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MEXICO: An Introduction to Intellectual Property

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Chambers Latin America 2023: Practice Area Overview

Mexico: Intellectual Property  

Current economic conditions affecting clients or the legal profession

Mexico is among the world's 15 largest economies and is the second largest economy in Latin America. The United States is its largest trading partner and the destination of nearly 80% of its exports.

Mexico's economy is diversified, including hi-tech industries, oil production, mineral exploitation and manufacturing. Mexico is the world's seventh agricultural power and ranks among the world's largest producers of coffee, sugar, corn, oranges, avocados and limes. Cattle farming and fishing are also important activities in the food industry. Mexico is also the world's fifth largest producer of beer and its largest exporter.

Industry employs 26.1% of the workforce and represents nearly 30.88% of GDP according to the World Bank. Mexico is among the world's leading producers of many minerals, including silver, fluorite, zinc and mercury. Moreover, oil and gas reserves are one of the country’s most precious possessions. The aerospace sector has grown sharply thanks to the development of a cluster in Querétaro and the presence of nearly 190 companies, including Bombardier, Goodrich, the Safran group and Honeywell; together these companies employ 30,000 people. Mexico is also one of the world's ten largest car producers and due to significant real estate investments, the construction sector is dynamic. In 2020, however, the manufacturing sector was deeply affected by the pandemic, especially the automotive, textile and beverage industries, and is still working to regain territory.

The service sector constitutes 59.87% of GDP and employs 61.37% of the workforce. The hi-tech, information and software development sectors are experiencing real momentum, driven by the quality of the workforce, clusters and low operating costs that favour the creation of call centres. Even though medical services and tourism had been growing steadily for the past few years, due to lower service costs than in other Western countries, 2020 saw a significant decline in the tourism industry.

The Mexican economy grew 4.8% in 2021. Manufacturing exports will support growth, benefiting from the strong recovery and policy support in the United States. Private consumption will strengthen gradually, aided by remittances and the rollout of vaccines.

Due to the COVID-19 outbreak, in Mexico, as in many other countries, many shops, restaurants and the industry in general were forced to close for a long period of time, which affected the economy in all sectors of the country.

In addition to the above, the courts and various administrative authorities, such as the Mexican Institute of Industrial Property (MIIP), also closed for several months at the beginning of the pandemic, which halted commercial and legal activity in the country. However, currently everything is back to “normal” and thus the commerce and economy are returning to their usual levels.

The level of activity, trends and developments in our area

According to the Mexican Institute of Industrial Property, in 2021 the number of inventions and distinctive signs submitted were the following:

Inventions: 

Patents: 16,161

Industrial Designs: 3,929

Utility Models: 706

Total: 20,796.

Distinctive signs: 

Trade marks: 195,185

Slogans: 4,762

Commercial Names: 296

Total: 200,243

Due to the COVID-19 outbreak, transactions through e-commerce grew significantly. Therefore there has been an increase in the number of counterfeit products or foreign products that use a trade mark that is registered in Mexico by a third party on sale in multiple platforms, such as Amazon, Mercado Libre and others.

Thus, e-commerce is the technology with the biggest impact on our clients’ trade marks, since more foreign products are sold in Mexico through various platforms without knowing if a trade mark is owned by a third party and could infringe its intellectual property rights.

On the other hand, by the end of 2020 (November 5, 2020), the New Federal Law for the Protection of IP (FLPIP) entered in force, which substituted the Industrial Property Law. The Mexican Congress enacted this law to comply with the obligations that Mexico has undertaken with the international treaties that were recently executed, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) and the United States-Mexico-Canada Agreement (USMCA).

Taking into consideration the new FLPIP, the enforcement of IP rights in Mexico is now more effective as damages can be claimed more quickly, without having to wait for a final and non-appealable resolution from the MIIP, as explained in the next question.

Additionally, considering the increase in the use of e-commerce, we expect to have more litigation cases related to this way of commercialising infringing/counterfeit goods.

New legislation that will have an effect on clients

As mentioned above, the FLPIP has entered in force and has several benefits for trade mark holders. For example, now the holder of an affected right can claim damages through the following two independent actions:

i) Before the MIIP, by filing a parallel procedure (incidental), once the plaintiff obtains a favourable decision declaring an infringement conduct; or

ii) directly before the Civil Courts by filing a civil or commercial lawsuit. In this scenario, the procedure may be suspended, in case the counterpart files as a counterclaim a cancellation or invalidation action against the plaintiff’s registration, which will be solved by the Trademark Office.

On the other hand, the Federal Copyright Law (FCL) was also amended in 2020, (July 1, 2020), as part of the obligations that Mexico had undertaken by signing the international treaties mentioned above, establishing the procedure known as “Notice and Take Down.”

This procedure obliges online service providers, websites, platforms, or internet search engines to remove and deny access to any infringing material, work, or content upon receiving a notice from the corresponding copyright holder.

These recent amendments are certainly having an important impact on the intellectual property system.

Potential hurdles or difficulties faced by clients and how these can be overcome

Taking into consideration the growth of e-commerce, the biggest challenge is how to know that there is a product being commercialised online that infringes trade mark holders' rights; if they are not aware that their trade mark is being used by an unauthorised party, how can they take any action to protect themselves?

Therefore what we have been successfully doing as a first step is registering our clients' trade marks in the databases of various platforms, and conducting periodic surveillance of: i) any counterfeit product, ii) any foreign product that may use a confusingly similar trade mark, and iii) any unauthorised sale of their products.

In our experience, if we detect any violation of one of our clients’ trade mark registrations, we have implemented several actions, including:

(i) the sending of a cease-and-desist letter directly to the unauthorised party selling the infringing product; and
(ii) requesting the platform to remove the infringing product, through the process operated by the platform in question.

By taking all the actions mentioned above, our clients have overcome the challenges associated with the growth of e-commerce.