On March 15, 2012 Division 3 of the Federal Court of Appeals ruled in the case “Szwarcbort, David v. Tolder S.A.” (Docket No. 11.779/06) that utility models must comply with a relative novelty requirement to qualify for grant, and not with the absolute novelty requirement as mandated for patents of invention.

Thus Division 3 delivered its judgment as to the scope of Section 55 of the Patent Law. This provision states that only relative novelty is required for the grant of a valid utility model in Argentina, but Section 55 of Regulatory Decree No. 260/96 appears to introduce the requirement of absolute novelty.

Section 55 of decree No. 260/96 is a confusing provision which a contrario sensu states that a utility model is not novel if the applicant has disclosed the invention abroad within six months prior to its filing in Argentina. Various commentators have held that section 55 of Regulatory Decree No. 260/96 is unconstitutional because it directly contradicts the statutory provision it purports to regulate, as on one hand it grants a 6-month grace period while the Patent Law establishes a period of one year, and on the other hand it appears to introduce an absolute novelty requirement for utility models.

Although the Court did not address the unconstitutionality of Section 55 of decree No. 260/96, it did confirm that the novelty of utility models must be adjudged taking into account only the state of the art in Argentina.

In practice, the National Institute of Industrial Property (INPI) applies Section 55 of the regulatory decree, requiring absolute or international novelty, and will not be satisfied with the relative novelty required by the text of law. Hence the importance of the ruling, because now the INPI must decide whether to review its stance to require absolute novelty or whether, instead, to apply the provision of Section 55 of the Patent Law.

The Court also held that it also had to decide whether the utility model had been infringed on, regardless of the fact that it had expired at the time the verdict was issued, as the plaintiff had the right to claim damages caused by such infringement.