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FTAA - Free Trade Area of the Americas

Draft Agreement

Chapter on Intellectual Property Rights


(Continuation)


[Article XX. Protection of undisclosed information

In the course of ensuring effective protection against unfair competition, Parties shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with the following article.

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

b) has commercial value because it is secret; and

c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
To grant such protection, each Party may require that the industrial secret consist of documents, electronic or magnetic media, optical disks, microfilm, films or other similar instruments.

No Party may limit the duration of protection for industrial or trade secrets, so long as the conditions described in paragraph 2 persist

No Party shall discourage or impede the voluntary licensing of industrial or trade secrets, by imposing excessive or discriminatory conditions that dilute their value.


Article XX. Protection of data relating to pharmaceutical or agrochemical goods

Each Party, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Parties shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use. ]

[Article XX. Protection

The Parties shall grant protection to industrial or trade secrets, with these being defined as any undisclosed information that a natural or legal person may possess, that could be used in any productive, industrial or commercial activity and which is transmissible to a third party.

The Parties shall recognize an industrial secret as protectable when the information comprising it was not, either as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question, and has been subject to reasonable steps, by the person lawfully in control of the information, to keep it secret.

Article XX.

Each Party shall grant the legitimate holder of an industrial secret the power to file suit to prevent or halt the following acts in particular, without prejudice to any action that may be applicable for damages:

1. Make use of an industrial secret, to which access has been obtained in confidence as a result of a contractual or employment relation, without the consent of the owner or legitimate holder;

2. Communicate or disclose the industrial secret referred to in subparagraph 1 above, without authorization from its legitimate holder, for the purpose of personal benefit, or benefit to a third party, or in order to injure the lawful holder;

3. Acquire the industrial secret by unlawful or unfair means, or when it was known or should have been known that the person who communicated the secret, acquired it by such means, or was not authorized by the legitimate holder to communicate it;

4. Exploit, communicate or disclose the industrial secret if it has been acquired by the means or under the conditions referred to in subparagraph 3 above. ]

[Article XX. Undisclosed information]

1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices 10 so long as such information:


a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

b) has commercial value because it is secret; and

c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.]

[Article XX. Protection of Undisclosed Information

1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Parties shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; 

b) has commercial value because it is secret; and 

c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. ]
[Article XX. Protection of Undisclosed Information

1. The Parties shall grant protection to industrial or trade secrets, with the understanding that such secrets are those that incorporate industrial or trade information that, maintained as confidential, enables a person to obtain or maintain a competitive advantage vis-à-vis third parties in carrying out economic activities.

2. Each Party shall ensure that the holder of an industrial or trade secret has the legal means to keep these secrets from being disclosed, acquired or used by third parties without the consent of the person who has legal control of the information, contrary to fair trade practices, such as breach of contract, abuse of trust, instigation to violation and the acquisition of undisclosed information by third parties who knew or did not know by negligence, that the acquisition implied such practices, to the extend that:

a) the information is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; 

b) has commercial value because it is secret; and 

c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
3. In order to grant protection, each Party may require that an industrial or trade secret include documents, electronic or magnetic means, optic disks, microfilms, films or other similar instruments. 

4. No Party may limit the term of the protection for industrial or trade secrets while the conditions described in subparagraphs a), b) and c) of paragraph 2 exist.

5. No Party shall discourage or hinder voluntary licensing of industrial or trade secrets by imposing excessive or discriminatory conditions on such licenses, nor conditions that detract from the value of the industrial or trade secrets.

6. If, as a condition of approving the marketing of pharmaceutical goods or of agricultural chemical products which utilize new chemical components, a Party requires the submission of data on experiments or of another type of data that have not been published and that are necessary to determine the security and effectiveness of the use of such goods, that Party shall protect such data presented by the persons, when the generation of such data implies a considerable effort, except when the publication is necessary to protect the public or unless steps are taken to ensure that the data are protected against all unfair commercial use. ]

[ Undisclosed information

An industrial secret shall be considered to be any undisclosed information within the lawful control of an individual person or legal entity that may be used for any productive, industrial, or commercial activity and that is capable of being transmitted to a third party, so long as that information:

a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

b) has commercial value because it is secret; and

c) has been the subject of reasonable steps by the person lawfully in control of the information, to keep it secret.

