Mexico joined the Madrid Protocol on November, 2012, and started accepting international registrations on February, 2013 (read our article about the accession of Mexico to the Madrid Protocol).

The Madrid Protocol is not perfect and applicants may find problems with the simultaneous examination of trademarks in different countries but, in general, I think it has proven to be a successful tool for international businesses.

Some countries’ legislation may provide specific burdens on right-holders of domestic and international registrations, forcing them to prepare additional filings to maintain the trademark rights in those countries.

The new Federal Law for the Protection of Industrial Property entered in force on November 5, 2020. It provides the filing of a declaration of actual and effective use. Such a declaration was added to the Mexican legislation since May, 2018.

The burden of filing the declaration of actual and effective use will impact, sooner or later, all trademark owners in Mexico, including owners of Madrid international trademark registrations.

The declaration of actual and effective use is due on two different moments:

1) Declaration of use after three years of registration.

The owners of trademark registrations issued on August 10, 2018, and thereafter, must file a declaration of actual and effective use, after the third anniversary of issuance of the registration. In the case of Madrid applicants, the filing is due after the third anniversary of granting of protection in Mexico (read our post about the new declaration of use).

The statutory term to file the declaration of use is very short: three months only, counted from the date the trademark registration (or the granting of protection of the international trademark registration in Mexico) becomes three years old.

One declaration is due per domestic registration. In the case of Madrid international trademark registrations, if the protection in Mexico was granted in more than one Class, one declaration of use is due in each Class; the Mexican Patent and Trademark Office (MPTO) assigns one separate Mexican registration number for each Class of products or services comprised in the International Registration. Further, each declaration of use has to be filed electronically or at the window of the MPTO by a local attorney authorized with a power of attorney. A government fee (about US$85.00) has to be paid with each declaration of use.

Failure to file the declaration of actual and effective use would result in the cancellation of the Mexican trademark registration or international registration, in full or in the Class where the declaration of use was not filed.

Furthermore, the protection in Mexico of the international registration shall be maintained only for the goods or services stated in the declaration(s) of actual and effective use.

2) Declaration of use when renewing.

A declaration of actual and effective use is required for all domestic trademark renewal applications filed on or after August 10, 2018.

In the case of Madrid International Trademark Registrations, a declaration of actual and effective use is due if filed on or after August 10, 2018. Given that it would be very difficult to file the declaration of use and the fee when filing the renewal with the World Intellectual Property Organization (WIPO), the MPTO will issue an office action, requesting the declaration of use and the fee[1]. We do not know if the MPTO will serve the office action through WIPO or if it will notify it through the Official Gazette.

One declaration of use per Class involved in the International Registration is due, and it has to be filed electronically or at the window of the MPTO by a local attorney. A government fee (about US$85.00) must be paid with each declaration of use, regardless any fee paid at WIPO with the renewal application.

The protection in Mexico shall be maintained only for the goods and/or services stated in the declaration(s) of actual and effective use.

[1] Under the old Industrial Property Law, the owner of the International Registration had three months to file the declaration of use, counted from the date WIPO notified the renewal, with no requierement from the MPTO. The notices that WIPO received from the MPTO explaining these, back then, new burden, may be reviewed here and here.

La entrada Madrid users, be warned: Renewing the International Registration is not enough in Mexico (Update 2020) se publicó primero en Reyes Fenig.

As a rule, a trademark registration is not enforceable against a third party that started using, in Mexico and in bona fide, a trademark identical or confusingly similar to the registered one, to identify the same or similar products or services, if such use started before the filing date in Mexico. Claiming a date of first use in the application creates an exception to the rule.

Further, as a rule, Mexican registered trademarks may be invalidated on grounds of earlier and continuous use, in Mexico or abroad, of an identical or confusingly similar trademark to identify the same or similar goods or services, provided that such use started before the filing date in Mexico and has been continuous[1]. Claiming a date of first use in the application creates an exception to the rule.

The claim of the date of first use in the trademark application does not have consequences before the issuance of the trademark registration. Mexico does not demand use of the trademark to issue the registration and claiming a date of first use would not expedite the examination of the application.

