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FAQ

IP LITIGATION AND UNFAIR COMPETITION

 

What is the structure of a typical IP litigation case in Mexico?

Most of the authorities involved with IP litigation in Mexico are part of a government agency, unless it is a criminal case.

The first instance is usually the Mexican Patent and Trademark Office (MPTO). The MPTO has authority to decide patent, trademark, unfair competition and most cases of copyright infringement. The MPTO also gas authority to issue preliminary measures against infringers and to decide invalidation and cancellation actions involving patents and trademarks.

Infringement actions regarding registered plant varieties are filed with the Ministry of Agriculture.

The infringement, invalidation and cancellation cases involve a full administrative trial with the MPTO. The time the MPTO takes to decide a case is very variable: from six months in a quick easy trademark case to four years in a patent case.

The decisions from the MPTO may be appealed, either by filing a revisión administrativa or petition of administrative review with a higher rank official of the MPTO (only advisable if the appellant wants to delay a final decision); an amparo or appeal with a Federal District Court (unusual); or an appeal with the Tribunal Federal de Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA). The FCTAA has a Chamber specialized in IP, and most appeals are filed with the FCTAA.

The FCTAA takes between twelve to eighteen months to render a decision; District Judges are usually faster. The FCTAA or the Judge’s decision may be appealed with a Tribunal Colegiado de Circuito or Federal Court of Appeals.

All the steps of a typical IP case take place in Mexico City.

Compared with the number of infringement actions the MPTO handles, the number of criminal cases is low and the civil cases for payment of damages, relatively common in the late 1990’s and earl 2000’s, are virtually inexistent now. However, recent amendments to the Federal Copyright Law may change that in the field of copyrights.

Is it possible to get injunctions against infringers in Mexico?

Yes, although it is not exactly an injunction. We call them preliminary measures, and the MPTO has authority to issue them.

Preliminary measures may include an order to the infringer to stop the manufacture and/or sell of the infringing product or service, an order to recall the infringing goods from the retailers, and the seizure of infringing products.

However, in order to obtain the preliminary measures, the plaintiff must file a bond (to guarantee payment of the damages the preliminary measures may cause to the defendant in case the MPTO decides there was no infringement), file evidence of the existence of an actual or potential infringement and prove that it marked the products with a warning about the existence of the patent or with the ® symbol or an equivalent. The MPTO usually accepts that the lack of marking may be cured by publishing a notice in some major newspaper, informing about the existence of the trademark registration or patent.

It is also possible to ask the MPTO to request the assistance of custom authorities to stop the importation of infringing products.

Can a licensee file infringement actions?

Yes. The statute stipulates that a licensee with the license recorded with the MPTO is allowed to file infringement actions against third parties, unless otherwise explicitly stipulated in the agreement. Even non-exclusive licensees and franchisees are allowed to oppose infringers if the agreement does not state the contrary.

What is final consequence of the infringement action?

The only actual beneficial consequence of filing an infringement action with the MPTO for the plaintiff, is that the MPTO will order the infringer to stop the infringing activities.

If the infringement action were successful, the MPTO would also impose a fine on the infringer of up to about $93,000.00 USD. However, all the monies collected from the fine would be for the federal government, not for the plaintiff.

The MPTO has no authority to award damages or legal fees.

Nevertheless, the final decision from the MPTO may be used to file a civil action for damages against the infringer.

What are the steps to be taken to file an action for damages due IP infringement?

The civil action for payment of damages or losses due trademark or patent infringement or unfair competition depends on the existence of a final administrative infringement decision issued by the MPTO.

The Industrial Property Law provides that the trademark or patent owner is entitled to claim as damages, at least the equivalent of 40% of the retail price of each infringing product or service sold by the infringer.

On the other hand, the Copyright Law stipulates that the right holder is allowed to claim as damages, at least the equivalent of 40% of the retail price, assuming as price the one of the legitimate product, if it is feasible to calculate the amount of the damages in such a way. In the case of copyright, it is no necessary to obtain a an administrative infringement decision from the MPTO before filing the civil action for damages or losses.

A binding decision from the Mexican Supreme Court states that it is necessary to prove that the plaintiff suffered actual damages or loses, and the consequential link between such damages or loses and the trademark, patent or copyright infringement. Therefore, the statutory provisions stating the 40% minimum damage only help to calculate the minimum amount of the indemnification.

The civil action for damages has to be filed with a court of common jurisdiction of the domicile of the defendant. The plaintiff may choose a federal or state court to file the action for damages.

Is there an opposition procedure?

Only patent applications may be subject of an opposition within a six-month term after the publication of the patent application in the Official Gazette.

There is no opposition for trademark applications. Trademark applications are not even published in the Official Gazette, although it is possible to learn about the existence of an application by conducting a search in the online database of the MPTO.

Notwithstanding the above, if a party believes that a trademark application may harm its rights if approved, it is possible to file a document with the MPTO, asking the examiner to consider certain facts (usually an earlier registered or applied identical or confusingly similar trademark for the same, similar or related goods or services) and reject the application. It is up to the examiner to consider the facts stated by the “oppose”. If the registration is issued, it would be possible to challenge it by filing an invalidation action, no matter if the plaintiff “opposed” the application or not.