The information constituting an industrial secret may be related to the nature, characteristics, or purpose of the products, production methods or processes, or the means or forms of distribution or marketing of goods or rendering of services. ]


12) UNFAIR COMPETITION

[Article XX.

The Parties shall deem as unfair competition the following acts, which, as such, shall be prohibited:

1. Any act carried out in the course of commercial activity or motivated thereby, which is contrary to the rules of good faith or to honest commercial practices and procedures;

2. Acts of any type that are liable to create confusion with respect to the establishment, products, services or activities of another trader;

3. The use or propagation of false indications or allegations liable to damage or undermine the prestige of the establishment, products, services or activities of another trader;

4. Use or dissemination, by a person or legal entity, of indications or allegations of any kind that are likely to create confusion with regard to the source, nature, mode of manufacture, characteristics, suitability for use or consumption, maintenance or quantity of products or services, either their own or those of a third party.

5. Direct or immediate use of a product placed on the market by a third party, to mold, trace or copy, or in any other way unlawfully reproduce that product by some technical means, so as to take “free-rider” advantage of the efforts of a third party for commercial purposes; and

6. Access to an industrial secret or other undisclosed information, or the use or disclosure of such secret or information, without the consent of its lawful holder. ]

[Article XX. Unfair competition]

1. Members are bound to assure to nationals of other Members effective protection against unfair competition.

2. Any act of competition contrary to the honest practices in industrial or commercial matters constitutes an act of unfair competition.. Breach of contract, fraud breach of trust, and incitement to infringe.

3. The following in particular shall be prohibited:

a) all acts of such a nature as to create confusion, by any means whatever with the establishment, the goods or the industrial or commercial activities of a competitor;

b) false allegations in the course of trade, of such a nature as to discredit the establishment of, the goods of the industrial or commercial activities of a competitor;

c) indications or allegations the use of which in the course of trade, could mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity of the goods;

4. Members undertake to establish administrative and judicial, penal and civil remedies to prevent or punish acts considered unfair competition. ]

[ Unfair competition

Any act in relation to industrial property carried out in the business domain that is contrary to honest practices shall be deemed to be an act of unfair competition.

The following acts of competition in relation to industrial property, among others, constitute acts of unfair competition:

a) any act of such a nature as to create confusion, by any means whatever, with the establishment, the goods, or the industrial or commercial activities, of a competitor;

b) false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor; or

c) indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.]

13) ANTI-COMPETITIVE PRACTICES IN CONTRACTUAL LICENCES

[Article XX. Anti-competitive practices in contractual licences

1. Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.

2. Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member.

3. Each Member shall enter, upon request, into consultations with any other Member which has cause to believe that an intellectual property right owner that is a national or domiciliary of the Member to which the request for consultations has been addressed is undertaking practices in violation of the requesting Member's laws and regulations on the subject matter of this Section, and which wishes to secure compliance with such legislation, without prejudice to any action under the law and to the full freedom of an ultimate decision of either Member. The Member addressed shall accord full and sympathetic consideration to, and shall afford adequate opportunity for, consultations with the requesting Member, and shall cooperate through supply of publicly available non-confidential information of relevance to the matter in question and of other information available to the Member, subject to domestic law and to the conclusion of mutually satisfactory agreements concerning the safeguarding of its confidentiality by the requesting Member.

4. A Member whose nationals or domiciliaries are subject to proceedings in another Member concerning alleged violation of that other Member's laws and regulations on the subject matter of this Section shall, upon request, be granted an opportunity for consultations by the other Member under the same conditions as those foreseen in paragraph 3. ]

[Article XX. Anti-competitive practices in contractual licences ]

1. Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology. Members shall take steps to prevent such practices and licensing conditions for intellectual property rights. 

2. Nothing in this Chapter shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Chapter, appropriate measures to prevent or control such practices, which may include for example exclusive .grantback conditions preventing challenges to validity and coercive package licensing in the light of the relevant laws and regulations of that Member. The measures provided to prevent such practices shall be consistent with the other provisions of this Agreement.]

[ Control of anti-competitive practices in the contractual licensing of patents

Any Party, either ex officio or at the petition of an interested party, and subject to prior ruling by the competent national authority on free competition, shall grant compulsory licenses on patents representing practices contrary to free competition, in particular, when they constitute an abuse of dominant market position by the holder of the corresponding industrial property rights. 

