to promote this intensely growing sector, including the enactment of Law 27506 on the Regime for the Promotion of the Knowledge Economy. However, more is needed. Intangible assets resulting from knowledge and innovation still need to be adequately protected in Argentina, and the National Institute that regulates trademarks and patents is in dire need of the tools to do so. To this end, we must organize, strengthen, and develop a modern, innovative ecosystem, promoting communication and interaction between the sectors involved: universities and technological poles, innovators, and entrepreneurs. The success of countries such as Denmark, Brazil, China, and India is the result of creating solid innovation ecosystems.
Argentina must urgently strengthen the protection of intellectual property rights, adopting a level of protection similar to that of Brazil, Chile, Colombia and México. Increasing protection of intellectual property requires quick accession to the Patent Cooperation Treaty (PCT), the Madrid Protocol, and the Protocol to the Hague Act on Industrial Designs. Most Latin American countries are already part of these three international treaties administered by the World Intellectual Property Organization (WIPO), which gives their small and medium-sized enterprises (SMEs) and entrepreneurs the tools to facilitate faster and cheaper protection of their intangible assets. Not having access to these treaties puts SMEs, innovators, and entrepreneurs in Argentina at a disadvantage when protecting their intangible assets, increasing the costs of protection. The current administration has given us a new opportunity. Let's hope we do not waste it.
Despite lagging behind its Latin American counterparts, Argentina has a well-structured legal framework regarding Intellectual Property. However, the system needs to function more adequately. Among other reforms (i.e., the need to ratify the international treaties mentioned above), the National Institute of Industrial Property (INPI), the body in charge of administering patent, industrial design, and trademark rights in Argentina, needs to be reformulated to provide the service required by a modern innovative ecosystem. The current authorities of the INPI are excellent and agree on the diagnosis and action plan, but they need more political support to carry them out.
Although the INPI was created as an autarkic entity, its autarchy was never implemented. Its effective autarchy must be established (foreseen in its creation but never implemented until today) so that it can operate efficiently and be able to pay salaries that are adequate to the level of specialisation required by an engineer or a biochemist expert in patents or a lawyer examining trademark applications, opposition proceedings, forfeitures, and administrative nullities, equating their remuneration to what a trademark expert lawyer and patent engineer receives in the market. Its highest authorities must have technical training in the area and be experts in intellectual property. A modern building is needed (the Innovation Park promoted by the City government would be an excellent site) and must be provided with all the necessary technological resources.
The INPI made significant strides in improving its operations during the Macri administration, partly thanks to the cooperation with the European Patent Office, EUIPO, WIPO, and the Danish Patent and Trademark Office. Notably, INPI implemented a project to provide for the electronic procedure for patents, trademarks, and designs, digitized its historical patent applications, implemented a system for receiving fee payments online, and uploaded all the statistical information that reflects its operations in real-time. These steps demonstrate Argentina's commitment to modernising its IP framework and fostering a more attractive environment for investment and innovation.
At present, the main problems are:
1) Due to its lack of resources, INPI has a significant backlog in processing trademarks and patents.
2) Argentina lacks protection in certain areas of patent law, notably inadequate protection for pharmaceutical products.
The absence of adequate and effective protection of certain aspects of intellectual property rights affects the possibility of receiving foreign investment. It also puts Argentine entrepreneurs and start-ups in a problematic position concerning their competitors in Latin America.
On the other hand, the Argentine Data Protection Law (DPL) was enacted in 2000 and has become outdated in the context of technological and legal developments, especially following the passing of the General Data Protection Regulation (GDPR). In this regard, the Executive Branch of the previous presidency sent to the National Chamber of Deputies the final version of a data protection bill, in line with regional and international standards.
Looking ahead, the main actions to be taken—and which have been insistently requested by the US, the EU, universities, Argentine business associations, and local users of the Intellectual Property system for decades—are the following:
1. Ratifying the PCT treaty, the Madrid Protocol on registering international trademarks, and the Hague Treaty on industrial designs.
2. Entering cooperation agreements with the European Patent Office (EPO) to use the patentability examinations carried out by its examiners for the same patent applications filed in Argentina. Using the same examinations would allow us to catch up with the existing examination procedures backlog without hiring new personnel.
3. Transforming the INPI into an autarkic agency under the authority of the President's Chief of Cabinet. The money received from fees charged at a reasonable value compared to any trademark office in Latin America would be enough for the institute to function efficiently.
4. Providing the INPI with a new building and professionally qualified and well-paid personnel.
These reforms will allow our entrepreneurs and researchers to protect the fruits of their inventions simply and economically. They will lay the foundations for foreign companies to invest in our country.
In summary, Argentina's efforts to strengthen IP protection and create a more attractive environment for investment and innovation, including simplifying IP filing through the ratification of the PCT and Madrid Protocol, are significant for the country's continuous development. All these measures will bolster support for start-ups and innovators, thereby increasing the exports of their products and services abroad.