After the issuance of the Mexican trademark registration, if the registrant claimed a date of first use in the application, the resulting registration would be enforceable against a third party using an identical or confusingly similar trademark in Mexico identifying the same or similar goods or services, even if such use started before the filing date in Mexico. Only if the use began before the date of first use stated in the application, then the trademark registration would not be enforceable against said third party.

As I said before, the rule is that a Mexican trademark registration may be invalidated due earlier and continuous use in Mexico or abroad if the use started before the filing date in Mexico. However, as an exception, if the registrant claimed a date of first use in Mexico in the application, then the plaintiff in the invalidation action would have to prove that it started the continuous use in Mexico or abroad before the date of first use stated in the application, instead of the filing date in our country.

Stating a date of first use has an important downside. The Mexican Industrial Property Statute stipulates that a trademark registration may be invalidated if it was issued using false information stated in the application. Although I am not aware of any statistics available, most of the invalidation actions I have filed on grounds of false information in the application, were related to the date of first use stated in the trademark application. The Mexican Patent and Trademark Office and the courts had consistently decided that the plaintiff did not have the burden of proof to demonstrate that the date of first use stated in the application was false; it was the trademark owner who had to demonstrate the truthfulness or accuracy of the date of first use. Considering that affidavits of use have almost no value as evidence in Mexico, proving that the applicant did not lie when stating a date of first use could be very difficult, especially in cases when the date of first use was several years old.

According to the statute of limitations, the vulnerability of a registered trademark against an invalidation action due false information stated in the application has to be filed within a five-year term after the publication of the trademark registration in the Official Gazette.

As you may imagine, stating a date of first use in a trademark application could become a dangerous trap and a potential risk of invalidation.

Some judges did some isolated efforts to moderate the rigor of the cause of invalidation provided in the statute. For example, there was an old isolated precedent from 1990 that provided that the invalidation on grounds of false information stated in the application, namely the date of first use, should only be declared if the plaintiff proves that the trademark owner obtained an unfair advantage from such a date of first use claim or that the first use claim could cause an unfair competition situation. However, other judges not only did not follow the precedent, but most of them affirmed the opposite position.

Things changed recently. On July 2016, a panel of judges issued a binding precedent about the invalidation action on grounds of false information stated in the application[2]. The precedent basically states that, in a cancellation action claiming that the date of first use stated in the trademark application was false, the burden of proof to demonstrate that the date of first use on a trademark application was false is on the plaintiff.

The precedent will dramatically reduce the chances of getting a trademark registration invalidated due a false or inaccurate date of first use; it seems extremely difficult to prove that someone was not using a trademark in the date it stated I the application. Therefore, the plaintiff has to prove that it was materially or legally impossible for the trademark owner to start using the trademark in the date stated in the application. Other than the above, the plaintiff may file evidence suggesting that a date of first sue is false, but not an actual direct proof.

The precedent was not free of controversy, because of the technicalities it implied. A significant number of judges in the panel disagreed, and one of them even prepared a very interesting minority report.

In any case, claiming a date of first use now seems much safer for trademark applicants and owners than it was just a few months ago. The precedent could be fair for trademark owners, but it may also lead to illegitimate claims with dangerous consequences (read my post The relevance of the date of first use in Mexican trademark applications)

One question that remains to be solved is if this precedent may be applied to invalidation cases that started before the publication of the precedent. The Amparo Statute provides that binding precedents from the federal courts of appeals or the Supreme Court may not be retroactive. I think the provision prevents the federal courts of appeals and the Federal Court of Administrative Affairs from using the precedent to decide appeals filed after July 1, 2016. However, I believe the Mexican Patent and Trademark Office may start ruling cases using this new binding precedent, no matter when they were filed.

[1] It is not required to prove that the plaintiff’s trademark is well-known in Mexico; earlier and continuous use of the mark in any country is enough. The statue of limitations provides that such an invalidation action has to be filed within the third anniversary of publication of the issuance of the Mexican  trademark registration in the Official Gazette.

