Intellectual property law
Under what statutes, regulations or case law are intellectual property rights granted? Are there restrictions on how IP rights may be enforced, licensed or otherwise transferred? Do the rights exceed the minimum required by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?
Under Mexican law, intellectual property rights are based on article 28 of the Mexican Constitution (MC), which states the prohibition of monopolies in our country, and considers intellectual property rights as an exception to monopoly practices, thus granting the exclusive right to the creators of artistic works, as well as to the inventors or sponsors of such inventions, to exploit their creations to the exclusion of any third party for a limited period of time.
Just as the MC is the source of intellectual property rights in Mexico, the international treaties signed by Mexico are also the source of the rules governing the matter, and federal laws must observe the principles contained in those treaties.
The federal law that governs copyright in Mexico is the Federal Law of Copyright (FLC). This law regulates artistic and literary works, related rights and interpreted matters. The Industrial Property Law (LPI) regulates inventions, distinctive signs, designations of origin and industrial secrets. In the case of plant varieties, these are regulated by the Federal Law on Plant Varieties.
In Mexico, there are no restrictions on the licensing or transfer of technology related to a patented invention.
The LPI, the FLC and the Federal Law on Plant Varieties all contain the minimum principles established in TRIPs. In Mexico, according to a recent LPI amendment, which entered into force the past on 8 May 2018, the protection of an industrial design is 25 years, renewable every five-year period, unlike that established in TRIPs, which provides a minimum protection of 10 years. Also, with respect to the duration of the patrimonial rights of a work of author, it prevails for 100 years after the life of the author, which exceeds the minimum established in TRIPs.
Which authorities are responsible for granting, administering or enforcing IP rights?
The Mexican Institute of Industrial Property (IMPI), a decentralised body in the Economy Ministry, with its own legal personality and patrimony, is the administrative authority in charge of administering industrial property. This authority is responsible for processing and granting patents for invention, utility model registrations, industrial designs, trademarks, commercial announcements (slogans), declarations of protection of designation of origin and geographical indications, investigations of alleged infringements, substantiation and resolution of administrative procedures, among others.
In relation to copyright and related rights, the National Institute of Copyright (INDAUTOR), a decentralised administrative body in the Ministry of Culture, is the administrative authority in matters of copyright and related rights; unlike the IMPI, this authority does not have its own patrimony. Its functions and powers, among others, are the following:
- registration of copyrighted works;
- to conduct investigations regarding administrative infractions related to copyrights;
- to order and execute provisional acts to prevent or end the violation of copyright and related rights; and
- to impose appropriate administrative sanctions for illicit actions.
Proceedings to enforce IP rights
What types of legal or administrative proceedings are available for enforcing IP rights? To the extent your jurisdiction has both legal and administrative enforcement options for IP rights, briefly describe their interrelationship, if any.
In Mexico, intellectual property rights can be defended before the IMPI, the INDAUTOR and the federal and civil judicial authorities, depending on the type of infringement.
In the case of industrial property rights, there are several behaviours contemplated in the LPI, which include, but are not limited to, acts contrary to good customs in industry, commerce and services that imply unfair competition; to show as patented products those that are not; and to put on sale or in circulation products or to offer services with a false indication that they are protected by a registered trademark, among others. These conducts, considered infringements and in some cases crimes, may be investigated ex officio by the IMPI or at the request of an interested party. Likewise, it is possible to request an inspection visit to prevent the commission of infractions or crimes relating to industrial property and copyrights. Regarding the inspection visit, in the event that the commission of any act that is considered an infraction or an offence, in accordance with the LPI, is conclusively proven, the IMPI may assure in a precautionary manner the products with which such infringement is committed.
The administrative infractions described above are sanctioned with a fine for the amount of 20,000 days of the minimum wage in force in Mexico City, an additional fine for 500 days of the minimum wage for each day that the infraction persists, temporary closure, final closure and administrative arrest for up to 36 hours, depending on the case.
