The lockdown started on March 24 and ended on July 12, 2020. All deadlines due between March 24 and July 12 were extended to July 13, 2020. Further, all terms calculated in days were suspended during the lockdown, and started running again on July 13.

Notwithstanding the above, the MPTO enabled a “buffer” period in the previous week (July 6 to July 10) to allow applicants to file all sorts of documents in paper at the window of the MPTO, and avoid unmanageable crowds on the first business day.

The MPTO was busy during the lockdown: It enabled new online systems to encourage e-filings, instead of the traditional paper filing at the window of the MPTO. According to the rules of the lockdown, documents and applications filed online and at the window in the “buffer” week during the lockdown, will have as official filing date July 13, 2020. In the case of new applications, since all of them will have July 13, 2020, as filing date, priority will be set according to the serial number of the new applications.

New Federal Law for the Protection of Industrial Property

The new Federal Law for the Protection of Industrial Property (FLIP) was published in the Official Journal of the Federation on July 1st, 2020. It will enter into force on November 5, 2020 and will substitute the current Industrial Property Law (old IPL) enacted in 1991. However the old IPL and the FLIP will coexist for some time.

The main purpose of the new legislation was incorporating the more recent commercial agreements Mexico has signed, especially the United States Mexico Canada Agreement (USMCA). Nevertheless, Mexican law states that a provision stated in an international treaty, such as the USMCA, may be applicable directly in favor of an individual or entity if it stipulates a specific right in benefit of such an individual or entity, even in the absence of local legislation.

The new law provides a more coherent and better structured legislation, not entirely free of some inconsistencies and voids.

FLIP also incorporates some practical guidelines already set by the examiners of the MPTO during the last years, giving applicants mores certainty in some fields of patent and trademark examination.

Pending of new Rules, the Rules of old the IPL will continue in force.

FLIP incorporates most of the 2018 amendments to the IPL. There are substantive changes in the fields of trademarks and industrial designs, but the most relevant changes are in patents and enforcement.

This article will mainly highlight the changes between the old IPL and the new FLIP, rather than making a comprehensive explanation about the new legislation. Future articles and updates will discuss specific issues in FLIP.

A. Inventions

A.1. Double patenting is now expressly forbidden (article 50 FLIP).

A.2. Explicit acknowledgement of patentability of microorganisms and biological material that has been isolated of its natural environment and obtained through a technical procedure (article 49 FLIP).

A.3. Inventions that may put people’s or animals’ life or health at risk, including inventions related to human cloning, human genetic material o the industrial or commercial use of human embryos, may not be patented (article 49 FLIP).

A.4. The Roche-Bolar defense is now part of the statute, without a time limit. A patent may not be enforced against a third party that uses, makes, offers in sale or imports a product claimed in a patent, only if such activities are aimed to generate tests, data and experimental production required to obtain a marketing authorization of a medicine for human health (article 57, paragraph II, FLIP). This defense was already stipulated in the Rules of Health Supplies.

A.5. Patents cannot be extended; the term is still 20 years counted from the filing date. However, the rights provided by a patent may be extended up for five years by means of a Supplementary Certificate, if there was an unreasonable delay in the grant of the patent (articles 126 to 136 FLIP).

A.6. Clearer and more comprehensive rules for divisional patent applications, especially voluntary divisional applications. The new law provides an extremely broad authority for the MPTO to decide if it accepts a divisional application from an already divided application (articles 100 and 102 FLIP).

A.7. Claims may not be constructed beyond the subject matter protected by the patent (article 55 FLIP).

A.8. The new term of utility models will be 15 years counted from the filing date, instead of 10 years (article 62 FLIP).

A.9. The causes to invalidate a patent have been limited to the cases expressly stated in the new statute. There is no statute of limitations to file an invalidation action against a patent (article 154 FLIP).

A.10. Detailed rules and procedure to request the limitation of the rights provided by a patent or correct mistakes (articles 121 a 125 FLIP).

A.11. Software is still not considered an invention, but in itself (article 47, paragraph V, FLIP).

A.12. FLIP provides a twelve-month grace period for inventions disclosed directly or indirectly by the inventor or the assignee and also by third parties that obtained the disclosed information from the inventor or the assignee. Such a disclosure would not affect the novelty of the invention.

B. Distinctive signs

B.1. The term of registered trademarks –including collective and certification marks-, registered slogans and tradenames, will be ten years counted from the date of registration or publication, instead of ten years from the filing date (articles 178, 204 and 211, FLIP).

B.2. Instead of a formal and substantive examination, there is now a single exam (article 225 FLIP).

B.3. The description of goods or services in a trademark application has to be determined and specific. We still do not know if multiple-class applications will be accepted; the Rules of FLIP will stipulate it (articles 176 FLIP and 57, paragraph I, of the Rules of the old IPL).

B.4. Oppositions. The consequences of filing oppositions are more serous now for all involved parties:

B.4.a. Unsuccessful oppositions will cause the opponent losing the right to file an invalidation action, using the same arguments and evidence, against the opposed trademark after its registration (article 259 FLIP).

B.4.b. The trademark applicant will have two months to answer the opposition and file all the evidence to support the right to the trademark. If the applicant does not answer the opposition, the trademark application will become abandoned (article 225 FLIP).

B.5. The MPTO may start ex officio an invalidation action against a trademark that identifies a product that, being subject of some regulation or specific legislation, breaks the applicable rules or provisions (article 178 FLIP). It is a new and odd provision, that stipulates losing trademark rights as a penalty due the infringement of laws or regulations not related whatsoever to the trademark.

B.6. Trademark coexistence agreements and letters of consent are still binding for the MPTO, but there are some changes. FLIP now provides that consent and coexistence agreements are acceptable for identical or confusingly similar trademarks to identify similar goods or services (article 123 FLIP). The consent is no longer valid to overcome the anticipation if the trademarks cover the same goods or services.

