Article 221 Bis of the Mexican Industrial Property Law (IPL) provides that the owner of a patent or registered trademark (there are no common-law rights in Mexico) is entitled to claim from the infringer as damages and/or lost of profits at least 40% of the retail price of each infringing product sold by the defendant. The reason of such stipulation is not only to provide monetary relief to the right holder but also to punish the infringer.

Further, article 221 of the IPL states that the right to file a damages claim is independent from the administrative penalties that the Mexican Patent and Trademark Office (MPTO) may impose to the infringer of the corresponding patent or registered trademark.

For some years, the federal courts of appeals ruled that articles 221 and 221 Bis of the IPL allowed patent and trademark owners to file damages claims against infringers without a prior infringement decision issued by the MPTO[1]. The courts also ruled that it was valid to claim as damages and/or lost of profit the equivalent of 40% of the retail price of the infringing products sold without proving that the plaintiff suffered an actual damage or lost of profit or the cause-effect link between the infringement and said damages/lost of profits. Although the decisions were referred to trademark cases, the same provisions were applicable to patent infringement.

In 2003, the Segundo Tribunal Colegiado en Materia Civil del Primer Circuito, or Second Panel of the Courts of Appeals for civil matters in Mexico City, decided a damages case due trademark infringement, and ruled that section 221 of the IPL demanded an earlier final infringement decision from the MPTO as a condition to file the civil action for damages[2].

Given the inconsistencies between the courts of appeals, the Mexican Supreme Court, namely the Primera Sala or First Panel, intervened to set a binding ruling. The result was binding precedent  1a./J. 13/2004[3].

It is necessary to state that the decision the Supreme Court contains many technical errors in connection to the intellectual property regulation, regrettably evidencing that the Justices that participated in the decision had not enough expertise in trademark and patent law.

In any case, the most relevant issue of the Supreme Court’s decision was a radical change about the conditions required to file a civil lawsuit for damages in cases of trademark and patent infringements.

Basically, the Supreme Court decided that it is necessary to have a final infringement decision from the MPTO before filing a civil action for damages and/or lost of profits. The Court also ruled that, in spite of the statutory minimum damages provided in the statute, the plaintiff had to prove in the damages trial that the infringement caused actual damages and/or lots of profit and the cause-effect relation between the infringement and the suffered damage/lost of profit.

In my opinion, the arguments and conclusions of the Supreme Court are incorrect and are not supported by the statutory provisions; further, such ruling works against the legitimate interests of intellectual property owners in Mexico.

I do not agree with the statement of a well-known Mexican business columnist that said that the decision of the Supreme Court made the MPTO stronger, given that the decision did not provide the MPTO with better tools to perform its job more efficiently. Actually the Supreme Court weakened the Mexican intellectual property system as a whole.

For an updated review of the civil action for indeminfication of damages due patent and trademark infringement, read Damages claims due infringement of trademarks and patents in Mexico. Who has the final saying?

[1] “PROPIEDAD INDUSTRIAL, LEY DE LA. NO ES NECESARIA LA PREVIA DECLARACIÓN ADMINISTRATIVA DE INFRACCIONES PARA LA PROCEDENCIA DE LAS ACCIONES MERCANTILES Y CIVILES PREVISTAS EN DICHA LEGISLACIÓN” at Semanario Judicial de la Federación y su Gaceta, Ninth Period, Vol XIII, March 2001, page 1797 (Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/ResultadosV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=190110&Dominio=Localizacion&TATJ=2&Orden=1&Clase=TesisBL&bc=Jurisprudencia.Resultados&TesisPrincipal=TesisPrincipal&InstanciasSeleccionadas=6,1,2,50,7&Hits=20. Date of review: January 14, 2019); and “MARCAS. DAÑOS Y PERJUICIOS DERIVADOS DE LA VIOLACIÓN A LOS DERECHOS DE PROPIEDAD INDUSTRIAL. LA ACCIÓN RELATIVA NO ESTÁ SUJETA A QUE PREVIAMENTE SE AGOTE EL PROCEDIMIENTO ADMINISTRATIVO ANTE EL INSTITUTO MEXICANO DE LA PROPIEDAD INDUSTRIAL” at Semanario Judicial de la Federación, Ninth Period, Volume XVI, August 2002, page 1323 (Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=186222&Dominio=Localizacion&TA_TJ=2&Orden=1&Clase=DetalleTesisBL&NumTE=1&Epp=20&Desde=-100&Hasta=-100&Index=0&InstanciasSeleccionadas=6,1,2,50,7&ID=186222&Hit=1&IDs=186222&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=. Date of review: January 14, 2019).

[2] “ACCIÓN DE RESPONSABILIDAD CIVIL POR DAÑOS Y PERJUICIOS. VIOLACIÓN AL DERECHO DE USO EXCLUSIVO DE MARCAS. ES CONDICIÓN PARA SU PROCEDENCIA EL PRONUNCIAMIENTO FIRME DE ILICITUD POR PARTE DEL INSTITUTO MEXICANO DE LA PROPIEDAD INDUSTRIAL (PROCEDIMIENTO MERCANTIL)” at Semanario Judicial de la Federación y su Gaceta, Ninth Period, Volume XVII, March 2003, page 1680 (Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=184719&Dominio=Localizacion&TA_TJ=2&Orden=1&Clase=DetalleTesisBL&NumTE=1&Epp=20&Desde=-100&Hasta=-100&Index=0&InstanciasSeleccionadas=6,1,2,50,7&ID=184719&Hit=1&IDs=184719&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=. Date of review: January 14, 2019.)

[3] “PROPIEDAD INDUSTRIAL. ES NECESARIA UNA PREVIA DECLARACIÓN POR PARTE DEL INSTITUTO MEXICANO DE LA PROPIEDAD INDUSTRIAL, SOBRE LA EXISTENCIA DE INFRACCIONES EN LA MATERIA PARA LA PROCEDENCIA DE LA ACCIÓN DE INDEMNIZACIÓN POR DAÑOS Y PERJUICIOS”, at Semanario Judicial de la Federación y su Gaceta, Ninth Period, Vol XIX, May 2004, page 365 (Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=1a.%2FJ.%252013%2F2004&Dominio=Rubro,Texto&TA_TJ=2&Orden=1&Clase=DetalleTesisBL&NumTE=1&Epp=20&Desde=-100&Hasta=-100&Index=0&InstanciasSeleccionadas=6,1,2,50,7&ID=181491&Hit=1&IDs=181491&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=. Date of review: January 14, 2019).