In such cases, in order to determine the amount of the corresponding payment, account shall be taken of the need to correct said anti-competitive practices. ]

III. ENFORCEMENT

[Article XX. Obligations on enforcement

Each Party shall ensure that its legislation establishes procedures for enforcing intellectual property rights, in accordance with the provisions of the TRIPS Agreement, such as to permit effective action against any act of infringement of intellectual property rights covered by this chapter, including expeditious remedies to prevent infringements and remedies to deter further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

This chapter shall not be construed as imposing any obligation to install a judicial system for enforcing intellectual property rights other than what exists for the general application of the law, nor does it affect the capacity of the Parties to generally enforce their laws. No provision herein shall be construed as creating an obligation as to the distribution of resources between those destined for enforcing intellectual property rights and those destined for enforcing the law generally. ]

[Article XX. General Provisions

Each Party shall ensure that its internal laws contain procedures for the defense of intellectual property rights, such as to permit effective action against any act of infringement of intellectual property rights covered by this chapter, including expeditious remedies to prevent infringements and remedies to deter further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

Each Party shall ensure that decisions relating to the merits of a case in administrative and judicial proceedings in defense of intellectual property rights shall:

a) Preferably be in writing and set out the reasons on which they are based;

b) Be made available at least to the Parties to the proceeding without undue delay; and

c) Be based only on evidence in respect of which Parties were offered the opportunity to be heard. ]
[Article XX. General Obligations

1. Each Party shall establish under its law intellectual property rights enforcement procedures as specified in articles xx to xx of this Agreement and the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) These procedures shall include measures to enable the prevention and deterrence of infringements of intellectual property rights. 

2. This chapter does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of law in general, nor does it affect the capacity of Members to enforce their law in general. Nothing in this chapter creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general. 

3. Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly and should be completed within the time periods set for that purpose in the laws of each State Party. The procedures thus stipulated shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. 

4. Decisions on the merits of a case shall be made in writing and be duly justified. They shall be based on evidence presented in conformity with the rules of due process. 

5. In any procedure concerning the enforcement of intellectual property rights, the parties shall always have the right to revision of administrative decisions by a judicial authority or to another independent review by a different higher authority from the same Party. ]

[ Article XX. General Provisions 

1. Each Party shall ensure that enforcement procedures, as specified in this Article and Articles xx through xx, are available under its domestic law so as to permit effective action to be taken against any act of infringement of intellectual property rights covered by this Chapter, including expeditious remedies to prevent infringements and remedies to deter further infringements. Such enforcement procedures shall be applied so as to avoid the creation of barriers to legitimate trade and to provide for safeguards against abuse of the procedures.

2. Each Party shall ensure that its procedures for the enforcement of intellectual property rights are fair and equitable, are not unnecessarily complicated or costly, and do not entail unreasonable time-limits or unwarranted delays.

3. Each Party shall provide that decisions on the merits of a case in judicial and administrative enforcement proceedings shall:

a) preferably be in writing and preferably state the reasons on which the decisions are based;

b) be made available at least to the parties in a proceeding without undue delay; and

c) be based only on evidence in respect of which such parties were offered the opportunity to be heard.
4. Each Party shall ensure that parties in a proceeding have an opportunity to have final administrative decisions reviewed by a judicial authority of that Party and, subject to jurisdictional provisions in its domestic laws concerning the importance of a case, to have reviewed at least the legal aspects of initial judicial decisions on the merits of a case. Notwithstanding the above, no Party shall be required to provide for judicial review of acquittals in criminal cases.

5. Nothing in this Article and in Articles xx through xx shall require a Party to establish a judicial system for the enforcement of intellectual property rights distinct from that Party's system for the enforcement of laws in general.

6. For the purposes of Articles xx through xx, the term "right holder" includes federations and associations having legal standing to assert such rights.

[ Article XX. General Provisions

1. Each Party shall guarantee that their national legislation shall establish a procedure for the respect of intellectual property rights, as set out in articles XX (Specific Procedural Aspects and Administrative Procedural Support) to XX (Border Protection of Intellectual Property Rights), that allow for the adoption of effective measures against any infringement of intellectual property rights referred to in this chapter, including rapid remedies to prevent violations and that are a true deterrent to any new violations. These procedures shall be applied in such a way as not to create barriers to legitimate trade and also establish safeguard measures against its abuse.

2. The procedures referring to the compliance of intellectual property rights shall be just and fair. These procedures shall not be unnecessarily complicated or economically burdensome, nor shall they have unjust deadlines or undue delays.

