Before the 2010 amendments, many activities associated to the infringement of IP rights in Mexico were already punished with extreme severity. For example, the willful production, distribution and importation of goods bearing counterfeited trademarks in commercial scale are delitos graves or felonies, thus the defendant is not allowed to be free on bail during the trial. In the same sense, the willful non-authorized reproduction of works protected by copyright in commercial scale is a felony too.

However, in all cases, in order to start an investigation, the holder of the copyright or registered trademark copyright had to file a querella or formal complaint. A characteristic of the crimes that require querella is that the right holder may stop the investigation or the trial by withdrawing the charges (perdón in Spanish).

The querella requirement could obstacle an investigation; for example, when officials of the Customs Agency or the General Attorney Office found and seized a shipment of counterfeited goods or illegal copies of works, without a querella, there was no justification to maintain the seizure of goods or authority to continue the investigation. Further, the formalities that have to fulfill a power of attorney required to file a querella can be very difficult to accomplish for foreign entities. As a result, a federal judge could dismiss a trial because the power of attorney of the representative of the right holder was missing some formal requirement.

As I said before, in the case of crimes that need a formal complaint, the copyright or trademark owner could terminate the investigation or even the trial with a perdón or withdrawal of charges. This possibility allowed the trademark or copyright holder to negotiate a settlement with the defendant, although this sort of negotiations often discouraged, even upset, the officials of the General Attorney Office.

Now, with the June 2010 amendment, many -not all- IP related crimes (most of them associated to copyright) will be investigated ex-officio.

In the copyright field, for example, willfully producing, reproducing, importing, transporting, distributing, selling (in a store) or leasing copies of copyright protected works, with commercial purposes and without authorization, is not only a felony but also will be investigated ex-officio. On the other hand, willfully selling unauthorized copies of copyright-protected works in the streets, with commercial purpose, is a crime that now will be investigated ex-officio, although it is not a felony.

In the trademark field, the June 2010 amendment did not change most of the crimes associated with trademark counterfeiting provided in the statute. Most cases of trademark counterfeiting remain being felonies, but they still need the formal complaint or querella filed by the trademark owner in order to be investigated.

Nevertheless, as a consequence of the June 2010 amendment, willfully offering in sale goods bearing counterfeited trademarks, in the streets with commercial purposes, is now a crime that may be investigated ex-officio although, paradoxically, it is not a felony.

The Federal Congress also amended some provisions regarding the preliminary measures that a trademark, patent or copyright holder may request from the Mexican Patent and Trademark Office (MPTO) to stop infringing activities, namely the requirements that the defendant must fulfill to lift such measures.

The most usual way to oppose infringement of IP rights –including most copyright infringement cases- is the administrative infringement action, filed with the MPTO. The MPTO has authority to issue preliminary measures. The preliminary measures may include the seizure of infringing products and an order to the infringer to stop the production of infringing products and recall the merchandise already in hands of distributors.

In order to obtain the preliminary measures, among other requirements, the defendant must file a bond. The purpose of the bond is to guarantee the payment of the actual damages that the preliminary damages may cause to the defendant in case the MPTO decides there was no infringement.

The defendant is allowed to lift the preliminary measures and continue it business as usual, by filing another bond. The purpose of the bond is to guarantee the payment of the damages that the defendant’s activities may cause to the plaintiff.

In practice, the MPTO has not enough data, if any at all, about the amount of the possible damages that the preliminary measures may cause to the alleged infringer, thus the MPTO sets the amount of the bond at it own discretion. Sometimes, the plaintiff files the bond with the MPTO before it accepts to issue them; if it is high, there is a good chance that the MPTO will accept it, although technically it is an arguable practice.

If after the enforcement of the preliminary measures, the MPTO believes that the amount of the bond is too low, it has authority to request the plaintiff to increase the bond, within a three or five days term. Failure of the plaintiff to increase the bond would result in the lift of the preliminary measures.

Once that the preliminary measures have been enforced, the alleged infringer has the right to lift them, y filing another bond. The purpose of this bond is guaranteeing the payment of the damages that the alleged infringing activities may cause to the plaintiff. The practice of the MPTO was to set the amount of the defendant’s bond in twice the amount of the bond filed by the plaintiff.

