Guatemala

In Guatemala, criminal prosecution is the most common way to fight against counterfeit products that are imported, produced or are present in the market. The process starts with a complaint when the owner, or their representative, has information that a counterfeit product is being imported, produced or commercialized in the country. This complaint is usually filed in the Public Ministry so that it can perform an investigation of the case; but it can also be filed before a criminal judge, together with all the supporting evidence. Once the Public Ministry receives the complaint, the case is assigned to the Intellectual Property Agency, and the agent in charge starts the investigation. The investigation consists of obtaining all the legal information of both parties to determine the rights on which the complaint is based and secure the information to investigate the infractor. After all the information is obtained, there is usually a conciliation hearing between the parties where a settlement can be reached and damages can be agreed; however, this is not mandatory. The settlement can be made at any stage of the process. If a settlement is not reached, the investigation shall continue, and the Public Ministry should request the judge’s authorization for a raid to seize the suspicious product. Once the product is seized, an original product and a seized product are sent to the National Forensic Institute to be examined, in order to see whether the product is counterfeit or not. If it is confirmed that the product is counterfeit, the Public Ministry should request the initiation of the criminal process, which starts with the first declaration of the infractor. If the judge considers there are sufficient elements to take the infractor to trial, he or she sets a term to the Public Ministry to finalize the investigation and present formal accusation. Once the term is finalized, if the judge accepts the accusation, an oral trial is ordered. In this oral trial, all arguments and evidence obtained in the investigation are presented to the judge and he or she decides whether a felony was committed.

The Criminal Code establishes different types of actions that can be considered infractions to IP rights, such as the counterfeiting of a product or the infringement of copyrights. Articles 274 and 275 regulate all the possible actions that may result in felonies, and they are wide-ranging. During the criminal process, the most important evidence to collect is the counterfeit product, since this will be used to prove that the infractor committed a felony, following the comparison of the original product with the seized product. In Guatemala, the ordinary criminal courts have jurisdiction. There are no special courts for intellectual property violations; however, currently there is a movement to create specialized courts to ease the process and obtain better resolutions. Penalties are jail time for a period of four to six years and a fine of approximately USD 7,000 up to USD 90,000.

Civil procedure is another way to enforce rights; however, this type of process is more formal, and the judges can take time to admit the suit and order measures. Unlike the criminal procedure, in which a simple complaint can be filed online, the civil complaint requires all the evidence to be filed along with the complaint, without the support of the Public Ministry, so this may complicate the preparation of the process and in some cases the infractors may be out of the stock in question once the judge admits the complaint and orders measures. The civil process consists of an oral trial in which, once the complaint is admitted, an oral hearing is scheduled. As part of this hearing, the infractor must file all of their arguments and evidence to prove their defense. Once the hearing is finished and all the evidence has been presented to the judge, a sentence is issued. The penalty in this type of case is economic compensation, for which damages should be proved. This type of process is heard in the ordinary civil court; there isn’t a specialized court. Finally, the industrial property law also establishes the possibility to enact border measures; however, because of the short terms and the jurisdiction of the courts — complaints must be filed in the state where the border across which the felony was committed is located — this is practically impossible to execute. Therefore, when there is a customs case, it is usually recommended that the brand owner or representative informs the customs authority about the brands they represent, to inform them of any suspicious importation. It is possible to train the authorities in distinguishing counterfeit products from the original.

The laws involved in this type of procedure are the Industrial Property Right Law, Copyright Law and Civil Procedure Law.

Injunctions can be requested; however, as mentioned before, it may take some time to reach a resolution and the product may not be secure. Damages are available after obtaining a favorable sentence and a specific process must be taken to prove the damages caused, using all the evidence provided.

In Guatemala, the grey market is immense, and unfortunately there are many counterfeit goods available that consumers believe to be original. Parallel imports are permitted, so sellers are not subject to any penalty, unless it can be proven that the goods are counterfeit. Consumer protection measures are available; however, they are not effective since most of the counterfeit products in the market are commercialized by non-formal companies and cannot be identified.

The criminal prosecution procedure is more flexible, smoother and less formal, which is why it is recommended. In anti-counterfeit cases, urgent actions are often required, and unfortunately, in the civil process, this is not possible to achieve. Also, the investigations carried out by the Public Ministry (the constitutional institution which performs criminal investigations) are of great help: the evidence has more value because it has been gathered by an official and objective institution, compared to an investigation carried out by the interested party. Finally, infractors are more threatened when they know there is a criminal case against them. Currently, customs authorities work very actively and alongside the Public Ministry, making the criminal process much more effective, since customs can secure the product with the filing of the complaint, which may even be filed electronically.

