The end of the calendar year is also, for legal purposes, the end of the corporate and accounting year, under Colombian Law.
The beginning of a new corporate year, on January 1, triggers, for corporate entities and branches of foreign companies, the need to carry out several duties, both in the form of legal obligations or in the form of managing maintenance duties, to guarantee that all matters are in line with the applicable regulations, and reflect the good status of the legal status of the entity.
Among these activities it is possible to count: the renewal of the registration of the entity with the competent chamber of commerce; accounting obligations regarding the financial statements for the preceding year, registration with the merchants registry, of all websites devoted to commercial activities; management report to be approved by the Shareholders annual meeting; registration of databases with the competent agency, among others.
Even though the focus of these activities involves, among others, accounting, financial, and the legal standing of the entity, there are also a number of tasks that involve the status of IP matters and rights held by the company. These activities must be carried out, since they are legal obligations, or because the noncompliance thereof may result in legal consequences or liability for the entity and the management, as per the following non-comprehensive checklist:
1. The management report must include a chapter where the management informs about the status of compliance of the entity with applicable regulations governing IP matters. To provide an accurate report, the management must have performed the necessary activities to verify each item included in the report, and must expressly mention in the report a list of evidence that supports the information of due compliance.
Particularly, the report must address (i) whether the company has all licenses, or other title, that enables the entity to use or access the software necessary for the development of the corporate purpose; (ii) whether the company is in due compliance with copyright regulations regarding public communication of copyrightable works, such as music, audiovisual works, or rights of actors, producers or other right-owners; (iii) compliance of contractual obligations such as licenses, coexistence agreements, and other agreements involving the use of IP.
In the event that a board member is not satisfied with the findings, an express disclaimer must be made to that effect, in the board minutes and in the report that will be reviewed by the shareholders meeting.
Failure to comply with the obligation to report the status of compliance with IP matters in the management report may encompass the imposition of fines by the Superintendency of Companies, who has the authority to request evidence of compliance.
2. Verify expiration of trademark registrations during the upcoming year, new registrations, and update of information.
The exclusive right to use a trademark in commerce, and to commence legal actions against third parties for the unauthorized use of a trademark, arises solely from registration. Trademark registrations are effective for a ten (10) year term, which is renewable for successive periods. Renewal must be applied for within the six (6) months before expiration, or within a six (6) month grace period, following expiration. Applying for renewal during the grace period encompasses payment of an additional fee.
If a trademark lapses, a new registration must be applied for, with no applicable priority.
In view of the above, for a new year, it is advisable to review the expiration dates of all registered trademarks, prepare a renewal calendar, and include the renewal expenses in the annual budget.
Also, if the features of the trademark have changed, if new graphic elements have been added or modified, or if a re-branding proceeding has occurred, among other situations, it is advisable to apply for new registrations to cover the newly adopted features of the brand.
In addition, the trademark owner must update before the Trademark Office any amendment in its corporate name, registered address, or domicile, since the trademark registry is a public registry that must reflect the actual information of right-owners.
Official fees for trademark proceedings are increased as of January 1, each year. Therefore, it is advisable to apply for renewals (when possible), new registrations or record information updates before the end of the preceding year.
3. Payment of patent annuities.
If the company owns a patent, to keep the exclusivity right arising therefrom, an annual payment for maintenance of the patent right (“annuity”) must be paid to the Patent Office in due term.
The amount of the annuity is set forth by the Patent Office on a yearly basis.
Annuities must be paid, for the following year, on the last day of the month when the patent was applied for, or within a six (6) month grace period, following expiration. Applying for renewal during the grace period encompasses payment of an additional fee.
If an annuity is not paid in due term, the patent expires, and the invention enters the public domain, thus, it may be used or exploited by any interested party.
We hope that this information is useful, and look forward to assisting your company in Colombia in connection with the compliance of duties to maintain the rights arising over IP assets.