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At-a-glance: Servicio Autónomo de la Propiedad Intelectual Centro Simón Bolívar, North Building, 4th Floor, El Silencio, Apto Postal 1844 - Cod Postal 1010, Caracas, Venezuela Tel: (0212) 481 64 78/484 29 07 Fax: (0212) 483 13 91 Email: webmaster@sapi.gob.ve Website:... [more]

Between forcible government takeovers of private enterprise and IP rights being dismissed as a capitalist construction, Venezuelan IP lawyers and their clients have been plunged into fear and uncertainty. "This is an increasingly hostile place for IP," said one partner. For attorneys, it is difficult to even know which legislation they are subject to. In September 2008, the Venezuelan industrial property office (SAPI) announced that the country was abandoning Decision 486, the IP law of the Andean Community, and reverting to the Industrial Property Law of 1955. The decision followed an announcement by President Hugo Chávez in 2006 that the country would extract itself from the Andean Community. Dissidents, such as former Supreme Court judge Hildegard Rondón de Sansó, have argued that the Andean legislation is still legally in effect until Venezuela officially withdraws from the treaty. However, with the 1955 law being applied in practice and Venezuela's obligations to the Andean Community expiring in April this year, the debate is merely academic.

The director general of SAPI reported recently that the agency will propose a new Industrial Property Law, which is expected to be on the agenda for 2011. Meanwhile, as their counterparts in other countries discuss new regulations for MP3 downloads and social networking sites, Venezuelan lawyers are struggling to reinterpret legislation which few are old enough to remember. The 1955 law – described by one partner as "totally outdated and incorrect for the 21st century" – offers no protection for geographic indications, service marks or pharmaceuticals, no provisions for mandatory licensing and no measures for unfair competition.

Reinstating the old legislation has caused logistical issues. "There's a backlog of four years for files and registrations," said one practitioner. "Sometimes we have to renew the registration before we can give the client a certificate." In an effort to relieve the problem, the patent office has begun issuing the registration documents online. Unfortunately, the 1955 law states that the official certificate must be signed by the registrar, leading some counsel to conclude that the electronic versions are not legally valid. "There has been a lot of confusion about what's accurate and what's incorrect," said one attorney. "The patent office doesn't even stick with the rules." There is also concern that the organisation has become political. "This is a country where the government hasn't granted a patent for years," said one lawyer. For IP professionals, it has been a difficult course to navigate. "You always think that you are at the worst point you can be and then something else comes along," said one partner. "Fortunately the IP community is fairly close-knit, but we have got to tread carefully. If you tread too heavily, your clients are the ones who are going to suffer. We are all trying to defend our clients' rights but it's a delicate balance."

Unsurprisingly, foreign investment has declined and some firms have gone out of business. Despite this, money continues to flow through Venezuela's economy and living conditions for the poor have improved substantially under Chávez. According to the World Bank, the percentage of the population living in extreme poverty fell from 32% to 19% between 1995 and 2005. Programmes such as free healthcare, subsidised food and land reform are largely financed by oil – Venezuela has the largest reserves outside the Middle East and Chávez has nationalised most of the country's petroleum industry. With oil sales making up 90% of export earnings, Venezuela's GDP is inextricably linked to the price of gas. The economy fluctuates widely and the rate of inflation is high.

When the government nationalised coffee giant Fama de América in November 2009, it made the surprising decision to keep the company's well-known name. "In other cases it has been changing the names of the product to reflect the philosophy of socialism," said one lawyer. "I believe it was the reputation of the brand [that made the government keep it]. It was a massive consumer product." Under Venezuelan law, the government is obliged to compensate the owners of an expropriated company for all assets, including IP. However, negotiations occur after the business has been taken over. "I am not familiar with any company that has been paid or at what price the trade marks would be valued," said one partner.

For now, IP lawyers are waiting for the dust to settle. "I'm optimistic that at least we will see a new law in 2011 ruling on patents and trade marks, although I'm not optimistic about how good the law will be," said one practitioner. "At least we will be governed by updated legislation and can give our clients some security." Though the future of IP looks uncertain in Venezuela, many are pragmatic. "In spite of the difficult circumstances we have, results can be delivered if you do the right things and keep insisting with the patent office and the courts," said another attorney. Others are taking a philosophical view. "History is cyclical, and things are going to get better here – it's just a matter of time," said a third lawyer. "There's hope. Unfortunately, that's all we have."