Every day, counterfeiters are working to improve the quality of their copies. In Guatemala, there have been cases where it is almost impossible to determine if a product is original or fake. One of the most helpful measures is training customs officials in how to identify products. The training is essential, because examples of the products can be shown and, when imported, pictures can be sent for the brand owner to identify if the product is original or fake. They make no decision; they just inform, which is a great help because in many cases the brand owner has already seen the counterfeit product in other countries, and they can identify whether it is original or fake. It means that brand owners don’t rely solely on the authority.

Counterfeiters, now being aware that the authority is more active, usually do not declare the trademark in the importation declaration, try to hide the trademark, or bring products in piecemeal, to try to fool the authorities into thinking that they are spare parts.

Social networking and online markets are growing and becoming very active in Guatemala. In many cases, monitoring online marketplaces and social networking is a great way to find targets when they have a physical establishment, but often they are informal sellers so don’t issue invoices or give their real name. This tends to make tracing actions more difficult and means a more formal investigation is required. Dupe culture continues to grow in Guatemala; there are several products with almost identical designs to genuine products but don’t have a brand name, or include a different brand name from a third party. Dupe culture has improved the quality of counterfeits and has given more protection to counterfeiters. The Guatemalan legislation has not been updated in many years, so it does not include provisions to protect brand owners against counterfeiters who sell in online marketplaces and via social networks. In order to perform actions against online sites, you need to investigate whether they are formal sellers with a physical establishment, but the difficulty lies in establishing the real identity of the owner of the profile or marketplace. The most problematic marketplaces or social networks where counterfeiters are found are Facebook Marketplace, Instagram and TikTok. There are a couple of local marketplaces that have been created recently; however, their marketing does not have the same reach as social networks. Currently there isn’t an initiative to protect against counterfeits being sold via social media, since the country does not consider it a priority and people consider it to be a valid business due to the lack of formal work opportunities in Guatemala.

In recent times, rights holders have become more active. This is mostly due to the fact that the authority is working well and results have been obtained, especially in customs seizure cases. According to the Public Ministry, in the last year, seizures at local establishments have increased greatly. This is due to the active participation of the brand owners, who are investing in this type of action and are aiming to recover damages and the costs of the action.

At present, there are no new problematic platforms. The platforms used by counterfeiters are the traditional ones: Meta (Facebook) Marketplace, Instagram and TikTok.

Regarding domain names, in Guatemala the domains are granted by Universidad del Valle. This university is responsible for the domains that end in .com.gt and .gt. In their policies, they have procedures to solve controversies, and it is mandatory to attend if someone files a claim. There aren’t any current trends relating to the registration of domain names. This is because most of the counterfeiters or non-formal businesses do not use a web page; they have moved to social networks such as Facebook, Instagram and TikTok, where you can find more illegal use of brand names as profile names. There has not been an increase in websites that sell fraudulent and counterfeit products, because as mentioned before, counterfeiters are showing a preference for social networks. In Guatemala, there aren’t many top-level domains (TLDs) so counterfeiters cannot take advantage of new TLDs; it is assumed that they use the usual TLDs.

With regards to social media, in Guatemala the social media platforms used are the most famous ones, like Facebook, Instagram and TikTok, but counterfeiters do use these platforms to sell counterfeit products. A significant percentage of counterfeit products is sold via social media, so measures need to be taken at some point. Taking down profiles or posts is a little complicated at present, and it takes a lot of time to obtain a resolution. This is a critical issue that needs attention. We have initiated many cases after finding counterfeit products on social media; this is an important instrument in our enforcement strategy. We usually find targets and engage with sellers to try to obtain all the information required to file a complaint, especially if they have a physical establishment (which is very important in order to determine the quantity of counterfeit products they sell). Usually, the engagement starts with a mystery purchase, so that we can receive an invoice, and with that we can obtain the name of the person or company and all the addresses they have, and carry out visits to the different establishments and inform the brand owner. Currently, counterfeiters are using social media freely; they are not scared because they are unaware that they are selling fake products and that this is considered a felony with penalties of large fines and jail time, so as a result, we don’t see counterfeiters taking any action to hide on social media. Sometimes, they even get sponsorship for their posts or profiles. In recent months, the increase in sales of counterfeit goods via social media has been notable: the use of AI and the trend of making videos showing the product has created more engagement between sellers and consumers, which increases the social media commercialization greatly. There are currently no policies in force to combat this, nor does it appear to be the intent to create any, so brand owners need to make their best effort to take the profiles down.

