On April 28, 2016, the Chamber of Representatives informed that it passed a bill that will amend the Mexican Industrial Property Law and insert an opposition system for trademark applications. The bill was approved by the Senate a few months ago, so all it takes is the publication by the President, which should happen soon. The amendment will be effective 90 calendar days after the publication in the Official Journal of the Federation.

(Update June 7, 2016: The amendments to the Industrial Property Law that introduced the opposition to trademark applications were published in the Official Journal of the Federation on June 1, 2016. The amendments and the opposition system will become effective on August 30, 2016)

The lack of an opposition system did not mean that trademark applications were not examined. The Mexican Patent and Trademark Office (MPTO) conducted the substantive examination ex-officio. If the examiner found obstacles, such as lack if distinctiveness, an identical or confusingly similar earlier registered or applied trademark covering the same or similar goods or services, or a well-known non-registered trademark, he issued an office action and allowed the applicant to answer and argue against the alleged lack of distinctiveness or similarities.

Further, if a third party believed that the approval of the trademark application could harm its rights, it could file an informal opposition. The informal opposition was a more or less short brief, calling the examiner’s attention to the existence of certain rights that could be harmed or infringed if the trademark application was approved. If the informal opposition was filed early in the examination proceeding, it had a good chance of being considered by the examiner and even cause the abandonment or final refusal of the opposed application.

The informal opposition was particularly effective to inform the examiner about the existence of a trademark application with a priority claim that predated the filing date of the examined application. It was not so effective when the ground of the opposition was earlier use in Mexico or abroad of an identical or confusingly similar trademark. If the MPTO approved an application for a trademark that was confusingly similar to another trademark used by a third party in Mexico or abroad to distinguish the same or similar goods or services, such third party could file an invalidation action, provided that it could prove that the use was earlier and continuous.

There has been an actual formal opposition (that has never been called like that) that takes place when a trademark application is subject of a final refusal because of the existence of an earlier registered or applied trademark in Mexico and the applicant files an appeal with the Federal Court of Tax and Administrative Affairs (FCTAA). In those cases, the court would serve a copy of the appeal to the owner of the anticipation, allowing it oppose the appeal by defending the legality of the final refusal, and even filing a final appeal (amparo) if the FCTAA’s decision were against the MPTO (see my earlier post Oppositions to trademark applications in Mexico).

Under the new opposition system, trademark applications will be published within ten business days after the filing date, regardless if formal requirements were meet. Third parties would have a one-month term to file an opposition.

The possible grounds for opposition will be broad, but limited to the substantive causes of non-registrability provided in sections 4 and 90 of the Mexican Industrial Property Law. For example, possible grounds of opposition would be descriptiveness of the trademark, illegal reproduction of the name or pseudonymous of an actual person, or the existence of an earlier identical or confusingly similar trademark registration or application in Mexico to identify the same or similar services.

On the other hand, earlier and continuous use (in Mexico or abroad) of an identical or confusingly similar trademark registration or application in Mexico to identify the same or similar services may not provide grounds for an opposition. Bad faith of the applicant because it was the licensee, representative, distributor or agent of a foreign trademark owner may not be a valid cause of opposition either. In these cases, the only available remedy has been and would be an invalidation action against the Mexican trademark registration.

There will be a government fee for opposing a trademark application. I do not know how much it will cost, but the reason behind the government fee is discouraging frivolous oppositions, thus I would expect it to be around US$150.00.

Oppositions would be published, and the applicant will have one month to answer the opposition and file arguments and evidence to support the application.

The Mexican opposition system intends to be simple and avoid becoming a burdensome time-consuming proceeding, as it happens in some South American countries. The opposition will be more a source of information for the examiner than a contentious proceeding (somehow similar to the ‘Letter of Protest’ in the United States) .

After the MPTO decides issuing the trademark registration or the final refusal of the application, the opposing party will receive a written communication informing about the success of the opposition or the approval of the trademark application. If the opposition were not successful, the opposing part may file an invalidation action.

