Both the old Industrial Property Law and the recently enacted Federal Law for the Protection of Industrial Property, state provisions that pose significant challenges, especially for holders of International Registrations. It is not that the Mexican legislation is particularly hostile to foreign applicants using the Madrid Protocol, but it ignores the special situation of users of the Madrid system before the Mexican legal system, namely, that they are not in Mexico.

The following are the three situations that, in my opinion, imply the biggest risk for Madrid users of losing the trademark protection in Mexico.

1. Oppositions.

Under the new law, if an applicant fails to answer an opposition within a two-month term counted from the day after the MPTO notifies said opposition, the trademark application or request for protection in Mexico becomes automatically abandoned. Right now, the MPTO does not issue an office action informing the applicant about the opposition and the term to answer; it just publishes the opposition in the Official Gazette (see example). If there is no office action, the MPTO sends nothing to WIPO.

The owners of International Registrations designating Mexico should review the Official Gazette (available online at https://siga.impi.gob.mx) to check for possible oppositions or hire someone to do it for them. It is true that the number or oppositions is relatively small if compared with the total number of trademark applications, but it takes only one unanswered opposition to ruin your day.

There is a possibility that, under the new law, the MPTO will issue an office action informing about the opposition, instead of simply publishing a notice in the Official Gazette. If this were the case, there is a chance that the MPTO will also send a notice to WIPO, so WIPO may notify the owner of the International Registration about the opposition. This would greatly benefit Madrid users, but we do not know, at this point, if that is going to happen. The Federal Law for the Protection of Industrial Property entered in force less than a month ago and there are many things we do not know how they are going to work.

2. Declarations of use.

All owners of trademark registrations issued on August 10, 2018 and on, must file a declaration of actual and effective use of the trademark (and a fee) with the MPTO within a short non-extendable three-month term after the third anniversary of registration or grant of protection in Mexico.

Another declaration of use is due when or after the renewal for all trademark registrations, no matter the date of issuance of the registration or if it is an International Registration.

Most likely, owners of International Registrations will not file the declaration of use or the fee simultaneously with the renewal application. Fear not: under the new law, the MPTO must request by mean of an office action the declaration of use if it was not filed with the renewal[1]; but do fear, we do not know yet how the MPTO would notify such an office action[2]. The sensible thing to do would be sending the office action to WIPO, allowing WIPO to notify the International Registration holder. However, there is the risk that the MPTO may decide notifying the request for the declaration of use through a publication in the Official Gazette, as it would happen with a regular domestic trademark registration. If the trademark owner fails to timely answer the office action and file the declaration of actual and effective use, the protection in Mexico will be abandoned.

3. Summons of invalidation and cancellation actions.

Many International Registrations get protected in Mexico without difficulties: there were no oppositions or refusals. Of course, that is good, but there is downside. The lack of intervention of a counsel addressed in Mexico also means that the owner of the International Registration does not have an address in Mexico where the MPTO may serve summons of cancellation or invalidation actions.

When the MPTO cannot serve summons of an invalidation or cancellation at the address of the trademark owner, the statute stipulates that the MPTO must serve summons through a publication in the Official Journal of the Federation and one of the main newspapers in Mexico. As you may imagine, there is a high chance that the owner of the International Registration never actually knows about the invalidation or cancellation action, eventually losing the trademark protection.

The only remedy would be appointing a Mexican lawyer or agent for each International Registration where Mexico was designated.

Update December 2020: This unfavorable situation caused for the lack of an address within the Mexican territory will eventually disappear after the third year of protection in Mexico, as a consequence of the filing of the declaration of actual and effective use. As I stated above, the declaration of use must be filed by an agent or counsel in Mexico, and she/he will state an address in Mexico when filing. It would be up to the trademark owners deciding if they want to wait three years before appointing a lawyer in Mexico.

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The Madrid Protocol is a great mechanism to protect trademarks in several jurisdictions in a cost-effective manner. However, maintaining the protection in Mexico involves some challenges that trademark owners should address. Hopefully, the future Rules of the Federal Law for the Protection of Industrial Property, to be published in a not-so-distant future, will soften some of the provisions that negatively impact Madrid users. Meanwhile, trademark owners should take steps to avoid losing rights on their valuable intangible assets.

[1] Under the old law, the trademark owner had only three months to file the declaration of use and fee, counted from the day after WIPO notifies the MPTO the renewal, with no request or office action.

[2] Actually, there is an inconsistency between the new law and the recently amended (November 11, 2020) Administrative Guidelines for the attention of Madrid filings. The new law expressly states that the MPTO will request the declaration of use if it were not filed with the renewal application, but the Guidelines state that no request will be issued. Of course, the law should prevail over the guidelines, but this kind of inconsistencies are not helpful at all.