Artificial intelligence is still very new in Guatemala. Currently there aren’t any related laws or provisions, and it is possible that some time will pass before any law is approved. Currently the Bar of Attorneys has not taken any action; local associations have held some events to talk about artificial intelligence, but no official institution has taken any action. However, sellers are starting to become familiar with these tools, using them to make better videos and attract more consumers.

Regarding deepfakes, few cases have thus far developed in Guatemala. Most deepfakes seen to date have been made in different countries and, due to the reach of social media, have been reproduced in Guatemala.

Currently, crypto is not regulated in Guatemala. The national bank issued a communication a couple of years ago stating that they were going to regulate cryptocurrencies, but time has passed and the authorities have changed, so at this time it isn’t a priority.

Digital content piracy is a big issue in Guatemala, with many people believing that they are getting access to all content for a great deal — cheaper than via legal platforms. Consumers can even buy hardware and software to play this content on social media. Digital content piracy is considered a felony against copyrights, so to initiate an action, a complaint must be filed and the full process explained above can be followed. Any measures to prevent felonies can be requested from a judge. A copyright owner, when filing a complaint, can ask for a site to be taken down. The owner should propose the method to take down the site.

Currently, in Guatemala, QR code abuse is not notable. Counterfeiters only include QRs on counterfeit goods when they are seen in the original product, but it is not a big issue.

In Guatemala, most anti-counterfeiting actions are initiated due to counterfeit products found during the importation process. As mentioned above, the Industrial Property Law of Guatemala sets out a specific procedure in which the brand owner must act within 24 hours in the court where the border is located. This is practically impossible, so this process is not employed by brand owners. The Central American Customs Code enables the customs authorities to pause an importation when they find suspicious products. The officials inform the brand owner representative to verify whether the product is counterfeit or original. Once this notification is received, if the brand owner identifies that the product is fake and decides to proceed, a complaint must be filed to stop the importation, and the investigation of the Public Ministry is initiated.

Once the importation is suspended due to the finding of suspicious products, all the costs regarding the container are the responsibility of the importer. The costs related to the seizure are the responsibility of the Public Ministry; however, in many cases the brand owner helps with transportation of the goods when the amount of product is considerable, and does not fit in the Public Ministry vehicle. Goods are stored in the Public Ministry or Judicial Body warehouse; there is no cost for any of the parties. The destruction of counterfeit goods is usually paid for by the importer when the parties have reached a settlement, the product has not been officially seized and it is still at the border, but if the product has already been seized, the authorities perform the destruction and there are no costs involved. The main benefit of this system is that the customs authorities inform the brand owner representative, and communication is very fluid; however, the downside is that the process is not regulated, meaning that there isn’t an official term during which the authorities can hold the merchandise, so there is always a risk that the goods can be liberated at any time without prior notice. Another benefit of the system is that once the brand owner confirms that they want to proceed with the complaint, this can be filed online. The customs authority and the law enforcement authority are totally independent, belonging to different government organizations. When the brand owner’s representative is notified of an importation, the authorities provide photos of the product to them; however, these photos are not used in the enforcement process. Any photographic evidence may consist of photographs taken by the authorities at the time of the seizure, although such evidence is not commonly relied upon.

These pictures and the importation declaration that contains the list of the imported goods and of the importer, including the latter’s address, are also provided. This is very important because details of the importer are obtained from this declaration and used in the complaint. The only remedy that can be taken against counterfeiters is to file a complaint to initiate the criminal process and receive the sanctions imposed by the law. However, if more felonies are committed, the penalties can be harsher. Where parties reach an agreement, the brand owners usually include a penalty clause if they commit the infraction again, which can be executed in a civil court. For customs actions to be effective, training for customs officers is essential, because they become aware of the brand and they can seek the product when they receive fresh information. It is recommended to provide training a couple of times a year. Currently, customs officials and law enforcement work very closely together to fight against counterfeiters.

There aren’t any recent trends or regulatory developments. The products are the same, but the importance of the fight against counterfeit goods has increased.