In recent years, the number of musical and cinematographic works that have been pirated in Ecuador has reached unprecedented levels and has been increasing with the passage of time. This is largely due to the fact that copyright owners of such works have taken no legal action to combat piracy, resulting in the rapid growth of informal businesses which engage in pirate activities, since it is easy and profitable to sell unauthorised copies of musical and cinematographic works.

The Intellectual Property Act enables the Ecuadorian Intellectual Property Institute (IEPI) – the body responsible for monitoring and protecting IP rights – to initiate actions ex officio if such rights are breached. However, due to the high costs involved, as well as the lack of personnel, infrastructure and adequate technology, the IEPI has been unable to combat piracy effectively in Ecuador.

It was not until recently that the IEPI could initiate ex officio its first investigations into local informal businesses dedicated to the piracy of musical and audiovisual works. Thus far, they have initiated actions against 26 stores dedicated to the sale of CDs and DVDs which lack the respective licences, and have fined each store approximately $1.8 million. If such fines are not paid, criminal action will be taken.

In response to the actions initiated, the Ecuadorian Association of Audiovisual Product Traders filed a constitutional claim against the IEPI on the grounds that the initiation of such processes against informal traders violates Article 325 of the Constitution and puts the government's well-being plan at risk. In response to the claim, Andrés Ycaza, IEPI president, stated that action will be initiated against formal stores in Quito and Guayaquil, where piracy is "not a necessity" but is simply an easy way to make money.

While the initiation of official action is a major step forward in combating piracy, the news is not as positive as it may first appear. The fact that the official position adopted by the IEPI is to take action only against formal stores which do not carry out piracy out of so-called 'necessity' is worrying, as such a statement appears to imply that piracy may be justified in certain circumstances (eg, due to a lack of job opportunities).

For further information on this topic please contact Santiago R Bustamante at Tobar & Bustamante Abogados by telephone (+593 2 986 456), fax (+593 2 986 462) or email ([email protected]).