La entrada The Mexican Industrial Property Law is tough on Madrid users se publicó primero en Reyes Fenig.

The Industrial Property Statute provides that trademark applications may include goods or services of one Class only, and that the goods and services described in the application should be specific. Mexico currently uses the 10th edition of the Nice Classification, and if there were doubts, the MPTO has broad authority to construe the Classification.

Today, examiners review and approve the goods or services listed in a trademark application simultaneously with the formal examination of the application, but always before the substantive examination. The substantive examination of a trademark application can’t start unless the examiner is satisfied with the description of goods or services, namely that the description is clear enough and that it does not list products or activities of more than one Class.

The purpose of the Guidelines is provide certainty to trademark applicant about how the description of goods and services is to be examined and construed. However, no matter what the intentions may be, changing the rules usually originates new questions and concerns.

This article will be focused on a very common practice in Mexico and other countries of copying the header of the International Classes as list of goods and services, and what will be the scope of coverage of trademark applications filed using those headers according to the Guidelines.

According to the Guidelines, the Class Headers now shall be construed in a restrictive way, and if the applicant uses them in the goods or services description, only the products and services expressly stated in the list shall be covered by the application.

The Mexican statute allowed full class coverage until the enactment of the 1991 Industrial Property Law. However, in spite that the new law did not allow claiming full-class coverage in trademark applications, as a matter of fact this kind of protection survived in practice by means of using the Headers of the International Classes.

The MPTO and many practitioners construed the Class Headers in a very extensive way. According to this construction, when the goods or services description reproduced the Header of the Class, the trademark application and resulting registration provided coverage for all the products and services included in the Class, including those goods and activities that were not implicitly described in the header through a genre.

An example would be the tacos. Tacos are classified in Class 30. The Class 30 header currently reads as follows: Coffee, tea, cocoa and artificial coffee; rice; tapioca and sago; flour and preparations made from cereals; bread, pastry and confectionery; ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces (condiments); spices; ice.

In my opinion, none of the goods and genres stated in the Class 30 Header include tacos. Nevertheless, an extensive construction of the Header lead the MPTO to consider that tacos were included the Class Header, so a trademark application or registration reproducing the Header of the Class 30 covered tacos. Today, with a restrictive construction according to the Guidelines, the MPTO will have to decide that a trademark application or registration with the Header of the Class 30 as list of goods does not comprise tacos in its coverage.

Therefore, this seems to be the actual death of the full-class coverage in Mexico.

One point of concern is, or should be, if the Guidelines will be applicable retroactively, not only to trademark applications filed before the Guidelines became enforceable, but to construe the coverage of trademark registrations issued before October 4, 2012.

Against the retroactive construction of the Classification as provided the Guidelines regarding trademarks and slogans registered before October 4, 2012, the Guidelines only make reference to trademark applications. The Guildelines explicitly state that their purpose is providing applicant with certainty about the examination of trademark applications, so it is clear that the MPTO’s intention to limit the Guidelines to trademark applications only.

In favor of the retroactive construction of the Classification as provided the Guidelines regarding trademarks and slogans registered before October 4, 2012, the Guidelines do not limit the list of products or services of trademark registrations and applications and do not generate new obligations for trademark owners. Actually, the bottom line question would be if the owner of a trademark registration has a right to a specific construction of the description of goods and services of a trademark application.

In the past, the Supreme Court ruled that the construction of laws and rules do not create new rules and law, thus using the Guidelines to construe the scope of protection provided in trademark applications and registrations filed or registered before October 4, 2012 would not be against the principle of no-retroactivity of the law (On the other hand, the new Amparo Law states that the precedents shall not be applicable in a retroactive way, thus it seems that there could be a right to a specific construction after all.).

Further, it would not be reasonable having two different simultaneous constructions of identical lists of goods or services that reproduce the same Class Header based on the date of registration.

The importance of the possible retroactivity of the Guidelines goes far beyond the academic interest. There are huge practical implications related to this issue: the use of registered trademarks and their consequences in connection to renewals and cancellation actions due lack of use of the registered trademark and invalidation of trademark registrations due false information about the date of first use of the trademark. We may also expect some impact regarding trademark infringement, anticipations and invalidation actions due earlier registration of an identical or similar trademark or because of earlier use.

La entrada What the New Guidelines to Construe the Classification of Goods and Services Mean for Trademark Owners and Applicants se publicó primero en Reyes Fenig.