3. Decisions made on the substance of the case shall be expressed in writing and contain the reasons on which they are based. At the very least, those decisions shall be made available to the parties in the dispute, without undue delay, and shall solely be based on evidence, upon which the parties have had an opportunity to be heard. 

4. An opportunity shall be provided to the disputing parties to have a review by a judicial authority of all the final administrative decisions and, at least, the legal aspects of all the judicial determinations made at trial court on the substance of the case, subject to the provisions of jurisdictional competency of the national laws in relation to the importance of the case. However, it will not be mandatory to provide them with the opportunity to review not guilty verdicts in criminal cases.

5. It is understood that the application of intellectual property rights imposes no commitment to set up a judicial system to observe different intellectual property rights to the existing ones for the application of legislation in general. Similarly, no commitment is made for the allocation of resources between those targeted for the respect of intellectual property rights and those for the respect of laws in general. ]

[Article XX. Procedural and Remedial Aspects of Civil and Administrative Procedures

1. Each Party shall make available to right holders civil judicial procedures for the enforcement of any intellectual property right provided in this Chapter. Each Party shall provide that:


a) defendants have the right to written notice that is timely and contains sufficient detail, including the basis of the claims;

b) parties in a proceeding are allowed to be represented by independent legal counsel;

c) the procedures do not include imposition of overly burdensome requirements concerning mandatory personal appearances;

d) all parties in a proceeding are duly entitled to substantiate their claims and to present relevant evidence; and

e) the procedures include a means to identify and protect confidential information.
2. Each Party shall provide that its judicial authorities shall have the authority:

a) where a party in a proceeding has presented reasonably available evidence sufficient to support its claims and has specified evidence relevant to the substantiation of its claims that is within the control of the opposing party, to order the opposing party to produce such evidence, subject in appropriate cases to conditions that ensure the protection of confidential information;

b) where a party in a proceeding voluntarily and without good reason refuses access to, or otherwise does not provide relevant evidence under that party's control within a reasonable period, or significantly impedes a proceeding relating to an enforcement action, to make preliminary and final determinations, affirmative or negative, on the basis of the evidence presented, including the complaint or the allegation presented by the party adversely affected by the denial of access to evidence, subject to providing the parties an opportunity to be heard on the allegations or evidence;

c) to order a party in a proceeding to desist from an infringement, including to prevent the date of entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right, which order shall be enforceable at least immediately after customs clearance of such goods;

d) to order the infringer of an intellectual property right to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of the infringement where the infringer knew or had reasonable grounds to know that it was engaged in an infringing activity;

e) to order an infringer of an intellectual property right to pay the right holder's expenses, which may include appropriate attorney's fees; and

f) to order a party in a proceeding at whose request measures were taken and who has abused enforcement procedures to provide adequate compensation to any party wrongfully enjoined or restrained in the proceeding for the injury suffered because of such abuse and to pay that party's expenses, which may include appropriate attorney's fees.

3. With respect to the authority referred to in subparagraph 2(c), no Party shall be obliged to provide such authority in respect of protected subject matter that is acquired or ordered by a person before that person knew or had reasonable grounds to know that dealing in that subject matter would entail the infringement of an intellectual property right.

4. With respect to the authority referred to in subparagraph 2(d), a Party may, at least with respect to copyrighted works and sound recordings, authorize the judicial authorities to order recovery of profits or payment of pre-established damages, or both, even where the infringer did not know or had no reasonable
grounds to know that it was engaged in an infringing activity.

5. Each Party shall provide that, in order to create an effective deterrent to infringement, its judicial authorities shall have the authority to order that:

a) goods that they have found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any injury caused to the right holder, or, unless this would be contrary to existing constitutional requirements, destroyed; and

b) materials and implements the predominant use of which has been in the creation of the infringing goods be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements.
In considering whether to issue such an order, judicial authorities shall take into account the need for proportionality between the seriousness of the infringement and the remedies ordered as well as the interests of other persons. In regard to counterfeit goods, the simple removal of the trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the goods into the channels of commerce.

6. In respect of the administration of any law pertaining to the protection or enforcement of intellectual property rights, each Party shall only exempt both public authorities and officials from liability to appropriate remedial measures where actions are taken or intended in good faith in the course of the administration of such laws.

