Since 1997, the Mexican statute makes a distinction between personal rights and economic rights. Personal rights include the right to decide if a work should be disclosed or not, the right to modify the work, the right to oppose the mutilation of the work, and the right to be acknowledged as author, among other rights. As a rule, personal rights have no monetary value and may not be assigned by contract.

Economic rights include the right to copy the work, distribute copies, communicate the work, authorize the public use of derivative works (such as translations and adaptations), among others, and may be assigned and licensed.

As a consequence of the 2003 amendment to the Federal Copyright Law, many lawyers and associations of authors claim that the economic rights on works of authors that died 50, 75 or 90 years ago are still in force, hence the holders of such economic rights are entitled to claim royalties for the use, public communication or reproduction of the works.

However, a thorough review of the different provisions and past legislations regarding copyright may lead to a different conclusion.

The Federal Copyright Law of 1947[1] provided that the term of copyright was the life of the author plus 20 years. A new copyright statute enacted in 1956 extended the life of copyright to the life of the author plus 25 years.

The Federal Copyright Law of 1956[2] expressly stated that the copyright term of works of authors that died before the enactment of the new law would be automatically extended to the term provided in the 1956 statute. In other words, the Federal Copyright Law of 1956 provided the retroactive application of the new extended term of copyright.

The 1956 law was amended in 1963; the 1963 amendments were so deep and extensive that it is usual to speak about the Federal Copyright Law of 1963[3], as if it were a new statute. The Federal Copyright Law of 1963 extended the term of copyright to the life of the author plus 30 years after his death. However, unlike the 1956 statute, the transitory articles of the 1963 law did not provide that the new term could be retroactively applied.

An amendment in 1982[4] to the Federal Copyright Law of 1963 stipulated a new extension for the term of the copyright: the life of the author plus 50 years. Again, the transitory articles of the amendment did not provide that the extended term would be retroactive.

Constitutional article 14 prohibits the retroactive enforcement of a law or regulation, only if it harms an acquired right. However, in my opinion, as a rule, in order to retroactively enforce a new law or amendment, it is necessary for the new or amendment law to expressly provide such retroactive effect[5]. The only exception would be new laws or provisions that stipulate criminal or administrative penalties, if the new stipulation or law states a benefit or less severe penalty; in this case the new stipulation or law would be enforced automatically, without explicitly stating the retroactive enforcement of the new law of provision[6].

Without a provision allowing the retroactive enforcement of the extended terms of copyright stipulated in the Federal Copyright Law of 1963 and its amendment of 1982, it is quite arguable to state that the original copyright term stipulated in the Copyright Law of 1956, was extended by the Federal Copyright Law of 1963 or its amendment of 1982. If the terms stated in the Law of 1963 and its amendment of 1982 cannot be enforced in connection with authors that died when the Law of 1956 was still in force, the copyright on the works of an author that passed away, i.e. on October 31, 1963, were extinguished by October 31, 1988, (25 years after the date of death).

In the same way, the term of copyright of authors that died when the Copyright Law of 1963 was in force, but before the amendment of 1982, did not get the benefit of the new extended term. The exclusivity rights on the works of an author deceased in 1966 would be extinguished by 1996.

The Federal Copyright Law currently in force was enacted on December 24, 1996[7], and became enforceable on March 24, 1997. As I stated at the beginning of this post, the 1997 Federal Copyright Law was the first statute to provide an explicit distinction between personal and economic rights in the field of copyright[8]. Originally, the Federal Copyright Law of 1996 stated a term of 75 years, counted from the date of death of the author, for economic rights. As in 1963 and 1982, the Federal Copyright Law of 1996 did not stipulate that the new extended term of the economic rights on a work could be retroactively enforced; the 2003 amendment to the Federal Copyright Law (enacted on July 23, 2003, and enforceable on July 24, 2003)[9] that extended the term of economic rights to a 100 years, counted from the death of the author, did not state retroactivity either.