In the case of copyright, the foregoing is applicable for those cases in which an infringement is sought in the matter of commerce, which includes, but is not limited to, communicating or publicly using a work protected by any medium and in any way without the express prior authorisation of the author, using the image of a person without authorisation, and offering, selling, storing, transporting or putting into circulation works protected by the FLC, among others.
The legality of the resolutions issued by the IMPI may be appealed within 30 working days of the notification of the challenged resolution at the specialised intellectual property department of the Federal Court of Tax and Administrative Justice. The objective of the plaintiff of said trial is to obtain a sentence rendering the resolution of the administrative authority null and void. In the event that the judgment is not favourable to the plaintiff, a direct amparo (constitutional action) may be filed against the judgment that recognises the validity of the challenged decision at a collegiate court in administrative matters.
In the event that the infringement is not a matter of commerce related to copyright, the federal and state courts, depending on the case, are available to examine the controversies related to the violation of copyright. Also, the FLC contemplates the procedure of agreement (aveniencia), which is substantiated before the IMPI, at the request of one of the parties to settle in an amicable way a conflict that has arisen as a result of the interpretation or application of the FLC. Likewise, the FLC contemplates the arbitration procedure, which will be regulated according to the FLC, its regulatory provisions and, in a supplementary manner, those of the Mexican Commercial Code. In this case, the person harmed by the copyright infringement may opt for the appropriate way to seek redress for the damage.
The LPI also contemplates various types of crimes, such as repeating conduct considered an infraction according to article 213 of the LPI and fraudulently falsifying trademarks, among others. The LPI states penalties of up to six years in prison and fines of 100 to 10,000 days of the minimum wage in force in Mexico City for the commission of an offence contemplated in the LPI.
The courts of the federation, as well as the public prosecutor’s office of the republic, are competent to hear the commission of intellectual property crimes.
In Mexico, there are administrative and judicial procedures with respect to the defence of intellectual property rights; the difference lies in the infringement or crime, which in the first case goes to an administrative or judicial authority and in the second to a court.
What remedies are available to a party whose IP rights have been infringed? Do these remedies vary depending on whether one utilises judicial or administrative review or enforcement?
To be entitled to demand the payment of civil damages connected with infringements of industrial property and copyright trade infringements, it is necessary first to have a resolution of the administrative proceeding that does not accept any appeal. After this resolution has been issued it is possible to demand the payment of the damages caused as a result of the illegal conduct through the civil path.
The LPI states that the repair of the material or immaterial damages will in no case be less than 40 per cent of the retail price of each product or the provision of services that imply a violation of industrial property rights.
Nexus between competition and IP rights
Do any statutes, regulations or case law in your jurisdiction address the interplay between competition law and IP law?
In Mexico, unfair competition with respect to industrial property is regulated in the LPI, which states in article 2 that it is the object of said order to prevent an act that infringes industrial property or that constitutes unfair competition related to it, as well as establishing penalties and sanctions. Likewise, article 213, section 1 of the LPI considers as an infringement of industrial property rights the carrying out of acts that imply unfair competition and that relate to industrial property.
Likewise, the Federal Law of Economic Competition (FLEC) aims to ensure free economic competition. There is no strict link with the LPI, but it still enters the scope of unfair competition.
Patent cooperation treaties and other agreements
Does your jurisdiction participate in any patent cooperation treaties or other similar agreements?
Yes, Mexico is part of the Patent Cooperation Treaty. Among others, Mexico is also part of the following international treaties:
- the WIPO Performances and Phonograms Treaty;
- the WIPO Copyright Treaty;
- the Strasbourg Agreement Concerning the International Patent Classification;
- the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure;
- the Paris Convention for the Protection of Industrial Property;
- the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations;
- the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration;
- the Berne Convention for the Protection of Literary and Artistic Works;
- the Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms;
- the Convention Establishing the World Intellectual Property Organisation;
- the Brussels Convention Relating to the Distribution of Program-Carrying Signals Transmitted by Satellite; and
Remedies for deceptive practices
With respect to trademarks, do competition or consumer protection laws provide remedies for deceptive practices?