Now, the amended statute stipulates that the bond that the defendant may file shall be 40% higher than the bond filed by the plaintiff. Nevertheless, the MPTO keeps authority to request the increase of the amount of the bonds filed by the plaintiff or defendant, in case it considers that their amounts are not high enough to guarantee the payment of the damages.

Finally, it is now an administrative infringement that the patent holder, or the recorded licensee (if the recorded license does not provide against the filing of infringement actions against third parties), files an infringement action against a third party, if there was an earlier final decision ruling that there was no patent infringement involving the same cause of infringement.

From my perspective, this new cause of infringement is odd, and I can only understand it as a way of refraining innovative pharmaceutical companies from harassing generics manufacturers with constant infringement actions repeating the same causes of infringement, assuming of course that the efforts of the patent holders to enforce their patent rights can be generally qualified as ‘harassment’.

The amendments to the Federal Criminal Code suggest that there is an intention to increase the fight against piracy, although it also shows lack of a coherent strategy, given the different treatment to crimes associated to trademarks and those related to copyright, and the inconsistencies in each field.

Only time will tell if the will to combat piracy is real, or only a measure to cool down Mexico’s trade partners, mainly the United States, who kept Mexico is the Watch List of the 2010 Special 301 Report.

La entrada Amendments to the Mexican statutes toughens (and softens) fight against piracy and IP infringement se publicó primero en Reyes Fenig.

The purpose of this post is offer a basic explanation about precedents in Mexico and their effectiveness in IP-related cases.

When I say “precedent”, I am referring to a published decision issued either by one of the salas or chambers of the Tribunal Federal de Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA), a tribunal colegiado de circuito court of appeals or the Supreme Court. It does not mean that there are no precedents from the MPTO. The MPTO is the first instance in most patent and trademark infringement or invalidation cases, so of course there are precedents, but they are not reported or collected. Mexican lawyers learn about the precedents of the MPTO from our own experience and interchange of ideas with other lawyers and sometimes with the MPTO’s officials. Although the MPTO does not have to follow its own precedents, it always has to state the statutory provisions applicable in each case and explain the reasons of all the decisions it issues.

About the decisions of the courts, it is necessary to distinguish different situations.

First. All the decisions from the federal courts (Mexico is a federal republic, so there are also state courts; the availability of decisions from state courts vary from state to state) become public shortly after they are issued, although the information about the involved parties may not be available in most cases. This situation makes it difficult locating certain decisions if you do not have information about the case number and the court that issued the decision you are looking for.

Second. The decisions of the juzgados de distrito or federal district courts and tribunals unitarios de circuito or higher federal courts are not reported or collected, thus there are almost no references to district courts or higher federal courts as source of precedents.

Third. When a court of appeals, a chamber of the FCTAA or the Supreme Court considers that the legal issues involved in a case are particularly relevant, it may decide to prepare an abstract about the ruling (we call it tesis) and publish it in a collection of precedents issued every month: the Semanario Judicial de la Federación or Weekly Judicial Journal of the Federation (it is no longer weekly, but it kept the name) in the case of the courts of appeals and the Supreme Court, and the Revista del Tribunal Federal de Justicia Fiscal y Administrativa or Journal of the Federal Court of Tax and Administrative Affairs in the case of the chambers of the FCTAA. These published rulings constitute the precedents.

The abstract of the ruling includes the identification of the issuing court and the case number, so it is relatively easy to obtain a copy of the actual decision and get a deeper knowledge about the reasoning behind the precedent.

In a broad sense, the collection of published precedents is called jurisprudencia; in a more restrictive and technical sense, only the binding precedents are jurisprudencia. Jurisprudencia is often translated into English as ‘jurisprudence’, although the concept is much narrower under Mexican law.

Fourth. In general terms, a precedent becomes binding or jurisprudencia when the ruling has been confirmed in five consecutive decisions –in the case of courts of appeals and the Supreme Court-. A decision may also become binding when different courts of appeals, or the two specialized chambers of the Supreme Court, render contradictory rulings about the same legal issue and the Supreme Court decides which ruling must prevail.

