Costa Rica Law Firm, attorneys by Bufete Nassar

Nationality is a relationship between a person and their State of origin, culture, association, affiliation and/or loyalty. Nationality affords the state jurisdiction over the person, and affords the person the protection of the State. Traditionally under international law and conflict of laws principles, it is the right of each state to determine who its nationals are. Today the law of nationality is increasingly coming under more international regulation by various conventions on statelessness, as well as some multilateral treaties.

Multiple nationalities or multiple citizenship, is a status in which a person is concurrently regarded as a citizen under the laws of more than one State. Each country has different requirements for citizenship, as well as different policies regarding dual citizenship.
People can become dual nationals:

Some countries consider multiple citizenship undesirable and take measures to prevent it; this may take the form of an automatic loss of a citizenship if another citizenship is acquired. Others may allow a citizen to have any number of nationalities. However, since each country decides for itself who its citizens are, based solely on its own laws and generally without regard for the laws of other countries, it is quite possible for a given individual to be considered a citizen by two or more countries even if some or all of these countries forbid dual or multiple citizenship.

Whether you are a dual national depends on the laws of the country involved. You could be considered and treated as one of its nationals by another country even if you don't accept that nationality.

With dual nationality, you have rights and obligations to two different states. Being a citizen of more than one country can have many advantages as it allows to draw various citizenship benefits from multiple sources. This includes the rights to establish residence, to work, and to acquire property, educational opportunities, eligibility for various government subsidies, including healthcare and retirement, etc. However, it is prudent to realize that each citizenship carries also responsibilities and obligations and that being a citizen of another country may be a liability.

On the other hand it also has some disadvantages, for example, you are obliged to perform your national service (military service) in the country in which you are permanently resident. This applies in most European countries and the USA. You do not normally have to perform your national service in the other country of which you are a citizen.

One of the essential duties of a country's consular and diplomatic corps is to provide protection and assistance to the country's citizens abroad. In the case of a dual citizen, there may be competing interests between the two countries.

Another objection concerns tax liability. Many governments are wary of dual citizenship, arguing that it encourages people to "shop around" for a country with lower taxes.

In some cases, multiple citizenship can create additional tax liability. Countries that impose tax will generally use a combination of three factors when determining if a person is subject to taxation: Residency - they tax anyone who lives there, regardless of citizenship; source - they tax income earned there; or citizenship - they tax their citizens. Most countries use residency and/or source when determining if a person should be subject to taxation. A few countries, such as the Philippines and the United States, do use citizenship, as one of the determining factors for tax liability.

A person with multiple citizenship may have a tax liability to his country of residence and also to one or more of his countries of citizenship; or worse, if he was unaware that one of his citizenships created a tax liability, then that country may consider him to be a tax evader. Many countries and territories have contracted tax treaties or agreements for avoiding double taxation. Still, there are cases, where a person with multiple citizenship will owe tax solely on the basis of holding one of those citizenships.

Other arguments go to the core of the symbolic meaning of citizenship. Some point out that dual citizenship makes possible the use of citizenship as a badge of convenience rather than of undivided loyalty, and impairs the "singleness of commitment" that is the hallmark of allegiance.

After World War II, the increase in international migrations created a new category of refugees, most of them foreign workers refugees. For economic, political, humanitarian and pragmatic reasons, many states passed laws allowing a person to acquire their citizenship after birth (such as by marriage to a national or by having ancestors who are nationals of that country), in order to reduce the scope of this category. However, this system still maintains in some countries a large part of the immigrated population in an illegal status.

The number of multiple citizens is large and increasing. Millions of people in the world are now citizens of more than one country.

Law deals with the social facts that refer to the interests of the individuals or groups that comprise a given society. Therefore, the concept of interest undertakes a predominant nature at the practical level for every attorney at law, since interests are involved in every legal moment.

Interest is an advantage, benefit, or profit, pecuniary or moral, that the exercise of a right or of an action represents for a person. Interests that were in conflict during their creation but that at the end, one prevailed, impregnate legal standards.