Would the new opposition system significantly change the state of things in Mexico? I don’t think so.

In my opinion, the new opposition system provides rules and terms to an existing practice, without actually changing it. Trademark applications will continue being examined in the same way they used to. Further, the opposition and the result would not prejudice about third party’s rights or the intrinsic legality of the trademark registration, and the causes of invalidation will be available regardless if there was as opposition.

The lawmakers that supported the bill stated that the adoption of the Madrid Protocol encouraged the creation of the opposition system (I do not see the connection). According to the lawmakers, the opposition will help to reduce the number of invalidation actions, improve the quality of trademark examinations and provide right-holders –especially owners of earlier Mexican trademark registrations and applications- with a very cost-effective tool to protect their rights.

La entrada Mexican Congress approves trademark opposition system. 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.

Before the amendment, if an applicant wanted to claim priority, it had to state the application serial number of the claimed priority in the Mexican application and file a certified copy of the priority application with the Mexican Patent and Trademark Office (MPTO) within a three month term counted from the filing of the trademark application in Mexico in order to have the priority claim acknowledged.

Now, the applicant only has to state the priority application serial number in the Mexican application – and enter the government fee for the acknowledgement of a priority- to secure the priority right.

If the Mexican trademark application lists more products than the ones stated in the priority, the priority would be acknowledged only for the coincidental goods. If an applicant claims a non-existent priority and the MPTO issues a registration with such  a false claim, the trademark registration may be declared invalid.

The new simplified rule for priority trademark applications only benefits applications filed after June 11, 2011. This new rule should significantly reduce the cost of filing trademark applications with priority claim, given that the trademark agent will have one less deadline to worry about.

Regrettably, while the procedure for Mexican trademark applications is evolving to require fewer formalities, the patent application procedure has virtually remained the same since 1994.

For example, it is no longer necessary to file a power of attorney with the MPTO when filing a trademark application, but such formality has been maintained for patent applications. Now, the applicant does not have to file a certified copy of the priority application in the case of trademarks, but the formality persists for patents.

Further, the amended Rules expressly state that if the applicant files the priority document without translation, the applicant has a two months term to file the Spanish translations and the MPTO has not have to issue an office action requesting the translation; otherwise, the priority claim would not be acknowledged. However, the precedents from the Federal Court of Tax and Administrative Affairs state that it is illegal for the MPTO to refuse acknowledging a priority claim because the applicant did not file the Spanish translation of the document within the two months term, if the MPTO did not issue an office action requesting the translation ^1. .

The MPTO has not explained the reasons why the procedural rules and provisions regarding patents are not following the less formalistic trend of the trademark-related procedures. I do not see a technical reason, and I may only speculate that the people in charge of patents and the people in charge of trademarks believe that, rather than a Mexican Patent and Trademark Office, there is a Mexican Patent Office and a Mexican Trademark Office.

¹ Precedent “Patent. The Auhtority has the obligation to request the translation that was not filed with the patent application” – Page 463, Revista del Tribunal Federal de Justicia Fiscal y Administrativa or Journal of the Federal Court of Tax and Administrative Affairs, Sixth Era, Volume 26, February 2010 (VI-TASR-EPI-222).

La entrada Mexico simplifies the acknowledgement of priority claims in trademark matters se publicó primero en Reyes Fenig.

There seems to be an increasing number of cases related to three-dimensional trademark applications, resulting in new precedents related to these marks. In 2009, the Fourth and Ninth Courts of Appeals in Mexico City published a couple of precedents** regarding the requirements that three-dimensional trademarks must fulfill to be registrable in Mexico. Further, the Specialized Chamber in IP Matters of the Federal Court of Tax and Administrative Affairs published a precedent*** regarding the scope of rights provided by the registration of three-dimensional marks.