Therefore, in opinion, the extended terms for economic rights provided in 1996 and 2003 may not be extended to works by authors that died before the new terms became enforceable.

About a year ago, AIPPI submitted Question 235 or Q235 about the term of copyright protection in Mexico. Unfortunately, the answer to the question from the Mexican chapter did not analyze the issues regarding the retroactive enforcement of the extended terms of copyright protection in Mexico.

In conclusion, there are four possible scenarios regarding the term of copyright economic rights in Mexico, depending on the statute or amended statute that was enforceable by the time the author of the work died:

A. In the case of the works of authors that died by or before January 11, 1982, the term of the copyright economic rights expired on January 11, 2012. These works are in public domain now.

B. In the case of the works authors that died between January 12, 1982 and March 23, 1997, the term of the copyright economic rights will expire 50 years after the date of death.

C. In the case of the works of authors that died between March 24, 1997 and July 23, 2003, the term of the copyright economic rights will expire 75 years after the date of death.

D. In the case of the works of authors that passed away on or after July 24, 2003, the economic rights will expire 100 years after the date of death.

For more information about copyright in Mexico, you may read Some basics about copyright law in Mexico.

———————–

[1] The Federal Copyright Law of 1947 (in Spanish) is available here.

[2] The Federal Copyright Law of 1956 (in Spanish) is available here.

[3] The Federal Copyright Law of 1963 (in Spanish) is available here.

[4] The 1982 amendment to the Federal Copyright Law of 1963 (in Spanish) is available here.

[5] There is an old non-binding precedent (in Spanish) from the Supreme Court that supports this opinion: “Retroactividad de la ley (Teoría de los derechos adquiridos) (Legislaciones del Distrito Federal y de Yucatán)”, Semanario Judicial de la Federación, Quinta Época, Tomo LXXVIII, p. 2435.

[6] There is a recent binding precedent (in Spanish) from the Supreme Court: “Principio de retroactividad de la norma posterior más favorable. Procede aplicarlo en beneficio del gobernado cuando la nueva disposición deja de considerar antijurídica la conducta sancionada con multa fiscal”, Semanario Judicial de la Federación y su Gaceta, Décima Época, Libro XIX, Tomo 2, abril de 2013, p. 1321.

[7] The original text of the Federal Copyright Law of 1996 (in Spanish) is available here.

[8] Before 1996, the distinction between economic and personal rights was known in Mexico, but limited to the jurisprudence and judicial decisions, as evidenced in this non-binding precedent (in Spanish) from 1987: “Derechos de autor. Distinción entre el derecho de divulgación y el patrimonial de explotación de la obra”, Semanario Judicial de la Federación, Séptima Época, Volumen 217-228, Sexta Parte, p. 214.

[9] The text of the 2003 amendment to the Federal Copyright Law of 1996 (in Spanish) is available here.

La entrada The different lenghts of Copyright in Mexico se publicó primero en Reyes Fenig.

ACTA is an international treaty. Morocco, Singapore, South Korea, Australia, Japan and the United States of America already signed it, although is not still in force as far as I know. In very general terms, the purpose of ACTA is attacking the illegal trade of pirated/counterfeited products, including their massive distribution online.

There has been a lot of controversy around ACTA, not only in Mexico but in many countries where the adoption has been proposed. A well-known case is the rejection of ACTA by the European Parliament after its approval by the European Commission.

It is not the purpose of this post starting a discussion about the possible benefits and risks of ACTA. However, there were two situations that strongly called my attention about the decision of the Mexican government about signing ACTA. First, I think it was odd that the Mexican President decided to sign ACTA (the President is the ultimate responsible of signing an international treaty) in spite of the explicit opposition of the Senate and the Federal Telecommunications Commission. Second, there are still a lot of informed people that believe that the Internet is “law-free” (or lawless?) environment beyond any State jurisdiction.

