Intellectual property issues

Paris Convention

Is your jurisdiction party to the Paris Convention for the Protection of Industrial Property? The Patent Cooperation Treaty (PCT)? The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

Mexico is a party to all three international treaties.

Contesting validity

Can the licensee be contractually prohibited from contesting the validity of a foreign licensor’s intellectual property rights or registrations in your jurisdiction?

Yes.

Invalidity or expiry

What is the effect of the invalidity or expiry of registration of an intellectual property right on a related licence agreement in your jurisdiction? If the licence remains in effect, can royalties continue to be levied? If the licence does not remain in effect, can the licensee freely compete?

Under the Federal Law for the Protection of Industrial Property, the recordal of a licence agreement before the Mexican Industrial Property Institute shall be cancelled when the intellectual property right (IPR) is declared invalid or expires in the case of patents and in the case of trademarks by nullity, expiration or cancellation of the registration of the mark, or when the marks were pending applications and their registration is not granted.

Apart from the recordal issue mentioned above, it has to be considered that if a licence subject matter expires or is invalidated then the purpose of the agreement ceases to exist. However, there is no legal provision that expressly states this situation. Considering royalties, the parties will be bound by the terms and conditions of the agreement that may foresee this issue. Aside from the cancellation of the recordal of the agreement, if the licence agreement establishes a longer term of validity, the contractual obligation will remain between the parties and thus the licensee will not be in a position to compete freely.

Requirements specific to foreigners

Is an original registration or evidence of use in the jurisdiction of origin, or any other requirements unique to foreigners, necessary prior to the registration of intellectual property in your jurisdiction?

No.

Unregistered rights

Can unregistered trademarks, or other intellectual property rights that are not registered, be licensed in your jurisdiction?

Yes. There is no express prohibition by law, but such licence agreements will only have legal effects between the signatory parties.

Security interests

Are there particular requirements in your jurisdiction to take a security interest in intellectual property?

For a security interest agreement to be opposable against a third party, such agreements must be recorded before the Mexican Institute of Industrial Property against the registered IPR subject matter of the security agreement.

There are certain legal requirements that the agreements must comply with in order to be recorded, as follows:

  • the name and address of the parties;
  • the trademarks or patents included in the agreement; and
  • the general terms of the security interest agreement.
Proceedings against third parties

Can a foreign owner or licensor of intellectual property institute proceedings against a third party for infringement in your jurisdiction without joining the licensee from your jurisdiction as a party to the proceedings? Can an intellectual property licensee in your jurisdiction institute proceedings against an infringer of the licensed intellectual property without the consent of the owner or licensor? Can the licensee be contractually prohibited from doing so?

Yes. If there is no indication to the contrary in the agreement, by law, the licensee will have the right to initiate proceedings against an infringer. This can be contractually prohibited.

Sub-licensing

Can a trademark or service mark licensee in your jurisdiction sub-license use of the mark to a third party? If so, does the right to sub-license exist statutorily or must it be granted contractually? If it exists statutorily, can the licensee validly waive its right to sub-license?

Yes, provided it is contractually allowed by the licensor only.

Jointly owned intellectual property

If intellectual property in your jurisdiction is jointly owned, is each co-owner free to deal with that intellectual property as it wishes without the consent of the other co-owners? Are co-owners of intellectual property rights able to change this position in a contract?

In the case of patents and copyrights, co-ownership of IPRs in Mexican law is not completely regulated. The principle of contractual freedom prevails, however, in the case of disputes that should be settled on the basis of civil law, as agreed by the parties under their corresponding agreements.

Conversely, trademarks have specific regulations by having to comply with article 217 of the Federal Law for the Protection of Industrial Property as follows:

  • when the mark is applied for in the name of two or more persons, the rules agreed upon between the applicants regarding the use and licensing of the mark and the transfer of rights of it shall be filed along with the application; the rules have to include at least;
  • the terms of use, license and assignment of the martk, as wel l as for the defense of the same;
  • the terms of cancellation and litiation of goods or services;
  • the terms and conditions of the agreement between the parties can be modified at any time via an addendum
First to file

Is your jurisdiction a ‘first to file’ or ‘first to invent’ jurisdiction? Can a foreign licensor license the use of an invention subject to a patent application but in respect of which the patent has not been issued in your jurisdiction?