B.7. Declarations of actual and effective use. Trademark owners must file a declaration of actual and effective use after when renewing and after the third anniversary of issuance of the registration. The transitory articles of FLIP clarified that the burden of filing the declaration of use after the third year is due only for registrations issued on August 10, 2018, and thereafter. If the declaration of use were not filed when renewing, as it will happen with International Trademark Registrations issued according the Madrid Protocol, the MPTO will issue an office action requesting such a declaration within a two-month term (article 237 FLIP). These are very good news for Madrid trademark owners, although we do not know how the MPTO will notify such a request: (i) through a notice to WIPO; or (ii) through a notification in the Official Gazette.

B.8. FLIP now expressly provides that the goods or services described in trademark registrations shall be limited to the ones stated in the declarations of actual and effective use (articles 233 and 237 FLIP).

B.10. FLIP will allow partial cancellation and invalidation actions, so the invalidation or cancellation may affect only some of the goods or services listed in the registration (articles 258, paragraphs II and IV; 260, paragraph II, FLIP).

B.10. FLIP gave a blow to the date of first use, by stating that a trademark may be invalidated if the right holder does not prove that the date of first use stated in the trademark application is true (article 258, paragraph III, FLIP).

C. Appeals of Origin

C.1. FLIP regulates appeals of origin and geographical designations. However, FLIP defines the appeal or origin in a weird way: “a product linked to the geographical area it comes from, if its quality, characteristics or reputation are exclusively or essentially because the geographical origin of the raw materials and production process and the natural and human factors that influence the product”. FLIP should have defined the appeal of origin as a geographical name used to name a product originated from such area, not as a product. This change in the statute increases the differences between the Mexican legislation and rules about appeals of origin and the Lisbon Arrangement.

D. Contentious procedures

D.1. Now there is a limited list of causes that may lead to the invalidation of a Mexican patent. There is no general cause of invalidation of a patent and a patent may not be invalidated due procedural flaws during the examination of the application. (articles 154 y 258, paragraph I, FLIP).

D.2. FLIP now stipulates that the invalidation of a trademark registration has retroactive effects. And the cancellation due lack of use has consequences from the date the decision is issued. The invalidation of a patent also has retroactive effects, but such consequence was already provided in the old IPL. (article 159 and 263, FLIP).

D.3. FLIP now provides rules for a conciliatory procedure to try to settle infringement actions (articles 372 to 385, FLIP).

D.4. Manufacturing, offering in sale, transporting, storing, distributing, importing and exporting goods or services identified with a trademark or incorporating an utility model, industrial design or layout design (topography) is considered “use” of such trademark, utility model, industrial design or layout topography design and, if not authorized, a cause of infringement. It is no longer required proving that the infringer knew that the registered trademark, utility model, industrial design or layout topography design was illegally used. (Articles 386, paragraphs IX, X, XI, XIII, XVII and XXI, and 387, FLIP). These new provisions significantly increase the potential liability of retailers.

D.5. Offering in sale patented goods or goods that were obtained using  a patented process, without authorization, is an infringement, even if the infringer did not know about the patent rights (article 386, paragraphs VI and VIII, FLIP).

D.6. The MPTO has, under FLIP, authority to impose and collect fines, as a tax authority (articles 5°, paragraph VI, and 393, FLIP).

D.7. FLIP provides that he MPTO has authority to calculate and award damages and loses after issuing an infringement decision (article 396, paragraph I, FLIP).The MPTO may not award attorney’s fees. The MPTO’s decision awarding damages or loses has to be enforced by a court of common jurisdiction.

D.8. Under FLIP, the owner of a registered trademark or patent, and the licensee, may claim with a court of common jurisdiction damages and loses from due the illegal use of the trademark or patent, without a prior infringement decision from the MPTO (article 396, paragraph II, FLIP).

D.9. FLIP, and the old IPL, provides punitive damages and loses, and different ways to calculate it. Under FLIP, the minimum amount of the punitive damages would be the equivalent of the 40% of the “legitimate value index”. Different sources may be used to set the legitimate value index: the retail price of the legitimate goods, the profits that the rights holder lost, the profits earned by the infringer or the commercial value of a contractual license. (article 396, paragraphs I, II, III y IV, FLIP).

In any case, the plaintiff would have to prove it suffered an actual damage or loses and the consequential link between the infringement and such actual damages or loses.

D.10. The courts are authorized to enforce the preliminary measures provided in FLIP and the international treaties (article 408, paragraph I, FLIP).

D.11. The alleged infringer may ask the MPTO or the court to lift the preliminary measures by filing a counterbond but, under FLIP, the MPTO or the judge must evaluate the prima facie affected IP rights, the possible harm that the preliminary measures and the lifting of the preliminary measures may cause to the IP owner and the alleged infringer and the impact on public good before deciding. There is no “cap” for the amount of the counterbond, as in the old IPL (article 346 FLIP).

E. Contracts regulated by FLIP

E.1. Licenses. There is no need to record the license so the use of the trademark or patent is deemed as performed by the right holder (articles 138 and 240, FLIP), as stated in TMEC. No license recordal is required either to allow the licensee file infringement actions against third parties (unless the license expressly states otherwise). The law does not state either that the recordation of the license is necessary to the license becomes enforceable against third parties, such as good faith assignees.

E.2. Creditors and beneficiaries of securities and guarantees recorded with the MPTO are entitled to file the application for the renewal of the trademark registration without filing the declaration of actual and effective use. The law is silent about if creditors and beneficiaries of securities affecting patents, industrial designs, utility models and layout topography designs are entitled to pay maintenance annuities.

La entrada News from Mexico: the end of lockdown and a new patents and trademarks law se publicó primero en Reyes Fenig.

One of the measures to try to slow down the spread of the disease is stopping non-essential activities, both in the government and private sectors.

Naturally, these measures have affected the industrial property system.

