Peruvian Law No. 31724 promotes the registration of distinctive signs
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Trademarks, tradenames, and commercial slogans are now available at a 25% discount
In the Official Gazette El Peruano on April 11, 2023, Law No. 31724 was published, which promotes the registration of distinctive signs.
The aforementioned Law is intended to promote the registration of distinctive signs before the National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi), thus reducing the cost of the application process for micro- and small businesses ( MYPE).
Fees for registering a trademark, tradename, or commercial slogan in Peru
Prior to the effective date of Law No. 31724
In this regard, prior to the entry into force of Law No. 31724, the registration fees for trademarks, tradenames, and commercial names were S/.534.99 (US 141.63) per class requested for registration.
Since the new Law No. 31724 entered into force
As a result of the entry into force of Law No.3176S, the registration fee will be reduced by 25% for micro and small businesses (Mype).
In this regard, the fee for applying for registration of a trademark, tradename or commercial name on behalf of a Mype, as of April 12, 2023, will be S /. 401.24 (US 106.22 approximately), while the fee for additional classes has been reduced from S/. 533.30 to S/ 399.97 (US 105.88 approximately).
Entrepreneurs can register their most valuable assets, such as their trademarks, tradenames, or slogans. Consumers are provided with information regarding the product or service they are about to purchase through a brand, which serves as the primary business identifier.
With the new Law, the National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) must adapt its Single Text of Administrative Procedures (TUPA), within a period not exceeding sixty business days.
Likewise, the Executive Power must adapt the Single Ordered Text (TUO) of Law 27444, Law of General Administrative Procedure, to the provisions established in this law, within a period of sixty business days.
Increasing the formalization of business by means of the law No.31724
The new Law establishes that, in order to access the benefit of the 25% reduction, the company must have:
- an active Single Taxpayer Registry (RUC),
- a single Taxpayer registry where the company indicates its fiscal domicile when registering with the RUC or notifies Tax Administration-SUNAT of a change of fiscal domicile, and in either case, SUNAT verifies or notifies the fiscal domicile,
- as well as the Registration or Re-registration Certificate in force in the “Tax Registry of the Micro and Small Business (Remype)”.
It is important to note that these requirements are part of the same purpose, namely to assist micro and small businesses in formalizing their operations.
As part of an economic policy that seeks to formalize business in our country, both the Single Taxpayer Registry and the Certificate of Registration or Re-Registration for small and micro businesses- MYPES are issued.
MYPES in Peru
ENAHO (National Household Survey) estimates that MYPES makes up about 96% of the national company’s contribution to our country. MYPES reported annual sales in 2021 of approximately S/107,945 million, an increase of almost 79% over the previous year (2020).
In terms of GDP (Gross Domestic Product), this is equivalent to 12% of the total. This resulted from the strong demand following the economic reactivation due to the lifting of the COVID-19 health restrictions.
As part of the country’s Economic Policy, this law encourages micro and small entrepreneurs to complete the necessary steps to formalize their businesses.
The Inter-American Development Bank (IDB) describes business formalization as the entry of companies into a country’s economy, as evidenced, for instance, by the payment of taxes, formal employment, and medical services.
A formalized company is required to declare and pay taxes, as well as to comply with labour benefits in favour of its employees.
As a result, tax collection increases significantly. As a result, more resources are acquired and distributed more widely.
Registration of trademarks by individuals
In spite of this, Law No. 31724 ignores a significant sector of entrepreneurs, namely individuals seeking trademark registration.
With the new Law in force, the benefit of reducing the fee will only be available to legal persons (companies) contemplating a specific corporate form and possessing a Micro and Small Business Registry registration certificate or re-registration.
Health pandemic in 2020
The 2020 health pandemic has led to the need for many people to start new businesses and exploit their skills for profit.
Therefore, a large proportion of trademark, tradename, and slogan registration applications are filed on behalf of individuals holding a national identity document (DNI).
It is therefore clear that a large number of entrepreneurs applying for the registration of their own brands, in their own names, without having yet established a company, will not be able to take advantage of the 25% reduction in registration fees, since they must meet the two requirements established by this law (R.UC. + Certificate of Registration or Re-registration in force with the Micro and Small Business Registry).
Finally, although Law No. 31724 is able to implement one of the measures designed to encourage the registration of distinctive signs, and with them the long-awaited formalization of businesses, the legislator seems to have forgotten that national laws permit the registration of trademarks without the establishment of a company. In addition, it does not appear to have taken into consideration that a significant number of entrepreneurs have registered their trademarks, tradenames, or commercial slogans in their own names and without establishing a company.
Autor: EMIR CANALES OLAZABAL
Ex-counsellor at the Peruvian Intellectual Property Office – INDECOPI and currently member of the legal team at ESTUDIO DELION.
Emir Canales Olazabal is a lawyer from the San Marcos University («Universidad Nacional Mayor de San Marcos»), and he has a wide range of experience in various legal fields, including Competition Law, Intellectual Property, Consumer Protection, Administrative Law and Corporate Law.
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