An extract from The Intellectual Property Review, Edition 10
Enforcement of rights
With the enactment of the new FLPIP, which became effective on 5 November 2020, the enforcement of industrial property rights in Mexico underwent a number of relevant changes that fundamentally impact both the conceptual understanding of patent law and the strategic approach required to ensure effective protection of patent rights. While most of the definitions and institutions traditionally governing patent law have been maintained, substantive changes have been introduced that compel revisiting proven prosecution and enforcement considerations and tactics. The present analysis aims to highlight the most relevant changes as these may immediately affect recent and long-term decisions.
The new philosophy behind the changes introduced on patent protection seeks to limit, in our view, the extent to which inventions may have found a way to obtain coverage under the former law with what are now considered excessive practices. The new Article 50 clearly reflects on this new approach as it sets out the general aim of the MPTO when it comes to patentable subject matter: 'Article 50 – The Mexican Patent Office is to guard public domain and to prevent double patenting during the prosecution and grant of patent rights.'
The verb used in the original Spanish text, 'velar', which we have translated as 'guard' for lack of a more appropriate word in English, entails an obligation to be protective of the public domain; to favour the public domain when examining an application. Vague as it may appear, the legal provision clearly conveys a worrying message on an anticipated change of criteria to be enforced by examiners, particularly under the umbrella of the double patenting argument.
The lack of Regulations to the law renders the application of the above legal provision rather unclear, at least for now. Transitory provisions of the new law provide that the current Regulations to the former law will continue in effect until a new set of Regulations is issued; however, legal principles applicable in the Mexican legal system provide that the text in federal law will prevail over that included in Regulations.
An aid to the understanding of the new statutory trend is the assumed definition for double patenting provided for in the new law, under which unsubstantial variations of the essential characteristics of an invention claimed in another patent, even if it belongs to the same patentee, will not be subject to patent protection. A conceptual conflict can be anticipated in consideration of the fact that inventions remain subject to patent protection if they meet novelty, inventive step and industrial application considerations, the definitions of which remain unchanged and subject to Paris Convention concepts and could, therefore, very well conflict with what could be comprehended or understood with the non-provided definition of 'unsubstantial'.
In line with the new trend, divisional applications have endured the prohibition of being filed from another divisional, unless the examiner specifically requests the same or if it is found viable by the examiner. No guidelines are provided, however, under which to determine the characteristics of a viable divisional filed from another divisional application.
Lastly, inventions claiming new uses of known substances, compounds or compositions are now statutorily allowed as opposed to assumed, as was the case under the former law.
Further amendments pertaining to patent enforcement were introduced, such as:
- conciliation proceedings as an alternative dispute resolution mechanism (expressly indicated for infringement proceedings);
- the authority of the MPTO to determine and award damages when ruling on a claim for infringement; and
- motions to obtain provisional measures (injunctive relief) to be automatically lifted with the simple offering of a counter bond are no longer available as substantive argument and evidence will be expected by the Patent Office to rule on whether to reverse or stay on injunctive relief.
Further detail will be provided on these issues in the course of the present analysis.i Procedural differences between Mexican and other jurisdictions and relevant evidence of infringement
While the process in itself remains practically the same as in the previous law, it remains quite different from those available in other countries, particularly non-Roman law countries. To begin with, all claims for patent infringement are to be tried with the MPTO, which renders the cases to be administrative processes rather than judicial instances. In addition, there is no discovery period under applicable law. Therefore, the plaintiff is to prepare the case thoroughly before the initial pleading is filed, without being able to avail, at this stage, information or documents in the exclusive possession of the defendant. The claim for infringement contained in the initial pleading of the case cannot be amended once filed. Therefore, it is necessary to include all arguments and evidence on which the case is supported, whether it be documentary evidence, expert testimony, official inspections or documents in the possession of the defendant that would be relevant to the case, as the MPTO can order the defendant to produce the same.