1. ACTA was signed in spite of the opposition of the Senate and a relevant Mexican government agency.

The Mexican Senate organized a Plural Study Committee (Grupo Plural de Trabajo) to analyze ACTA. In its conclusions, the Committee expressly requested the Executive Branch not to sign ACTA.

The position of the Senate is extremely important because ACTA needs the Senate’s ratification to be in force in Mexico. On the other hand starting September 1, 2012, a newly-elected Senate will start working. Perhaps the President (who will step down from office next November 30, 2012) thought that the newly-elected Senate will be more favorable to ACTA than the current senators.

The Federal Telecommunications Commission (COFETEL) is the government agency in charge of regulating telecommunications. COFETEL also expressed an adverse opinion to ACTA. COFETEL’S press release 65/2010 states that ACTA “could negatively impact the rate of penetration and general development of the national Internet industry”. The opinion of COFETEL was not binding.

During an interview with the Mexican journalist Carmen Aristegui, the Commissioner of the MPTO stated that the opinion of COFETEL was disregarded on formal grounds, basically because there was no evidence that all the commissioners approved the opinion against ACTA and COFETEL did not confirm its position after a request from the MPTO. Therefore, it is clear that the President (not actually the MPTO) decided to ignore the opinion of the federal regulatory agency in the field of telecommunications, in the in spite of the explicit purpose of ACTA of impacting the digital environment.

Now that the term of President Calderón is about to end, in less than two months the Mexican government took material steps to make Mexico part of two somehow controversial international agreements related with Intellectual Property (the Madrid Protocol and ACTA), although it is unclear when Mexico will effectively join both agreements. We do not know when the Mexican government will deposit the accession document to the Madrid Protocol (it may take months, even years) and ACTA needs the ratification of the Senate.

The approval of the Madrid Protocol and the accession to ACTA were unexpected.

Although the MPTO has been providing information about the Madrid Protocol for at least one year, by September 5, 2011 the Ministry of Foreign Affairs had no knowledge of Mexico approving the Madrid Protocol, but in April 2012 the Ministry of the Interior submitted the Madrid Protocol to the Senate for approval, which was swiftly granted.

On the other hand, after the negative opinions of the Mexican Senate and COFETEL, ACTA seem dead and still the federal government signed it without giving any prior notice.

Recently, the Minister of Economy stated that Mexico decided to join the Madrid Protocol because the United Stated conditioned supporting Mexico to join the Trans-Pacific Partnership (TPP) to the approval of the Madrid Protocol. I would not be surprised that signing ACTA was also a condition set for supporting the accession of Mexico to the TPP.

2. Internet as a “free environment”

In the interview with the Commissioner of the MPTO, the journalist Carmen Aristegui suggested that internet is a “free environment” that should allow the free and unrestricted distribution of ideas content.

The journalist’s position reflect the extended idea about the Internet as a law-lawless environment, as if it were another planet away from the reach of the State.

It is clear that there is a lot of freedom in the Internet, especially freedom to express ideas and opinions; this blog is an example. However, the freedom and rights of any person have limits, and usually the limits are set by the freedom and rights of others.

The above is extremely important in the case of distribution of contents through the Internet, therefore distribution or works. Freedom as a rule in the Internet is not a license to infringe other people’s rights. Freedom of speech should be encouraged, but the freedom to express my own ideas and works is very different from communicating and distributing the ideas and contents of other people when the owner of the rights on such ideas and contents does not agree with their distribution.

The distribution of contents and works in the Internet should be punished when such distribution is against the will of their authors or right-holders, even in the absence of monetary gain. Copying and distributing contents and works of others without authorization or against the explicit prohibition of the right-holders to do so without profit might not be a crime, but it is still against the law. Unfortunately, a lot of people do not understand this and prefer to support a misconception of freedom in the Internet.