There have been a lot of discussions about the requirements to register three-dimensional trademarks, not only in Mexico but in many other countries and regions. On one side, companies and business are trying to differentiate themselves from competitors not only by developing new packages and containers and registering them as trademarks, but also by attempting to protect the shape of their products by registering them as a trademark. On the other side, there is a clear tendency of many Trademark Offices -including the Instituto Mexicano de la Propiedad Industrial or Mexican Patent and Trademark Office (MPTO)- to reject the registration as a trademark of the three dimensional shape of an object when the shape has a functional character.

This post will be mainly about the possibility of registering the three-dimensional shape of a product as a trademark in Mexico.

In the first place, there is no doubt that Mexican law allows the registration, as a trademark, of the shape of a product. Section 89, paragraph II of the Industrial Property Statute stipulates that three-dimensional trademarks may be registered in Mexico; and section 53 of the Rules of the Industrial Property Statute explicitly provides that the shape or presentation of a product may be registered as a trademark, among other three-dimensional marks such as packages and containers.

Notwithstanding the above, not all three-dimensional marks can be registered. Section 90, paragraph III of the Industrial Property Statute prohibits the registration of “three-dimensional shapes that are of public domain or that have become of common use, and that do not have originality to make them easily distinguishable, as well as the usual and common shape of the products and the one imposed by its nature or industrial function”.

Therefore, the shape of a product is registrable as a trademark, if: (i) such shape is original enough to allow it to make it easily distinguishable, (ii) it is not of public domain; (iii) it has not become of common use; (iv) it is not the usual and common shape of the product to be identified by the mark and; (v) it is not imposed by the nature or industrial function of the product.

With some many “if’s”, obtaining the registration of the three-dimensional shape of a product can be extremely difficult in Mexico. In the case of the shape of a product, no matter how original it may be, I cant’ imagine a design completely voided of functional characteristics, and the presence of a functional characteristic may be a cause of rejection of the trademark application.

Of course I am not saying that it is impossible to secure IP rights for the shape of a product. Industrial design registrations are often used to secure exclusivity rights for the shape of products. The issue I want to raise is directed to the trademark aspect of three-dimensional form of a product, and if it is actually possible to register it as a trademark while avoiding all the restrictions that the statute provides.

For example, in the field of industrial designs, it is possible to register the three-dimensional design of a light bulb, provided that the design is new and substantially ornamental. I highlight the expression ‘substantially’ because under Mexican law three-dimensional industrial designs have always to be referred to a specific industrial product. Therefore there has to be a minimum or tolerable degree of functionality in the design; otherwise, there would be no industrial product at all to apply the design to. In any case, it is clear that the exclusivity rights that the design registration provides do not include the functional or technical characteristics of the product or design.

However, in the field of trademarks, the shape of a light bulb, no matter how original and distinctive it might be, has to be determined in some degree by its nature and function. A complete absence of functionally in the product’s shape would result in a useless product or in no product at all.

Therefore, the consequence of claiming that the shape of a product has to be absolutely voided of functional characteristics in order to be registrable as a three-dimensional trademark (in my opinion, this has been the MPTO’s position in the last years) would be that, in practice, it is not feasible to obtain trademark protection for the three-dimensional design of a product itself, no matter what the statute or its rules provide whatsoever.

I believe that the current position of Mexican authorities about the registration as trademark of the shape of products is too dogmatic, even against the law.

In an effort to avoid the rejection of applications for the three-dimensional marks on grounds of functionality or lack of distinctiveness, some applicants added literal and figurative elements to the three-dimensional mark subject of the application. These three-dimensional trademark cases with additional bi-dimensional elements included containers (the precedents from the Fourth and Ninth Courts of Appeal in Mexico City make specific reference to the shape of containers) and shapes of products.

The main argument behind adding intrinsically distinctive literal and figurative features to the three dimensional trademark was that the trademark must be analyzed as a ‘whole’, without splitting its bi-dimensional and three-dimensional elements (“The whole is other than the sum of its parts”). The applicants claimed that, if as a result of the examination of the trademark as a ‘whole’, it was reasonable to conclude that the shape of the product or container plus the literal and figurative bi-dimensional elements, allows an average consumer to distinguish the product from other of the same kind, then the trademark is registrable, and the exclusivity rights would comprise the three-dimensional design and the literal and figurative elements.