As noted above, all evidence is to be included with the initial pleading. The only exception to this rule for the plaintiff applies to documentary evidence in the exclusive possession of the defendant and that, once offered, the MPTO deems relevant to the case. If so, the MPTO would request said evidence be produced by the defendant, under the warning that if the same is not produced as ordered, the allegations of the plaintiff made in connection with the respective documents will be assumed proven. While there are certainly some concerns over the legality of this rule under Constitutional provisions, the courts have consistently accepted and supported the statute invoked to this effect.ii Provisional measures (injunctions)
Injunctions are not available under Mexican law in the form known in other jurisdictions. For instance, no judge in Mexico can award such measures and thus we are left with the figure of provisional measures on industrial property cases, as provided for in the FLPIP, and which are tried and ruled upon by the MPTO.
The previous law provided for two different forms of provisional measures, namely: an order to seize the alleged infringing goods, or an order under which the defendant is to immediately cease the alleged infringing activity, or both. It is relevant to note that this new law added the possibility for the plaintiff to request provisional measures over merchandise in transit while in Mexican ports of entry and on alleged infringing goods being offered for sale or sold in whatever virtual, digital or electronic means, known or not yet known.
Contrary to applicable rules contained in the former law that provided for a relatively simple process to be awarded provisional measures and an even easier and basically automatic one to stay on the effects of the same, the FLPIP now provides that the implementation and the eventual stalling of the effects of provisional measures will no longer be automatic and limited to the posting of a bond or a counterbond. The attorney assigned to the case at the MPTO will have to assess whether a ruling ordering the implementation or the lifting of the injunctive measures is to be awarded, taking into consideration the extent of the potential damages to either party, particularly assessing potential irreparable harm – the 'appearance of law' as it may be inclined to favour either of the parties – as well as potential violations to public order or common good. In a substantial and highly expected amendment to the law, injunctive remedy will now bear substantive content in which the parties will need to effectively address the merits in the given case before being awarded or stalled on provisional remedies.
Interlocutory decisions addressing injunctive remedies will be subject to appeal before the Federal Court by means of amparo proceedings (Constitutional Appeal), as the reasoning offered to award or lift provisional measures may incur constitutional violations, such as due process, fair interpretation of the law or consistency with applicable case law.iii Structure of the trial
Once the MPTO has admitted the initial pleading and the evidence offered by the plaintiff, service of the same on the defendant is ordered. If inspection visits were offered as part of the evidence, these are to take place precisely on the date of service of the claim, even if the facilities of the defendant were also chosen for an inspection visit. The inspections are to take place without any prior warning to the defendant or to the places where the inspections are to take place, leaving the visited entities, among which the defendant is normally included, without time to prepare for the same. An official report is prepared by the inspector for each visit, which is introduced into the case as the result of the inspection visit offered as evidence. The visited entity has the right to make observations, comments and objections to the inspection visit, either during the visit itself or within 10 days of the inspection, which are to be introduced in the case file for proper consideration by the Patent Office.
The defendant is then given a non-extendable term of 10 days to produce a response to the claim for infringement. Any counterclaim by the defendant will also need to be instituted within the 10-day term, with no extensions available. Revocation or invalidation claims instituted by the defendant after the 10-day period granted to respond will not be deemed linked to the process and, thus, the claim for infringement may very well be decided upon before the revocation or invalidation case is decided, and without taking the same into consideration. The defendant is also to produce all arguments and evidence (documentary evidence, inspection visits, expert testimony, etc.) in support of its defence, within the 10 days granted. The only exception to this rule is for documents offered by the defendant that are located outside Mexico. If this is the case, the MPTO will grant a further 15-business-day term, to be counted from the date of service of the relevant ruling, by which the respective documents are to be produced. Failure to meet the extended term, for which no further extensions are available under the law, will result in said evidence being ruled inadmissible in the case and, thus, not to be taken into consideration.