[2] “NULIDAD DE REGISTRO MARCARIO. CUANDO SE ALEGA LA FALSEDAD DE LA FECHA DEL PRIMER USO DE LA MARCA, CORRESPONDE AL ACTOR LA CARGA DE ACREDITAR LOS HECHOS CONSTITUTIVOS DE SU ACCIÓN”, at Semanario Judicial de la Federación, Volume II, No. 32, July 2016, page 1445. benefit-from-new-binding-ruling-precedent.

La entrada New binding ruling benefits owners of trademarks registered in Mexico that claimed date of first use. se publicó primero en Reyes Fenig.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nevertheless, Mexico acknowledges certain rights and defenses for the users of non-registered trademarks; Mexico also allows applicants to claim a date of commencement of use in Mexico, in order to obtain some benefits after the issuance of the trademark registration. In any case, these rights and defenses should not be construed as common-law rights (there is no common-law in Mexico) or exceptions to the first-to-file principle: the first applicant has priority to get the trademark registration, no matter who claimed the earliest date of first use or if the earliest applicant expressly stated that it has not started using the trademark at all.

In the same sense, only the registered owner of the Mexican trademark registration would have exclusivity rights on the trademark, regardless if a third party started using the same trademark before, even if the Instituto Mexicano de la Propiedad Industrial or Mexican Patent and Trademark Office (MPTO) has acknowledged such earlier use.

Notwithstanding the above, the claim of the date of first use of the trademark in the application, may actually extend the scope of rights resulting from the registration, but may also create a significant vulnerability of the trademark registration against an invalidation action.

I. ACTIONS AND DEFENSES FOR THE EARLIER USERS OF NON-REGISTERED TRADEMARKS IN MEXICO

The first user of a non-registered trademark in Mexico is not acknowledged as the proprietor of the mark, thus it may not file trademark infringement actions against other users of the same mark for the same goods or services.

Nevertheless, in theory, the first user of the trademark could file unfair competitions actions against other users of the mark, but it has to prove an intention to deceive the consumers, or that the trademark is well-known; in practice, it is difficult to prevail if there is not a registered or well-known trademark involved in the unfair competition claim.

Notwithstanding the above, Mexican law provides a defense and an action to the first users of non-registered trademarks to oppose the holder of a trademark registration.

A. Defense against a trademark registration

The Mexican statute provides that a trademark registration is not enforceable against a third party that have used in good faith and in Mexico, an identical or confusingly similar trademark to the registered one for the same or similar goods/services, if such use in Mexico has been continuous and started before the filing date of the trademark application or before the date of first used stated in said application.

B. Action against a trademark registration

The user of a trademark may file an invalidation action against an identical or confusingly similar registered trademark, covering the same or similar goods or services, provided that said use is continuous, started before the filing date of the application or the date of first use stated in the application, if any.

The Mexican statute of limitations stipulates that the invalidation action has to be filed within a three years term after the publication of the registration in the Industrial Property Gazette.

This action is unique because it is not necessary to prove earlier use in Mexico. Earlier and continuous use in any country in the world would be enough to invalidate the Mexican trademark registration. It is not necessary to prove that the used trademark is well-known or famous in Mexico (there is another action for those cases), and there is no reciprocity requirement in case the use took place abroad.

II. BENEFITS FROM CLAIMING FIRST USE IN A MEXICAN TRADEMARK APPLICATION

Claiming a date of first use in a trademark application may provide important advantages compared with a trademark registration with no prior use claim, although the applicant may benefit from those advantages only after the issuance of the registration.

The first use claim does not expedite or delay the prosecution of the trademark application. It is not required to file a specimen of the product/or service and the MPTO would not demand evidence confirming the date of commencement of use.

The claim –or lack of claim- about the date of first use and the statement stating that the trademark has not been used in Mexico may not be amended.

1. Defense of the trademark registration against earlier users

If a third party wants to challenge the validity of a trademark registration due earlier and continuous use in Mexico or any other country (as explained in I.B above) of an identical or confusingly similar mark covering the same or similar products or services, and the challenged registration has a claim of first use, then the plaintiff has to prove that it started using the trademark before said date of commencement of use (and not before the filing date in Mexico as it happens with a “regular” trademark registration).