At the level of the Act for Brands and Other Distinctive Signs, there are several interests, among which those present in Articles 7 and 8 may be mentioned. These articles also determine the inadmissibility of a brand. Since commercial brands are signs that distinguish products or services, these may be similar or may forbid the common use of things.

Article 7 states the causes of inadmissibility due to intrinsic reasons keeping as a fundamental interest the community of things. That is, that the distinctive sign limits the use of a word or of any other sign of common use in society, as is the case of clauses a (usual or common form), c (sign or indication of common commercial usage), d (a sign that simply qualifies or describes the product), e (simple color), f (letter or isolated code), g (lack of distinctive nature), m (reproduction of national symbols), n (official sign of a State or public entity), ñ (reproduction of coins or bills), and o (use of medals or awards that tend to cause confusion).

In practice, as per this article, it is forbidden to register as a commercial brand, the red color to distinguish a brand of peppers, or a common use word as would be in Spanish, the Costa Rican phrase “pura vida” to distinguish any product or service. This would violate not only this standard, but also an interest that exists in society, as is the use of free, common, and socially accepted vocabulary.

Likewise, Article 8 establishes the causes of inadmissibility due to rights of third parties that maintain as a protected interest the legal sphere of the third parties, as brand holders or as consumers. Two visions of the article are then presented, one that is addressed to protecting a real interest as is intellectual property and another one addressed to the protection of the consumers from confusing the product with another one with which there is no relationship.

Within the article, there is no difference between the right of the consumer and of the holder, but rather keeps them linked because the commercial brand is an intellectual creation of industrial use that is intended to distinguish a product or service. This is a way of reaching the consumer, mainly due to its commercial use, since a product or service would be nothing if it were not consumed or obtained by a third party.

Article 8 keeps a bilateral interest that exists in the marketed product, in its buying and selling. When analyzing it, it is clear that no brand may be registered if it is similar to another one that has already been registered or that is in process of being registered by a third party and that identifies the same products or services, which may cause confusion in the consumers.

No individual may register a brand that has a similar name or design and that protects the same products or services. This is from two different points of view. One is the right of the holder to use a brand in an exclusive fashion, its intellectual creation. The other one is the right of the consumer of not being confused by a brand that does not represent the product to be purchased, of not wanting to buy something that is not what the consumer wants, or that has no connection with the desired product.

What was previously presented is of tremendous relevance for the brand request process due to the expeditiousness with which every individual wants to register their brand. Upon starting the process, the national registry or the competent authority for this purpose will carry on a survey to determine if the brand breaches or not the mentioned articles. If the brands were against the existing interests, they would be rejected, which is not useful for the parties.

The above-mentioned interests become useful during the process of intellectual formation of the brand since before filing the application a detailed study shall be carried on for existing brands that are similar to the one to be registered with the purpose of analyzing if it is convenient to file the application. This is a way to avoid the bothersome and slow process of brand application.

It is important to keep in mind that the brand application process has three procedural moments in which the brand might be reported: the study of the registration, the period for filing claims after the publication of the edict, and before the issuance of the certification (as per the new registration instructions). It is important to try to avoid that at some moment the brand application is contested.

The best way to avoid this type of conflicts is through the due implementation of the brand interests, showing respect to the intellectual property of others and to the consumers. A previous study together with a careful internal deliberation of the holder before creating a brand are the best tools to expedite and provide effectiveness to the registration procedure.

These notes shall not be taken lightly. It is important to mention that the purpose of every applicant is to obtain security for his/her products and services. Therefore, for an effective registration, the stakeholder shall take into account the relevant steps to take.

In Costa Rica, the employer and the employee freely agree upon salary issues. Nevertheless, it shall not be lower than the minimum wage that is established annually by the government for each type of job.

According to our labor legislation, the salary may be paid per unit of time (monthly, biweekly, daily or hourly); by the item, by the task or by the job; in cash and in kind; and for participation in the profits, sales or collections made by the employer.