What are the causes to invalidate or cancel a Mexican trademark registration?

The invalidation and cancellation actions are filed with the MPTO, as first instance.

There are several causes of invalidation of a Mexican trademark registration:

(a) Registration issued against a statutory provision (i.e. unfair registration of a well-known or famous trademark) of the trademarks statute or any other statute (registration of a copyrighted design without authorization from the right-holder).

The statute of limitations stipulates that the invalidation action on the above-stated ground may be filed at any time.

(b) Earlier and continuous use, in Mexico or abroad, of an identical or confusingly similar trademark, to identify the same or similar products or services.

The plaintiff has to prove that it started using the trademark in any country in the world before the filing date of the Mexican trademark registration, or before the date of first use in Mexico stated in the defendant’s trademark application.

This cause of cancellation is unique of the Mexican law, given that it allows the cancellation of a Mexican trademark registration based only in the use of an identical or confusingly similar trademark in other countries. The statute does not demand reciprocity from the plaintiff’s country or that the plaintiff’s trademark is well-known in Mexico; earlier and continuous use in any other country is enough.

The statute of limitations stipulates that the invalidation action on the above-stated ground must be filed within a three years term, counted from the date of publication of the registration in the Industrial Property Gazette.

(c) Stating false information in the trademark application.

Applicants must be careful with the information stated in the application, to avoid the registration from becoming vulnerable to this cause of invalidation. Applicant should pay special attention to the date of first use stated in the application. If there are doubts about if the trademark has been used in Mexico, or about the availability of evidence, it would be better not to claim any date in most cases.

The statute of limitations stipulates that the invalidation action on the above-stated ground must be filed within a five years term, counted from the date of publication of the registration in the Industrial Property Gazette.

(d) Existence of an earlier registered identical or confusingly similar trademark in Mexico, for the same or similar goods or services.

Although the issuance of a registration for a trademark identical confusingly similar to an earlier registered one in Mexico, for the same or similar products or services is against the statute -see cause of invalidation (a)-, this special stipulation would be the applicable one instead of the more general provision.

The main implication of this distinction relates to the statute of limitations. The statute of limitations provides that the invalidation action has to be filed within a five years term, counted from the date of publication of the registration in the Industrial Property Gazette.

(e) Registration of a trademark identical or confusingly similar to one already registered abroad, if the application was filed by an agent, representative, distributor or licensee of the trademark owner, without its consent. In this case, the statute explicitly provides the presumption that the trademark was filed in bad faith.

The statute of limitations stipulates that the invalidation action on the above-stated ground may be filed at any time.

(f) Lack of use of he registered trademark, as registered in the case of device trademarks, for three consecutive years in Mexico, on at least one of the products or services covered by the registration.

This cause of cancellation becomes available only after the third anniversary of issuance of the registration.

(g) Tolerated dilution of the registered trademark, to the extent that it has became the generic name of the covered product or service.

Does the Mexican law provides any kind of provisional protection for patent applicants, before the issuance of the patent?

No. The patent applicant has no action to oppose the use of the claimed product, apparatus or process by third parties as long as the patent is not issued.

The only “remedy” or deterrent that the statute provides is that the patentee would be allowed to claim damages from infringers, retroactively to the date of publication of the patent application. However, it is necessary to wait for the issuance of the patent. Further, in order to file a lawsuit for payment of an indemnification due patent infringement, it is essential to have a final infringement decision issued by the MPTO first.

Is there discovery of evidence under Mexican law?

No, at least in IP, civil and commercial litigation.

The statute that governs patent and trademark litigation provides that one of the parties may request the MPTO to order the adversary to file specific evidence (usually a document) under its control, provided that the requesting party filed all the evidence that would be reasonable to prove the merits of the action or the defense. Nevertheless, the statute does not state a specific penalty for failing to file the evidence requested by the adversary through the MPTO, resulting in the lack of effectiveness of the provision.

Are there depositions under Mexican law?

No.

Are there hearings in IP litigation procedures?

There are no oral hearings or witnesses examinations in all procedures governed by the Industrial Property Law, such as patent and trademark infringement and invalidation procedures.

In criminal, civil and commercial procedures, there can be oral hearings and witnesses examinations. The court may even request one of the parties to appear before the court in order to answer questions previously prepared by the adversary, related to the case.

The appeal with the Federal District Court allows the examination if witnesses, but not the direct questioning to the parties; the appeal with the Federal Court of Tax and Administrative Affairs does not allow witnesses, and arguably it allows the direct questioning to the adverse party.

Is it a requirement to have the work registered with the Mexican Copyright Office in order to file a copyright infringement action and/or the criminal charges and/or civil actions for damages?

No. The Federal Copyright Law explicitly states that the copyright is fully protected without registration of the work.

Notwithstanding the above, in practice, it can be really hard to enforce copyright if the work is not registered in Mexico.

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