The Mexican Patent and Trademark Office

On March 23, 2020, the Instituto Mexicano de la Propiedad Industrial (IMPI) or Mexican Patent and Trademark Office (MPTO) issued an order, suspending all deadlines due after March 24 and April 19, 2020; all such deadlines were extended for an undetermined period that will be reviewed in weekly basis. to April 20, 2020 (Update April 19, 2020: The suspension of deadlines has been extended to May 4, 2020 Update April 30: The suspension has been extended. Now all deadlines due between March 24 and May 31 are due on June 1, 2020).  Although the order does not provides that all days after between March 24 and April 19, 2020, are non-business days, no documents or applications may be filed, or notifications served, within such period (Update April 19, 2020: The MPTO started accepting online applications and documents related to trademarks and patents on April 16, 2020. Deadlines are still suspeded, but it is unclear if the filing date of such electronic documents would be the actual filing date or the date when the MPTO opens again. Update June 5, 2020: On May 13, 2020, the MPTO enabled an online platform that allows electronic filing of renewals, declarations of use, licenses and assignments. The MPTO plan this platform to be permanent). Terms calculated in days (such as the 10 business-day term to answer an infringement action) have been suspended. A copy of the order (in Spanish) and the updates thereof (in Spanish) are available here, here,  here and here.

The suspension does not affect the terms calculated in months or years. For example, if the MPTO served an officeaction regarding the examination of a patent or trademark application on February 22, 2020, the initial two-month term to answer would be calculated as normal and the answer would be due on April 23, 2020. The only change would be the deadline; if  the answer was originally due between on or after March 24 and April 19 May 3, May 31, 2020, the deadline would be extended to the first business day of the MPTO after the suspension April 20 May 4 June 1, 2020; and the automatic two-month term extension would start the day after on April 21 May 6, June 2 2020 (May 5 is holiday).

For a few days, between March 24 and March 26, 2020, the MPTO was on partial lockdown. Documents and applications on paper were received at the window of the MPTO, but the filing date of all such documents would be April 20, 2020 June 1, 2020 the first business day after the lockdown. Electronic documents and applications were not accepted (Update April 19, 2020: Starting April 16, 2020, the MPTO is acepting online application and documents again).

On March 26, 2020, the MPTO widened the suspension of activities. Starting March 27, the MPTO has suspended virtually all acivities and the offices are closed. The only exceptions are actions essential for the mitigation of the Covid-19 outbreak and enforcement of orders to lift preliminary measures issued in infringement procedures. The new order (in Spanish) is available here.

The MPTO refrained from providing a schedule to restart activites. That would be decided in weekly basis and in coordination with the federal sanitary auhtorities. is scheduled to restart normal operations again on April 20 June 1, 2020.

The Federal Court of Administrative Affairs and the federal courts of appeals

The courts also shut down. (Update April 30, 2020: The Federal Courts are under partial lockdown, and provisions to allow online meetings between the judges have been enacted. Urgent matters will have preference, but online meetings should help to reduce the growing backlog of decisions. All terms and deadlines have been suspended; deadlines due between March 18 and May 31 have been extended to June 1, 15, 2020).

The Tribunal Federal de Justicia Administrativa or Federal Court of Administrative Affairs (FCAA) and all its panels, including the the Sala Especializada en Propiedad Intelectual or Specialized Panel in Intellectual Property, and the tribunales colegiados de circuito or federal courts of appeals, closed on March 18, 2020. A few district courts and courts of appeals are open for emergency cases only. (Update April 30, 2020: The panels of the FCAA are working online to decide urgent matters).

In both the FCAA and the courts of appeals, all days between March 18 to April 19, May 31, June 14, 2020, would be considered as non-business days, and would not be counted for terms calculated in days (such as the term to file an appeal against a decision of the MPTO).

The courts are scheduled to start working again on April 20, 2020 (Update April 19, 2020: The courts are now scheduled to restart activities on May 6, 2020 Update April 30, 2020: The courts are scheduled to restart full activities on June 1, 2020. Update June 5, 2020: The courts are scheduled to restart full activities on June 15, 2020). All deadlines due between March 18 and May 431 June 14, would be extended to April 20, May 6 June 1 15, 2020.

The setting of a possible date to restart normal activities (April 20, 2020) was not based on scientific data, but to match the date students go back to school after the Easter holidays.

The non-business period may be extended, depending on how the Covid-19 outbreak develops.

Dear reader, please stay safe and help others staying safe.

La entrada The temporary shut down of the Mexican Patent and Trademark Office and courts (updated to June 5, 2020) se publicó primero en Reyes Fenig.

Civil actions for indemnification of damages due trademark and patent infringement are unusual if compared with the number of administrative infringement actions. The main statutory provisions regarding payment of damages are articles 221 and 221 Bis of the Industrial Property Law, enacted in 1994.

Section 221 Bis of the Industrial Property Law states that the amount of the indemnification due violation of the rights stipulated in the statute shall be no less than the equivalent of 40% of the retail price of the goods or services sold or rendered in violation of such rights. The claim for damages has to be filed with a court of common jurisdiction.

A landmark decision was the 2004 jurisprudencia or binding precedent 1a./J. 13/2004[1] from the Mexican Supreme Court (MSC). The binding precedent was a consequence of contradictory decisions issued by lower court, namely, if it was necessary to have a final infringement decision issued by the Mexican Patent and Trademark Office (MPTO) as a prerequisite to file a civil action for damages (read our article  Damages claims due patent and trademark infringement).

After the binding precedent 1a./J. 13/2004, the MSC has issued a handful of decisions in about the civil action of indemnification of damages associated to patent and trademark infringement (copyright too), none of them binding. From the decisions of the MSC, I have extracted a few basic guidelines:

a) It is necessary to have a final infringement decision from the MPTO before filing a civil action for indemnification of damages.

b) The court where the civil lawsuit has been filed cannot review the MPTO’s decision about the infringement.

c) The plaintiff has to prove, in the trial, that the infringement caused actual damages.

d) The plaintiff must also prove the cause-effect relation between the infringement and the actual damages.

e) Civil actions for damages that involve trademark or patent rights originated from a contractual dispute (such as a breach of a license agreement), or that are not related to a cause of administrative infringement (i.e. a criminal case), do not require a previous infringement decision from the MPTO.