According to the bulletin, the basic purpose of the amicus brief was to persuade the FCTAA to “reverse the decision rendered by IMPI (the Spanish acronym for the MPTO) and to interpret the law to provide Mexican trademark owners with the right to seek cancellation of a registration on the ground of bad faith, a right currently enjoyed by foreign trademark owners.”

Of course, as a Mexican lawyer, it was interesting to learn that INTA was involved in a Mexican case, but it was even more interesting that the basic purpose of the brief did not make much sense to me.

The Trademark Reporter (Vol. 99 July-August, 2009, No. 4), available online for INTA members, reproduces the amicus brief (in English) filed on behalf of INTA with the FCTAA.

The brief is related to an appeal associated to three trademark cancellation actions filed by a well-known large restaurant operator named Grupo Anderson’s, S.A. de C.V. (Grupo Anderson’s), against three different trademark registrations, and to section 151, paragraph V, of the Industrial Property Law.

The challenged trademarks cover the design of a frog character used mainly on apparel; the proprietor was Tiendas Oficiales, S.A. de C.V.

The brief does not disclose specific information about the challenged trademarks, but after a quick research, I suspect that they are Mexican trademark registrations Nos. 743,437 FACE OF FROG CHARACTER DESIGN (International Class 25) and 804,371 FACE FROG CHARACTER DESIGN (International Class 35).

By coincidence (or perhaps not), on April 2008, Tiendas Oficiales, S.A. de C.V. assigned the above-stated registered trademarks to a Mexican corporation named Grupo Serigráfico, S.A. de C.V.

The amicus brief also makes reference to a trademark registration in International Class 27 -an odd Class, considering that the trademark is mainly for clothing- for the FACE FROG CHARACTER DESIGN, but my preliminary search did not reveal it (finding out what registration that could be would demand spending some money and a more time-consuming research, which I am not interested to do for the time being).

The statutory provision

Section 151 of the Industrial Property Law stipulates five basic reasons to challenge a Mexican trademark registration:

I. Registration issued against a provision stated in the Industrial Property Law or in any other statute (including international treaties).

II. Earlier and continuous use, in Mexico or abroad, of an identical or confusingly similar trademark, covering the same or similar services or products.

III. False information stated in the application.

IV. Existence of an earlier Mexican trademark registration for an identical or confusingly similar mark, covering the same or similar products or services.

V. 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 in bad faith.

A Mexican trademark registration may also be cancelled due lack of use for three consecutive years in Mexico, on at least one of the products or services listed in the registration, and because the registered trademark became a generic expression.

The amicus brief explains that the cancellation actions against Tiendas Oficiales’ trademark registrations claimed that the defendant’s trademark registrations were not valid under paragraphs I, II, III, IV and V of section 151 of the Industrial Property Law.

An invalidation claim on the grounds provided in section 151, paragraph V, of the Industrial Property Law, would necessarily involve a licensee, agent, representative or distributor that registered, without authorization from the trademark owner, an identical or confusingly similar trademark already registered abroad.

According to the brief, the MPTO refused to cancel Tiendas Oficiales’ trademark registrations on the grounds provided by section 151, paragraphs I, II, III and IV, of the Industrial Property Law, but failed to make an explicit statement about the invalidation claim under paragraph V.

Such flaw should be enough to invalidate, at least partially, the MPTO’s decision, and allows the FCTAA to render a decision on the merits of the undecided invalidation claim.

The amicus brief states that section 151, paragraph V, of the Industrial Property Law, discriminates Mexican citizens and entities, because “a trademark registration may only be declared null and void on the basis that the mark was registered in bad faith in circumstances involving foreign trademark owners. As such, the owner of a Mexican trademark registration has no recourse against an agent, representative, licensee or distributor who applies to register an identical or confusingly similar mark in its own name without consent”.

Further, the brief states that section 151, paragraph V, of the Industrial Property Law is against section 1 of the Mexican Constitution (equal protection), articles 41, paragraphs 2 and 3, and 62, paragraph 4, of TRIPS and article 1708 of NAFTA.

I must say that I disagree with most of the arguments stated in the three substantive considerations provided in the amicus brief, and with the conclusions.

First consideration. Lack of cancellation procedures for trademarks registered in “Bad Faith” to Mexican Companies.

The first consideration is incorrect.

Paragraph V of section 151 of the Industrial Property Law provides a special protection for owners of trademarks registered abroad against unfair registrations by their licensees, distributors, agents or representatives, regardless the nationality of such trademark owners.

It is important to clarify that Mexico is a civil law country, with a first-to-file trademark system; although users of non-registered trademarks have some limited actions and defenses, there are no common law rights in our country. The only way to be acknowledged as trademark owner in Mexico is having a Mexican trademark registration. Further, the statute demands the existence of a Mexican trademark registration or application in order to license the mark in Mexico.