Regarding salary in kind, articles 164, 165 and 166 of the Labor Code, regulate it. After studying these articles, the conclusion is that salary in kind has a place within our legal framework, only as part of a mixed salary and as per a legal obligation. It is not possible to pay for the total salary in kind.

The first paragraph of Article 166 of the Labor Code declares, “Salary in kind is understood only as what the employee and the employee’s family receives in food, lodging, clothes and other articles for immediate personal consumption.”

It has also been defined as “…what is paid in valuable goods which are not money, accepted to free the employer of the obligation of the payment in cash. Within this category, any good that fulfills the purpose of a salary in reward for services provided by the employer is included.”

Salary in kind is the sum of all those goods, other than money, that may be used and consumed by the employee or by the employee’s family and that may be exchanged for a price, so that these may also be converted into money.

According to the third paragraph of Article 166 of the Labor code, for all legal purposes, the value of the payment in kind is not determined. It will be estimated to be equivalent to fifty percent of the salary that the employee receives in cash.

The jurisprudence of our Labor Tribunals has considered that to determine what corresponds to the employee as salary in kind, it is not calculated as being fifty percent of what is received in cash nor is it the fickle result of an estimate. It must be done based on a series of determining factors, which together with prudent and realistic criteria lead to set on a fair way the corresponding amount. Whenever these elements are not present and there is no possibility to specify the true value of this payment, then calculations must turn to the fifty percent.

On this regard, the Second Tribunal declared, “The interpretation made by the stakeholders regarding this standard, when intending to set the salary in kind as fifty percent of the total that would be received in cash, is legally wrong. This tribunal has declared in many occasions that the value that corresponds to the salary in kind that is received by the employee must be calculated for every specific case, and only when this is not possible, will this amount be set according to the percentage fixed by law. The fact that in the working contract nothing is included on this regard, it does not mean that this amount operates automatically, much less on this subject matter in which working relationships thrive with a greater emphasis on reality. Such an estimate must be made by the judge, on a discretionary manner, in relation to what has been in fact received by the employee as a salary, and not in relation with all the benefits received from the employer. The truth is that there are many employers that do not do this.”

Within the benefits of this way of payment, collection of goods from the company, company services, meals, transportation, power supply, and others, can be found.
On the benefits mentioned and as an example, following is a transcription of sentences declared by our Tribunals, which have confirmed or denied the nature of salary in kind:

“Insurance for medical expenses does not constitute salary in kind since the insurance fees paid to the insurance company cannot be taken as a form of payment, regardless of the fact that with this insurance, the defendant company protects the employee and the employee’s family. The intention is to guarantee quick professional attention at a private hospital that is close to the workplace whenever the employee or the employee’s dependents have health problems, without going to a hospital of the public Social Security System, even though legal fees are paid to this institution, and the system has to provide the service to the employee and the employee’s family, without any further disbursement. Therefore, the payment for insurance for medical expenses by the company represents some kind of assistance or complement to the Social Security System, but does not represent any cash advantage for the employee.” (Vote No. 17 at 10:40 hours of January 28, 2002)

“Readjustment was made to the severance payment for the employee because it was proven that the defendant provided free transportation during extraordinary shifts –provided by Fertica by means of a contract with a cab company- from the workplace to the employee’s homes and back, and on ordinary shifts, free bus transportation covering different routes. For a reduced group of employees, there was no normal bus service, but the company paid for their monthly public transportation. This benefit is considered as salary in kind.” (Vote No. 173 at 10:00 hours of May 31, 1996).

“Meals in this case are considered as salary in kind because the employee enjoyed the meals provided by the defendant at the workplace.” (Vote 146 at 10:00 hours of May 05, 1995, and Vote No. 120 at 10:20 hours of May 14, 1999).

- Working tools: includes not only the cellular phone but also the computers that might not be considered as salary in kind.