Issues identified as a), b), c) and d) were stated in the 2004 binding precedent from the MSC. As a consequence, and until very recently, I thought there would be little controversy about them in indemnification cases associated to trademark and patent infringement.

On December 2017, the Judicial Journal of the Federation published a non-binding decision from the MSC, regarding the constitutional validity of article 221 Bis of the Industrial Property Law[2]. Basically, the MSC ruled that the lack of identification of the specific industrial property rights that, if infringed, would allow the claim of payment of damages provided by article 221 Bis of the Industrial Property Law, does not make the statutory provision unconstitutional.

Of course, the precedent of the MSC was very important, and confirmed the standing of the Court on different technical issues (namely the ones identified as a), b), c) and d) above) around the action for indemnification of damages because of patent and trademark infringement. However, making a little research, I found that the underlying civil case (from 2013) was even more interesting because the lower tribunal colegiado or court of appeals disagreed with some critical positions that the MSC has adopted since 2004 in different decisions.

Because of a number of technical reasons, the MSC did not review the merits of the underlying civil case in the decision published in 2017, only the constitutionality of article 221 Bis of the Industrial Property Law.

The underlying civil case was decided by the Octavo Tribunal Colegiado en Materia Civil del Primer Circuito or Eight Panel of the Federal Court of Appeals in Mexico City (Eight Panel)[3] on May 8, 2013. (Update February 27, 2019: The case number was D.C. 153/2013. The public version of the full decision (in Spanish) may be downloaded here).

The Eight Panel ruled that the precedent 1a./J. 13/2004 of the MSC was binding only about having a final infringement decision from the MPTO as a prerequisite for a civil action for indemnification of damages. Other questions stated in the precedent are just “orientations” (unfortunately the Eight Panel did not state a statutory provision, precedent or legal theory supporting the ruling).

Therefore, the Eight Panel decided that, on a damages case based on section 221 Bis of the Industrial Property Law, the plaintiff does not have to prove actual damages or the cause-effect relation between the infringement (previously declared by the MPTO) and the actual damages. The plaintiff only has to prove the amount of the sales at retail price of the infringing product/service, and calculate the equivalent to 40% in order to obtain the amount that, as a minimum, the plaintiff has the right to collect as indemnification from the infringer/defendant.

If other federal panels and state courts follow the Eight Panel’s example, we may see in the next years a revival of successful lawsuits for indemnification of damages due to patent and trademark infringement in Mexico. It will also be interesting to see if the MSC will have something to say about the non-binding “orientations” that the Eight Panel and potentially other courts will start finding in the binding precedents of the MSC.

[1] “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).

[2] “PROPIEDAD INDUSTRIAL. EL ARTÍCULO 221 BIS DE LA LEY RESPECTIVA NO CONTRAVIENE EL PRINCIPIO DE SEGURIDAD JURÍDICA” at Semanario Judicial de la Federación, Décima Época, Book 49, Vol I, December 2017, page 437 (Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=%25202015750&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=2015750&Hit=1&IDs=2015750&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=. Date of review: January 19, 2019).

[3] While all decisions from the different federal courts and panels are of public record and everybody may request a copy (with personal information redacted), not all decisions are published as precedents. It is up to each court and panel deciding if the case is relevant enough to be published in the Judicial Journal of the Federation. The decision of the underlying civil case rendered by the Eight Panel on May, 2013, was not published. (Update February 27, 2019: You may download the public version of the full decision (In Spanish) here)

La entrada Damages claims due infringement of trademarks and patents in Mexico. Who has the final saying? se publicó primero en Reyes Fenig.

One change that has not received much attention is referred to the Government Fee, and how it is calculated according to the amendment published on April 26, 2018 (Update October 30, 2018: An additional amendment was published on August 7, 2018).

Good news first: The government fee for new patent filings was cut by almost half.

Bad news: Under the new fee, long applications will pay more.

Under the old fee, the number of drawings or claims or the number of pages was not relevant to calculate the government fee. It was the same fee for short applications than for long applications.

The government fee is now calculated according to the total number of pages of the specification, drawings and formal documents (such as priority application, power of attorney and assignment). The flat minimum fee applies only to patent applications with 30 pages or less, considering all the above-stated documents. For every page over 30 pages, the applicant will have to pay between US$4.00 and US$5.00. Amino-acid sequences will not be considered for the calculation of the fee, if the patent application is filed electronically.

Since the only documents to be considered to calculate the government fee are the ones enclosed to the application form, this new way to determine the fee will encourage applicants to file patent applications with the fewest possible number of pages: more figures might be included in each page; applicants may prefer filing formal documents (assignment, POA and priority document) and the Spanish translation of the specification and claims at a later stage after the filing of the application (English uses fewer words than Spanish and rules regarding letter size and margins apply only to the Spanish translations. Don’t be surprised if a 37 pages long specification in English results in a 56 pages long Spanish translation).

(Update October 30, 2018: A further amendment to the Government Fee published on August 7, 2018, set some rules to clarify how to calculate the amount of the government fee due in a patent application: 1. Only the official application form, specification, claims, abstract and drawings shall be considered to calculate the number of pages of the application, thus, the amount due; 2.  The government fee should be calculated based on the Spanish text or Spanish translation of the specification, claims, abstract and drawings. This means that the amount paid when filing the patent application might not be final if the specification, claims and/or drawings were filed in English or any other language different than Spanish.  As I stated above, English uses fewer words than Spanish, so most likely the application will have to make an additional payment when filing the Spanish translation).

In spite of the changes to the rules regarding the government fee, the Mexican Patent and Trademark Office did not include a definition of small entity, as a general concept applicable to domestic and foreign small entities. Instead, the rules provide a reduced rate to inventors, universities, government research entities and “micro y pequeñas industrias”, as defined by the Mexican Ministry of Economy.