Therefore, in order to acknowledge a company as trademark owner in Mexico, the trademark must be registered in Mexico. If the licensee, distributor or agent registers a trademark identical or confusingly similar to an earlier registered or applied mark in Mexico, for the same or similar products or services (the earlier licensor’s trademark registration or application should block such an application by the licensee, but the MPTO sometimes makes errors), the senior trademark owner could file a cancellation action claiming that the licensee’s trademark registration is invalid under sections I (claiming the existence of a senior trademark application), II (earlier and continued use of the trademark) or IV (claiming the existence of a senior trademark registration), regardless if the licensee filed the application in bad or good faith.

Under Mexican law, if the licensee’s registration is for a trademark that is not identical or confusingly similar to the licensor’s mark, or for products or services different from the ones covered by the licensor’s trademarks, there would be no invasion of the licensor’s exclusivity rights; the licensee would not be registering the licensor’s trademark because it would not be the licensor’s trademark in the first place, either because the mark is different or because the covered goods or services are different (actually, from the amicus brief, this seems to be the reason why the MPTO refused to invalidate Tiendas Oficiales’ trademark registrations under section 151, paragraph IV of the Industrial Property Law).

Notwithstanding the above, a trademark registration acquired by a licensee for a trademark identical or confusingly similar to the licensor’s but applied to different products could still be deemed invalid, if the licensor mark is well-known or famous in Mexico. However, such invalidation would not be related to the invasion of earlier exclusivity rights, but to the unfair competition that the registration of a well-known or famous trademark could imply.

Nevertheless, the invalidation cause provided in paragraph V of section 151 of he Industrial Property Law provides one advantage in relation with the causes of invalidation stated in paragraphs II (earlier use) and IV (earlier Mexican registration). Such advantage is associated with the statute of limitations. A cancellation action on the grounds provided in paragraphs II and IV must be filed within a three and five years term, counted form the date of publication of the challenged trademark registration in the Industrial Property Gazette. On the other hand, a cancellation action on the grounds stated in paragraph V may be filed at any time.

In any case, although the invalidation cause stipulated in section 151, paragraph V, of the Industrial Property Law, may be filed only by owners of trademarks registered abroad when their licensees, distributors, agents or representatives obtain a Mexican trademark registration for said trademarks without their authorization, Mexican companies are nor banned from challenging the Mexican trademark registration on such grounds, provided that they own a foreign trademark registration.

Second consideration. Section 151, paragraph V, is against equal protection provided in Section 1 of the Mexican Constitution.

The second consideration is incorrect.

First, as explained above, the invalidation cause provided in section 151, paragraph V, of the Industrial Property Law, may be claimed by any owner of a foreign trademark registration, regardless if it is a Mexican company or a foreign company.

Second, the statute stipulates an identical treatment for all persons in the circumstances provided in paragraph V of section 151 of the Industrial Property Law.

For example, if the Industrial Property Law provided a different statute of limitations, depending on the nationality of owner of the foreign trademark registration, then it would be possible to argue that the stipulation is against the equal protection clause stated in the Constitution, but that is not the case.

Third Consideration. Mexico’s compliance with International Agreements.

First, no international treaty, State Constitution or federal or state law or statute is of equal rank than the Federal Constitution. They are all of lower rank than the Constitution.

For many years, the guideline provided in a binding precedent from the Supreme Court was that international treaties were of equal rank than the federal laws, but below the Constitution. In 1999, the Supreme Court rendered a new ruling, stating that federal treaties were of higher rank than federal laws, but always below the Constitution. This new ruling from the Supreme Court was confirmed in 2007, but is not binding yet.

From my perspective, the Mexican statutes provide the applicant or right-holder with reasonable procedures and formalities that are fair and equitable, as TRIPS and NAFTA demand, and I fail to see how the cause of invalidation stated in section 1512, paragraph V, of the Industrial Property Law, provided in the benefit of owners of foreign trademark registrations (both Mexicans and foreigners) may be deemed as unfair, unreasonable or inequitable. 

I believe that section 151 of the Industrial Property Law, including paragraph V, provides a reasonable opportunity to cancel a Mexican trademark registration, as stated in section 1708 of NAFTA, within reasonable time frames; the shortest term provided in the statute of limitations to file a cancellation action is three years, while there is no term to challenge a registration on the grounds provided in paragraph V.

Section 151, paragraph V, of the Industrial Property Law is not against the principle of national treatment stated in Article 3 of TRIPS and 1703 of NAFTA.