Eventually, different courts of appeals issued contradictory decisions. The contradictions caused the intervention of the Supreme Court and the publication of a binding precedent in April 2010.

Basically, the Supreme Court ruled that there was no obstacle for the filing of a trademark application for a three-dimensional mark that also includes literal or figurative elements. However, the decision also provides that the examination of the registrability of such a trademark must be conducted in two stages. In the first stage, the examiner must consider the three-dimensional aspect of the mark only, excluding the bi-dimensional features. If the conclusion of the examiner is that the three-dimensional trademark is registrable, then he/she may start the second stage of the examination and consider the literal and/or figurative aspects of the trademark.

The decision expressly states that if the three-dimensional feature of the mark is not intrinsically registrable, then the trademark application must be rejected, without need of considering the bi-dimensional elements that the trademark may include.

The decision of the Supreme Court only provides guidelines about the examination of three-dimensional trademarks. It does not provide any restriction about the intrinsic registrability of the shape of a product as a trademark.

Personally, I am against to the two-stage examination of three-dimensional trademarks provided in the Supreme Court’s decision. However, it is a binding precedent that confirms the way the MPTO has examined three-dimensional trademarks in the last years. Therefore, it is most likely that the somehow hostile approach to this kind on non-traditional trademarks (especially to the ones that protect the shape of products) will continue in Mexico.
* Judicial Journal of the Federation, Ninth Era, XXXI, April 2010, page 430.

** Judicial Journal of the Federation, Ninth Era, XXIX, January 2009, page 2769; and Judicial Journal of the Federation, Ninth Era, XXIX, March de 2009, page 2811.

*** Journal of the Federal Court of Tax and Administrative Affairs, Sixth Era, Year II., No. 24, December 2009, page 259.

La entrada The Mexican Supreme Court provides guidelines about examination of three-dimensional trademarks 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.

The decisions of the FCTAA have made the Mexican Patent and Trademark Office (MPTO) to acknowledge the extension of term of several pipe-line patents, for the same extended term granted to the corresponding foreign patent from which the priority was claimed. Further, the decisions of the Highest Chamber of the FCTAA allowing the extension of term are now binding*. For a more detailed explanation about Mexican pipe-line patents and their extension, you may review the post  The extension of life of patents in Mexico.

In spite of the relatively large number of extended pipe-line patents, all the controversy surrounding the pipe-line patents themselves and their life extensions and that the FCTAA published the first precedent regarding this matter in 2005, neither the Federal Courts of Appeals nor the Supreme Court had published any ruling concerning the term extension of pipe-line patents, until January 2010.

The January 2010 issue of the Weekly Judicial Journal of the Federation publishes a non-binding decision of he First Court of Appeals in Administrative Matters of the First Circuit (based in Mexico City)**. This decision is associated to a final appeal (Amparo Directo) filed by the well-known Mexican pharmaceutical company Probiomed, S.A. de C.V. The decision rules that the term of pipe-line patents, and of all patents in general, cannot be extended whatsoever. This decision is in open conflict with the binding ruling of the FCTAA, and restarts a discussion that I thought was (a few technicalities aside) essentially over, as a consequence of the binding precedent from the FCTAA and because all pipe-line patents, even the extended ones, should expire by mid 2012 (the statute provided that no pipe-line patent could have a term longer than 20 years counted from the filing date in Mexico).

Notwithstanding the above, the decision of the Federal Court of Appeals does not imply an actual change in the way Transitory Article Twelve of the 1991 Industrial Property Statute has been understood, particularly concerning the extension of pipe-line patents.