Once the defendant has produced a response and all evidence offered by the parties has been completed, the case will be deemed closed and ready for a decision to be rendered. Current practice at the MPTO dictates that the contentious section of the MPTO may then request from an examiner a technical opinion, to be shared with the parties before closing arguments are called for. Technical opinions generally take a few months before they are made available, since applicable law fails to submit a term by which these are to be produced. However, once closing arguments are filed, the MPTO will be ready to render a decision, likely to be handed down within approximately two months.iv Defences
In addition to a defence supported on non-infringement arguments that may be supported by expert testimony, grounds on which the revocation of a patent may be sought are:
- lack of novelty;
- lack of inventive step;
- lack of industrial applicability; and
- sufficiency of disclosure or enablement.
A revocation action when invoked as a defence during infringement proceedings will be resolved alongside the claim for infringement.
Once the counterclaim for cancellation has been admitted by the MPTO, together with the evidence offered, service of the same on the defendant is ordered. The defendant is then given a non-extendable term of one month to produce a response. The defendant must also produce all arguments and evidence in support of the defence within the one month granted (as noted above, an extraordinary extension for 15 business days will be available to the defendant to produce evidence located outside Mexico). Once the defendant has produced its response and all evidence offered by the parties has been completed, the case is closed and ready for a decision be rendered.
When initiated independently, revocation proceedings will take approximately the same time to be resolved, namely two to three years for a firm decision to be available.v Damages
The fact that the MPTO is now be able to determine and award damages when ruling on a claim for infringement is perhaps one of the most questionable issues in patent litigation resulting from the recent amendment to the law. While in theory the idea is to simplify and provide a sufficient level of certainty and readiness to collect damages (as it will not be necessary to obtain a firm decision nor to institute civil proceedings to be issued with a finding for damages at the same time as liability for the infringement is found by the MPTO), quite relevant questions on the constitutionality of the relevant provisions will lead the otherwise commendable effort into a sombre scenario. Awarding damages has always been and remains within the realm of the judiciary, and the relevant laws are yet to be amended before the new authority bestowed on the MPTO becomes certain. The amendment takes the issue on damages a step further when the judiciary is empowered to find on substantive issues addressing industrial property concerns, without caring to amend the rules governing the scope of their jurisdiction which, at present, fails to include intellectual property disputes.
It is discouraging as well to note that transitory provision 17 provides that before these new functions can be carried out, further amendments to the organic structure of the MPTO will be needed to meet the necessary budgetary, financial, human and material resources to operate. A deadline by which to see these needs fulfilled has not been set.
Alternatively, the new law still provides for the traditional course of action with which to seek and be awarded damages, which entails a firm decision finding for infringement before being able to institute the required civil proceedings to that effect.vi Alternatives to litigation
The FLPIP introduces a whole new chapter providing for conciliation proceedings, the main purpose of which is to encourage the parties involved in a claim for infringement to explore the possibility of an amicable settlement.
Conciliation should be requested in writing with the MPTO by either of the parties, at any time prior to the issuance of a decision. The petition needs to be accompanied by a proposal of the settlement agreement, and service of the same will be ordered to the counterparty. If the proposal is accepted, the parties will be required to produce the executed agreement within five days; however, if it is declined, the Patent Office will call the parties to a conciliation hearing to discuss the terms of a possible settlement. The MPTO is to exercise its best efforts to reconcile the positions of the parties, but refrain from venturing the terms of a decision addressing the merits of the case.
Any settlement reached by the parties will need to be formalised before the MPTO to be enforceable, although conciliation proceedings will not stay the course of the claim for infringement, which continues its regular course. Absent specifics, a settlement agreement may well include damages or whatever other form of compensation the parties may be amenable to agree.vii Appellate review
Decisions rendered by the MPTO on infringement cases can be appealed before the IP Branch of the Federal Tribunal on Administrative Matters and before the Collegiate Courts by means of amparo proceedings. Occasionally, on issues pertaining to the constitutionality of legal provisions or if the case is found sufficiently relevant, a further appeal before the Mexican Supreme Court can also be tried.