All entities and individuals, regardless their nationality, are entitled to seek the invalidation of a Mexican trademark, if they fulfill the requirements stated in said paragraph V, mainly owning a foreign trademark registration. As I stated above, if the plaintiff (Mexican or foreigner) holds a Mexican trademark registration, then a different cause of cancellation, provided in paragraph IV, would apply.

It is true that when there is discrepancy between a federal (or state) statue and an international treaty, the latter must prevail, and the court (or the MPTO) should apply the international treaty, if such treaty provides in the benefit of one of the parties a specific substantive right, claimable before a Mexican authority.

For example, the old Industrial Property Law of 1942 (in force until 1976) did not provide protection for service marks. However, the Supreme Court ruled that service marks could be registered and protected in Mexico, by applying the provisions stated in the Paris Convention*.

No Mexican court, not even the Supreme Court, may change a statute to adjust it to an international treaty. The Supreme Court and other federal courts may declare invalid a statutory provision, or a statute, but they can’t amend the law.

The amicus brief asks the FCTAA to interpret the Mexican Industrial Property Law in a manner according to the international treaties, namely, “that it does not limit the cancellation of trademark registrations obtained in bad faith to circumstances involving foreign trademark owners only”.

As I stated above, the statutory provision does not limit the cause if cancellation stated in section 151, paragraph V, to foreign trademark owners, but to owners of foreign trademark registrations, which is not the same.

On the other hand, neither NAFTA or TRIPS provide that the holder of a trademark registration is entitled to invalidate another trademark registration because the latter was filed by a licensee, distributor, representative or agent of such right holder, and the registration is presumed to have been obtained in bad faith; therefore, there is no substantive right stipulated in those international treaties that the FCTAA could apply in the benefit of one of the parties in the dispute.

If the lack of a statutory provision in Mexico, stipulating a cause of invalidation as the one stated above, were deemed to be against the obligation of Mexico of providing fair and equitable procedures, or stating a reasonable opportunity to cancel a Mexican trademark registration (a position I would not agree with), the courts cannot remedy such failure, at least not under the current Constitution.

It would be up to the Federal Congress to amend the statute and broad the current causes of invalidation of a trademark stated in the Industrial Property Law; meanwhile, the lack of compliance of Mexico of the international treaties would be a source of international liability.

It would be important to state that article 6 Septies of the Paris Convention provides the right to cancel a registration filed by an agent or representative without authorization of the trademark owner, no mater if such trademark owner had the mark registered in Mexico or in another country; the provision makes no reference to licensees, so it would be quite arguable if this cause of cancellation can be applied to licensees, as in the Grupo Anderson’s case.

Conclusion

Stating that the Mexican owner of a prior registration does not have the right, available to non-Mexican trademark owners, to challenge a later registration (for an identical or confusingly similar trademark) that was obtained in bad faith, as the amicus brief of INTA concludes, is wrong. The right is available for Mexicans and foreigners, provided that they own a foreign trademark registration and that the registration in Mexico was obtained by a licensee, distributor, representative or agent, without consent of the right-holder of said foreign trademark registration. This action is available besides the more general cancellation cause, on grounds of the existence of an earlier Mexican trademark registration for an identical or confusingly similar trademark, covering the same or similar services or products, regardless the good or bad faith of the applicant of the junior registration.

I agree that an amendment to the current section 151, paragraph V, of the Industrial Property Law, providing additional protection to holders of trademarks registered abroad and in Mexico against bad faith trademark registrations obtained by licensees, distributors, agents and representatives, would be desirable. However, current section 151 of the Industrial Property Law already allows all owners -Mexicans and foreigners- of a prior Mexican trademark registration or application (even earlier users of non-registered trademarks) to challenge a later registration that invades the previously acquired exclusivity rights.

* Binding rulings of the Second Chamber of the Supreme Court. Seventh Era, Second Chamber, Weekly Judicial Journal of the Federation, 72 Third Part, Pages 23 and 25.

La entrada The amicus brief filed by INTA with the Federal Court of Tax and Administrative Affairs (Grupo Anderson’s Case) se publicó primero en Reyes Fenig.

The Tribunal Federal de Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA) is a relatively new court. It was enacted in 2001, and its immediate predecessor was the Federal Tax Court. Most of the judges of the FCTAA are tax specialists. However, amendments to several statutes, particularly the modifications of April and May 2000 to the Federal Law of Administrative Procedures, broadened the scope of the old Federal Tax Court to decide a large number of administrative matters, (i.e. trademark registration, public officials liability, environmental protection, mining permits… etc.) until it became the FCTAA in December 2000. 