“The use or enjoyment of cellular telephones does not constitute salary in kind since this device is considered as an indispensable instrument for work, of continuous use by the employee. For this reason, it may be argued that the telephone was granted for its continuous use, for working reasons and not as a reward. Therefore, it must not be considered as salary in kind” (Vote No. 17 at 10:40 hours of January 28, 2002)

“Neither is payment for life insurance considered as salary in kind –Crowley American Transport, Inc. Collective Insurance-, because the insurance fees, paid by the insurance company shall not be considered a reward since the benefit never enters the employee’s patrimony. This shall be considered as a free benefit for the family of the deceased employee meanwhile there is a labor relationship between the employer and the insured employee” (Vote No. 17 at 10:40 hours of January 28, 2002).

It is common for companies to grant some of the previously mentioned benefits without analyzing the consequences that this might generate. Upon termination of the working contract, claims arise from the employees for the corresponding adjustment of the severance payment.

Due to the implications that granting salary in kind might have for a company, during the term of the working contract for the payment of social expenses, termination, and severance payment, it is important to determine previously what percentage of the salary corresponds to these items and the consequences of granting these benefits.

With the enactment of the new Litigious-Administrative Procedural Code that will be in effect in January of next year, a series of important reforms in the procedural area are taking place, applicable in the Republic of Costa Rica.

The main objective of the drafters of this code is to achieve the real application of Article 49 of the Political Constitution, which declares that:

“The litigious-administrative jurisdiction, as an attribution of the Judicial Power, with the purpose of guaranteeing the legality of the administrative function of the State, its institutions and every other entity of public law. The deviation of power will be a reason to contest administrative actions. The law will protect, at least the subjective rights and the legitimate interests of the managed parties.”

This constitutional standard stipulates that the State functions must have total coherence with what was laid out within the laws that are in effect. This tries to avoid abuse of power and guarantees adequate decision making by the Administration, always trying to satisfy public interest.

The terms “administrative function” used in this article, have a broad interpretation that includes the actions as well as the omissions of the State in general. This drafting of the constitutional standard may be considered one of the fundamental pillars of the exemplary Costa Rican democracy.

The old administrative procedural regime granted to employees only the capacity of protecting their interests against any damaging acts incurred by the Administration. No real protection was provided for all the situations in which the harm to public interest was caused by omissions from the State, even though it is well known that most of the social problems do not have a solution due to the lack of efficiency of the Administration.

With this ideal situation in mind, the reform of the administrative process introduces several important innovations. Among these innovations is verbal procedure mainly, as well as the protection of groups or of the collectiveness that shares common interests, the introduction of precautionary measures subject only to the judges´ discretion, and the substantial expansion of subjects that may the object of this process, just to mention a few.

A challenge for Costa Rican jurisdiction is to set forth and to face a procedural reform introducing an oral, expeditious, and less formal process, with the objective of controlling the actions and the omissions of the State. The ideology behind this radical change is based on a well-known premise: “justice must be quick and correct.”

The idea is to expedite all those processes in which the intention is to preserve the interest of the public, even when the offender is the State itself. The justification that motivated change is very simple. A rigid, formal, and extremely complicated process like the current one becomes an insurmountable obstacle if the aim is to guarantee public interest.

This change will be quickly noticeable since the terms that judges and tribunals will have to settle disputes will be counted in minutes, not in days. Without any doubt, this is a professional challenge for all those involved in this type of processes. It is clear that the great winners with this change are the employees.

The modification and the election of an oral process set a precedent in the legislative and judicial history of our country. This becomes more important if we declare that nowadays most of the judicial processes are carried through in writing, with a series of formalities that have as a direct consequence the obstruction of justice, and therefore, harm for all citizens.

Justice must be exerted at the precise moment since a late justice does not satisfy social interests. On the contrary, it might cause greater damages that the act itself or the omission that is being contested. As has been often said, “if justice is not quick, it will not be correct either.”

Another point of tremendous relevance within the reforms made, refers specifically to the topic of precautionary measures which are measures dictated by a judge with the purpose of avoiding that what has been set as a sentence stays simply in paper. The main functions of the measures are to protect and to guarantee the effectiveness of the definitive sentence.

With the reform, there are more possibilities of setting precautionary measures as required by the specific case. There is no precise list of applicable measures. These are only limited to logical reasoning by the judge who applies the measure.