The definition of “micro” and “pequeñas industrias” is stated in the “Ley para el Desarrollo de la Competitividad de la Micro, Pequeña y Mediana Empresa”[1] or Act for the Development of Competitiveness of Micro, Small and Medium Businesses. The act refers and governs Mexican businesses only. Therefore, the reduced fee for “small entities” does not refer to foreign entities, regardless the size. Applicants from abroad should be careful when claiming “small entity status”, even if the Mexican Patent and Trademark Office currently accepts the small entity claim. The courts might not be that flexible.

[1] See Diario Oficial de la Federación, December 30, 2002; amended in Diario Oficial de la Federación, June 6, 2006; August 5, 2011; January 18, 2012;  January 21, 2015; December 1, 2016; May 19, 2017.

La entrada Change in the government fee will impact patent practice in Mexico. se publicó primero en Reyes Fenig.

The most important changes were the introduction of a special statutory protection for geographical indications and amendments to the statutory provisions about industrial designs, including the term of protection.

The amendment to the statute became effective on April 27, 2018.

In this second part, I will comment on the amendments affecting the protection of geographical indications.

Geographic indications 

The Mexican statute now provides a special protection of geographical indications through a registration issued by the Instituto Mexicano de la Propiedad Industrial or Mexican Patent and Trademark Office (MPTO). A geographical indication is the name of a geographical zone or a name that includes such geographical name or a reference to a geographical zone, that identifies a product as originated from such a zone when its quality, reputation or other characteristic is mainly caused because of its geographic origin.

Mexican law has provided protection for Appeals of Origin for many years. Geographical Indications and Appeals of Origin share some characteristics: they are both geographical names used to identify a product originated there. However, in the case of Appeals of Origin, all the characteristics of the goods that use them are consequence of their geographic origin. Geographical Indications are more flexible about the link to the geographical origin of the goods; if juts one of the characteristics of a product is essentially a consequence of the geographic origin, that is enough to justify the protection of the Geographic Indication.

I have to clarify that Mexico has adopted the use of Appeals of Origin in a very liberal way. For example, “Tequila”, perhaps Mexico’s best known appeal of origin; there are some facts that might call the reader’s attention: Tequila is the name of a town and a municipio or region in the western state of Jalisco known for the production of the blue agave spirit named “tequila”. Nevertheless, there is legitimate tequila produced outside the Tequila region, even outside the state of Jalisco. For example, there is tequila legally identified with the appeal of origin produced in the area of Pénjamo, state of Guanajuato. It is obvious that such a diversity of geographical locations seems inconsistent with an appeal of original, but that is the current state of things in the case of tequila.

Before the March, 2018, amendment to the statute, the protection of Geographical Indications was provided, not with a special registration, but through the legal stipulations against unfair competition. Now there is a special registration for Geographical Indications that would give exclusivity rights. Geographical indications existed before the amendment to the law, but nobody owned them; after registration, the owner will be the federal government.

There are two main reasons behind the creation of a registration for geographical registrations*: On one hand, give consumers certainty about the origin of the goods they purchase; on the other hand, the Geographical Indication may add value to goods from certain region, town or ethnic group, if any of its characteristics is directly related to the geographic origin.

Since registered geographical indications will be owned by the federal government, producers will have to apply for a license to use them through the MPTO.

As for foreign geographical indications and appeals of origin, the amendment created a special registration. The purpose of the registration is give owners of foreign geographical indications or appeals of origin certainty in Mexico by making the general public aware of the existence of the appeal of origin or geographical indication and entitling the entities that appear in the registration as owners of the geographical indication or appeal of origin to file actions against infringers.

This new registration system for appeals of origin and geographical indications add to the protection that Mexico had already the obligation to protect according to the Lisbon arrangement and the Agreement for Economic Cooperation between Mexico and the European Economic Community, regardless if such foreign appeal of origin or geographical indication is recorded in the new registration.

The statute has been amended to explicitly state as a cause of infringement using an appeal of origin or geographical indication, registered or unregistered, Mexican or foreign, without authorization.

Finally, on May 18, 2018, Mexico enacted the most relevant amendments to the trademark law in the last 30 years. A future post will comment on that.

* I thank my colleague Alejandro Luna Fandiño, Chair of the Legislation Committee of the Mexican Chapter of AIPPI, for kindly providing the project of the amendments to the Industrial Property Statute.

Diario oficial 13-mar-18 (diseños)

La entrada Mexico amends the Statute regarding industrial designs and geographical indications (Part 2 of 2) se publicó primero en Reyes Fenig.

The most important changes were the introduction of a special statutory protection for geographical indications and amendments to the provisions regarding industrial designs, including the term of protection.

The amendments to the Statute will become effective on April 27, 2018.

In this first part, I will comment on the amendments affecting the protection of industrial designs.

Industrial Designs

1. The term of protection of industrial designs was amended.

The old term was fifteen years counted from the filing date in Mexico. The new term will be five years from the filing date, renewable for five terms for a maximum term of twenty five years. The window to renew will start six months before the expiration date of the design registration, with a grace term of six months.

2. Design applications still pending on the date the amendments become effective will be examined according to the old provisions, unless the applicants file a written petition within a thirty business-day term, asking the Mexican Patent and Trademark Office (MPTO) to examine applications and grant issue registrations under the amended provisions. The deadline to ask the MPTO to examine applications under the new provisions will be June 11, 2018.

3. Existing design registrations will maintain their original fifteen years term, subject to the payment of the usual maintenance annuities, but they may be renewed for up to two five-year terms. The renewal application must be filed within six months before the date of expiration or within the following six-month grace term.

4. The amended statute intends to provide more accuracy to define novelty regarding industrial designs.

The Industrial Property Statute states that industrial designs may be registered if they are new and may be used in industry; that did not change. The statutory provision also states that a design is deemed to be new of they are of “independent creation and differ in a significant manner of known designs or combinations of characteristics of known designs”; that did not change either.