Yes. It is possible to grant a licence agreement over an invention regarding a patent that has not been issued in our jurisdiction.

Scope of patent protection

Can the following be protected by patents in your jurisdiction: software; business processes or methods; living organisms?

None of the above are patentable.

Trade secrets and know-how

Is there specific legislation in your jurisdiction that governs trade secrets or know-how? If so, is there a legal definition of trade secrets or know-how? In either case, how are trade secrets and know-how treated by the courts?

Yes. Trade secrets are governed under a specific chapter of the Federal Law for the Protection of Industrial Property. Specifically, article 163 of such law provides the following definition of a trade secret:

 

[A] trade secret shall be considered as any information susceptible of industrial or commercial application that a natural person or legal entity keeps, is of confidential character and is associated with securing or retaining a competitive or economic advantage over third parties in the conduct of economic activities, and regarding which the said person or entity has adopted sufficient means or systems for preserving confidentiality and restricting access.

 

The information constituting a trade secret shall necessarily relate to the nature, characteristics or purposes of products, to production methods or processes or to ways or means of distributing or marketing products or rendering services.

Information that is considered as public domain, that is evident to a person skilled in the art on the basis of previously available information or that must be disclosed by virtue of a legal provision or court order, shall not be considered a trade secret. Information that is supplied to any authority by a person possessing it as a trade secret shall not be considered public domain or be disclosed by virtue of a legal provision when it is supplied for the purpose of obtaining licences, permits, authorisation, registrations or any other official acts.

Courts have been somewhat reluctant to enforce trade secret violations, although any violation thereto is punishable by civil, administrative and criminal remedies.

Does the law allow a licensor to restrict disclosure or use of trade secrets and know-how by the licensee or third parties in your jurisdiction, both during and after the term of the licence agreement? Is there any distinction to be made with respect to improvements to which the licensee may have contributed?

Any confidentiality provisions will be determined in the licensing agreement when necessary. The law does not explicitly allow this restriction, but nor does it forbid it; thus, it is allowed under general contractual law. Such restrictions may last longer than the term of the licensing agreement.

Concerning improvements for methods in know-how and trade secrets, there is no legal provision in Mexico to determine whether the licensor or the licensee will have proprietary rights in connection with them. In this regard, the licence agreement needs to foresee:

  • if the licensee will be authorised to make improvements;
  • who should be the owner of the improvements; and
  • the implications upon termination of the agreement.
Copyright

What constitutes copyright in your jurisdiction and how can it be protected?

Copyright is the recognition given by the state to a creator of any of the literary and artistic works specified in article 13 of the Federal Copyright Law, under which it grants its protection to the author’s enjoyment of exclusive prerogatives and privileges of a personal and economic character. The former constitutes moral rights; the latter, economic rights. Copyright subject matter is protected under a federal statue.

Copyrightable subject matter includes literary works, musical works, dramatic works, dances, pictorial works or works of drawing, sculptures and works of a plastic nature, works of caricature and short stories, architectural works, cinematographic and other audiovisual works, radio and television programmes, computer software, photographic works, works of applied art, including works of graphic or textile design, and works of compilation.

Also, there are other rights recognised under the Federal Copyright Law, such as the ‘related copyrights’, that may include those rights that the artists and musicians have in connection with their performances. There are also other special mechanisms to protect titles of serial publications and broadcasts, artistic names and characters, referred to as ‘reservation of rights’ that, although governed under the Federal Copyright Law, are not copyrights per se.

Strictly speaking, legal protection is obtained once the work is fixed in any tangible medium of expression. For enforcement purposes, however, registration is recommended before the Mexican Copyright Office and is requested by the authorities when trying to enforce a copyright.

Law stated date

Correct on

Give the date on which the information above is accurate.

21 January 2021