Up to date, the precautionary measure that has been mostly used in litigious-administrative procedures is that of the suspension of the effects of the action being contested. With the reform, this measure becomes an immediate consequence of the lawsuit and not a precautionary measure.

Article 20 of the new Litigious-Administrative Procedural Code, states that the judge will have the possibility of requesting, as a precautionary measure, the performance of any conduct required by the Administration, whether it is an action or an omission. Even more, if this conduct is not carried on satisfactorily, the judge will have the legal authority to occupy the position of the responsible official and to order the sentence that was required.

This might apply in those cases in which the required execution, permanence, or omission of the conduct produces real or potential damages. It could even be applied ex-officio. In addition, it is subject to the fact that the precautionary measure is not stipulated in a reckless fashion, according to the interpretation of the judge in each specific case.

It is evident that the ideology that motivated this reform has very good intentions. It tries to grant a protection mechanism that really satisfies the effectiveness of the sentence. Nevertheless, enforcement is a sensitive topic, since a misinterpretation from the judge could cause serious damages to the interests of the State.

The risk increases if we take into account that State property is not considered to be strictly necessary for the satisfaction of public interests. However, it might be embargoed in order to guarantee the fulfillment of the obligations of a sentence.

Another important innovation is the possibility that the State has to conciliate. The rule within the new litigious process is to set, expeditiously, a conciliation hearing as a procedural action taken immediately after responding to the lawsuit.

This possibility facilitates the employee with another option to satisfy his/her own interests in an economic, quick manner and through dialogue and negotiation in equal conditions, even if the opposing party is the State.

Expeditious tools for conflict resolution grant legal security. If these tools are effective, the environment for foreign investment will be safer and therefore this activity will increase. Moreover, the protection of the interests of the employees will cause the people in general to have effective solutions.

The success or failure of this reform will depend on the conscious application of tools created under this new administrative process. It is only through the application and honest, ethical and reasoned interpretation of the standards of this reform, that the expected result will be achieved and thus serve as a model of democracy.

This reform is not the solution to all current conflicts in Administrative Law, but it is a necessary and important step to satisfy the interests of the general population.

The National Assembly of the Republic of Nicaragua approved the Act for Access to Public Information on May 16, 2007, and the President of the Republic sanctioned it on June 15, 2007. It will be effective next December 22.

The Act for Access to Public Information has the purpose of standardizing, guaranteeing and promoting the right to access public information found in documents, archives and data bases of public entities or institutions, mixed corporations and corporations subsidized by the State, as well as of public entities that handle, manage or receive public resources that are subject to accountability, tax benefits or other benefits, concessions or advantages.

In Nicaragua, the protection to the privacy of personal information is included as a right on Article 26 of the Political Constitution and guarantees the fundamental right of the people to intimacy and privacy.

Nevertheless, the Act of Access to Public Information protects and guarantees that private information owned by the State is not considered of free public access and therefore requires express authorization from its holder for its publication. This protection includes people and legal entities, citizens as well as foreigners.

Within this protection to personal and sensitive information, there are other ways to handle public information. Public information is understood as information that is produced, obtained, classified, and stored by public management when performing its functions, as well as all the information owned by private entities referring to public resources, tax benefits and any other benefits, concessions or advantages.

This refers to Reserved Public Information, which is information that is temporarily subject to exceptions, after being classified as such:

a). - Information that may place the security of the territory of the State and/or the defense of National Sovereignty at risk;

b).- Information that when disclosed might hinder or frustrate activities for the prevention or persecution of crimes and of organized crime, performed by the Public Ministry, National Police and any other State entity that as per the Constitution and/or by law, works in the prevention or persecution of crime.-

c).- When it refers to bank secrecy, commercial, scientific, or technical secrets that belong to third parties or to the state, intellectual property of industrial, commercial or reserved information that the Government has received in compliance with a requirement or procedure, without affecting the publicity of the Intellectual Property Registry established by the corresponding laws.-