Mexico must improve the protection of IP rights, there is no question about it. However, treaties and laws by themselves are not enough to change the reality. Existing laws and regulations in Mexico are fairly good (they could be better), but Mexico has to dramatically improve the enforcement, and in order to do so, courts and administrative authorities need better technical and material capabilities, and also the will. Getting the will to strongly and consistently enforce the existing laws against counterfeiting is difficult when the society continues considering most cases of piracy and product counterfeiting as lesser offenses, if offense at all. Incentives to purchase counterfeited goods are strong, and as long as there is demand for counterfeited products there will be offer, no matter treaties and laws. People need to be educated not only about the importance of protecting and observing IP rights but about the benefits that society and as whole and its members individually obtain from IP. Otherwise, I do not see how to win this fight.

La entrada Mexico signs ACTA se publicó primero en Reyes Fenig.

The amendments corrected a few inconsistencies between the Rules and the Industrial Property Statute (the Statute), adjusted a few regulations to follow some repeated rulings of the Federal Court of Tax and Administrative Affairs and simplified the acknowledgement of priority claims in trademark matters.

CHANGES TO THE RULES OF WORD MARKS

I think that the most important amendment to the Rules refers to word marks.

In Mexico, only graphic symbols are acknowledged as trademarks, thus only graphics may be registered to obtain exclusivity rights on them. Depending on the claims stated in the application and the characteristics of the mark, there are four kinds of registered trademarks: nominativas or word-marks, innominadas or design-only marks, mixtas or word+design marks and tridimensionales or three-dimensional marks.

Word-marks consist of literal elements only, such as a word, a phrase or a combination of numbers and/or letters. One issue that neither the Statute nor the Rules clarified was if symbols, such as &, @ and +, and written signs that do not exist in Spanish, such as the ‘ (apostrophe), could be registered as part of a word-mark.

The amendment to the Rules of June 10 seeks to clarify, in a restrictive and confusing way, what can be included in a word mark.

The amended last paragraph of section 56 of the Rules, now states that “word marks and slogans may only include letters or words taken from the roman alphabet, western Arabic numbers and those written signs that would help the correct understanding of the mark”.

What surprised me more of the amendment, was the used of the expression “Roman alphabet”. In Mexico the official language is Spanish, and Spanish speakers use the Spanish -not the Roman- alphabet.

I believe that the new section 56 of the Rules now clearly exclude symbols such as &, #, @, mathematical symbols (+, /, >, <) and currency symbols ($, €), among others, from being included in trademark applications for word-marks.

Further, the amended section 56 of the Rules makes it very clear that word marks may not be expressed in characters taken from non-Latin alphabets, such as Greek, Hebrew, Chinese, Arabic, Cyrillic, etc.

The reform does not prohibit the registration of trademarks that include mathematical symbols or letters from non-Latin alphabets. However, such trademarks may not be registered as word marks, given that the Rules now implicitly consider such characters as a sort of drawing. Therefore, trademarks with non-Latin Characters or other symbols as the ones explained above have to be filed as design-only marks (innominadas) or word+design (mixtas) marks.

This is a quite relevant change. If a trademark is registered as a word-mark, the trademark owner may use it in any font, size and color, and such use would be regarded as use of the registered trademark for maintenance purposes. If a trademark is filed as word+design or design-only, the registrant must attach a print of the trademark to the application; if the registration is issued, the trademark owner must use the trademark as registered, so the use may be acknowledged as valid use of the registered trademark for maintenance purposes, including renewal.

I did not understand the distinction in the amended section 56 of the Rules about “written signs that would help the correct understanding of the mark”. What is the point of the distinction? If there are written signs that would help the correct understanding of the mark, then there could be written signs that would not help the correct understanding of the mark, or worst, that help the incorrect understanding of the mark?

My opinion is that there are no written signs included in the mark that help the correct understanding of the trademark. Written signs included in the mark are not intended to helping understanding the mark; they are part of the mark, thus all orthographic signs should be allowed to be included in word-marks. I am sure that among the written signs that will not have a problem to be part of word-marks are the punctuation marks, the exclamation (¡ !) and interrogation points (¿ ?), the diaeresis and the accent, although doubts and objections about the dash and the apostrophe are likely.

