Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and the Dominican Republic form the "DR-CAFTA" region. This name comes from the United States-Dominican Republic-Central America Free Trade Agreement.

DR-CAFTA eliminates customs tariffs on various goods, opens service sectors and creates clear and readily enforceable rules in areas such as investment, government procurement, intellectual property protection, customs procedures, electronic commerce, the use of sanitary and phytosanitary measures to protect public health and the resolution of business disputes.

According to the US State Department, the DR-CAFTA region has a combined population of 45 million and yearly imports valued at an estimated $54 billion. Because of the steady economic growth of the area, its strategic location and new potential consumers of goods and services, the region is no stranger to counterfeiting challenges. Owners of intellectual property rights may file actions against suspected counterfeiters and trade mark infringers in both criminal and civil courts. However, because damages may be very difficult to collect in a civil trial, the criminal prosecution of counterfeiting is an important option to consider.

Guatemala

The crime of counterfeiting is not specifically defined in Guatemalan law. Nevertheless, counterfeiting is penalised by the Criminal Code of Guatemala (CCG) as a violation of industrial property rights (violación a los derechos de propiedad industrial) or a violation of copyright (violación de derechos de Autor y derechos conexos).

According to Articles 274 and 275 of the CCG, the crime of violation of industrial property rights and the crime of violation of copyright each carry a penalty of one to six year's imprisonment and a fine that ranges from Q50,000 to Q750,000 ($6,600 to $100,000). Punitive damages are not awarded, neither in civil nor criminal procedures.

A criminal complaint (querella) related to the violation of industrial property rights or the violation of copyright can be understood as a formal charge of an individual accusing another person of an offence. It can be initiated by the victim (agraviado) or his or her legal representatives in the case of minors, persons with legal disabilities or legal entities such as corporations or associations (Article 116 of the Criminal Procedures Code of Guatemala or CPCG). A victim can be a corporation, an association or any person affected by the crime (Article 117 of the CPCG).

Different from the querella is the denuncia (a criminal report), which is the act of denouncing a crime to the competent authorities by any individual who is aware of it. The person who denounces the crime (denunciante) is not a party in the criminal legal process: the querellante (person who files the criminal complaint) is a party in the criminal legal process, with specific rights and obligations established by local law.

The governmental institution dealing with the prosecution of criminal actions (including the prosecution of counterfeiting) is the Public Ministry, through its section against crimes related to intellectual property (Fiscalía de Sección de Delitos contra la Propiedad Intelectual). The Public Ministry's main activity is to oversee the enforcement of the country's laws.

According to Article 302 of the CPCG, in addition to evidence, the following items must be included in order to meet the legal filing requirements of a criminal counterfeiting claim: a) name of the victim, who must be fully identified in the proper documents; b) legal address or residence of the victim; c) if the person filing the counterfeiting claim (querella) is acting on behalf of another person or individual, the representation title; d) address for notifications and citations in Guatemala; and e) statement of the facts of the crime.

Guatemala is debating the merits of pretext investigations or trap purchases performed by an interested party in a counterfeiting case. The Intellectual Property Prosecution Office, several intellectual property private litigators and this author agree that this method is legal if the elementos de prueba (the evidence presented with a denuncia o querella) is obtained without violating constitutional rights and strictly observing the CPCG. However, no judicial consensus exists at present. Some courts have ruled that it is valid, while others have ruled that it is not when the pretext investigations or trap purchases are performed by the denunciante or querellante before filing the querella or denuncia, even claiming that it constitutes an illegal investigation if it does not involve the authorities. A final decision on this matter is pending in the Supreme Court of Guatemala and the Constitutional Court (the highest court) in several cases.

The statute of limitations to file a criminal complaint in a counterfeit case is eight years as of the moment the crime was committed.

El Salvador

The violation of intellectual property rights is a criminal offence in the Republic of El Salvador (Articles 226 to 231 of the Criminal Code). The crime of forgery and the marketing of counterfeit products, with regard to copyright, is liable to punishment, ranging from two to six years in prison. Regarding the infringement of industry property rights (patents, industrial designs and trade marks), the penalty ranges from one to four years in prison.

Committing a crime has civil and patrimonial implications detrimental to the offender (Articles 114 to 127 of the Criminal Code and Articles 42 to 47 and 184-A of the Criminal Procedural Code).

The period or statute of limitation for criminal proceedings is consistent with the penalty for the offence. For example, if the conviction is for four years, the limitation period is four years. However, the limitation period will never be less than three years (Article 34, paragraph one of the Criminal Procedural Code).