d). - When it refers to information that the Nicaraguan State is forced to protect because if disclosed, it might endanger international relations, any lawsuits presented before International Tribunals or the strategy for negotiating trade agreements or integration agreements. This shall be done without affecting the right for citizen participation during negotiation processes or all the information related to collective defense and to the security of the citizens, by disposition or specific standards of International Law

e).- When related to projects of sentences, resolutions and agreements from a single member or from a collegiate organization, as well as the recommendations or opinions from technicians or from the members of the collegiate entity that are part of a deliberative process, while the definitive decision is not adopted. Everything that refers to the process of formation of the law and to the processes related to the adoption of any disposition of general nature or to the outlining of public policies and to the progress or to the preliminary reports of the General Comptroller of the Republic.-

Within these exceptions, the protection measures dictated by other regulating entities and/or legal standards are found on Article 15, Clause c) on the classification of public information that is considered confidential.

1) Bank secrecy established by Act No. 561 for General Banking, Non-banking Financial Institutions and Financial Groups and their special regulation through Standard CD-SIBOIF-454-2-NOV28-2006 dictated by the Bank and Other Financial Institutions Superintendence, that establishes responsibilities and sanctions for handling credit information in Nicaragua. The banks and the employees or responsible officials are obliged to repair any damages.

2) Tax secrecy established by Act No. 562 of the Tax Code of the Republic of Nicaragua, for all employees and for any individuals and/or legal entities that interfere in the different procedures related to the application of tax provisions. An exception are the cases of legal requests from other organizations that manage taxes, locally or from other countries with which international exchange agreements have been signed, whenever the tax payer requests, in writing, information of his tax obligations.

Under this right to confidentiality, the tax authority has dictated Technical Provision No. 12-2007 “Confidentiality of information provided by tax payers,” in order to establish a procedure that guarantees the protection and the confidentiality of the tax payer’s information, in the cases in which tax secrecy foresees exceptions to the law.

Finally, public or private employees shall respond through civil, criminal, or administrative processes for any infringement and crime committed by breaching the confidential nature of private information, (credit, tax, or any other kind of information) which for Nicaragua represents great progress regarding legislative issues and constitutional guarantees.

For all this, it is recommended that individual or legal entities watch over the correct use and handling of private information and the guarantee of authorization by the holders so that this information becomes public.

Published in La Gaceta, Official Newspaper Number 118, dated June 22, 2007.

Public Entities or Institutions subject to the Law - the Powers of the State: Legislative, Executive, Judicial and Electoral; Autonomous and Government Entities and their companies; Municipal and Regional Governments of the Atlantic Coast; attached or independent entities and companies; any mixed or private concessionary of public services; public or private law representatives acting in support of the previous entities or that receive resources from the General Budget of the Republic and that are subject to accountability and that manage and/or receive tax benefits or any other benefits, concessions or advantages.

Article 26 Every person is entitled to: 1) His/her private life and the private life of his/her family; 2) To inviolability of his/her house, mail and communications of any kind; 3) Regarding honor and reputation; 4) To know all information on him/her, that has been registered by state authorities, as well as the right to know why and what is the purpose of the information.

Information comprised by personal information that refers to private or family life, such as health, race, political or religious preferences, economic, social or family situation, or honor and reputation, as well as all the personal data that is protected by the Political Constitution and by law.

Information classified as reserved will maintain this nature for a period of up to ten years, which can be extended to up to five more years.

Comprises all protected information supplied by the taxpayer or obtained by other sources: tax declarations, statements of account, payrolls, financial statements, returns, administrative resources, exemptions and any other.

Every trade partnership contract of the kind established on Article 17 of the Trade Code (Collective Partnership, Limited Partnership, Limited Accountability Partnership and Corporation) when registered in the Commercial Registry, acquires its own legal standing rights, different from those of its members (partners).

The partnership contracts not registered on the Commercial Registry do not have legal standing rights. Legal standing rights make the entity become a unit that is different from its members, with its own and separate rights and obligations and with an autonomous patrimony.

