Protecting IP ownership and rights in Costa Rica: 6 things employers need to know
Understanding intellectual property laws can be complex, especially for companies with global workforces. However, it is crucial to prioritize comprehending the intricacies of IP regulations to keep your advantage over competitors and profit from your innovations.
In Costa Rica, it’s important to have an overall strategy to handle your intellectual property rights, as your U.S. trademark and patent registrations may not be enough. You must be registered under Costa Rican laws to be recognized and receive intellectual property protection. Following the proper process in Costa Rica will protect your company from IP theft, counterfeiting, loss of customers, and lengthy legal disputes and maintain exclusivity in the market.
According to the World Intellectual Property Organization (WIPO), half of the Costa Rican patent applications submitted to the National Intellectual Property Office in 2021 were from the United States, and 27% were for industrial designs. Keep reading to see how to protect your company’s IP rights and ownership and stay compliant in Costa Rica.
(Note: our guide is for informational purposes and isn’t intended to provide legal advice).
1. Intellectual property protection is written onto the Costa Rican Constitution
Costa Rica takes intellectual property protection seriously as it raised it to constitutional status within the current Constitution of 1949. The Industrial Property Registry and the National Registry of Copyright and Related Rights oversee regulations to ensure companies meet the required standards.
Article 47 of the Constitution says: “Every author, inventor, producer or merchant shall temporarily enjoy exclusive ownership of his work, invention, trademark or trade name, according to the law.”
2. Costa Rica’s IP court is one of a kind in Latin America
In 2000, Costa Rica enacted a law to enforce intellectual property rights to prioritize further the importance of IP protection for economic growth.
The Law of Trademarks and Other Distinctive Signs protects the rights and interests of trademark owners and other distinctive signs and addresses the impact of unfair competition on consumers' rights and interests.
The Tribunal is a one-of-a-kind court in Latin America that handles these cases of intangible and tangible rights. The court has its own budget and operates autonomously to keep transparency and encourage impartial decisions.
Five judges, all specialized in patent protection and IP rights, are appointed by the Ministry of Justice to oversee the cases and bring transparency into the process with their expertise.
3. Costa Rica enforces non-disclosure agreements
Costa Rica enforces non-disclosure agreements necessary to protect your company’s confidential information, IP protection, and copyright protection.
Under Costa Rica’s Undisclosed Information Law, disclosing confidential information without authorization is a crime. Still, because it protects personal data more than companies, adding an NDA to your employment agreement is essential for extra protection.
For your NDA to be valid in Costa Rica,
- The agreement must be in writing and signed by all parties without coercion.
- The agreement must identify what’s confidential, what’s excluded or public information, and the time frame in which it’s confidential.
- The agreement must identify the parties entering into the agreement.
4. Clearly state ownership of work done by independent contractors in contract
According to Costa Rican copyright law, any work produced by employees during their employment period belongs to their employer by default. However, that's different with independent contractors.
This instance is why potential misclassification of workers can hurt you in more ways than just penalties within the country. The creator is the presumptive owner of the IP. It's important to establish ownership rights in the contract agreement with the independent contractor to clarify ownership of work done during the contract.
5. There are two types of intellectual property in Costa Rica
- Copyright: Copyright law No. 6683 grants copyright protection to any original intellectual creation, whether artistic, scientific, or literary, to comply with the World Intellectual Property Organization Treaty. These rights cover literary and artistic works, including music, plays, books, films, paintings, photographs, and even architectural designs. Inventors and creators hold the copyright of their creations. You can register at the National Registry of Costa Rica in San José. Software and databases are protected by copyright laws.
- Industrial property: These rights relate to patents for inventions, trademark applications, industrial designs, and geographical indications. For example, Costa Rica is one of the world’s three top banana-exporting nations. Because of this, in 2011, the banana from Costa Rica became the first geographical indication registered in the country.
6. The National Patent Office has implemented electronic filing for faster patent protection
To promote further foreign investment and economic development, Costa Rica is one of the leading countries in Central America with intellectual property rights protection. Under the Patent Cooperation Treaty (PCT), the National Patent Office has implemented electronic filing of international applications for faster, more accessible additions to the Costa Rica Intellectual Property Registry.
Through its WIPO membership, Costa Rica also enforces several international treaties relating to trademarks, patents of invention, industrial designs, copyright, and related rights. These include the Budapest Treaty, the Paris Convention, and many more to cover necessary regulations to protect intellectual property rights.
Frequently asked questions about IP law in Costa Rica
Who owns IP in Costa Rica: employee or employer?
The responsibility of IP ownership lies with the employer as the creator is the presumptive owner. The employer must add a clause covering ownership of IP, non-compete, and non-disclosure requirements to their employment agreements and independent contractor contracts.
What is an IP assignment agreement?
An IP assignment agreement is a contract between the employer and the employee that transfers ownership of IP created by the employee during the employment period back to the company. It is commonly used for trademarks, trade secrets, patents, and any other potential transfer of intellectual property rights. This agreement is critical for stating the IP's valid owner.
Costa Rica does enforce IP assignment agreements, but it will be necessary to consult with a local law firm to confirm current regulations due to changing intellectual property laws.
What happens if an employee violates intellectual property law?
In Costa Rica, infringement of intellectual property laws, specifically trademarks and copyrights, is considered a civil matter. The offender may face fines or imprisonment for up to five years if found guilty. However, the victim must file a complaint for criminal proceedings to begin.
It's important to note that patent and trade secret infringement do not result in criminal prosecution under Costa Rican law. Additionally, the courts will also consider any relevant clauses in the employment contract.
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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
