Introduction

The government recently approved a reform of the IP Law, which made a number of amendments regarding trademarks and trademark litigation and aims to harmonise the law with international legislation.

Some of the key amendments that will affect trademark litigation are the introduction of:

  • Article 90(XXII), which establishes bad faith as a prohibition against obtaining a trademark registration; and
  • Article 151(VI), which makes it possible to cancel a trademark registration obtained in bad faith.

Previous legislation

Previously, the IP Law included no prohibition against registering trademarks in bad faith. Rather, Article 151(V) stipulated that a trademark registration could be cancelled if it was obtained by an agent, representative, user or distributor of the owner of a foreign-registered trademark without its express consent and where it was understood that said registration was obtained in bath faith.

The law also provided that no registration should be granted when it contravened morals and good customs, but included no specific definition of 'bad faith'. Therefore, it was possible to cancel a trademark on the grounds of bad faith only by applying Article 151(V). This considerably limited the applicability of bad faith for purposes other than those established in Article 151(V).

It was thus common practice for parties to obtain Mexican registrations for trademarks registered in other countries and pretend to enter the Mexican market with the aim of impeding the rightful trademark owner from registering the mark in Mexico.

In that context – and inspired by Austrian, Danish and Spanish legislation – the amendments to the IP Law attempt to position Mexico at the forefront of IP regulation. That said, it is important to analyse the amendments in order to determine whether Mexico is on the right track to achieve its aims in this regard.

Analysis of amendments

The new Article 90(XXII) states that a trademark will be found to have been registered in bad faith when, among other things:

  • the registration was applied for in a way that is contrary to "good uses, customs and practices of the IP system, commerce or industry"; or
  • a benefit or advantage is sought at the legitimate trademark owner's expense.

In terms of cancelling a trademark registration, the above definition must be examined with regard to proof and applicability, pursuant to the new Article 151(VI).

As regards the first bullet point above, the concept of "good uses, customs and practices in the IP system" is so broad that the Supreme Court or the federal courts must issue criteria to determine the specific scenarios in which a registration would be against said standards and how they could be proved.

As regards the second bullet point above, this is clearly an attempt to end so-called 'trademark kidnapping', which has become common practice under the Mexican IP system. However, this general definition represents a challenge for Mexican litigators needing to prove that a trademark registration was obtained in bad faith. This is because it will be necessary to prove that a party is trying to obtain a benefit or advantage at the legitimate owner's expense.

In view of the above, the Supreme Court and the federal courts must determine what would constitute suitable evidence to prove that a benefit or advantage was obtained at a legitimate trademark owner's expense.

Notably, these amendments provide no time limit for requesting a cancellation action grounded on bad faith. This aligns with the Paris Convention for the Protection of Industrial Property, fulfilling at least one of the reform's aims.

Comment

Unfortunately, the IP Law reform has left a number of legal lacunae. Thus, to be effective and applicable, good legislative practice which takes into account Mexican IP practice is required.

However, the reform was arguably necessary to modernise Mexico's legal system and broaden the scope of trademark protection and defence. Thus, Mexico can be seen to be moving in a positive direction that will enable it to achieve a more efficient and pioneering IP system.

For further information on this topic please contact Maria Fernanda de la Cerda at Becerril, Coca & Becerril SC by telephone (+52 55 5263 8730) or email (mdelacerda@bcb.com.mx). The Becerril, Coca & Becerril website can be accessed at www.bcb.com.mx.

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