The decision of the First Court of Appeals in Mexico City is non binding (the binding precedents of the Highest Chamber of the FCTAA are not binding for  the District Courts and Courts of Appeals, only for the different lower Chambers of the FCTAA), so there is no reason for the Specialized Chamber in Intellectual Property of the FCTAA to stop following the binding decision of the Highest Chamber of the FCTAA and continue ordering the MPTO to acknowledge the term extension of pipe-line patents when the foreign patent offices grant the term extension of the foreign patent that corresponds to the claimed priority in the Mexican pipe-line patent.

We have to wait to see if the precedent from the First Court of Appeals in Mexico City causes the intervention of the Supreme Court. The Supreme Court may intervene if there is a contradictory ruling from another Court of Appeals. I believe that at least the first decision of the Highest Chamber of the FCTAA allowing the extension of term of a pipe-line patent (precedent V-P-SS-629, decided on July 7, 2004) was appealed by the MPTO and a Court of Appeals had to decide based on the merits of the appeal (the statute changed in December 2005; since then, most appeals of the MPTO against the decisions of the FCTAA are dismissed).

Not everybody is allowed to demand the intervention of the Supreme Court to decide which of the contradictory decisions held by different courts of appeals is right, but the MPTO can. I hope that the MPTO, or the parties involved in the appeals, will soon demand such intervention of the Supreme Court, so we may have certainty about the validity of the term extension of Mexican pipe-line patents. (Update January 2011: Unfortunately, as a result of some formal flaws in the appeal brief that the MPTO filed against the first decision of the Highest Chamber of the FCTAA of 2004, the Federal Court of Appeals dismissed that appeal without reviewing the merits, thus the intervention of the Supreme Court, will take more time to occur, if ever).

* Jurisprudencia or binding decision VI-J-SS-40. Journal of the Federal Court of Tax and Administrative Affairs, Sixth Era, Year II, No. 21, September 2009, page 27.

** Isolated precedent published in the Weekly Judicial Journal of the Federation, Ninth Era, Courts of Appeals, XXXI, January 2010, page 2173.

La entrada Mexican courts disagree about the term extension of patents 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 Mexican statutes do not stipulate any provision regarding trademark coexistence agreements and letters of consent. Nevertheless, these instruments have been widely used to prevent or overcome objections from the Mexican Patent and Trademark Office (MPTO) associated to applications for trademarks identical or confusingly similar to earlier registered or applied ones, protecting the same or similar products or services.

The Industrial Property Law provides that the MPTO will reject a trademark application when the trademark is identical or confusingly similar to an earlier registered or applied one, to cover the same or similar goods or services. Owners of existing registrations are allowed to apply for the registration of an identical trademark to protect goods/services similar to those covered by the senior registration.

The attitude of the MPTO to trademark coexistence agreements and letters of consent has changed, and in the last twenty four months it has been quite hostile. Now the question would be: if they are not regulated, do letters of consent and coexistence agreements actually work in Mexico?

In general, letters of consent and coexistence agreements have two basic purposes: (i) to overcome an objection raised by an examiner, associated to a senior trademark registration or application; and (ii) to prevent or settle a trademark dispute between two different persons.

In general, Mexican practitioners give more importance to the administrative aspect of the letter or agreement (as a mean to overcome an objection from the examiner) and often neglect the second contractual aspect, overlooking the rights and obligations arising from the letter of consent or coexistence agreement.

Consequences of letters of consent and coexistence agreements in connection with the MPTO

As I stated above, letters of consent and coexistence agreements are not regulated in Mexican law, thus they are not binding for the MPTO.

The Mexican Industrial Property Law states that one of the aims of the statute is “encouraging the improvement of the quality of goods and services in industry and commerce, according to the interest of the consumers”.

With the above in mind, the MPTO started arguing, about two years ago, that the protection of the consumers must have priority over the interests and wishes of the trademark owners. As a consequence, the approach of the MPTO to letters of consent and trademark coexistence agreements has been lees friendly than it used to be.

