Preliminary injunction measures
IMPI inspection
Calculating counter-bonds and adjusting bonds
Federal circuit court criterion
Comment


One of the options available to the Mexican Institute of Industrial Property (IMPI) in IP rights infringement proceedings is the imposition of preliminary injunction measures against the alleged infringer.

Preliminary injunction measures

Under the IP Law, in order to prevent an IP rights infringement, the IMPI can:

  • order the infringing goods to be withdrawn from circulation or ban their distribution;
  • order the following to be withdrawn from circulation:
    • objects manufactured or used illegally;
    • infringing objects, wrappers, containers, packaging, paperwork, advertising material, signs, labels and similar articles; and
    • utensils or instruments intended or used for the manufacture, preparation or production of any of the articles specified above;
  • prohibit the marketing or use of the infringing goods with immediate effect,;
  • order the seizure of the infringing goods;
  • order the alleged infringer to suspend or discontinue the acts that constitute the IP rights infringement; and
  • order the suspension of the service or closure of the establishment in cases where the measures provided for in the previous bullet points are insufficient to prevent or avoid the IP rights infringement.

In order for the IMPI to impose provisional measures, the affected rights holder must comply with certain requirements, such as:

  • demonstrating that its IP rights may have been infringed; and
  • offering a bond to guarantee any possible damage caused to the alleged infringer following the implementation of the preliminary injunction measures.

IMPI inspection

Once the above requirements have been fulfilled, the IMPI will, through its authorised inspectors, conduct an inspection at the place where the IP rights infringement is alleged to have occurred in order to confirm the existence of the infringing conduct. The IMPI will then impose preliminary injunction measures and give the alleged infringer a short timeframe in which to file arguments in response to the inspection. Further, it will give the alleged infringer the option to pay a counter-bond to lift the preliminary injunction measures.

Calculating counter-bonds and adjusting bonds

In accordance with the IP Law, a counter-bond must equal 100% of the bond filed by the IP rights holder plus an additional 40%. In practice, depending on the provisional measures requested and the IP right that has allegedly been infringed, the IMPI requires rights holders to pay a bond:

  • whose amount is determined on a case-by-case basis; and
  • which will cover the damages that could be caused to the infringer following the imposition of the requested preliminary injunction measures.

Notably, once the IMPI has undertaken an inspection, it can ask the IP rights holder to increase the amount of the bond to cover the damages caused to the presumed infringer. This is because the IMPI may, after carrying out the inspection, determine that the bond initially filed by the IP rights holder was insufficient to cover the eventual damages caused following the implementation of the provisional measures. If the IP rights holder fails to file the complementary bond requested by the IMPI in the term granted, the measures will be lifted.

The above scenario is common in practice. When an IP rights holder asks the IMPI to seize allegedly infringing goods as a preliminary injunction measure, it is only after doing so that the IMPI can determine whether the goods seized are covered by the original bond paid by the IP rights holder. Therefore, it is highly probable that the authority will adjust the bond and ask the IP rights holder to file a complementary bond that covers all of the seized goods if the original bond is insufficient to cover them.

Federal circuit court criterion

On September 1 2017 a federal circuit court issued a criterion relating to the possibility of adjusting the bond amount set by the IMPI. With this criterion, the court recognised that the bond originally filed by an IP rights holder can be adjusted once the IMPI learns that the original bond will not cover the damages that could be caused following the implementation of the provisional measures. The court also recognised that the parties involved in an administrative proceeding (ie, the presumed infringer and the IP rights holder) can request the IMPI to adjust the amount of the bond by offering supporting evidence.

Comment

Although in practice the presumed infringer files arguments concerning the inspection, such party usually argues that the initial bond was insufficient to cover the damages caused following the implementation of the provisional measures. The federal circuit criterion recognises the right of parties to request the IMPI to adjust the initial bond, provided that they file evidence that demonstrates the necessity of the adjustment. This is of utmost importance in cases in which the IMPI, having completed its inspection, is unaware of the total damage that the implementation of the provisional measures could cause to the alleged infringer. By applying this criterion, the affected party would have the right to ask the IMPI to obtain complete coverage for the damages that the provisional measures will cause.

For further information on this topic please contact Carlos Hernandez at Becerril, Coca & Becerril SC by telephone (+52 55 5263 8730) or email ([email protected]). The Becerril, Coca & Becerril website can be accessed at www.bcb.com.mx.