From mid 2000 to late 2008, appeals regarding IP matters were decided by on the thirteen non-specialized chambers of the FCTAA in Mexico City. Since January 2009, IP appeals are being decided by a specialized chamber, also located in Mexico City. 

The Federal Law of Contentious Administrative Procedures (FLCAP) rules the appeal procedure with the FCTAA. The immediate predecessor of the FLCAP was the contentious chapter of the Federal Tax Code, that governed the appeals with the now extinct Federal Tax Court. 

As you may see, a tax court and a tax law were the predecessors of the current specialized IP Chamber of the FCTAA and of the statute that govern the procedure for appeals involving IP. 

In a typical procedure concerning taxes, there are two parties with opposing interests: the State and the tax payer. The statute that governs the appeals in IP matters took this model. The problem is that in many IP matters, there may be more than one opposing party (such as the proprietor of a registered trademark that was cited as anticipation in a case involving the rejection of a trademark application, or the adversary in a patent invalidation or infringement action). 

At Law School, my Tax Law teacher told us that the purpose of Tax Law was defending tax payers, and many of the provisions (not all) stated in the Federal Tax Code, and later in the FLCAP reflect this way of thinking. Tax law tends to be very formalistic about the decisions and procedures to determine the existence of taxes and liabilities related to unpaid taxes. The lack of fulfillment of a formal or procedural requirement may result in the invalidation of the decision and the procedure, and all the Chambers of the FCTAA must review ex officio that the challenged decision complies with all formal requirements, regardless the arguments of the appellant. 

While such rigor may be desirable in a tax case, it may not be justifiable in a case where the decision of the Mexican Patent and Trademark Office (MPTO) was the result of a “trial-shaped” procedure or did not impose a fine but rejected a trademark or patent application. 

The FLCAP makes no distinction between decisions arising from a purely administrative procedure (such as the abandonment of a patent or the rejection of a trademark application) and decisions rendered as the result of an administrative procedure where the MPTO acted as a court to decide a dispute between two parties, such as a trademark or patent infringement case. 

Therefore, all the rigor that the FCTAA must use to review the compliance of formalities of a tax related decision, regardless the merits of the appeal, are being also applied to review all the decisions from the MPTO. 

The precedents 

A very important issue in Mexican administrative law, and especially in tax law, refers to the authority of the government agencies and the officials to decide taxes, administrative sanctions and impose fines. 

Historically, the government has exercised it power abusively. As a consequence, the Constitution and legislation have provided a number of requirements and limits to protect individuals and private entities from such abuses (whether such protections actually work or if they work only in the benefit of a privileged few would be subject of another discussion). 

One of the above-stated requirements is that the authority of any government agency to impose some burden or extinguishing some right of a private person must be expressly provided in an act of a federal o state legislature (Ley) or in a body of rules issued by the President or Governor himself (Reglamento). 

Certain bodies of rules, such as the estatutos orgánicos or “organizing regulations and the acuerdos delegatorios or “decisions to delegate authority” may provide a government agency with authority for certain actions, but in no case such authority may be broader than the one provided in the legislation or rules, and may not stipulate authority to impose burdens or limit or extinguish rights, if the legislation or the rules did not explicitly stated such authority. 

The requirement for all government officials to have explicit authority provided in the statute or in the rules to decide a case where the official imposes a burden or extinguishes or limits a right does not stop there. There is a binding precedent from the Supreme Court that demands that the official that decides a case must state all the statutes and rules that provide the authority to render the decision, including the article, section, paragraph, subparagraph, etc.** The FCTAA must review this issue ex-officio***, and if it finds one mistake, it must invalidate the decision due lack of authority of the issuing official, even if such lack of authority was never argued by any of the parties, or if it is irrelevant to decide the merits of the case. 

As I explained above, such rigor may be desirable in a tax case, because it has the clear intention of protecting the tax-payer against the abusive behavior of the executive branch. However, in a trademark infringement or cancellation case, this sort of ruling does not result in the enhanced protection of intellectual property rights. On the contrary, it seriously harms intellectual property owners and their activities; the delay of a final decision causes doubts and uncertainty about the enforceability and validity of IP rights, because the effect of the invalidation due apparent or actual lack of authority of the MPTO’s officials is the issuance a new decision signed by an official with authority to do so, or simply correcting the typing flaw that refers to the applicable provision of the statute that originates the authority of such official. 

Of course, given the some voids in the regulations that govern the activities of the MPTO’s officials, the new decision is not always free of formal flaws that may also cause, again, their invalidation, without ever looking at the merits of the appeal. 