The FLEC makes no specific mention of intellectual property rights, thus the person who is affected in their rights may opt for the claim, as the case may be, of civil damages.
Likewise, the Federal Consumer Protection Law (FCPL) states precautionary measures, such as the immobilisation of containers, goods, products and transport, and ordering the suspension of information or illicit advertising. The FCPL also states different measures such as a fine of 244.36 to 24,436.82 Mexican pesos and of 9,774.73 pesos for each day the infringement conduct persists. The FCPL also states the aid of the public force in certain cases.
Technological protection measures and digital rights management
With respect to copyright protection, is WIPO protection of technological protection measures and digital rights management enforced in your jurisdiction? Do statutes, regulation or case law limit the ability of manufacturers to incorporate TPM or DRM protection limiting the platforms on which content can be played? Has TPM or DRM protection been challenged under the competition laws?
In Mexico, the provisions of international treaties are hierarchically superior to federal and state laws, including intellectual property treaties; thus, the provisions and principles of those treaties are considered of general observation in our country. Mexico, as mentioned above, is part of the WIPO Performances and Phonograms Treaty and the WIPO Copyright Treaty, among many others.
In relation to TPM or DRM measures, the FLC grants the owner of economic rights the right to authorise or prohibit the reproduction or fixation of the work, among others. Therefore, the right holder of a copyrighted work has the right to use any measure to protect the work from misappropriation or exploitation without consent. However, in Mexico there is no background related to limitation of the use of these technological measures. Likewise, as far as competition rules are concerned, they do not conflict with or provide for any rule against TPM or DRM measures, since work protected by copyright is considered an exception to monopolies and unfair competition in Mexico.
What consideration has been given in statutes, regulation or case law to the impact of the adoption of proprietary technologies in industry standards?
In Mexico, there are no conditions on international standards with respect to certain technologies to be adopted by the licensees of a patent or an industry. There are also no cases related to patent hold-up scenarios.
What statutes set out competition law?
Article 28 of the MC states the prohibition of monopolies and their different practices. It also establishes exceptions to them, regarding artistic, literary and inventive creations as being an exception to this practice.
This article also refers to competition authorities, such as the Federal Competition Commission (FCC), which aims to guarantee free competition, as well as to prevent, investigate and combat monopolies, monopolistic practices, mergers and other restrictions to the efficient functioning of markets. Likewise, the Federal Institute of Telecommunications is also established in article 28, whose objective is the efficient development of broadcasting and telecommunications, and is the authority in matters of economic competition in the broadcasting and telecommunications sectors.
The FLEC also regulates article 28 of the MC, and aims to promote, protect and guarantee free competition and economic competition, as well as to prevent and investigate monopolies, monopolistic practices, illicit concentrations and barriers to free competition and economic competition, as well as any restriction on the markets.
Both the MC and the FLEC state exceptions to monopolies, such as the functions that the state exercises exclusively in strategic areas determined in the MC, as well as intellectual property rights, among others.
The legislation containing regulations regarding competition, includes, among others, the following:
- the Political Constitution of the United Mexican States;
- the Federal Economic Competition Law;
- the Federal Telecommunications Law; and
- the Industrial Property Law.
IP rights in competition legislation
Do the competition laws make specific mention of any IP rights?
The FLEC (article 7), as well as the MC (article 28), state that monopolistic practices are not considered to be monopolistic for certain authors, artists and inventors for their creations. This is related to intellectual property rights, considering that these privileges are the object of protection in our intellectual property laws.
Likewise, the LPI is created based on article 28 of the MC, which includes acts of unfair competition as an infringement of industrial property rights, whose recidivism constitutes a crime.
Review and investigation of competitive effects from exercise of IP rights
Which authorities may review or investigate the competitive effect of conduct related to exercise of IP rights?