2. Enforceability against earlier incorporated legal entities that use the trademark without authorization in their corporate name

The general rule is that the owner of a trademark registration may file an infringement action against a company that uses, as part of the corporate name, the registered trademark without authorization of the trademark owner, provided that:

(i) The infringing company’s activities are related to the goods or services covered by the infringed trademark, and

(ii) The filing date of the infringed trademark registration is earlier than the date of incorporation of the infringing company.

The above is the general rule. However, if there was a claim of first use in the trademark application, the trademark owner may file the infringement action against companies that started using the mark in their corporate names before the filing date of the application in Mexico, but after the date of commencement of use stated in the application.

One matter that has not been clarified in connection with this cause of infringement (actually, with all causes of patent, trademark and copyright infringement) is associated to the statute of limitations. The special statutes are silent about this issue, but the more general Federal Law of Administrative Procedures (complementary to the special Industrial Property and Copyright statutes) states a 5 years term.

The existence of a statute of limitations in connection to the infringement of IP rights has so many important implications (such as when the term stated in the statute of limitations starts; in our case,  when the infringing corporation ws incorporated, when the infringing corporation ceases activities or when the infringing corporation is is dissolved) that discussing them requires another post.

3. Enforceability against earlier non-authorized users of the registered trademark

The general rule provides that a Mexican trademark registration is not enforceable against a third party that started using in Mexico, in good faith, and before the filing date of the Mexican trademark application, a mark identical or confusingly similar to the registered one to identify the same or similar goods or services.

However, a Mexican trademark registration would be enforceable against a third party that started using before the filing date of the Mexican registered trademark, the same or a confusingly similar mark in Mexico (even in good faith) applied to the same or similar goods and services, if there is a date of first use stated in the trademark application, and such date of first use predates the date the third party began using the mark.

III. RISKS ASSOCIATED TO THE FIRST USE CLAIM IN THE TRADEMARK APPLICATION

This is not a perfect world, and the benefits that may provide the claim about the date of first use of a trademark in the trademark application are not exempt of certain risk, namely the vulnerability of the trademark registration with the first-use claim against an invalidation action due false information stated in the application.

The statute provides as cause of invalidation of a trademark registration, stating false information in the trademark application. Such false information may refer to any of the data fields of the application, such as the applicant’s name, address, nationality, and of course, the date of first use.

The statute of limitations provides that an invalidation action against a trademark registration due false information in the trademark application may be filed within a five years term, counted from the date of publication of the registration in the Industrial Property Gazette.

When a third party files an invalidation action against a trademark registration, claiming that the date of first use stated in the trademark application was false, the burden of proof is on the trademark owner, who has to prove that the date of commencement of use in Mexico was correct.

Mexican law and courts are very formalistic, thus proving the accuracy of a date of first use can become an extremely difficult task.

A non-binding precedent from the Tribunal Federal de Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA), states that if the date of first use was inaccurate by just a few days, and the evidence shows that the trademark owner it started using the trademark long before the plaintiff, the trademark registration should not be invalidated*. I think that the FCTAA’s position is absolutely fair, but it is not fully consistent with the statutem and the precedent has yet to be confirmed to be binding.

(Update September 30, 2016. A binding ruling from a panel of appeal judges in the Mexico City Circuit ruled that the plaintiff has to prove that the date of first use was false or innacurate. This ruling significantly reduces the risk of having a registered tradematk invalidated because there was a date of first use. Read my post “New binding ruling benefits owners of trademarks registered in Mexico that claimed date of first use”.)

In order to prevent the vulnerability to an invalidation action due false information stated in the application, the general advice is that the date of commencement of use should have some documentary backup, namely invoices issued to customers located in the Mexican territory.

If the applicant is not certain that the trademark has been used in Mexico, or does not have any document to prove it, the usual recommendation is not stating a date of first use in Mexico, either by explicitly stating that the mark has not been used in our country, or by leaving the data field in the application blank.

Use by persons different from the trademark applicant, such as sister and parent companies and shareholders, as a general rule, may not be claimed in the benefit of the trademark applicant.

Some tips about the claim of first use:

(1) If the applicant has used the trademark on goods or services different from the ones stated in the trademark application, the applicant should not claim a date of commencement of use.

(2) In my opinion, if the applicant has used the trademark on one or a few of the goods or services listed in the trademark application, but not all of them, the applicant may claim a date of first use and such date would benefit all the products or activities listed in the trademark application.

