CEMCAPI Launch: A New Stage for IP Dispute Resolution in El Salvador
The National Registry Center (CNR), through the Salvadoran Institute of Intellectual Property (ISPI), has officially launched the Intellectual Property Mediation, Conciliation and Arbitration Center (CEMCAPI), an initiative that strengthens the protection of intangible assets in El Salvador.
The creation of a specialized center for alternative dispute resolution in matters of intellectual property represents a relevant step in the institutional modernization of the country that has been taking place in recent years. Hence, CEMCAPI not only expands the alternatives available for the resolution of disputes related to trademarks, patents, copyrights and other Intellectual Property rights, but it is also expected to contribute to easing the judicial route (the traditional dispute resolution mechanism), which currently faces a high accumulated caseload of proceedings, in addition to broad competencies that require constant training from judicial officials. Hence, the promotion of such alternative dispute resolution mechanisms in matters of Intellectual Property could generate positive effects not only because they are usually more expeditious avenues than the judicial route, but also because, to the extent that the technical specialization of mediators and arbitrators is fostered, the confidence of interested parties to opt for such mechanisms will be strengthened in complex areas such as technology, software, licenses, know-how or sophisticated trademark conflicts.
In this sense, mediation, conciliation and arbitration mechanisms allow the parties to submit their disputes to professionals with specific knowledge in intellectual property, which is particularly valuable in disputes where technical and specialized aspects are particularly decisive.
Alternative dispute resolution mechanisms in matters of intellectual property may be used in various scenarios in which technical and commercial elements are decisive. Among them are: (i) disputes arising from license, assignment or franchise agreements; (ii) disputes for infringement of trademarks, patents or copyrights; (iii) conflicts related to trademark coexistence or delimitation of rights; (iv) disputes arising during opposition or nullity proceedings; (v) disputes concerning domain names. With respect to the latter, a clear example of the effectiveness of alternative mechanisms in intellectual property is the system administered by the World Intellectual Property Organization (WIPO) in matters of domain names.
In particular, when we refer to disputes concerning domain names, we are mainly referring to situations in which a third party registers a domain name identical or similar to a previously registered trademark, without having rights or legitimate interests over that sign and, in many cases, with the intention of taking advantage of the reputation of another. These situations, commonly known as cybersquatting, may involve anything from the simple speculative retention of the domain for its subsequent sale to the trademark owner, to its use to divert traffic, commit fraud, impersonation (phishing) or market counterfeit products.
Thus, the creation of CEMCAPI opens the possibility for intellectual property disputes in El Salvador to be resolved through more flexible, specialized procedures adapted to the commercial needs of the parties and to the interests underlying every conflict.
Now, it should be noted that, although the Intellectual Property Law provides, in an illustrative manner, the possibility that certain types of disputes in particular, resort to a referral to the Mediation, Conciliation and Arbitration Law (LMCA) with respect to the framework rules of such mechanisms. Likewise, Article 16 of the Regulations of the Intellectual Property Law establishes that the ISPI will develop complementary regulations with the purpose of facilitating the implementation and use of alternative dispute resolution mechanisms, therefore we will await the issuance and publication of such regulations. Now, in order to distinguish the nature of these alternative means, and without prejudice to the fact that interested parties may agree on stepped clauses that allow them, for example, to resort to mechanisms that could be complementary —for example, mediation and arbitration—, we will refer to the definitions established for them by Article 3 of the LMCA:
Conciliation may be understood as "a dispute resolution mechanism through which two or more persons attempt by themselves to achieve the solution of their differences with the help of the Judge or arbitrator, as the case may be, who acts as a neutral third party and seeks to reconcile the interests of the parties”.
Mediation, for its part, is "a dispute resolution mechanism through which two or more persons attempt by themselves to achieve the solution of their differences with the help of a neutral and qualified third party called a mediator”. One of the main strengths of this mechanism is its confidential nature (Article 12 of the LMCA), in addition to its flexibility, which enables greater transparency and favors the search for a dialogue-based solution that addresses the interests of both parties in conflict. In addition, in its development the specialized knowledge of the mediator plays a crucial role, who must know and apply —while maintaining a neutral position— specialized techniques in order to ensure that the parties reach, through dialogue, an agreement that puts an end to the dispute. Another incentive to resort to mediation before CEMCAPI will be its considerably accessible costs, since the service fee established in the Intellectual Property Law (LPI) for the request for mediation is two hundred United States dollars (US$200.00).
Finally, arbitration is "a mechanism through which the parties involved in a conflict of a transigible nature defer its solution to an arbitral tribunal, which is vested with the power to issue a decision called an arbitral award”. It should be noted that, in the exercise of the autonomy of the will, the parties have the power to define in the arbitration agreement the rules by which a potential arbitration will be governed. This mechanism is distinguished from the previous two in that it is an arbitral tribunal —and not the parties in conflict— that issues a decision —an arbitral award— that will put an end to the dispute and that may be enforced in case of non-compliance. It is a flexible, private, technical and generally more expeditious mechanism than the judicial route for the resolution of disputes.
Although these are mechanisms alternative to the judicial route, it should not be overlooked that both the agreements obtained through mediation and arbitral awards —both national and international— may be judicially enforced in case of non-compliance, and there is even the possibility that the interested party may secure the outcome of an arbitral award through precautionary measures. Now, in the case of mediation it is appropriate to consider that, although there is local legislation regarding this mechanism and the enforceability of the mediation agreement granted in El Salvador is recognized —which would allow it to be judicially enforced in case of non-compliance—, greater openness is required with respect to international mediation, since to date El Salvador has not yet signed —and, consequently, has not ratified— the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention).
It should be noted that, since they are alternative dispute resolution mechanisms, their initiation and potential agreements —particularly in the case of conciliation and mediation— depend on the voluntariness of the parties, that is, it is required that the parties in conflict have agreed to submit to a particular alternative dispute resolution mechanism. Therefore, as a good practice, we recommend that, particularly in certain types of contracts that document complex obligations and whose breach could generate substantial disputes —for example, in license, technological development and business collaboration agreements— the inclusion of clauses submitting the parties to alternative dispute resolution mechanisms such as mediation and arbitration be contemplated, even as complementary mechanisms.
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