The procedure for filing a complaint against the counterfeit of products is as follows:

• the holder of the violated intellectual property rights, through his plaintiff, files a complaint to the Attorney General of the Republic (FGR); and

• the FGR, in concert with the police, begins an investigation and collects relevant evidence, which could be tangible (products), documentary (invoices, among others), analytical (expert examination of original and pirate products, among others) or testimonial.

An undercover agent may buy a pirated product and become a witness against the accused, provided that the agent did not act as a provocateur or seek to convince the accused to carry out a crime. This imposed limitation has a negative effect on the judicial criteria regarding the use of undercover agents, because it allows judicial officials to have subjective criteria that could promote impunity in favour of the accused.

When there is evidence that a crime is being committed, the FGR gets a search warrant from a Judicial Court called "Juez de Paz". Once the order is issued, a raid and seizure of the pirated product is carried out.

If the judge finds that there is enough evidence, he gives continuity to the process and does not dismiss the accused at this stage, which is investigative. At this stage, the judge may order personal precautionary measures (imprisonment or mobility restriction) or property seizures against the accused. However, the accused has the right to obtain counsel at any time during the process. If the crime or his participation in the crime cannot be proven, he is acquitted.

Later, a more detailed investigative stage is carried out by the Inquiry Court Judge (Tribunal de Instrucción). In this second phase, the process is unpacked in greater detail. Once all parties have presented their arguments and evidence, the judge considers whether to acquit the accused due to lack of evidence or to refer the case to a trial court (Tribunal de Sentencia), which is formed by three judges.

The trial court is the third and final stage in this first instance judicial process. It is here that the accused is found guilty or innocent by a majority vote of the judges.

In addition to imprisonment for the convicted, there may also be a financial penalty.

The defeated party may still appeal before a second tier: the Criminal Chamber. This will be the second part of the process.

In the end, the party that loses in this second instance is entitled to appeal for cassation to the criminal division of the Supreme Court of Justice, which is the third and last instance of the criminal judicial process.

Honduras

As part of the obligations acquired under the DR-CAFTA, Honduras has established communication links between the Honduran General Directorate of Intellectual Property and the Customs Authorities for the seizure of infringing goods imported into the country. Ex-officio border measures will only take place from January 1 2010 under the above treaty, so for the time being all seizure orders and communications between the said governmental entities are still carried out as a result of complaints filed by the affected parties before the abovementioned General Directorate and the IP Special Crimes Division of the Attorney General's office.

Laws

Article 251 imposes up to six years in prison for those who engage in the counterfeiting of goods or for those who, knowing that the goods are counterfeit, negotiate for them or commercialise them in any manner.

A whole chapter of the Honduran IP Law is dedicated to the enforcement of industrial property rights. For present purposes, it is important to consider the following.

Article 167 provides that the use in the market of a servile copy or fraudulent imitation of a registered mark in connection with identical goods or goods similar to those covered by the legitimate registered mark will be penalised with a fine of between 10 and 20 times the minimum wage ($4400 maximum), in addition to any other penalties, including those established in the Criminal Code.

Article 165 provides that whoever initiates or tries to initiate an action for the infringement of IP rights is entitled to request immediate precautionary measures, with the purpose of stopping the felony and avoiding its consequences, to obtain and keep evidence and to be assured of the effectiveness of the action or the indemnification of damages. The precautionary measures will be requested before filing the infringement action, at the moment of filing the same or after it has been filed, depending on the particular circumstances of the case. These measures will be executed without having previously heard the counterpart.

Without prejudice of the regulations in the Criminal Code and Criminal Procedures Code, the judge will order the following precautionary measures:

• immediate cessation of the infringing acts;

• the preventive seizure, retention or deposit of the infringing objects and of the means predominantly devoted to perpetrating the infringement;

• the setting up of a bond or other guarantees by the presumed infringer for the payment of eventual damages; and

• import/export prohibitions for the objects or means referred to in Section 2.

The IP Special Crimes Division of the Attorney General's Office is the institution dealing with the prosecution of criminal actions in counterfeiting cases in Honduras. They respond fairly quickly and the claimant may expect them to coordinate the seizure of the infringing goods with the Special Services Directorate of the Honduran Police within two weeks of initiating the action.