Competition laws in Mexico do not differentiate between the relationship of intellectual property rights, as well as their licensing or exercise, with respect to other sanctions related to similar practices. If an agreement contains provisions establishing obligations not to produce, process, distribute, market or acquire only a limited quantity of goods or the provision or transaction of a limited number of services, or any other provision contrary to free competition, regardless of its nature, it shall be investigated by the competent authority. The competent authority to investigate such practices, as with any other IP-related matter, is the FCC, whose attributions have been indicated previously.
Competition-related remedies for private parties
Can a private party recover for competition-related damages caused by the exercise, licensing or transfer of IP rights?
There are sanctions that can be brought to economic agents; however, sanctions related to the licensing or transfer of intellectual property rights are not considered so, because these rights are an exception to the monopoly as stipulated by the MC and the FLEC. Notwithstanding the foregoing, there are characteristics in agreements that are considered unlawful practices, independently of the IP. In the case of the LPI, it establishes that the IMPI or a representative authority may prohibit or regulate the use of trademarks and distinctive signs, registered or not, associated with practices of unfair competition.
Have the competition authorities, or any other authority, issued guidelines or other statements regarding the overlap of competition law and IP?
As already mentioned, the competition authority has not issued guidelines related to IP. There are guidelines relating to IP and unfair competition, which are contained in the LPI, as is the case of IP violations contained in article 213, section 1 of the LPI.
Exemptions from competition law
Are there aspects or uses of IP rights that are specifically exempt from the application of competition law?
As mentioned above, article 28 of the MC states that the privileges granted for a certain period to authors and artists for the production of their works and those for the exclusive use of their inventions do not constitute monopolies. The foregoing translates into all intellectual property rights regulated in national legislation.
Also, as already mentioned, article 7 of the FLEC takes the literal text of the MC exempting the intellectual property regime from the application of antitrust and unfair competition rules.
Does your jurisdiction have a doctrine of, or akin to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition laws?
In Mexico, the economic rights of a work of an author grant to its holder the right to authorise or prohibit the different forms of exploitation and communication of the same. Article 27 of the FLC establishes such rights and provides in subsection IV that the owners of copyrighted works have the right to distribute the work, including the sale or other forms of transfer of ownership of the material supports containing it, as well as any form of transfer of use or exploitation, but also establishes that when the distribution is carried out by sale, this right of opposition will be understood as exhausted after the first sale in relation to copies of the original work. This section of FLC states an exception to this rule, applicable to computer programs, which are protected in Mexico through copyright. The section states that the owner of the rights over software or a database shall retain, even after the sale of copies thereof, the right to authorise or prohibit the lease of such copies.
However, the foregoing is applicable with respect to copies of works of authorship, which is not applicable to the economic and moral rights contained in said works, which are always maintained in the author or owner of the economic rights.
It is important to note that economic rights can be licensed or transferred on an exclusive or non-exclusive basis. According to Mexican law, the licence or transmission cannot be for an indefinite period, with a maximum term of 15 years, except for literary works and those works whose nature or magnitude of the investment required so justifies.
The same principle is applicable with regard to patents and inventions, since the LPI states that the right conferring a patent will not have any effect against any person who markets, acquires or uses the patented product or obtained by the patented process, after such product has been lawfully introduced into the trade.
Likewise, in relation to trademarks, the LPI states that the registration of a trademark shall not have any effect against any person who markets, distributes, acquires or uses the product to which the trademark is applied after that product has been lawfully introduced in trade by the trademark owner or by the person to whom a licence has been granted.
To what extent can an IP rights holder prevent ‘grey-market’ or unauthorised importation or distribution of its products?
In Mexico, products protected by an intellectual property right, once they have been marketed by their owner or a licensee, may be resold, imported or distributed by any third party. This is the exhaustion of the right.
In the event of a possible violation of an intellectual property right, the owners may apply to the IMPI for measures to apply to the goods, products, advertisements and any material that is liable for the commission of conduct that infringes the rights of intellectual property. To determine the above, the IMPI will require the applicant to prove the existence of the violation of a right or that the violation is imminent. Likewise, the plaintiff must grant a bail to respond to any possible damages or losses that may be caused to the person against whom the measure has been requested. The applicant must demand the infringement within a period of up to 20 days from the execution of the measure; otherwise, the plaintiff will be responsible for the damages caused as a result of the execution of such measure.