Unfortunately, an IP case does not always stop at the FCTAA. The final instance is the Federal Court of Appeals. There are eleven non-specialized courts of appeals with jurisdiction to review the decisions rendered by the IP Specialized Chamber of the FCTAA. The courts of appeals issue contradictory rulings from time to time. When contradictory rulings arise, the Supreme Court may review the cases and decide what ruling should prevail; the Supreme Court’s decisions are binding for all the courts of appeals and the FCTAA. 

Finally, if the patent, trademark or copyright owner wants some indemnification related to a patent, trademark or copyright, the MPTO’s infringement decision must become final (after all the appeals), and then the right-holder may file an action with a court of common jurisdiction, which means to start all over again, but now to try to claim damages and lost of profits. 

The future 

One thing is clear: The current system does not work. Even a relatively simple case may take many years to be decided just because all the time wasted in irrelevant appeals. 

Some practitioners have suggested that the law should be amended to exclude IP from the scope of the FCTAA. Actually there is a bill that the Chamber of Representatives approved in late 2006 to exclude IP from the scope of the Federal Law of Administrative Procedures, and as a consequence, from the FCTAA. The bill is pending at the Senate. 

Although the lack of efficiency of the FCTAA is obvious, I am not sure that this is a good solution. District Courts may decide faster than the FCTAA, but the MPTO’s decisions tend to have many procedural and forma errors that may result in decisions from the District Judges just to cure formal and procedural flaws, with no actual benefit as for the time it takes to reach a final decision would be concerned. 

Finally, most District Judges have not been in regular contact with IP law since 2002, after the FCTAA took over the appeals for IP matters, so their decisions show in general less analysis of the case that the decisions of the FCTAA. 

From my perspective, Mexican IP law needs a structural change. The MPTO should not have authority any long to decide infringement and invalidation cases; such authority should be on specialized federal district courts, which may decide in the same decision if the trademark registration or patent is valid, if it has been infringed and award damages and/or attorney’s fees to the prevailing party.

 Of course, it is a complex issue and any solution would have to be more complex than what I just stated above. In any case, what all practitioners agree is that we need a change, and we have to start working on it now.

 * Ninth Era, Weekly Judicial Journal of the Federation, Courts of Appeals, XXIX, April, 2009, page: 1925, Thesis: I.7o.A.617 A, Registry 167451

 ** Ninth Era, Weekly Journal of the Federation, Supreme Court, Second Chamber, XXV, June 2007, page 287, Thesis: 2a./J. 99/2007

 *** Ninth Era, Weekly Journal of the Federation, Supreme Court, Second Chamber, XXVI, December 2007, page 154, Thesis: 2a./J. 218/2007

La entrada The basic structure of IP litigation in Mexico (Second part) se publicó primero en Reyes Fenig.

A very common complaint from IP owners is the extremely long time it takes to obtain a final decision in an IP infringement action or a patent invalidation or trademark cancellation case.

The purpose of this post is explaining the structure of IP litigation in Mexico, and of the appeals system in this field of law; why appeals have been taking so long in being decided; why they may take longer; why the courts appear to be so unreasonably formalistic about the authority of the officials of the Mexican Patent and Trademark Office that decide cases; and what can we expect in the close future.

In Mexico, most IP litigation involves administrative instances, such as the Mexican Patent and Trademark Office.

It is possible to file criminal charges in connection to trademark forgery and illegal reproduction of works protected by copyright, and file actions for damages with a civil court, and the Mexican Patent and Trademark Office would have little involvement, if any, in these sorts of procedures.

However, administrative cases involving infringement and invalidation of IP rights largely outnumber the matters currently handled by the General Attorney’s Office and the criminal and civil courts, thus this post with make only reference to the administrative litigation.

Having said the above, the basic structure of an IP litigation process is the following:

A. The first instance is the Instituto Mexicano de la Propiedad Industrial or Mexican Patent and Trademark Office (MPTO).

The MPTO not only issues patents and registers trademarks; it also has authority to decide infringement actions involving patents, trademarks and some cases of copyright, and the invalidation or cancellation of patents and trademarks.

An infringement or cancellation or invalidation action involves a full administrative trial, with the filing of a complaint, and answer, filing and review of evidence, final arguments and a decision.

The MPTO typically takes from 10 to 18 months to decide a trademark cancellation/infringement action. A patent infringement/invalidation action may take from one to three years, sometimes more, if the substantive matter of the patents is complex, as in the case of biotechnology.

The MPTO may not award damages or attorneys’ fees. It may only impose a fine of the infringer; order the preliminary and/or definitive seizure of infringing product issue a preliminary/definitive order to stop the manufacture and/or commercialization of infringing goods; or remove a trademark from the registry or invalidate the patent.