The accusation must include evidence of the infringer goods and designate the place(s) where the goods are being negotiated for or commercialised. There is no need to identify the original importer or counterfeiter in the application of Article 251 of the Criminal Code. Please note, however, that the registration of the mark (being infringed or counterfeited) in Honduras is a requirement to presuming that those negotiating for or commercialising the infringing goods may have knowledge that the goods are not legitimate.

High commission against counterfeiting

The highest commission against counterfeiting has been created and it involves the following.

1. The Attorney General Office's IP Special Crimes Division

2. The Customs Authority of the General Taxation Office

3. The National Telecommunication Authority

4. The Honduran Supreme Court

5. The General Directorate of Intellectual Property

With the basic structure and regulations briefly outlined above, Honduras is attacking counterfeiting and IP infringement with determination. Unfair competition actions and certain other administrative actions are also available.

Luis F Ruiz

Luis F Ruiz is a partner in Arenales & Skinner-Klée, where he practises law in the areas of intellectual property with emphasis on trade mark law, copyright and anti-counterfeiting, M&A and corporate law. As an IP and M&A lawyer, he has represented numerous international high profile clients in complex transactions and litigations. Luis is the head of the firm's intellectual property practice group. His team renders opinions on the availability or registrability of trade marks, domain names and company names in the entire Central American region. Luis has supervised and run investigations involving counterfeit merchandise and has organised and participated in seizures of such merchandise. In some of these cases, he worked with members of the Intellectual Property Prosecution Office of Guatemala to help combat counterfeiting. He has been featured in Latin Lawyer 250, the definitive guide to the leading law firms of Latin America. Luis is a member of the Guatemalan Bar Association, the International Trademark Association (Latin America & Caribbean Subcommittee of the Anti-Counterfeiting & Enforcement Committee) and the Inter-American Association of Intellectual Property (Internet and Electronic Commerce Committee). In different arbitration processes, he has acted as arbitrator or litigator. Luis is a former arbitration law professor at the Francisco Marroquin University School of Law of Guatemala, where he now administers oral bar exams (a local legal requirement) to aspiring attorneys.

Ricardo Anibal Mejia

Ricardo Anibal Mejia is a partner in and head of the intellectual property department of Bufete Mejia & Asociados. He is an attorney at law specialising in commercial law. Ricardo has been ad-honorem adviser to the Ministry of Industry and Trade of Honduras in intellectual property issues since 1995, was professor of commercial law at the University of San Pedro Sula Honduras, is a member of the editorial board of Inter-American Trade published by the National Law Center, was the vice-president of the Intellectual Property Sub-Committee of the Inter-American Bar Association and is a member of the council of said association. Ricardo contributed to The New Role of Intellectual Property in Commercial Transactions, edited by Simensky, Bryer & Wilcof, was president of the Honduran-Mexican Chamber of Commerce and contributed to Katzarov's Manual of Industrial Property. He is an overseas associate of the Institute of Trade Mark Attorneys, a member of the PTMG, delegate for Honduras before the Inter-American Association of Industrial Property (ASIPI) and is a member of the INTA Annual Review Task Force. Ricardo speaks Spanish, English and French.

Luis Ernesto Guandique Chavez

Luis Ernesto Guandique Chavez was admitted to the Bar in 1994. He graduated from the University Dr José Matías Delgado (licentiate in juridical sciences, JD equivalent). He was awarded a degree in the legal aspects of international business at Georgetown University Law Center at INCAE. Luis has been head of the intellectual property department at GSQ since 1995 and is on the board of directors of the Centre for Legal Studies. He was a national delegate in El Salvador for the Inter-American Association of Industrial Property (ASIPI) from 1994 to 1997 and from 2004 to 2007. Luis is the founder (1998) and former president (2002-2004) of the Salvadoran Association of Intellectual Property (ASPI), was a representative (2003-2004) of ASPI in the negotiations of the Central American (plus Dominican Republic) Free Trade Agreement with the US (CAFTA) and has been a member of the Committee for Legal Studies and Intellectual Property of the American Chamber of Commerce of El Salvador (AMCHAM) since 2001. He has been legal adviser to the board of directors of the Salvadoran Chamber of Commerce and Industry (SCCI) since 2004, on the board of directors and president of the Committee for Legal and Economic Studies of the SCCI since 2005 and arbitrator of the Centre for Arbitration of the SCCI since 2006. Luis's practice focuses on intellectual property law in general, commercial and distribution shipping agreements, franchising, licensing, litigation and arbitration. He is fluent in Spanish and English.