The legal standing right is the capacity that the partnership has to obtain the rights and obligations (capacity of ownership, of being subject of the law and of exercising the law, of acting on own account, of acquiring rights and obligations). The legal standing capacity is exerted through its representatives.

Form is not a requirement for the validity of a social contract. Even when not honoring the form established by Law, a partnership contract may be valid.

The form and registration on the Commercial Registry are requirements for the partnership to obtain its own legal standing rights.

An irregular partnership is one that has been constituted according to one of the types of partnership included on Article 17 of the Commercial Code, following the formalities for its constitution included on Articles 18 and 19 of this code, but that has not been registered on the Public Registry.

An irregular partnership is the one that having adopted one of the types foreseen by law, interrupted the path for its constitution and was left on the field of irregularity that is obtained with the registration (sic).

On the other hand, a partnership in fact is one on which there is no attempt or intention from the partners for subscription and registration. In other words, it is one on which the elements of the partnership contract converge (group of two or more persons, contribution from the partners, common exercise of legal and profitable activities), but the formalities established by law are not fulfilled (none of the forms or requirements established on Articles 17, 18 and 19 of the Commercial Code).

Neither the partnership in fact nor the irregular partnership have legal standing rights. (They do not have legal capacity, they cannot have legal rights and obligations, nor do they have an autonomous patrimony.)

The problem in partnerships of this kind is the possibility of determining who is going to respond for the obligations of the partners.

The Code of Commerce establishes three articles for dealing with these partnerships: Articles 22, 23 and 24.

ARTICLE 22. - While the publication and the registration referred to in Article 19 have not taken place, the resolutions, the covenants and the social documents will not cause any legal effect to the detriment of third parties. The founding partners will respond in solidarity to these third parties regarding the obligations that in such circumstances have been acquired by the company. Any partner may request the registration of the deed, and if the nature of the activity is proven, the partner’s accountability will end from the moment on which formal arrangements are made for registration.

ARTICLE 23. - In the lack of a social deed, the interested third parties may look for the accreditation of the existence of the partnership in fact and the conditions under which it has worked, by all the common probational means. The partners have the same right in order to prove the contract among them.

ARTICLE 24. - It is forbidden to use a company name, any common name or distinctive if the partnership that is being announced is not duly constituted as per this Code. The offenders to this disposition, aside from the civil responsibility in which they might incur, will be penalized with the sanctions established on Articles 281 and 282 of the Criminal Code, according to the circumstances.

Article 22 is divided into two parts, a general part that is applied to the partnership in fact and to the irregular one and a second part that is applied only to the irregular partnership.

- The partner that may proof that the registration of the partnership is underway is exempt. Then, what happens if all the partners are able to proof that they arranged for registration? Who will respond to third parties?

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Brands and their use within trade as a basis of its existence

The brands, the commercial name, the logo, the slogan, among other distinctive signs, constitute the business card of every company. It is for a reason that every year companies dedicate a significant portion of their economic resources for the development of the image.

It is for this reason that it is essential to grant the maximum possible protection to every sign that distinguishes the company and that has been the result of the effort and of its positioning, as well as of the products and services within the market.

It is common to find distinctive signs in products placed on shelves at the supermarket that have not been registered by their owners. Thus, there are brands that have even become renown within a specific territory, without being protected by their owners.

Even so, our legislation grants some protection to those who, without registering the brand, have used it in commerce and are able to prove it. These individuals will have priority in front of any third party that intends to register that same brand, or a similar one, on a later occasion.

Regardless of this, the holder of the non-registered brand shall have enough proof to show that the brand has been used during a given term, which is not always easy.

The best option is to apply for the registration of the brands before the Intellectual Property Registry. This process grants the holder the priority and the right of exclusive use of it sign, as well as the power to take actions against any third party that afterwards intends to use and/or register similar or identical brands.

According to the current legislation in Costa Rica, it is not necessary that the distinctive sign be in use when the application for registration is presented before the Intellectual Property Registry.

Contrary to what occurs in our country, in places like the United States, a brand may be registered only when the product or service that identifies a product or service is active in business. In the cases in which at the moment of applying for registration the sign is not in use, the applicant shall certify the intention of using it in the future.