Jurisdictional interaction between competition laws and IP rights
Are there authorities with exclusive jurisdiction over IP-related or competition-related matters? For example, are there circumstances in which a competition claim might be transferred to an IP court to satisfy subject matter jurisdiction? Are there circumstances where the resolution of an IP dispute will be handled by a court of general jurisdiction?
In Mexico, competition and intellectual property authorities have their jurisdiction defined, so there has been no circumstance that would direct an authority of any subject to take a case because of the nature of the rights in conflict. The competition authority, regardless of the nature of the investigation, is the only authority empowered to take cases related to competition and monopolistic practices, with independence from the nature of the illicit conduct. Likewise, only the intellectual property authority is has authority with respect to the procedures established in the laws of the matter. Their powers and attributions are not transferred from one dependency to another.
The Federal Competition Law does not include any specific provision for intellectual property rights. Nevertheless, the LPI considered the competition law scenario when it empowered the IMPI to forbid or regulate the use of a mark when it is associated with monopolistic or oligopolistic conduct.
Powers of competition authority
Does the competition authority have the same authority with respect to reviewing mergers involving IP rights as it does with respect to any other merger?
The economic competition commission has the authority to determine whether a merger should be authorised or not, regardless of the nature of the monopolistic or anticompetitive practices that are carried out in making such a merger. The FLEC also considers that a merger will be considered unlawful as long as it has the purpose or effect of hindering, diminishing, damaging or impeding free competition or economic competition.
Analysis of the competitive impact of a merger involving IP rights
Does the competition authority’s analysis of the competitive impact of a merger involving IP rights differ from a traditional analysis in which IP rights are not involved? If so, how?
The FCC makes no distinction between the study, investigation and, where appropriate, establishment of penalties with respect to the nature of the rights related to the merger of two or more companies. Although the element of intellectual property may be subject to a special study, it is not a differentiator with respect to the substantiation of the respective investigation.
Among other capacities, the FCC is responsible for authorising the mergers of companies before they are carried out when the following characteristics are present:
- when the act giving rise to them contemplates an amount greater than the equivalent of 18 million times the general daily minimum wage in force for Mexico City;
- when the act giving rise to them implies the accumulation of 35 per cent or more of the assets or shares of an economic agent whose annual sales originating in the country or its assets in that territory import more than 18 million times the general daily minimum wage in effect for Mexico City, or
- when the act of origin implies an accumulation of assets or capital stock greater than the equivalent of 8.4 million times the general daily minimum wage in force for Mexico City and if the merger involves two or more economic agents whose annual sales in the country or assets in said territory import more than 48 million times the general daily minimum wage in effect for Mexico City.
Challenge of a merger
In what circumstances might the competition authority challenge a merger involving the transfer or concentration of IP rights? Does this differ from the circumstances in which the competition authority might challenge a merger in which IP rights were not a focus?
As already mentioned, the prohibition of a merger by the competition authority makes no distinction with regard to the nature of the unlawful nature of such a merger, whereby intellectual property rights do not make a difference in the motivation of the respective investigation.
It is important to mention that the competition authority can initiate an investigation for the purpose of prohibiting a merger that goes against free competition. The foregoing may be ex officio, at the request of the federal government or at the request of a third party through a complaint that complies with the requirements stated in the FLEC.
Remedies to address the competitive effects of mergers involving IP
What remedies are available to address competitive effects generated by a merger when those effects revolve around the transfer of IP rights?
The FLEC does not state specific sanctions with respect to mergers involving intellectual property rights, or rather, it does not contemplate such rights as a differential with respect to the sanctions to which the offender is subject.
Article 126 of the FLEC states the measures of urgency, ranging from a fine for the equivalent of 3,000 times the general minimum wage in force in Mexico city, up to arrest for up to 36 hours.