Other unclear, and somehow odd, issue involves trademarks that evolved from the Latin alphabet but do not actually belong to it, i.e. “Æ”, “Ç”, “Ø”, etc. Given that a word mark may only include characters from the Roman alphabet, the first reaction could be that a trademark that includes such letters may not be registered as a word-mark.

However, there are letters in Spanish that evolved from the Roman alphabet, but do not actually belong to it, such as “J”, “W” and most notably the “Ñ”. There is no question that the “Ñ” belongs to the Spanish alphabet, but undoubtedly is was not a part of the Roman alphabet; further, the classic Latin alphabet did not include the “J” and “W”.

Certainly, it would be ridiculous stating that, as a consequence of the amendment of section 56 of the Rules, words that include the “Ñ”, “W” or “J” may not be registered as word-marks any long. Then, the new section 56 of the Rules should be understood in the sense that all words including letters that evolved from the Latin alphabet should be allowed to be part of word-marks, naturally including the “Ñ”, “W” and “J”, but also “ß”, “Å”, “Ŝ”, “Ų” and all other letters that do not exist in Spanish but in other languages that that evolved from Roman characters too.

I am not sure if the Mexican Patent and Trademark Office will use a narrow concept of “Roman Alphabet” (excluding the registration as word-marks of trademarks that use the “Ñ”, “J” or “W”) or liberal (including each and all letters that developed from Roman, regardless if they belong to the Spanish alphabet or not), but it would not the first time that a rule or statutory provision is constructed in a way different of what the Government or the Congress meant. As example, there is the case of the extension of life of pipe-line patents (see The extension of Life of Patents in Mexico)and the inclusion of formulation patents in the linkage system situated in section 67 Bis of the Rules (see The Mexican Supreme Court expands the linkage system to prevent patent infringement). It would be odd and regretful, but I would not be surprised if in the future, Wikipedia becomes the authorized source to know what trademarks may be registered as word-marks in Mexico and which ones do not.

The Mexican government would have avoided problems if, instead of using the phrase “Roman alphabet”, they would have used the expression “Spanish alphabet”.

Another topic that makes me uneasy is the reason behind the restrictive amendment to section 56 of the Rules. Why the Executive Branch decided to restrict the possibility of obtaining word-mark registrations to those trademarks using Latin characters only? In a global economy, especially in such an open economy as the Mexican, it does not make much sense to close the possibilities of giving full protection to trademarks originated in other nations just because they are written different.

Further, why denying registration as word-mark of trademarks that use non-orthographic characters (the +, @ and &, for example)? I do not see a technical reason for narrowing the kind of characters that a word-mark may include, especially in the case of symbols that are widely used in Mexico.

I also think that the Administration lost a good opportunity to clarify if it is valid disclaiming words, phrases or letters from word-mark trademark applications. It also waste the opportunity of explaining whether the registration of a design-only or word+design trademark filed in black and white or grays gives the trademark owner the right to use the registered design in any color or color combination, in spite of having being registered in white and black or grays.

In general, I am in favor of any amendment to the Rules or the Statute that provides more certainty about the procedures and substantive rights, even if I do not like the amendment itself. Therefore, the upside of the amendment of section 56 of the Rules is that now it is clear that trademarks including or consisting of non-orthographic symbols and signs, and marks written in non-Latin characters cannot be registered as word-marks in Mexico. Now we have to clarify, and probably the courts will do it, how narrow or liberal is going to be the concept of “Roman Alphabet” that Mexican lawyers will have to use in trademark law to determine if a trademark may be registered as word-mark.

Finally, an issue that should concern Mexican practitioners is the potential conflict between the new Mexican Rules and the Paris Convention, in connection with priority-based trademark applications for word-marks that include letters or signs that may not be registered in Mexico, under the amended Rules, as word-marks.

