The Venezuelan PTO only accepts fees in the cryptocurrency petro, which the government launched in February 2018, while the US imposes sanctions on anyone who uses it. This leaves foreign IP owners in a bind. When petro was introduced in an attempt to replace the national currency (the bolívar), which had been devalued, the Venezuelan PTO froze all pending applications and said it would not accept fees to process them in any currency.
This March 19 2018 press release from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) details US President Trump’s executive order. It includes the threat of sanctions against companies that deal in Venezuela’s petro, even if they’re not US-based, “so it really affects everyone”, says Patricia Hoet-Limbourg, partner at Hoet Peláez Castillo & Duque in Caracas, Venezuela.
On February 1 this year, the PTO published a notice that it would start accepting fees paid in petros. “The good news is that the fees are much lower”, says Hoet-Limbourg. It used to cost $1,950 to process a new patent application, and now it will be less than $300. The exact value in dollars is difficult to determine, however, because the value of the petro fluctuates greatly, as it is not an established currency.
The bad news is that foreign entities cannot safely take advantage of the reduced fees and push their applications or renewals forward for fear of sanctions. Around 80-90% of IP filings in Venezuela are from foreign entities, according to Hoet-Limbourg, and 40% of those are from the US.
There are around 2,000 patent and trademark applications currently pending at the Venezuelan PTO. “If the fees are not paid in two months”, says Ricardo Enrique Antequera, partner at Antequera Parilli & Rodríguez, also based in Caracas, “those applications will be abandoned”.
Hoet-Limbourg is confident that this will motivate the PTO to find a solution quickly, because “their major income is from foreign companies”, she says. “They wouldn’t allow the applications to be abandoned. In the worst case, they would be frozen again”.
One firm may have found a workaround, but it is a risky procedure. “Going directly is impossible”, an anonymous partner at an IP firm outside Venezuela explains. The workaround involves going to the Venezuelan PTO with “a bunch of cash, they change it to crypto, and then bill you in US dollars.
“It’s really complicated,” says the source, “and money gets lost in the transfer, but that’s one way to do it. It costs more, but we’ve been successful with renewals”.
All foreign clients must understand that there is no logic in the whole operation, says Fernando Triana, partner at Triana Uribe & Michelsen, based in Bogotá, Colombia. “Each client must evaluate their own risk and make a decision on how to proceed”.
The other way to proceed is to wait for a change. Flexibility from either country could make the situation workable. Either the Venezuelan PTO could change its policy and collect fees in currencies other than the petro, or the US Treasury’s OFAC could grant Venezuela a general licence.
Antequera, of Antequera Parilli & Rodríguez, says collecting fees in a currency other than petros is possible, but it would be bad politically. “It’s about sovereignty”, he says. “The government doesn’t want to be seen as giving in to the sanctions”.
Ideally the PTO would allow other currencies, says Hoet-Limbourg, of Hoet Peláez Castillo & Duque. “They should allow us to pay in bolívares”, she says, “because it would be cheap and easy. A more stable, recognised cryptocurrency like bitcoin could also work”.
For political reasons, a compromise from the US Treasury may be more attainable. OFAC has granted general exclusive IP licences to other countries that the US has sanctioned – including Cuba, Iran, Sudan and Syria. Hoet-Limbourg and others have requested that the OFAC consider granting the same licence to Venezuela, but has not yet heard back from the office.
In the meantime, she says, “we’re trying all fronts”. Venezuelan IP firms have banded together to call for the changes they need to function at OFAC and the PTO, and are enlisting the help of IP organisations including COVAPI (the Venezuelan Association for Industrial Property Agents) and ASIPI (the Inter-American Association of Intellectual Property). “Our differences are on hold”, says Hoet-Limbourg, “because we don’t want to risk our firms or our clients to be sanctioned, so we will not pay in petros, and we’re being very careful”.
Venezuelan firms have brought two actions against the PTO in court so far: a request for reconsideration and a preliminary injunction on the PTO’s notice that it will accept fees only in petros. The motions were filed on March 4, but the court hasn’t been able to review them. “Usually it only takes three or four days,” explains Hoet-Limbourg, “but the problem is the blackout we’ve been experiencing since Thursday the 7th”.
Many parts of the country have been without electricity or running water, and President Maduro declared a public holiday to relieve people from going to work in the midst of the catastrophe. Don’t be confused, says Hoet-Limbourg, “the holiday is not actually a festive day”. Despite the practical hurdles, Hoet-Limbourg expects the court to be on track to issue a decision next week. If the requests are denied, she plans to appeal to the Supreme Court.
Triana in Colombia offers to Venezuela: “We do hope that this situation and suffering will soon end for our neighbours”.