In an effort to provide some certainty about how effective a letter of consent might be to improve the chances of having a trademark registered in spite of the existence of earlier registered identical or confusingly similar trademarks, to cover the same or similar products or services, the MPTO developed a few guidelines. The guidelines are not actual directives, since they do not appear in any document or internal regulation, and have been communicated orally by the official in charge of the trademarks area of the MPTO in conferences with practitioners, so it also means that they may become more liberal or more astringent at any time and without notice.

Basically, the MPTO will accept a letter of consent or coexistence agreement to dismiss an anticipation, in the following cases:

(i) Similar trademarks covering the same or similar products or services, provided that the distinctive element of one of the trademarks is not identically reproduced in the other trademark; and

(ii) Identical trademarks covering similar products or services, provided that the goods or services listed in the pending application are not implicitly included in the list of products or activities of the senior trademark registration/application, or vice versa.

The MPTO will not accept a letter of consent or coexistence agreement in the following cases:

(a) Identical trademarks covering the same products or services. A word mark would be regarded identical to a word+design trademark if they share the same words.

(b) Confusingly similar trademarks that share the same distinctive element to cover, implicitly or explicitly, the same products or services.

This last guideline is causing problems to corporations that allow different subsidiaries or sister companies to register trademarks using the same house mark or distinctive feature for their specific lines of business, because the MPTO is rejecting such new applications, even when the applicant files a letter of authorization or agreement executed with the proprietor of the senior trademark registration †(see updates of January 2011 and April 2013).

In a case I found a few minutes ago while browsing in the on-line database of the MPTO, on February 20, 2009, the MPTO rejected the trademark application No. 919,139 “ILT ON SITE” filed by a Mexican corporation to cover “real estate affairs”, due the existence of the earlier trademark registration No. 982,020 “ILT”, also covering “real estate affairs”. The MPTO rejected the application in spite of the fact that the owner of the anticipation is a shareholder of the applicant and that he executed a letter of consent, stating that he authorized the registration of “ILT ON SITE” by his company.

Usually the MPTO does not issue an office action, informing the applicant that it will not accept the letter of consent or coexistence agreement, instead, it issues the final rejection of the trademark application. From there, the only remedies available for the applicant are filing a petition for administrative review by a higher rank officer within the MPTO itself (often a waste of time), or an amparo indirecto or constitutional appeal with a District Judge, or an appeal with the Tribunal Federal del Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA), which is the most usual way of challenging the MPTO’s decisions.

It is important to state that the non-specialized Chambers of the FCTAA have issued inconsistent decisions concerning the consequences of letters of consent and coexistence agreements; I have no information about any ruling from the specialized Chamber.

† Update of January 20, 2010: The Specialized Chamber in IP of the FCTAA published a precedent that rules that a letter of consent may not be enough to overcome an objection raised from the MPTO associated to the existence of a an earlier registered or applied confusingly similar trademark covering the same or similar goods**.

Although I am aware of the existence of rulings in different senses, the only two published precedents I found (non-binding) from two of the non-specialized Chambers of the FCTAA*, expressly state that the MPTO should reject an application for a trademark identical or confusingly similar to an earlier registered one for similar goods or services, even if the owner of the earlier registered trademark expressly authorizes the approval of the application.

Therefore, letters of consent and coexistence agreements may not guarantee that the MPTO will approve a trademark application; in the best scenario, they would only increase the chances of success, provided that they follow the current guidelines of the MPTO.

† Update January 26, 2011: The Semanario Judicial de la Federación or Weekly Judicial Journal of the Federation of October 2010 published a non-binding precedent of the Fourth Court of Appeals in Administrative Matters in the First Circuit (Mexico City)*** regarding trademark coexistence agreements and letters of consent.

The court stated that the consent of the owner of a registered trademark is enough to allow an entity of the same economic group to obtain the registration of an identical or confusingly similar trademark applied to the same of similar goods of services. Therefore, the MPTO must issue the trademark registration.

The court ruled that the fact that the first trademark owner and the applicant belong to the same economic group will avoid conflicts between the proprietors and would also prevent any harm to the consumers’ interests, in spite of the coexistence of identical or very similar trademarks owned by different persons. The precedent make no reference whatsoever to letters of consent and coexistence agreements between individuals or entities that do not belong to the same economic group.