La entrada Amendments to the Rules Governing Registration of Word-Marks in Mexico se publicó primero en Reyes Fenig.

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 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.

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.

On January 5, 2009, the new Chamber specialized in intellectual property of the Federal Court of Tax and Administrative Affairs (FCTAA) started working.

The Mexican Patent and Trademark Office (MPTO) is the first instance in most IP matters (registration, administrative enforcement and validity of IP rights).

For the second instance, the appellant has three alternatives available: (i) a petition for administrative review with a higher rank official of the MPTO itself (usually a waste of time); (ii) an amparo appeal with a Federal District Court; (iii) or an appeal with the FCTAA. The appeal with the FCTAA is the most usual.

The tribunal colegiado de circuito or federal court of appeals will continue being the final instance.

The FCTAA has jurisdiction to decide cases in a wide range of administrative-related areas, such as environment, administrative liability of federal officials, federal taxes, trademarks, patents, copyright, mining, logging permits…

The FCTAA has Chambers all over the country; in Mexico City, where most of the administrative activity is concentrated, it has thirteen unspecialized Chambers of each Judges. There is also a Highest Chamber of eleven Judges. Before January 5, most appeals related to an IP case would be, more or less randomly, sent to one of the thirteen unspecialized chambers in Mexico City.

Starting January 5, 2009, a single Chamber will concentrate all the appeals filed with the FCTAA regarding IP matters. Most cases that were handled by the other Chambers of the FCTAA, in Mexico City and in other states, have been transferred to the specialized one.

Although the new specialized Chamber is considered by most practitioners an important breakthrough, its life could be short in connection to trademarks, patents and litigation cases related thereto, as well as in most copyright administrative enforcement cases.

The jurisdiction of the FCTAA in trademark, patent and administrative copyright enforcement matters started with an amendment of the Federal Law of Administrative Procedures enacted on April 2001, that provided that proceedings and decisions from several government agencies, including the MPTO, would be regulated by the Federal Law of Administrative Procedures.

The 2001 amendment was severely questioned by most IP practitioners, given the many technical deficiencies of the Federal Law of Administrative Procedures. However, we learned to live with it, and eventually appreciated some important advantages that the Federal Law of Administrative Procedures offers given its pro-applicant profile.

However, on November 2006, the Chamber of Representatives passed a bill that amends the Federal Law of Administrative Procedures, excluding intellectual property from the scope of the statute. As a consequence, the FCTAA will no longer have jurisdiction on IP matters.

It was an odd amendment. The reasons stated by the lawmakers that proposed the bill were extremely poor. The FCTAA was not consulted, and who was actually behind the bill to exclude IP matters from the scope of the Federal Law of Administrative Procedures remains a mystery, although the lawmaker that proposed it is from the current government’s party. Although some lawyers welcomed the amendment, most practitioners are against it. As far as I know, the MPTO has not assumed any position about the amendment to the Federal Law of Administrative Procedures, but it is well-known that the MPTO’s officials have never been happy with such statute.

The bill to amend the Federal Law of Administrative Procedures was unanimously approved by all parties at the Chamber of Representatives on November 2006. Odd enough, on December 2007, the FCTAA announced the creation of the Chamber specialized in IP matters.

Now the Senate must approve the bill in order to be enacted by the President. The bill has been pending with the Mexican Senate for more than a year. The Mexican chapter of AIPPI has opposed the bill and urged the Senate to reject it. We’ll see if the objections against the amendment of the Federal Law of Administrative Procedures, persuade the Senate to reject the bill.

Meanwhile, the new IP Chamber of the FCTAA (located in Mexico City) has started working. Although I do not think that the creation of the specialized Chamber will solve the considerable backlog of IP-related cases nor expedite the appeals procedures, I would expect higher quality decisions.