In the case of the FCTAA, it is divided in different chambers of three judges each. There is one chamber specialized in intellectual property matters that decides most appeals against the decisions of the MPTO and the Mexican Copyright Office. The specialized chamber of the FCTAA may publish precedents, but only the precedents of the Highest Chamber of the FCTAA may become binding, if and when a ruling has been confirmed by three or five consecutive decisions, or when it decides the prevailing ruling in the case of contradictory decisions between different chambers of the FCTAA.

Fifth. A precedent may become binding for lower courts, but not for higher or equal-ranked courts. The binding precedents from the Supreme Court and the courts of appeals are binding for all the chambers of the FCTAA.

The MPTO is not a court (even if it acts like one in infringement and invalidation cases) but an administrative entity. Therefore, the MPTO has no actual obligation to follow the binding precedents issued by the courts, although it usually tries to adjust its decisions to such binding rulings.

Further, it is very usual in the Mexican practice –the MPTO, courts and lawyers included- to rely on the authority of some non-binding precedents to justify decisions, opinions and claims.

La entrada A general view about precedents in Mexico se publicó primero en Reyes Fenig.

For many years, a usual complaint from patent owners of pharmaceutical products was that the Mexican FDA –Comisión Federal para la Protección contra Riesgos Sanitarios, better know by its acronym COFEPRIS- was encouraging patent infringement by issuing marketing authorizations for patent-infringing drugs.

On 2003, the President amended the Reglamento de la Ley de la Propiedad Industrial or Rules of the Industrial Property Law and the Reglamento de Insumos para la Salud or Rules for Health Supplies to create a “link” between the Mexican Patent and Trademark Office (MPTO) and the Mexican FDA.

According to the amended Rules of the Industrial Property Law, the MPTO must publish every six months an updated list of patented drugs, identified by the name of the active ingredient. The list must include the names of the patentee and recorded licensee (if any), the term of the patent, among some other information about the protected drug. The idea of the list, widely known as the “List of Patented Medicines”, is to inform the public, and especially the Mexican FDA, about the existence of patent rights on certain active ingredients.

On the other hand, according to the amended Rules for Health Supplies, when filing an application with the FDA for marketing authorization of a drug, the applicant must state either there is no patent protection for the drug, or that it is the patent holder or recorded licensee. The Mexican FDA has to review the List of Patented Medicines and even verify with the MPTO to make sure that there would be no patent infringement if it grants the marketing authorization to the applicant. If necessary, the Mexican FDA will request the applicant to provide evidence that it is the patent owner or that it has a license recorded with the MPTO.

The disputes around the linkage system

It was clear that patents claiming new active ingredients should be included in the List of Patented Medicines, and that patents claiming processes were not to be listed.

However, there were a lot of questions about patents for new compositions or formulations and new uses. The language used when amending the Rules of the Industrial Property Law raised some doubts, although the amended Rules for Health Supplies only considers patents claiming new active ingredients as subject of being included in the List of Patented Medicines.

The original position of the MPTO was that new pharmaceutial formulations and compositions should not be included in the List of Patented Medicines. It did not mean that is was ok to infringe patents claiming new formulations or processes, but that the mechanism provided by the linkage system only benefited patents that claimed new active compounds.

Many innovative pharmaceutical laboratories starting filing amparos or constitutional appeals with the district courts in Mexico City against the lack of inclusion of their formulation patents in the List of Patented Medicines, and in most cases the patent owners prevailed, so the MPTO has been forced to publish several addenda to the List of Patented Medicines to include patents for new formulations and compositions.

Although most federal courts of appeals in Mexico City supported the idea that the  List of Patented Medicines should include patents for new formulations, the Fourth Court of Appeals in Mexico City published a ruling[1], stating that only patents on new active ingredients should be included in the List of Patented Medicines.

The expansion of the linkage system

The contradictory rulings between different courts of appeals caused the intervention of the Supreme Court shortly after the Fourth Court of Appeals in Mexico City published the ruling. On January 2010, the Second Chamber of the Supreme Court, specialized in administrative matters, published binding precedent number 2a./J. 7/2010[2], stating that the List of Patented Medicines should include patents claiming new formulations in a very close decision (3 Judges in favor and 2 Judges against).

n the Mexican system, a binding decision from the Supreme Court is binding for all federal, state and administrative courts in Mexico, but not for the MPTO. Technically, the MPTO could continue refusing to include patented formulations in the List of Patented Medicines and the owners of the excluded patents would have to appeal such exclusions, although such appeals should be decided quicker than before the Supreme Court’s decision.