Although the decision of the Fourth Court of Appeals is not binding, thus unlikely to provoke any change in the short term, it  is an important precedent. As far as I know, it is the first published decision from a court of appeals that makes reference to trademark coexistence agreements. Further, the ruling is against the decisions that the MPTO and the Specialized Chamber in Intellectual Property Matters of the FCTAA have issued regarding letters of consent and trademark coexistence agreements.

† Update April 25, 2013: The Semanario Judicial de la Federación or Weekly Journal of the Federation of December 2011 published a jurisprudencia or binding decision (2/2011) of the Second Hall of the Supreme Court to end a contradiction between rulings of two courts of appeals (one of them was the aforementioned ruling of the Fourth Court of Appeals)****. The Supreme Court ruled (contrary to what the Court of Appeals stated) that the MPTO must reject an application to register a trademark identical to a previously registered one to cover similar goods or services if the application is filed by an individual or entity different from the owner of the senior registration, regardless if the applicant belongs to the same economic group than the owner of the registration or if there has been a consent.

Consequences of letters of consent and coexistence agreements between the parties

When a letter of consent is executed by the trademark owner only, it is only an unilateral declaration, with no binding effects for the applicant. However, once the letter if filed with the MPTO, the applicant is implicitly accepting the terms of the letter, and then it becomes a contract under Mexican law.

Most letters of consent I have reviewed are more or less vague about the rights and obligations of the involved parties. In many cases, the letter only states that the trademark owner ‘authorizes’ the registration of the applicant’s trademark for certain goods or services or in a specific International Class.

A plain authorization granted by the trademark owner must imply at least some obligations for the authorizing party and some rights for the applicant; the problem is that these obligations and rights would be implicit, not explicit. From my perspective, the ‘authorization’ implies the obligation for the trademark owner to not oppose the application, but nothing more. If the letter or agreement only refers to an “authorization”, the earlier trademark owner would be allowed to file a cancellation action against the registration resulting from the so authorized application, claiming that it invades the exclusivity rights arising from the senior trademark registration, because the general Mexican statute that governs contracts, provides that the waiver of any right must be explicit; otherwise it is illegal and unenforceable.

The above is just an example about the importance that a trademark lawyer should give to the contractual aspect of the letter of consent or a coexistence agreement. Further, if the applicant is unsuccessful in obtaining the approval of the trademark application, in spite of the authorization letter or agreement, such letter or agreement could be the only instrument available for the applicant to defend itself in case it decides using the unregistered trademark and, on the other hand, the earlier trademark owner decides to file an infringement action. What I mean is that even if the letter of consent or coexistence agreement was not effective to obtain the trademark registration from the MPTO, the obligations and rights contained therein would still be valid and enforceable between the parties, thus it becomes extremely important that the letter of consent or coexistence agreement explicitly stipulates the rights of the parties and the waivers.

*Journal of the Federal Court of Tax and Administrative Affairs. Fifth Era, Year VII, Volume IV, No. 73, January 2007, Page 1927. Thesis: V-TASR-I-2346.

* Journal of the Federal Court of Tax and Administrative Affairs. Fifth Era, Year VII, Volume IV, No. 73, January 2007, Page 1929. Thesis V-TASR-II-2347.

** (Update January 2010) Journal of he Federal Court of  Tax and Administrative Affairs. Sixth Era, Year II, No. 22, October 2009, Page 292. Thesis VI-TASR-EPI-105.

*** (Update January 2011) Weekly Judicial Journal of the Federation, Ninth Era, Courts of Appeals, Vol. XXXII, October 2010, page 3119.

**** (Update April 2013) Weekly Judicial Journal of the Federation, Tenth Era, Second Hall, Vol. III, December 2011, No. 4, page 2887.

La entrada Are letters of consent and trademark coexistence agreements effective in Mexico? 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.