La entrada New Intellectual Property Court in Mexico se publicó primero en Reyes Fenig.

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

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

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

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

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

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

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

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

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

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

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

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

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

La entrada Damages claims due patent and trademark infringement se publicó primero en Reyes Fenig.

Trademark applicants must be careful when filing trademark applications. Otherwise, the resulting trademark registration may be either too restrictive, too vague or in the worst-case scenario, completely useless to provide an effective trademark protection.

The following are a few tips for trademark applicants in Mexico:

What trademark should apply for?

a) First, the applicant must register those trademarks that are already being used in Mexico.

b) Second, the applicant should register those trademarks that are not yet being used in Mexico, but it plans to start using them in the short or medium terms. It is not necessary to prove use of the trademarks to obtain the registration and the trademark owner would have three years to start using them in Mexico before they become vulnerable to cancellation due non-use.

(Update May 19, 2018: An important amendment to procedural and substantive trademark-related provisions was enacted on May 18, 2018. For Mexican registrations issued on August 10, 2018, it would be compulsory to file a declaration of use within a three-month term after the third anniversary of the trademark registraton. Failure to file the statement of use would result in the automatic cancellation of the registration. For more information, read our post).

c) Third, the applicant may register trademarks that are not being used and there are no plans to use them, but it wants to block them for use or registration by third parties. If after the third anniversary of the registration the trademark owner maintains the interest in blocking the trademark, it may get around the vulnerability to cancellation due non-use by re-filing the application and obtaining a new registration.

What version of the trademark should be registered?

Most trademark applicants will have two or three options to register the trademark: (i) in standard block characters; (ii) characters with a design; (iii) a design without alphanumeric characters.

Mexican law provides that registered trademarks should be used as registered, or with minimum changes, provided that they do not affect the distinctiveness of the trademark.

With a few exceptions, the stylization of trademarks tends to change with time. Although a word+design trademark registration would give proprietary rights on the mark and the design, the trademark owner has to use the trademark as registered or with non-material changes. A significant variation in the used stylization or design may cause the registration to eventually become vulnerable to a cancellation action due lack of valid use of the registered trademark.

Sometimes trademark owners find that because the evolution of the designs, the existing registrations are not any longer useful, and they have to file new trademark applications in order to guarantee an adequate protection, although giving up the filing date of the “obsolete” registrations; in a first-to-file system, giving up a filing date has some undesirable consequences in connection to the vulnerability of the trademark registration against different causes of cancellation, such as earlier use in the particular case of Mexico.

On the other hand, if the trademark is registered in standard block characters, the use of the mark in any letter style, size or color would be considered as valid use of the registered trademark for maintenance purposes. Therefore, the proprietary rights on the trademark will remain unaffected by the changes of the stylization of the mark.

Concerning design trademarks, most trademark practitioners agree that a design registration in black and white would provide a broader and more flexible protection than if claiming colors. The general opinion is that a design registered in black and white allows the registrant to use the mark in any color combination, although it is important to remark that said opinion is not expressly supported by the statute or some judicial precedent.

Therefore, in an ideal scenario, the applicant should file applications for both the stylized and the standard character trademark. If the trademark involves a logo in colors, filing the applications with and without color claim would also be advisable.

Unfortunately, budget limitations often prevent trademark owners from ideal scenarios, and force them to make choices. Although each case is different and require a specific analysis, in most cases I would recommend filing the application for the mark in standard block letters. However, if the logo and/or stylization is highly distinctive and there is a high commitment to use the trademark without changes in the colors and fonts, the application should be filed for a word+design trademark claiming the colors. An intermediate solution would be filing the application for the word+design trademark in black and white.

Who should file the trademark application?

There are many reasons and situations that may impact the decision about who should be the trademark owner, such as corporate policies and tax advantages.