 The new thing is that, now, the amended statute explains that a design is of independent creation “if no other identical industrial design was publicly disclosed before the filing date of the application or the acknowledged priority”. Designs that only differ in “irrelevant” details will be considered identical. It will be up to the MPTO (and eventually the courts) to decide when a detail is irrelevant.

Further, the amended provisions stipulate that in order to decide whether a design actually differs in a significant manner from earlier disclosed designs, it will be necessary to consider the general impression that the design would cause on an expert on the subject matter and to the general impression caused by any other industrial design publicly disclosed before the filing date of the design application or the acknowledged priority, taking always in account the degree of freedom for the designer to create the industrial design.

The lawmakers that proposed the bill* explicitly explained that the purpose of the above amendment was to make novelty examination and prosecution of industrial design applications easier. However, I have doubts that they accomplished their aim. The demand of considering the impression that the design would cause on an expert, not just a person skilled in the art, seems out of proportion. Further, the amended statutory provision refers to an expert on the subject matter; what subject matter? I wonder if the examiners will need to have a PhD in Aesthetics to be deemed as an expert in the subject matter.

5. The Mexican statute allowed industrial designs to be registered in reference to a genericity of products. Now, the amended statute requires the applicant to identify the specific product on which the industrial design would be used.

6. The original bill proposed that industrial design registrations might also protect the design of handcrafts.

However the enacted amendments make no reference to handcrafts. It is not clear to me what happened at Congress and why the lawmakers decided to remove the explicit reference to handcrafts.

7. Before the changes in the Statute, design applications were not published; now they will be published as soon as the formal examination is completed.

8. Last but not least, one consequence of the amendments to the Industrial Property Statute is that official records of published patent, utility models and industrial design applications will become of public record just after the publication. Before the amendment, access to the official records of published patent, utility models and industrial design applications were very limited, even after the publication of the application. This change in the law is consistent with one of the main explicit purposes of the Industrial Property Statue, namely, encourage dissemination of information and technological knowledge. Further, allowing third parties to have full access to all the information stated in the patent/design/utility model application might give third parties a timely warning to avoid infringing the potential rights of the applicant.

* I thank my colleague Alejandro Luna Fandiño, Chair of the Legislation Committee of the Mexican Chapter of AIPPI, for kindly providing the project of the amendments to the Industrial Property Statute.

Diario oficial 13-mar-18 (diseños)

La entrada Mexico amends the Statute regarding industrial designs and geographical indications (Part 1 of 2) se publicó primero en Reyes Fenig.

I can remember the huge optimism around free market and trade liberalization when I was at Law School in the mid-nineties. The triumph of economic and political liberalism in most of the world seemed secured.

However, security concerns, inequality, distrust in the traditional political elites and fear of “others”, have caused some countries to take steps in unexpected directions. I do not see a revolutionary change, but we are seeing scenarios that were unthinkable five years ago.

One victim of the change og the tide has been NAFTA.

Readers should know that the implications of NAFTA in Mexico were huge, far beyond trade. For Mexicans, it was assuming a different role in the world. Needless to say, NAFTA deepened an already fundamental relation between Mexico and the US (the relation with Canada is important, but far from the relevance of the relation with the United States). As the well-known Mexican historian Lorenzo Mayer explains:

NAFTA was one of the most important symbolic moments in the Mexico-US relations since the formal alliance between the two countries in World War II. The agreement highlighted the failure of the development model known as Mexican economic nationalism, became a personal triumph for President Carlos Salinas and a collective triumph for the then ruling group in Mexico. After NAFTA, the state policies that were in place in Mexico, from the Mexican Revolution to the policy toward Central America in the eighties, were forgotten. Instead, Mexico adopted an administrative policy that may be called a new “special relationship” with the only Superpower of the end of the 20^th Century[1].

NAFTA had profound effects in the regulation of IP rights in Mexico. Large parts of the Mexican statutes regarding trademarks, patents, vegetal varieties and copyright were direct consequence of NAFTA. Now that that the survival of NAFTA is compromised, one may ask if the end of the trade agreement would impact the Mexican IP legislation.

Making predictions is a risky activity, but I think I can make a few reasonable guesses:

1. The United States, Canada and Mexico will continue being neighbors and trade will continue. In spite of the alleged efforts to diversify the destiny of exports, Mexico will continue highly dependent of trade with the United States and the relation will continue being highly asymmetric.
2. Economies in the three NAFTA nations will suffer; less in the United States and Canada than in Mexico, especially due decreased growth and investment rates in our country. Of course, there also will be winners.
3. Trade rules will change, but not too much. Mexico, the United States and Canada are still members of the World Trade Organization (WTO) and its rules would apply. The advantages of NAFTA would be gone, but Mexico is not going back to protectionism and import substitution industrialization policies.
4. It is unlikely that the end of NAFTA will cause a setback in the current protection of IP rights in Mexico. Even without NAFTA, our country would still be a party of many bilateral and multilateral agreements (notably, the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS) that bind Mexico to keep the current legislation.
5. On the other hand, without NAFTA, Mexico will have little incentives to enhance the protection of IP rights, mainly in the field of technological innovation, where our northern neighbor enjoy a dominant position. I can think about a few examples of “not-happenings” if NAFTA ends: a) extending the term of patents due unjustified delay in examination or in issuance of marketing authorizations; b) providing a better regulation to the “non-reliance” aspect of efficacy and security data for new chemical entities to be used in pharmaceuticals and agrichemicals[2]; c) providing a minimum exclusivity term for sad data[3]; d) extending the patentability of certain developments that today are not even considered inventions, and; e) providing some sort of provisional protection procedures for inventions that are subject matter of published pending patent applications.

We do not know what the future of NAFTA will be; last October, some pessimistic estimates calculated that that the chances of survival of NAFTA were less than 50%[4]. If negotiations are not succesful and NAFTA ends, it would certainly not be the end of the world but, whatever the outcome may be, Mexicans should think again what kind of relation we want with our North American neighbors and the rest of the world.

