In Mexico, in order to recover damages following a violation of their rights, industrial property owners must first file an administrative infringement action before the Mexican Institute of Industrial Property (IMPI) in order to obtain a declaration of infringement. Subsequently, rights holders must undergo a trial before a civil court, which will not be specialised in IP matters, in which they must prove the damage and its connection to the infringing act. The court will then quantify the damages based on the mathematical formula set out in the Industrial Property Law.
As this process can take up to five years, rights holders often choose not to claim compensation for damages caused by a violation of their industrial property rights.
In light of the above, there have been several initiatives to reform the process for recovering damages caused by a violation of industrial property rights. For example, in April 2019 a proposal to amend several provisions of the Industrial Property Law (including Article 6(V)) was published in the Gazette of the Upper House.
Article 6(V) of the Industrial Property Law sets out the IMPI's powers. The reform proposes to authorise the IMPI to impose – in its infringement proceeding decisions – appropriate administrative penalties on infringers requiring them to compensate or assume liability for damages caused by their violation of industrial property rights recognised in the law.
This new power aims to improve the reparatory system to benefit rights holders by enabling the IMPI to declare the infringement of an industrial property right and determine the damages that must be paid in the same decision.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – to which Mexico is a party – states that the courts of each member country can order infringers to pay rights holders adequate compensation for damages suffered as a result of the violation of the latter's rights.
Although Mexican law already provides a compensation system for damages caused by a violation of industrial property rights – over which the civil courts have jurisdiction – it is debatable whether this system guarantees adequate compensation given how long it takes.
However, authorising the IMPI to resolve disputes between individuals will arguably not create an adequate and timely recovery damage compensatory system, since such a system requires the creation of various procedural acts – a fact which has been ignored in the proposal before Congress.
Further, the IMPI is an administrative authority and not a court. As such, it is not constitutionally empowered to rule on civil cases. Thus, authorising it to resolve matters which, by constitutional mandate, are reserved for the civil courts goes against the legal definition of 'damages' and the adequate compensatory system required under TRIPS.
Mexico's inadequate compensatory system should not be resolved by changing the structure provided for in the law as this caters to the nature of each procedural act and competent authority. Although the civil courts are not specialised in IP matters like the IMPI, the law empowers the competent courts to name a specialised expert if they require technical knowledge to reach a decision.
The adequacy of Mexico's compensatory damages system for industrial property matters depends on reducing the amount of time that it takes. Therefore, instead of granting the IMPI greater responsibilities which contravene its very nature, any reform must consider increasing the IMPI's human resources, as well as preserving its local offices and increasing their powers to function as auxiliaries. This would reduce IMPI's resolution times and speed up proceedings, thereby incentivising rights holders to defend their rights.
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