Likewise, article 127 of the FLEC states fines and sanctions, including ordering the correction or suppression of monopoly practices or illicit mergers, which may be sanctioned with a fine of the equivalent of 10 per cent of the income of the economic agent.
Specific competition law violations
Can the exercise, licensing or transfer of IP rights create price-fixing or conspiracy liability?
Article 54 of the FLEC states as monopolistic practices those contained in article 56 of the FLEC, which include, but are not limited to, any contract or agreement that establishes different prices or conditions of sale or purchase for different buyers or sellers situated under equivalent conditions. The foregoing is applicable to the field of intellectual property, even though it is not specifically mentioned for this branch of law.
Reverse payment patent settlements
How have the competition laws been applied to reverse payment patent settlements in your jurisdiction?
There is no precedent related to the application of sanctions for unlawful conduct related to competition, which in turn has as its object intellectual property rights. Likewise, the FLEC makes no distinction between unlawful conduct related to competition regarding IP.
(Resale) price maintenance
Can the exercise, licensing or transfer of IP rights create liability under (resale) price maintenance statutes or case law?
As with any practice that consists of maintaining an advantage through unfair competition or monopolistic practices, intellectual property in Mexico is not exempt from this prohibition; however, there is no different regime for such cases, which is why the FLEC makes no distinction between an intellectual property-related licensing agreement and any other agreement that establishes pricing related to products or services related to IP and others.
Exclusive dealing, tying and leveraging
Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to exclusive dealing, tying and leveraging?
As long as there is an existing intellectual property right, it is exempt from being considered as a monopolistic practice or unfair competition because it is considered an exception to monopolies by its nature. Competition laws do not contemplate intellectual property as a differentiator in this type of behaviour. Also, there has been no background regarding tying or leveraging conduct.
Abuse of dominance
Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to monopolisation or abuse of dominance?
As already mentioned, intellectual property rights in Mexico do not differentiate with respect to monopolistic practices and unfair competition, nor are they subject to a different regime.
Refusal to deal and essential facilities
Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to refusal to deal and refusal to grant access to essential facilities?
Compulsory licences can be granted, as already mentioned, if the rights holder has not exploited the patent after three years from the date of granting the patent, or four years from the filing of the application, as any third party can subsequently apply for a compulsory licence.
In the case of public utility licences, these can be granted in the case of serious illnesses that cause an emergency or undermine national security.
In Mexico, there are no provisions that prevent the owner of a patent from granting a licence under special conditions. Likewise, there are no provisions related to economic competence related to intellectual property rights.
Remedies for violations of competition law involving IP
What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?
The FLEC makes no distinction between sanctions that relate to intellectual property rights and those that do not. Some of the applicable sanctions are:
- a fine up to the equivalent of 3,000 times the general daily minimum wage valid for the Federal District, which amount may be applied for each day that passes without the fulfilment of what has been ordered;
- the assistance of the security forces or other authorities; and
- arrest for up to 36 hours.
Likewise, article 127 of the FLEC states fines and penalties.
There is the matter of compulsory licences in Mexican law, which can be requested by any person three years after the patent was granted or registered, or four years after the application (whichever occurs later), as long as the rights holder has not exploited it.
There are also public utility licences, which are granted in cases of serious diseases that could cause an emergency or undermine national security, impede, hinder or increase the production, presentation or distribution of basic goods or medicines for the population. The authorities that intervene in the granting of such licences are the IMPI, the Health Ministry and the general health council.
The Health Ministry shall determine the conditions of production and quality, duration and field of application of the said licence, as well as the qualification of the technical capacity of the applicant.
The IMPI will establish, hearing from both parties, a reasonable amount of the royalties that correspond to the holder of the patent.
Competition law remedies specific to IP
Do special remedies exist under your competition laws that are specific to IP matters?
The FLEC does not mention specific sanctions related to IP.
Scrutiny of settlement agreements
How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?
