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Intellectual Property :: 


Trademark infringements or counterfeiting in Panama can be pursued through criminal, administrative and civil actions.

Criminal actions

Under our Penal Code and IP Law (Law No. 35 of 1996), trademark infringements and counterfeiting are considered criminal offenses.

The IP Law grants powers to public prosecutors to initiate ex officio criminal actions against trademark counterfeiters whenever they learn from any source about the commission of this crime. The prosecutors are also empowered to order provisional remedies, such as, the seizure of pirated products and the machines or equipment used in the manufacture or assembly of these goods. This type of criminal action does not require the filing of any bond nor does it require quantification of damages.

The intellectual property rights owner just needs to file a criminal denunciation before the National IP District Attorney’s Office, which will order the search of the premises of the subject company and the seizure of all the counterfeit goods. Additionally, the law affords the trademark owner the opportunity to cooperate with the DA’s Office in the gathering of evidence, including participation in the seizure, by becoming a “collaborating party”.

The sanctions that can be imposed to the defendant if he is found guilty are:

Imprisonment for 2-4 years (this sanction is set forth in the Penal Code)
Fines ranging from US$10,000.00 to 200,000.00.
Seizure and destruction of the infringing products and the equipment used in the manufacture of same
Suspension of the commercial license
For companies located in the CFZ: fines equivalent to 25% of the monthly commercial movement of the company, but never less than US$75,000.00, and the provisional or definitive revocation of the CFZ operation permit.

In spite of the ex officio nature of the criminal action, the law allows the termination of the process by means of a settlement agreement between the parties, which can take place any time before the rendering of the trial court’s decision.

Administrative actions

They include Customs and CFZ procedures of inspection and retention of suspected counterfeit or infringing goods.

Customs authorities are empowered to inspect and retain merchandise undergoing customs procedures, regardless of its final destination, that might be violating Panama’s IP laws. This means that even in-transit goods can be inspected and retained.

CFZ authorities have the same powers in respect of merchandise located or stored within the duty-free territory.

These procedures can be initiated ex officio, upon request of the intellectual property right owner or licensee or through a court order.

Ex officio procedure: The authorities may proceed on their own motion whenever they learn from any source about possible counterfeit or infringing merchandise or if they have reasons to believe that the goods are violating Panama’s IP laws. Under this procedure, both the trademark owner and the merchandise consignee must be notified of the retention of the goods.

Once the IP right owner is notified, he has the right to request samples of the products to examine them and determine whether they are counterfeit or infringing products. If they are indeed pirated goods, the IP right owner is entitled to file an opposition brief against the release and traffic of the merchandise. The opposition must be submitted within 5 working days after the receipt of the samples. Subsequently, the seized goods are appraised and the IP right owner must post a bond to guarantee potential damages, the amount of which could be up to 50% of the appraisal value of the retained goods. The bond must be filed within 3 working days following the notification of the appraisal.

Upon request of the IP right owner or its licensee: This procedure requires the posting of a bond to guarantee potential damages. This bond is originally fixed in US$2,000 and must be increased if the percentage of the appraisal value of the retained goods determined by the authority is higher than the original bond.

In the case of the CFZ, it is necessary to pay an inspection fee of US$300.00 per inspection.

Through a court order: The trademark owner can request a civil court to order Customs or CFZ authorities to conduct the inspection and retention. In this case, the bond is also originally fixed in US$2,000 and must be increased if the percentage of the appraisal value of the retained goods determined by the authority is higher than the original bond. The petitioner must deposit the bond with the court.

Once the administrative procedure is completed, the case is transferred to the competent DA’s Office for the initiation of the criminal proceeding.


Civil actions

The law also entitles IP rights owners to seek money compensation for material and moral damages sustained as a result of the infringement or counterfeiting through a civil action.

As provisional remedies, the plaintiff can request, among others, the following actions:

[1].The seizure of the counterfeit or infringing products.
[2].The immediate suspension of the importation, exportation, distribution and circulation of the counterfeit or infringing products.
[3].The suspension of the CFZ operation permit for companies doing business in that area.
[4].The posting of a bond by the defendant to guarantee payment of damages.

To obtain the granting of any of these provisional remedies it is necessary to post a bond the amount of which could be up to 50% of the appraisal value of the seized merchandise.


Benedetti & Benedetti 2004 :: Web Site produced by EM Technologies Corp.