[1] Josefina Zoraida Vázquez and Lorenzo Meyer, México frente a Estados Unidos. Un ensayo histórico, 1776-2000, 4^th ed., México, FCE, 2001, p. 239.  The English translation is mine.

[2] Data protection regarding safety and efficacy of new chemical entities for medicines and agrochemicals have tow aspects: non-disclosure and non-reliance. Only non-disclosure is properly covered by the statute and regulations, while non-reliance enjoys a weak protection, limited to pharmaceuticals, from an administrative internal guideline of the Mexican FDA. Such guideline may be easily suspended or terminated at any time.

[3] TRIPS does not provide a minimum term for data exclusivity. NAFTA states a minimum five years term, the same that the internal guideline of the Mexican FDA, although the guideline is applicable to pharmaceuticals only. The end of NAFTA will leave the term of data exclusivity in a weaker situation.

[4] “US demands raise fears that leaving NAFTA could hurt economy” at Chicago Tribune; electronic version at http://www.chicagotribune.com/business/sns-bc-us–nafta-in-danger-20171011-story.html. date of review: December 2, 2017.

La entrada What happens with IP in Mexico if NAFTA dies se publicó primero en Reyes Fenig.

On November, 2016, the Weekly Journal of the Federal Judicial Branch published a non-binding decision by one of the panels of the Court of Appeals of the First Circuit, in Mexico City, regarding patent infringement.

Essentially, the court stated that there is patent infringement if the infringer, instead if using the invention according to the literal claims, obtained the same result by equivalent means, without involving an inventive step[1].

This is an important breakthrough in Mexican patent law. In a more general view, this is one of a significant number of relatively recent non-binding precedents from courts of appeals in Mexico City and the Specialized Panel in Intellectual Property of the Federal Court of Administrative Affairs (FCAA) that seek to improve the protection of IP rights in Mexico by means of a more liberal construction of the statutory causes of administrative infringement (punishable by the Mexican Patent and Trademark Office) provided in the Mexican Industrial Property Law.

This tendency of the FCAA and some courts of appeals in Mexico City was somehow announced by a non-binding precedent of 2013. In this precedent, the Eight Court of Appeals in Mexico City stated that the general provision against unfair competition provided by Section 213, paragraph I, of the Industrial Property Law may be considered as a last resource remedy that allows punishing actions that, in spite of harming IP rights, are not literally stated as administrative infringement in the Industrial Property Law.

For example, the Industrial Property Law does not state as a cause of infringement importing goods identified with trademarks identical or confusingly similar to one registered in Mexico to identify the same of similar products to the ones stated in the Mexican trademark registration. In order to cure that void, the FCAA ruled in a non-binding precedent published on August, 2015[2], that such an activity should be punished as unfair competition under the Industrial Property Law and the general provision against unfair competition (Section 213, paragraph I, of the Industrial Property Law[3]).

More recently, on March 2017, the First Court of Appeals in Mexico City published in a non-binding precedent[4] stating that importing a product using a registered industrial design may be punishable as administrative infringement under the general provision against unfair competition (again, Section 213, paragraph I, of the Industrial Property Law), in spite of the fact that importing goods that use registered industrial designs without authorization is not stated as an infringement in the Industrial Property Law.

Although the above-stated precedents are not binding, they are considered authoritative, so I expect that the Mexican Patent and Trademark Office and the FCAA will show a more favorable and flexible approach to infringement cases in the benefit of IP owners in the following months.

However, the liberal construction of the statutory causes of infringement provided in the Industrial Property Law has not been free of criticism. One important objection relates to a binding precedent from the Supreme Court[5] regarding the basic principles applicable to administrative infringements.

The Supreme Court ruled that some principles ruling criminal law are applicable to administrative infringements cases, namely, the principle about the definition of the offense or “tipicidad”: in order to make an action punishable, such action must be exactly stated as an offense in the statute. An action can’t be punishable using analogy or higher reason.

If the MPTO and the courts must construct the statutory causes of administrative infringement as narrowly as criminal offenses, I wonder if the flexible constructions of the general provision against unfair competition stated in paragraph I of Section 213 of the Industrial Property Law would meet the standard set by the Supreme Court.

[1] “Patente. La interpretación periférica, por identidad o por equivalencia, constituye un método para definir si un tercero ha invadido en perjuicio de su titular los derechos que derivan de esa exclusividad dentro de un procedimiento de infracción” at Gaceta del Semanario Judicial de la Federación, Tenth Period, Number 36, Volume IV, November 2016, page 2412. Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=interpretaci%25C3%25B3n%2520perif%25C3%25A9rica&Dominio=Rubro&TA_TJ=2&Orden=1&Clase=DetalleTesisBL&NumTE=1&Epp=20&Desde=-100&Hasta=-100&Index=0&InstanciasSeleccionadas=6,1,2,50,7&ID=2013115&Hit=1&IDs=2013115&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=.

[2] “Infracciones en materia de comercio. El abandono de la mercancía en aduana no exime de que se constituya una conducta infractora originada en la motivación psicológica del dolo al momento de realizar la importación” at R.T.F.J.F.A., Seventh Period, Year V, Number 49, August 2015, page 468.

[3] Section 213.- “It is an administrative infringement: I. Taking any action against the good uses and customs in industry, trade and services that imply unfair competition and related with the subject matter regulated by this Act”.

[4] “Diseño industrial. La importación de un bien protegido por un registro relativo sin consentimiento de su titular, constituye un acto contrario a los buenos usos y costumbres en la industria o comercio”, at Gaceta del Semanario Judicial de la Federación, Tenth Period, Number 40, Volume IV, March 2017, page 2695. Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/DetalleGeneralV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=IMPORTACI%25C3%2593N%2520DE%2520UN%2520BIEN%2520PROTEGIDO%2520POR%2520UN%2520REGISTRO&Dominio=Rubro&TA_TJ=2&Orden=1&Clase=DetalleTesisBL&NumTE=1&Epp=20&Desde=-100&Hasta=-100&Index=0&InstanciasSeleccionadas=6,1,2,50,7&ID=2013984&Hit=1&IDs=2013984&tipoTesis=&Semanario=0&tabla=&Referencia=&Tema=.