It is important to say that this is my opinion; the statute is silent regarding this issue, and there are no published precedents supporting or rejecting my position.

(3) In my opinion, stating that the trademark has not been used, or leaving the field blank (there would be a statutory presumption that the trademark has not been used), in spite of the fact that the trademark has actually been used in Mexico, would not be a false statement that would make the registration vulnerable to an invalidation action due false information.

From my perspective, stating that the trademark has not been used or failing to make a statement at all, in spite that the applicant has used the mark, would be a valid and legitimate waiver of the right to claim the date of first use, given that no third party would be harmed in any way by such non-use statement.

Of course, my colleagues may disagree with my opinions, especially in the absence of explicit provisions in the statutes or judicial precedents. Hopefully, the courts will decide who is right in a not so distant future.

* See Journal of the Federal Court of Tax and Administrative Affairs, Era VI, Year I, No. 11, November 2008, page 587. This decision somehow confirms an old isolated non-binding ruling from a Federal Court of Appeals of 1990 (Weekly Judicial Journal of the Federation, Eight Era, Volume VI, Second Part-1, July-December 1990, page 198).

La entrada The relevance of the date of first use in Mexican trademark applications 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.

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(Update March 7, 2019: Owners of all trademark registrations (including Madrid International Registrations) need to file a declaration of actual and effective use  with the Mexican Patent and Trademark Office after the third anniversay of the grant of protection in Mexico (one declaration per Class) and after filing the renewal of the domestic or international registration. For more information, read here).

There are two frequent questions I receive from foreign colleagues and Mexican businessmen regarding maintenance of Mexican trademark registrations.

One is if it is required to file evidence of use of a trademark with the Mexican Patent and Trademark Office (MPTO) from time to time in order to keep a trademark registration alive. The answer is ‘no’.

The other question is: If it is not required by the statute, why some Mexican trademark lawyers insist in this filing every three years?

Since 1991 it is not necessary to file statements or evidence of use of a trademark with the MPTO in order to keep a trademark registration in force. It does not mean, however, that stopping using a registered trademark would not have negative consequences. If the use of a registered trademark is interrupted for three consecutive years or more, the registration would become vulnerable to a cancellation action by a third party with adverse legal standing.

Notwithstanding the above, when renewing a trademark registration (Mexican trademark registrations are renewed every ten years), the attorney of record must state under oath with the MPTO that the trademark is being used on at least one of the goods or services covered by the registration, and that the use of the trademark has not been interrupted for three consecutive years or more (specimens are not required). Therefore, a registered trademark that has not been used for three consecutive years should not be renewed.

Some Mexican colleagues state that filing proof of use every three years with the MPTO would prevent third parties from filing a cancellation action on grounds of lack of use, although such opinion lacks of support on the statute or some precedent from the courts.

The effects to filing evidence or statements of use from time to time would be limited to dissuade third parties from challenging the trademark registration, if the trademark owner shows that it would have evidence to defend the registration if it becomes necessary. Therefore, and assuming it is not a trademark renewal, filing a statement of use (even under oath) would not provide any actual benefit for the trademark owner. In any case, the MPTO would issue an office action, but it would only be an acknowledgement of receipt; it would not acknowledge that the registrant proved the use of the mark.

If a third party files a cancellation action on grounds of lack of use, the trademark owner would have to prove that the trademark has been used in Mexico, either by the registered owner or a recorded licensee, regardless the evidence of use previously filed.

If a trademark owner is interested in filing some evidence of use in order to discourage third parties from challenging its trademark registration on grounds of non-use, we suggest filing evidence that would actually show the use of a trademark in Mexico, as in a cancellation action; a label or an affidavit of use would not be effective.

It is important to be very careful when filing proof of use with the MPTO. Filing wrong or insufficient evidence may actually encourage a third party to file the cancellation action due non-use instead of dissuading it.

When the filing of the evidence effectively discourages a third party from challenging the registered trademark, the trademak owner saves of thousands of dollars in attorneys fees, preparation of evidence and uncertainty about the outcome of the action. Unfortunately, the benefit is extremely difficult to measure.

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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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