7. Notwithstanding the other provisions of Articles xx through xx, where a Party is sued with respect to an infringement of an intellectual property right as a result of its use of that right or use on its behalf, that Party may limit the remedies available against it to the payment to the right holder of adequate remuneration in the circumstances of each case, taking into account the economic value of the use.

8. Each Party shall provide that, where a civil remedy can be ordered as a result of administrative procedures on the merits of a case, such procedures shall conform to principles equivalent in substance to those set out in this Article.

[Article XX. Specific Procedural Aspects and Recourse to Civil and Administrative Procedures

1. Each Party shall make available to the copyright holders the civil judicial procedures to defend any and all intellectual property rights included in this chapter and provide that:


a) The defendants have the right to receive a timely notice in writing that states in sufficient detail the basis of the complaint; 

b) The parties in the procedure are permitted to be represented by an independent lawyer; 

c) The procedures do not impose excessive demands for mandatory personal court appearances; 

d) All the parties in the procedure are entitled to substantiate their claims and to submit pertinent evidence; and

e) The procedures have the means to identify and protect information of a confidential nature. 

2. Each Party shall provide that their judicial authorities have the authority to:

a) Order that, when a party to a procedure has submitted sufficient evidence, which it could reasonably have access to, as a basis to its allegations, and has identified some pertinent evidence to substantiate its allegations that are in the hands of the opposing party, the latter shall provide that evidence, subject to, alternatively, the conditions that guarantee the protection of confidential information; 

b) To decide preliminary or final determinations, whether they be negative or positive, in case that one of the parties in the procedure, voluntarily and without good cause, obstructs access to evidence or does not provide pertinent evidence that is in his control within a reasonable amount of time or seriously obstructs the defense of an intellectual property rights procedure. Those determinations shall be decided on the basis of the submitted evidence, including the claim or the allegations submitted by the party that adversely affects the refusal to have access to the evidence, on condition that the parties are granted the opportunity to be heard in respect to the allegations and evidence;

c) Order the violator of an intellectual property right to pay the copyright holder of the right an appropriate reimbursement as compensation for the damages that the copyright holder has suffered as a result of the violation, when the violator knew that he was involved in an infringing activity or had good reason to believe it;

d) Order the violator of an intellectual property right to cover the costs of the copyright holder, which could include appropriate lawyer’s fees; and 

e) Order one party to the procedure, on whose request the measures would have been adopted and who abused the defense procedure that provide for adequate compensation to any party wrongly subjected or restricted in the proceedings, in respect to damages suffered, due to that abuse, and to pay the expenses of that party, which may include appropriate lawyer’s fees.
3. In reference to the authority in sub-paragraph d) paragraph 2, each Party may, in so far as work protected by copyright and records are concerned, grant the judicial authorities the authority to order the recovery of profits or the payment of previously determined damages or both, even when the violator was not aware that he was involved in an illicit activity or did not have good reason to believe it.

4. Each Party shall provide that, to effectively deter violations, their judicial authorities have the authority to:

a) Not compensate, in any way, the goods that have been determined to be in violation of the intellectual property rights; withdraw them from the markets in such a way as to create no injury to the copyright holder, or destroy them if it is not in contravention of the constitutional provisions in force; and 

b) Not compensate the materials and equipment predominantly used in the manufacture of the goods that were in violation; withdraw them from the markets in such a way as to minimize future violations.
5. When considering the issuance of orders referred to in paragraph 4, the judicial authorities of each Party shall take into account the proportionality between the severity of the violation and the ordered measures, as well as the interests of other persons, including the copyright holder. In so far as the counterfeit goods are concerned, the simple removal of the illicitly placed trademark shall not suffice for customs clearance of those goods, except in rare circumstances such as those where the authority decides that they are a donation to charitable organizations.

6. Without prejudice to what is provided in articles XX (General Provisions) to XX (Border Protection for Intellectual Property Rights), a Party being sued for the violation of an intellectual property right, as the result of the use of that right by the Party or on its behalf, may establish as the only recourse available against it, the payment of adequate compensation to the copyright holder, in accordance with the circumstances of the case, and bearing in mind the economic value of its use.

7. Each Party shall provide that those procedures shall be adjusted to the principles that are essentially equivalent to those stated in this article, when civil redress can be ordered as a result of administrative procedures on the substance of the matter. ]

Continuation: [Article XX. Provisional Measures

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