B. Appeals against the MPTO

There are three possible ways to challenge a final decision from the MPTO, no matter if the decision is the result of litigation or of a purely administrative procedure (final rejection of a trademark or patent application).

B1. Administrative Review. It is possible to file a petition for administrative review with a higher-rank official of the MPTO itself.

The filing of the petition for Administrative Review is optional. The appellant may choose not to file it and appeal the decision with the Tribunal Federal de Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA) –see B2- or file an Amparo claim (constitutional appeal) with a Federal District Court –see B3-.

The higher rank officials of the MPTO tend to confirm the decisions, unless there was a clear procedural or formal error.

Filing a petition for Administrative Review using substantive arguments against the decision is usually a waste of time, or an effective way to delay a final decision, given that the MPTO may take one year or more to simply confirm the earlier decision.

The decision issued in connection Administrative Review may be subject of an appeal with the FCTAA (see B2) or an amparo claim (see B3).

From a technical perspective, the appeal with the FCTAA and the amparo claim are completely different procedures in nature and structure, but in order to keep it simple, I will make emphasis only in practical issues.

B2. Appeal with the FCTAA. The appeal with the FCTAA is the most usual way to challenge the decisions of the MPTO. The appellant has 45 business days to file the appeal with the FCTAA.

The FCTAA is divided in salas or chambers of three judges each, and a Highest Chamber of eleven judges.

The FCTAA started reviewing appeals concerning IP in mid 2000, as a consequence of an amendment to the Federal Law of Administrative Procedures (FLAP). Since January 2009, appeals concerning IP matters are decided by a specialized chamber.

The FCTAA takes between one and two years to decide an appeal. The FCTAA has authority to order the MPTO to cure some formal or procedural flaw and render a new decision, or to decide on the merits of the case instead of the MPTO.

The general rule is that the parties are allowed to file new evidence and arguments, not previously submitted with the MPTO. However, there is a recent non-binding decision from the Seventh Court of Appeals in Mexico City, that intends to limit the filing of new evidence and arguments to prove the use of a trademark in appeals associated to cancellation actions due lack of use*.

B3. Amparo claim. The amparo claim involves a constitutional review of a final authority’s decision by a federal district judge to verify if there was a breach of a garantía individual or constitutional basic right.

One basic constitutional right in Mexico is that all decisions should be issued in accordance to the law. If the decision breaches the law, then it may also be unconstitutional.

As a general rule, the consequences of the amparo are limited to the invalidation of the authority’s decision, if found against the constitution, and the issuance of a new decision, which under certain circumstances, may be subject of a new amparo claim or an appeal with the FCTAA.

The amparo was the usual way to challenge decisions from the MPTO, until mid 2000, when the amendment to the FLAP gave the FCTAA authority to review appeals against the decisions o the MPTO, among other government agencies.

Notwithstanding the above, the amparo claim is still available to challenge most decisions of the MPTO, although practitioners do not use it, given the shorter time they would have to prepare the appeal. Further, the district judges tend to invalidate decisions only to order the MPTO to cure a formal or procedural flaw and render a new decision, instead of deciding the merits of the case. Finally, and from my very personal perspective, the FCTAA’s decisions usually show more careful analysis of the parties’ arguments than the decisions from the district judges.

Unlike the appeal with the FCTAA, the general rule is that the parties are not allowed to file new evidence or arguments.

The appellant has 15 business days to file the amparo claim, and the judge may take from 6 to 12 months to issue a decision.

C. Final appeals

As explained above, the decision issued by a higher rank official of the MPTO in connection to a petition for administrative review (see B1) may be challenged with the FCTAA or a federal district judge.

The decisions issued by the FCTAA and the district judge may be subject of a final appeal with a tribunal colegiado de circuito or federal court of appeals, or with the Mexican Supreme Court in some extraordinary cases, such as the direct interpretation of the Federal Constitution or the constitutionality of a statute or statutory provision.

The final appeal may be decided by any of the seventeen courts of appeals specialized in administrative matters located in Mexico City. A federal court of appeals takes about six to ten months to decide a final appeal. The Supreme Court may take a little longer.

In the second part of this post, I will explain some of the reasons why the appeals take so long to be decided, and why they may take longer.

* Ninth Era, Weekly Judicial Journal of the Federation, Courts of Appeals, XXIX, April, 2009, page: 1925, Thesis: I.7o.A.617 A, Registry 167451

La entrada The basic structure of IP litigation in Mexico (First part) se publicó primero en Reyes Fenig.