Favorable Venue For Manufacturers Licensing Their Technology/Intellectual Property Rights

Author:Mr Diego Fernandez
Profession:Foley & Lardner

Argentina, together with Brazil and Mexico, are Latin America's three largest economies representing more than 80 percent of the region's manufacturing output. In addition, Argentina has proven to be a favorable venue for foreign companies seeking to license their technology or intellectual property rights (IPRs).

What makes Argentina attractive for licensing and IPR?

No specific form of license agreement or structure is required; the parties are free to structure a license agreement as it best fits their particular business needs. The only potential limitation one may encounter in Argentina is under is the Argentine public order whereby certain licensing provisions are deemed to be unenforceable under the law even if both parties agree to them contractually (for example, exclusive patent grant back clauses are not allowed under the Argentine Patent Law). No prior governmental approval is needed (even between related companies). The market is well-developed for transferring technology and licensing IPRs. Argentine courts understand cases involving technology and IPRs. Argentine courts will also grant preliminary injunctions if and when appropriate. Argentina's Transfer of Technology Law No. 22,426 (TTL) provides tax benefits to both the licensee and licensor for registering transfer of technology agreements or IPRs with the Argentine Trademark Office. The TTL's main objectives are to: (i) foster the effective transfer of technology to local companies; (ii) provide information as to the flow of technology and the successful development of local industries; and (iii) govern the transfer, assignment, or license of technology and trademarks, patents, industrial designs and know-how, from a foreign company to a local company. The term "technology" is broadly defined to encompass any technical knowledge applied to the manufacturing of goods or rendering of services (see Regulatory Decree 580/81).

Registering these license agreements with the Argentine Trademark Office is voluntary and serves only to inform the Argentine government of the flow of technology to local companies. It is important to note that registration does not affect the enforceability of...

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