All this allows the whole registration procedure to develop normally. Nevertheless, once this process is completed, the United States Patent and Trademark Office (USPTO) will request the applicant to present an official declaration indicating that the brand is currently in use, and in case this is not done, the authority will not issue the corresponding registration certificate.

On this regard, our legislation is more flexible for those who are interested in registering their distinctive signs, which may have been used or not before trying to protect them. This flexibility may be taken advantage of in the good sense, but it may also be subject to abuse within the system.

In principle, the legitimate interest is a subjective requirement for the applicant, and it implies that whoever requires the registration of any given distinctive sign has a valid intention, generally commercial, on the sign.

This intention may be expressed in two ways according to the interests of the applicant. The first way, and probably the most evident, occurs when the brand is being used to identify goods and/or services within the market, in which case obviously its holder will have the intention of registering it.

In second place, it could happen that a given individual or company intend to introduce to the market products or services with a novel brand; therefore, there would be an urgent need to register it, as one of the previous phases before placing their good or service at the disposition of the consumers.

The individual that does not register a distinctive sign for personal use but who intends to profit in some way by selling or leasing it to third parties, will not be considered to have an effective interest on its registration.

In Central America, there are individuals who are dedicated to the registration of brands for selling them, which leaves without any protection those who have not registered their distinctive signs on a timely manner.

It is not surprising that in countries as close as those of the Central American region, the brands that become renown to some extent in one country, are registered in another country, or even in all the rest, by third parties, with the purpose of blocking the expansion of the original owner of the brand and to obtain a profit.

All this finds a solution on a preventive attitude from the owners of any brand by registering it in the places in which an operations start up is planned, currently or in the future.

Likewise, in reference to the effective commercial use of the brand, it is important to mention that once the brand is registered in Costa Rica, and in case it is not being used upon the time of registration, its owner will have a five-year term to use it. If it is not done, any interested third party may request its cancellation.

All this is based on the brand philosophy that states that the registering party should have a legitimate interest on the distinctive sign and should not intend an expansion of exclusive use before third parties if in practice there is no interest on the sign.

On this regard, the Brands and Other Distinctive Signs Act, on its article 39, provides the possibility of cancellation, besides situation interests for third parties, as a defense against the registration of a brand by the Intellectual Property Registry, or against oppositions presented by any third party, against the request of declaring nullity of a brand registration and/or against the actions due to an offense against the registered brand.

Any of the previous reasons to request the cancellation of a brand will bring upon legal action. The Intellectual Property Registration may not act ex officio.

Thus, the Costa Rica legislation allows that a distinctive sign be effectively registered, and it is not necessary that it is in use on the moment of registration and during a maximum term of five years, after which, if the brand has not been used, it may be annulled as per request of the interested party.

All this implies that, even though the use of the brand is not mandatory during a certain term, legislation is coordinated with the philosophy that indicates that the owner of a brand must show legitimate interest on it by means of an effective use.

The Brands Act on its Article 40 states that it will be considered that a brand is being used when its owner has placed on the marketplace its products or services, on enough quantities and on a “normal” way. This will be analyzed for each case after taking into account the dimension of the market as well as the nature of the products or services, and the ways on which these are traded.

On this regard, for each specific case the owner of the distinctive sign will use it according to the needs in the market.

Reviewing the previous paragraphs, it is important to consider that in Costa Rica, unlike other countries like the United Status, the budget for the use of the brand is not required upon application. Based on this, some individuals go to the brand registry to obtain profit with third parties interested on its registration.

What is convenient for each company is to register its signs before starting operations or upon entering a determined market in order to ensure its protection.

Likewise, once a brand is registered, it will be necessary that its owner uses it in commerce because after five years without use following registration, it may be cancelled as per request of any other interested third party.

On this regard, this Act proposes, as a valid use of the brand, the reasonable use in agreement with the type of products of services protected by it and its specific market as well as its specific characteristics. It is necessary to analyze each concrete case.

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