URGENT VENEZUELA ALERT: Registration and renewal of marks and patents potentially sanctionable.
On March 19, 2018, the Trump administration issued executive order 13827 called “Executive Order on Taking Additional Steps to Address the Situation in Venezuela.” This executive order prohibits all transactions using digital currencies issued by or for the Government of Venezuela.
In February 2018 the Venezuelan government issued its own cryptocurrency called the Petro. On February 1, 2019, an official announcement issued by the Venezuelan Trademark Office (the “Servicio Autonomo de Propiedad Industrial” or “SAPI”) declared that transactions with SAPI, including registrations and renewals, must be made in Petros.
Treasury regulations related to many restricted countries such as Cuba or Iran have general license exceptions for expenditure of funds to protect intellectual property. However, there is no such general license which would carve out such expenditures Accordingly it would violate executive order 13827 to pay for any action related to a trademark or patent with SAPI. Some Venezuelan firms have offered to advance the payment, however, based on legal history related to other restrictions, it would likely be held to constitute a conspiracy to circumvent the order.
Our firm has contacted the Treasury Department Office of Foreign Asset Controls (“OFAC”) and they had not addressed the issue as of the writing of this note. They suggested obtaining an OFAC special license for payment of SAPI fees. This creates quite a burden since it takes approximately two (2) months to obtain a special license. Although OFAC is likely to provide a solution in the near future, for now it is important that your clients plan ahead to protect their intellectual property in Venezuela. If you have any questions regarding this situation or how to obtain a special license, feel free to contact us.