[5] “Tipicidad. El principio relativo, normalmente referido a la materia penal, es aplicable a las infracciones y sanciones administrativas” at Semanario Judicial de la Federación y su Gaceta, Ninth Period, Volume XXIV, August 2006, page 1667. Electronic version: https://sjf.scjn.gob.mx/sjfsist/Paginas/ResultadosV2.aspx?Epoca=1e3e10000000000&Apendice=1000000000000&Expresion=174326&Dominio=Rubro&TATJ=2&Orden=1&Clase=TesisBL&bc=Jurisprudencia.Resultados&TesisPrincipal=TesisPrincipal&InstanciasSeleccionadas=6,1,2,50,7&Hits=20.

La entrada A court opens the door to the Doctrine of Equivalents in Mexico se publicó primero en Reyes Fenig.

Virtually all final decisions that the Mexican Patent and Trademark Office (MPTO) and the Mexican Copyright Office (MCO) issue may be challenged with the FCAA. Technically speaking, the challenge with the FCAA is not an appeal, but a trial, where the MPTO or the MCO are the defendants; these procedures are often referred to as “nullity trials”. However, I think “appeal” is a good analogy, so that is how I am going to call the procedures to challenge the final decisions of the MCO and MPTO.

The main purpose of the amendments to the Statute was shortening the time that an appeal takes to be decided. The press release issued after the enactment of the amendment explicitly stated that the FCAA expected a drop of up to 50% in the timing of deciding an appeal.

Basically, the amendment cut the terms to file and oppose appeals, to file final arguments and to cure flaws in the brief, among others. For example, the term to file and oppose the appeal was 45 business days; now, it is 30 business days. We used to have 15 business days to file the final arguments; the amended term is only 5 days.

The amended Statute also seeks to force judges to issue decisions faster.

The amendments are not applicable to appeals filed before June 14, 2016.

Oddly enough, the Statute, as amended, has a handful of technical inconsistencies, evidencing that Congress was not careful enough when preparing the amendment. However, I think the inconsistencies will not be an actual source of concern.

Although the terms cuts seem a good measure to reduce the time an appeal takes to be decided, I wonder if that was all Congress could do to make the appeal proceedings with the FCAA faster.

Further, in an appeal against the rejection or abandonment of a patent, copyright or trademark application, cutting the term to file the appeal implies reducing the opportunity of the applicant to adequately prepare the defense of its rights against a possibly illegal, even abusive, decision. In a time when the defense of humans rights at Mexican courts has taken an unprecedented push, making it harder to applicants to challenge the decisions of the MPTO and the MCO does not seem to harmonize with the pro personae tendency.

La entrada Mexico expedites appeals se publicó primero en Reyes Fenig.

Under some extraordinary circumstances, it is possible to file an appeal against a decision of the MPTO with a Federal District Judge, but this not the rule and the appeal I will refer to in this article is the appeal with the FCTAA.

One of the rules of the appeals with the FCTAA has been that the appellant and the appellee may file new arguments and evidence that were not previously filed with the MPTO; we call this rule litis abierta.

The filing of new arguments and/or evidence in the appeal has caused the FCTAA to revoke some decisions issued by the MPTO, fully legal and consistent to what the parties argued and proved. Nevertheless, not all courts of appeals agree on how the litis abierta rule should be applied. The Fourth Court of Appeals in Mexico City was against the filing of new evidence of use in appeals associated to cancellation actions against registered trademarks due non-use.

A new binding precedent from the Supreme Court (73/2013)[1], published in July 2013, has set some limits to the possibility of filing new evidence in appeals, although the language the court used in drafting this precedent is ambiguous. Although the precedent does not affect the right to file new arguments in the appeal with the FCTAA, the court stated that it would not be valid to declare the invalidation of a decision based on the analysis of evidence that the appellant did not file in the original procedure in spite of having the obligation and being capable to legally do so.

The precedent was issued to solve contradictory rulings between courts of appeals. Although origin of the contradictory decisions and the precedent itself were associated to tax cases, it construes a statutory provision that applies to all appeals filed with the FCTAA, thus it will impact IP cases.

In my opinion, the language the court uses in the precedent is a little ambiguous and it raises some questions. I am concerned about the obligation of filing evidence. Under Mexican law, filing evidence is a burden, but not an obligation. Actually, some lawyers believe that proving is a right. So what did the court mean about having the obligation of filing evidence?

I think that filing evidence becomes an obligation when the government agency, i.e. the MPTO, issues a specific order requesting one of the parties to exhibit certain document in the procedure. If the MPTO issue an order requesting a specific document, then there was an obligation to file it. If the party that received the order to file the document did not do it, according to this binding precedent, it can’t file it later as evidence in the appeal. Further, any document that was not subject matter of an order from the MPTO to be filed in the invalidation/cancellation/infringement proceeding, may be filed as new evidence in the appeal, because there was no obligation to file it in the previous procedure.

However, I think the courts of appeals will construe the precedent 73/2013 in a broader way. While continuing accepting the filing of new arguments, I think the courts of appeals will decide against the filing of all new evidence in the appeal. As an example, the Tenth Court of Appeals in Mexico City construed the precedent 73/2013 in such a broad way when deciding the final appeal (amparo directo) DA 552/2013.

The litis abierta rule applicable to appeals with the FCTAA will probably continue evolving, and I hope the courts of appeals and the Supreme Court itself will publish new precedents clarifying and narrowing the broad construction of this relatively new precedent.

La entrada The Mexican Supreme Court sets limits to the filing of new evidence in appeals. se publicó primero en Reyes Fenig.