If we limit the perspective to the Mexican trademark law, there are two issues that demand special attention as for who should be the applicant:

a) Claim of use. Mexican law allows trademark applicants to claim the use in Mexico earlier than the filing date in our country. If the trademark registration is issued, the use claim would give the trademark owner some additional advantages in case of a dispute with third parties if compared to a registrant that did not claim earlier use.

Notwithstanding the above, claiming use may be tricky. The applicant is not allowed to claim in its benefit the earlier use in Mexico performed by a parent or sister company or a subsidiary. Although the use claim gives some advantages to the registrant, it also may allow third parties to challenge the validity of the trademark registration claiming that the date of commencement of use stated in the application is false. The burden of proof on such cases would be on the trademark owner, who would have to demonstrate that the stated date of first use is true.

(Update May 19, 2018: A binding decision from the Federal Courts of Appeals ruled that the burden of proof to prove that a date of first use stated in a Mexican Trademark Applicaton is false is on the plantiff. This ruling makes claiming a date of first use in Mexico much safer. For more information, please read our post).

b) Licensing. Lack of use of a registered trademark by the trademark owner for three consecutive years (after the registration) on at least one of the goods/services described in the registration would make the trademark vulnerable to cancellation due lack of use.

Although license agreements are fully valid and enforceable between the parties without any special formality, the use of the mark by a licensee would inure in the benefit of the trademark owner only if a written license is recorded with the MPTO; sister companies and subsidiaries would be considered licensees too for these purposes. There have been several decisions from the MPTO and the Federal Court of Tax and Administrative Affairs (FCTAA) that flexibly such a formalistic statutory requirement, there are no binding decisions yet.

Therefore, if the application is filed by an individual or entity that would use the trademark through a licensee or franchisee, it should take into account that it will have to eventually record a written license with the MPTO.

In which International Class should apply?

Mexico does not allow multiple-class applications. The applicant must file one application per International Class, according to the Ninth Edition of the Nice Classification.

This is an issue trademark applicants must be very careful about. If the examiner considers that the application includes goods/services of more than one International Class, she/he will demand the applicant to delete some of the goods/services from the application. If the applicant is interested in securing trademark rights on the deleted products or services, they would have to be included in a new application that would not have any sort of preference or priority arising from the original trademark application.

There are three considerations that may help to decide in which class(es) the trademark application should be filed in:

a) First, the trademark application must be filed for those goods or services where the trademark is already being used.

b) Second, the trademark application should be filed for those goods or services where the trademarks is not yet in use but there are plans to use it in the short of middle term.

c) Third, the trademark application may be filed for goods or services where there are no plans to use it, but the applicant wants to block third parties from using or registering the trademark in such services or products. As we stated before, the trademark registration would become vulnerable to cancellation due lack of use only after the third year after the registration of the mark. If it is a strategic mark, the registrant may re-file the application after the third year and obtain a new registration.

Although Mexican law does not allow “full-class coverage”, the current practice of the MPTO allows applicants to use the header of the international classes in the description, obtaining a virtually full-class coverage. (Update May 19, 2018: The overhaul of the Mexican tradenark system enacted on May 18, 2018, provides that the header of the Class may no longer be used as description of goods and services. Such a restriction will become effective on August 10, 2018. For more information, read our post). So far, such broad protection is not limited to the products or services generically stated in the class headers, but also include products or services than may hardly be considered as implicitly included in the class header, such as “retail services” in the case of the class 35. (Update May 25, 2013: The New Guildelines of the Construction of the Classification, in force since October 4, 2012, provide a restreictive construction of the Classification, thus goods or services do not explicitly stated in the application or identified by genre of the lits of products or services stated in the application or registration are no longer considered covered by the application or registration. Read the post).

If the applicant seeks the broadest possible protection, it may combine a specific description with the class header (The header of the Class may not be used. See above update of May 19, 2018); the use of the mark in only one of the stated services or products would be enough to maintain he registration.

Of course, the broadest the products/services description is, the higher the chances of entering into conflicts with third parties.

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