New Law on Economic Crimes and Intellectual Property

Hernán Torres Aguirre,  January 8, 2024

Alessandri Abogados - With regard to the arrival of this new year 2024, it is important to remember that as of September 1 of this year, the amendments to the criminal liability of legal entities of the new law on Economic Crimes will enter into force.

This law establishes a particular system for the prosecution of certain conducts, through a catalog of crimes that are classified as first, second, third and fourth category, and that will be considered for these purposes as economic crimes.

Within the second category, we can find -among other crimes-, those against Intellectual Property (copyright), Industrial Property, trade secrets, and Plant Breeders’ Rights.

Regarding second category crimes, particular requirements have been established for them to be considered as economic crimes. In the first place, the act must be perpetrated in the exercise of an office, function or position at a company or when they are for the economic (or other) benefit of a company. Secondly, those companies with annual revenues from sales, services and other activities of the line of business above 25,000 UF, or that are not considered as small-size companies, pursuant to Law 20,416, will be considered. In the event that the company is part of a business group, the income of the group must be added for this determination.

Considering the list of second category offenses of the law, there are those contrary to the law that governs the Rights of Breeders of New Plant Varieties, those related to Intellectual Property and those contrary to the Industrial Property law. Additionally, the new law provides for an amendment to the articles of the Criminal Code in relation to trade secrets.

Regarding the Intellectual Property Law 17,336, there is an express reference to the crimes provided in Articles 79, 79 bis, 80 and 81. These offenses are mainly related to the unauthorized use of copyrighted works; the unauthorized use of phonograms, productions and broadcasts without the authorization of the holders of the related rights; the falsification or adulteration of performance schedules; the falsification of data in the rendering of accounts in the publishing contract; the collection of royalties and granting of licenses without the authorization of the right holder; plagiarism; the infringing use of works of common cultural heritage or public domain; the omission in the preparation of performance schedules and, finally, piracy on a larger and smaller scale.

In relation to Law 19,039 on Industrial Property, the crimes set forth in Articles 28, 28 bis, 52, 61, 67, 85 and 105 have been included in the catalog of economic crimes of this category. These offenses are mainly related to trademark usurpation, trademark counterfeiting, infringement of patents, utility models, designs, industrial drawings, integrated circuit layouts or topographies, and geographical indications or appellations of origin. The foregoing, in addition to the amendment to Articles 284, 284 bis and 284 ter of the Criminal Code, relating to trade secrets, also included in the catalog of crimes belonging to this category.

With regard to Law 19,342 on Breeders’ Rights of New Plant Varieties, the new Law on Economic Crimes has established that the offenses referred to in Article 44 may also be considered economic crimes, particularly any act aimed at commercializing and using a protected variety as propagating material without the consent of the relevant right holder.

This type of crime is particularly important in innovation, development, creative, media and entertainment industries, which are naturally more exposed to these contingencies.

There is no doubt that the most appropriate way to mitigate any risk related to these crimes is the establishment of policies and standards in the organization, since a crime prevention model will serve to manage the various processes and activities of companies exposed to these risks.

Given this situation and considering that the provisions on criminal liability of legal entities will come into full force in the coming months, it is highly relevant that companies promptly implement effective prevention and compliance models to address the risks of committing crimes, especially those contrary to the rules of Intellectual Property, Industrial Property, trade secrets and Plant Breeders’ Rights.

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