Notwithstanding the above, the MPTO usually tries to adapt its actions and decisions to the binding precedents of the courts, so I would expect that the MPTO will voluntarily include patents on new pharmaceutical compositions and formulations in the next number of the List of Patented Medicines. The ruling of the Supreme Court did not mention patents for new uses of drugs, and we may exact the MPTO to continue opposing the publication of these patents in the List of Patented Medicines.

(Update September 20, 2018. Several decisions from the federal courts of appeals show that the courts favor the publication of second use patents in the linkage system. No  binding precedent has been issued).

Some downside of the linkage system and its expansion

All measures and mechanisms to improve the protection of patents and prevent the infringement are welcome. However, the linkage system and the expansion ruled by the Supreme Court could lead to unfair decisions.

First, and this has nothing to do with including formulation patents in the List of Patented Medicines, I am against the fact that the Rules for Health Supplies force applicants for marketing authorizations to prove that they are the patent owner or a recorded licensee. Why there should be a license and why it should be recorded? If the applicant for the marketing authorization is just distributor, there is no reason for the parties to execute a license; however the Mexican FDA will still demand evidence that the applicant has a license recorded with the MPTO in order to issue the marketing authorization. From my perspective, the demand stated in the Rules for Health Supplies about the existence of a license recorded with the MPTO shows that neither the Mexican FDA not the MPTO understood the legal consequences of recording a license. It also evidences the extremely formalistic mentality of the Mexican bureaucrats and society in general.

Second, considering the restrictive construction that the MPTO originally made of the amended Rules of the Industrial Property Law about what patents should be included in the List of Patented Medicines, I believe that it was not the original intention of the Administration to benefit formulation patents from the linkage system. I think that the courts have been able to expand the system to formulation patents mainly because the lousy language used in the 2003 amendment to the Rules of the Industrial Property Law.

The fact that the Rules for Health Supplies were amended at the same time than the Rules of the Industrial Property Law and that the Rules for Health Supplies clearly limit the scope of the linkage system to patents claiming an active ingredient somehow confirms the above.

Third, the inclusion of formulation patents in the List of Patented Medicines, although it may be a very effective way to prevent infringement of such patents, it may also cause the rejection of marketing authorizations for drugs that use a formulation different from the one claimed in the patent. Unlike many cases of patents claiming active ingredients, the Mexican FDA may have to interpret the claims of the formulation patent to decide whether the applied drug infringes said claims. This is dangerous, because the Mexican FDA is not a patent expert, and it is unclear whether if the MPTO would be able to provide effective, timely and accurate support in this field.

Does it make sense for a non-innovative country such as Mexico to increase the protection to pharmaceutical patents at the risk of blocking non-infringing drugs?

[1] “PROPIEDAD INDUSTRIAL. LAS PATENTES DE MEDICAMENTOS ALOPÁTICOS QUE DEBEN PUBLICARSE EN LA GACETA RELATIVA, DEBEN SER ÚNICAMENTE AQUELLAS QUE PROTEGEN UNA SUSTANCIA, INGREDIENTE O PRINCIPIO ACTIVO”, at Semanario Judicial de la Federación y su Gaceta, Ninth Era, Tome XXIX, May 2009, page 1092.|

[2] “PROPIEDAD INDUSTRIAL. LAS PATENTES DE MEDICAMENTOS ALOPÁTICOS O SUS REIVINDICACIONES QUE NO CONSTITUYAN PROCESOS DE PRODUCCIÓN O DE FORMULACIÓN DE MEDICAMENTOS Y QUE EN SU COMPOSICIÓN FARMACÉUTICA INCLUYAN UN INGREDIENTE, SUSTANCIA O PRINCIPIO ACTIVO, DEBEN INCLUIRSE EN LA PUBLICACIÓN A QUE SE REFIERE EL ARTÍCULO 47 BIS DEL REGLAMENTO DE LA LEY DE LA PROPIEDAD INDUSTRIAL”, at Semanario Judicial de la Federación y su Gaceta, Ninth Era, Tome XXXI, February 2010, page 135.

La entrada The Mexican Supreme Court expands the linkage system to prevent patent infringement 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.