Argentina’s economy has faced multiple challenges in the last decade, with inflation running at more than 200%, negative net foreign currency reserves, and years of economic stagnation. IP Owners have felt the impacts of this turmoil through frequent price increases – sometimes multiple per year.
A new government has been elected with the promise to address the problem, leading to a series of announcements this week, most notably devaluing the Argentina Peso from roughly 360 Pesos to the Dollar to 800 Pesos to the Dollar. Even more important, the government has committed to continued currency devaluation in the coming months.
So, what does this mean for IP Owners?
Declining PTO Costs
A basic patent application in Argentina is 48,000 Pesos, or approximately 133 US dollars, using FX rates before the currency devaluation. At 800 Pesos to the Dollar, the cost drops to 60 US Dollars. A significant reduction.
Trademark applications are impacted similarly. Before the currency devaluation, a basic trademark application was 17,680 Pesos or 49 US dollars. At 800 Pesos to the Dollar, trademark applicants can expect to pay 22 Dollars.
As can be expected, maintenance costs will decrease as well. Annuity years 1 through 3 will decrease from 66 Dollars to 30 Dollars. Trademark renewals will decline from 98 Dollars to 44 Dollars.
In general, devaluation has the potential to benefit IP owners outside Argentina, but there are some things to watch out for.
Vigilance is Important
If you are receiving services through firms in Argentina, it will be important to monitor invoices for irregularities over the next year. Some firms may take advantage of the situation and continue to convert the Peso at old rates and pocket the difference (it happens more than you could imagine). Also, look for high currency exchange charges or additional fees that can’t be explained.
Unfortunately, most IP owners don’t check their invoices and/or don’t know what is going on in countries like Argentina, so they just pay the bill. One or two properties won’t be too expensive, but if you are maintaining a large portfolio, it can add up.
Don’t fall victim to unscrupulous associates!
Given the focus on reducing the deficit, it wouldn’t be surprising to see PTO fees increase dramatically to increase revenue – so any currency-related savings may be short-lived.
Stay tuned and you’ll be the first to know when things change!
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