In this case, regardless of the nature of the negotiation with respect to the termination of an IP-related contract and its consequent impact on a potential competitive advantage that results in unlawful conduct, as already mentioned, the fact that the act involves intellectual property rights makes no difference for the FLEC, and thus, in its investigation, this fact would not determine a different way of proceeding with respect to unlawful conduct.
In Mexico, the rights conferred by a patent have a term of 20 years after the submission of the application with respect to its exclusive exploitation. Therefore, as long as the term has not come its end, if the patent has been granted, the patent holder will have a temporary monopoly on its exploitation, and thus the terms and conditions on which the patent holder decides to grant a license cannot be predetermined, as long as they are not illegal or go against current legislation.
Nevertheless, the FLEC states that any conduct performed by a group of producers of a related product that enables such a group to control the production, sale and price of the same so as to obtain control of such product market will constitute punishable conduct.
Economics and application of competition law
What role has competition economics played in the application of competition law in cases involving IP rights?
In the case of Mexico, although the economy is an element or tool to determine a certain type of responsibility before the scrutiny of a monopolistic practice, intellectual property has not been the subject of an investigation of this type, and for this reason there is no precedent in this respect.
Recent cases and sanctions
Have there been any recent high-profile cases dealing with the intersection of competition law and IP rights?
On 19 October 2016, a notice for investigation was published in the Official Gazette of the federation, whereby the FCC initiated an ex officio investigation for possible monopolistic practices in the production, distribution and marketing of medicines in Mexico, carried out by participants in the drug markets (pharmaceutical companies, distributors and pharmacy chains).
The probe specifically focuses on behaviours regulated under article 53 of the FLEC. This article forbids fixing, raising or manipulating the sale or purchase price of goods or services, dividing, distributing, allocating or imposing portions or segments of a current or potential market for goods and services, as well as establishing or coordinating positions or the abstention in tenders and contests, among others. Possible market segmentation and price manipulation are the reasons why the FCC is carrying out the current investigation, which is mainly focused on the manufacture, distribution and marketing of these goods.
In November 2017 an amparo was granted to the principal companies that are parties to the investigation because of omissions from the procedure on the part of the FCC. A new investigation was opened ex officio on 27 June 2018 regarding the possible realisation of an illicit concentration in the distribution and marketing of wholesale of pharmaceutical products and hygiene and personal beauty products. The outcome of this new investigation, if favourable for the FCC, would establish an important precedent for the intellectual property regime within the scope of economic competition.
Remedies and sanctions
What competition remedies or sanctions have been imposed in the IP context?
So far, none of the well-known competition cases or different cases of which we have knowledge has involved competition sanctions associated with intellectual property matters.
Update and trends
Update and trends
Are there any emerging trends or hot topics in the law of IP and antitrust policy? Have changes occurred recently or are changes expected in the near future (through either legislation or court decisions) that will have an impact on the application of competition law to IP rights? (For example, has there been any development with regard to assessment of the appropriate basis for royalty determinations (eg, ‘smallest-saleable unit’ versus total cost of product?)
There were two amendments to the LPI, the first of them focusing on patent granting, utility models and industrial designs. Likewise, there have been some changes regarding the appellations of origin, and for the first time geographical indications are recognised and regulated by the LPI.
The second amendment contains one of the most significant changes, which is to do with the new types of trademarks that will be available for registration, such as olfactory trademarks, sound trademarks or a combination of these, which will result in greater protection for IP rights holders, as well as a change in the procedure for examination and subsequent granting.
Another IP matter to highlight is a new kind of trademark registration: ‘The plurality of operational elements; image elements, including, among others, the size, design, color, layout of the form, label, packaging, decoration or any other that when combined, distinguish products or services in the market’. In other legislation this is known as trade dress, which was not included in Mexico’s legislation, so that from the entry into force of the new regulations, applicants can benefit from this new form of IP.
Finally, some changes will come with the United States-Mexico-Canada Agreement, primarily regarding pharmaceutical patents and the Internet. It includes a measure that involves internet service providers as recipients of procedural orders to suspend online services to sites that traffic illegally with works protected by copyright.