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At-a-glance: Instituto Nacional de Propiedad Industrial Moneda 975, Piso 13, Santiago, Chile Tel: +56 2 836 0000 Fax: +56 2 836 0101 Email: adminintranet@economia.cl Website: www.inapi.cl In February 2010, business ground to a halt in Chile when... [more]

In February 2010, business ground to a halt in Chile when an earthquake occurred off the coast of the Maule Region, taking 521 lives and displacing 1.5 million people. President Michelle Bachelet declared a state of catastrophe and sent in the military to take control of the worst-affected areas. The earthquake generated a blackout, which affected 93% of Chile's population. "For three days afterwards we didn't have connections with the world," said one attorney. The earthquake, which occurred around 200 miles south of the capital Santiago, also triggered a tsunami which devastated the Chilean coastline. Santiago, where most of Chile's IP firms are based, was not as badly affected – but business was still disrupted by the disaster. "Companies were dedicated to other issues, not developing trade mark designs and campaigns, so our semester was slow," said another practitioner. "But we are recovering and we hope to come back."

In March 2010, President Bachelet, a moderate socialist, was succeeded by centre-right Sebastián Piñera following a close-run electoral race and three months of uncertainty over the ballot results. IP practitioners speculate that the move to a right-wing government may bode well for their clients.

Patent filing was down considerably during 2010 as a result of Chile joining the Patent Cooperation Treaty (PCT) the previous year. Following Chile's accession, all foreign applications filed on or after June 2 2009 were automatically sent for international preliminary examination. This involves an 18-month processing period, which came to an end in December 2010. Some firms reported as much as a 90% drop in filings in 2010 compared to previous years, but lawyers are expecting a massive increase in patent work this year. "The challenge is to provide good assistance when the PCT avalanche comes through," said one partner.

Chile is also a member of various other treaties which make it an appealing business venue for international companies. "Because of free trade agreements, Chile has good relations with a number of countries, including the US," remarked one lawyer. "Chile has IP standards above that of most countries in Latin America." Another practitioner said: "The trade between Asia and our market is very active. Chile was the first Latin American country to be a member of APEC [the Asia-Pacific Economic Cooperation], so many countries tried to get into Latin America through Chile."

The country's thriving economy has also attracted investment. Chile has the strongest sovereign bond rating in South America and has experienced an average of 4% year-on-year growth over the last decade, leading one partner to describe it as "a good country in a bad neighbourhood". He continued: "Our problem is that we are too small as a market, but we are a very mature market."

With many law firms counting production and processing companies amongst their major clients, enterprising attorneys have been trying to convince Chilean industry to embrace the concept of branding. "Chile has been known and renowned because of its exportation system," said one attorney. "We need to add value to our products and transfer that to other countries that might need it from us. We need to convince the authorities that creators must receive advice from the administration and not dedicate as much time to bureaucracy."

Red tape was repeatedly cited by practitioners as one of the biggest problems for IP owners. "We don't have specialised courts – they are normally civil courts – so you have to bring in a claim and educate the judge," said one partner. "We lack awareness of IP and judges are not accustomed to dealing with these matters." Lawyers also criticised the amount of time it took to resolve a dispute. "It could take maybe three years or more to get a resolution," said another attorney. "In three years, many things have happened and most of the time the clients have lost interest in the case."

Because of the geography of the country, preventing the import and export of pirated merchandise was recognised as both a challenge and a business opportunity by IP lawyers. "Chile is a very long country, so it's possible to smuggle counterfeit goods in at several major points on our coast," said one partner. However, many firms reported an increase in anti-counterfeiting work, and attorneys felt the government has taken a more proactive approach to border measures in recent years. Some firms reported holding educational seminars for Customs agents on how to detect and deal with counterfeit products.

As Chile's economy develops, IP practitioners are beginning to identify technology as the future. Firms reported a dramatic increase in litigation relating to the internet, particularly in connection with social networking sites. Practitioners felt this was partly due to increasing regulations in this area. "The biggest challenge approaching is the digital world," said one lawyer. "A big issue is peer-to-peer file sharing. I think there's a lot of work still to be done and it's challenging."