Why local counsel is key to a strong filing strategy
Rights holders seeking trademark protection, whether on a national or international basis, should consult local counsel in order to formulate a filing strategy that holds up to Mexican customs and practice.
Industrial property is one of the most globalised and uniform areas of law, with international treaties such as the Paris Convention having set the basic rules for domestic laws. However, despite this consistency, brand owners should also take account of local regulations and criteria when expanding into different countries.
The ideal scenario for rights holders would be to obtain protection for the same trademark worldwide, as this ensures global recognition and fewer expenditures when dealing with advertising materials and labelling, among other things.
Unfortunately, this is not always possible due to existing registrations or specific prohibitions contained in domestic legislation (eg, lack of distinctiveness or refusal of non-traditional marks).
As a result, rights holders should keep in mind certain strategies and considerations when filing for trademark protection in Mexico.
Article 88 of the Industrial Property Law defines a ‘trademark’ as “any visible sign that distinguishes goods or services from others of their same type or class in the market”. Further, Article 89 of the law states that the following types of sign may constitute a trademark:
I. Denominations or visible devices sufficiently distinctive capable to identify the goods or services they intent to cover, from others of their same class or type;
II. Three-dimensional shapes;
III. Commercial names and denominations or corporate names;
IV. The name of an individual as long as it does not lead to confusion with a registered mark or a published commercial name.
By stating that a trademark must be a “visible” sign, the law prevents the registration of marks comprising sounds, scents and textures. However, amendments to the law which may introduce protection for such marks are currently under discussion.
Compliance with the visibility requirement alone does not guarantee trademark protection. Holograms and motion figures, which could function as trademarks, cannot be registered on the grounds that Article 90 of the law refuses the registration of denominations, figures or three-dimensional (3D) shapes “which are animated or expressed in an animated way regardless of if they are visible”.
Nevertheless, 3D shapes – which may be considered non-traditional marks in foreign jurisdictions – are fully protected as trademarks in Mexico, without need for rights holders to prove secondary meaning.
Distinctive shapes (eg, bottles and packaging) are also protected as trademarks under the Industrial Property Law.
Registration versus use
The exclusive right to use a mark is granted by its registration before the Mexican Institute of Industrial Property (IMPI).
However, priority of adoption and continuous use of an unregistered mark also plays a key role in obtaining IP rights.
The use of an unregistered mark entitles the rights holder to file a cancellation action against the registration of a trademark or service mark based on prior use, regardless of whether such use occurred in Mexico or abroad.
Filing a cancellation action based on prior use abroad offers a significant advantage to foreign brand owners that are expanding their businesses into Mexico and discover that an identical or confusingly similar mark has already been registered.
However, the ability to file a cancellation action based on prior use is not perpetual. The owner of the unregistered mark must file the action within three years of the date on which the registration was published by the IMPI in the Industrial Property Gazette.
Despite this protection, relying on unregistered rights is inadvisable. The rights holder will continue to be exposed to infringement, regardless of the outcome of infringement proceedings, and asserting certain actions (eg, licensing and franchising) will be debatable.
Rights holders should employ local counsel to conduct a comprehensive search covering the likelihood of confusion and distinctiveness of a trademark when filing for registration in Mexico. Local counsel is well accustomed to the criteria applied by the IMPI when analysing trademarks.
Further, Mexico follows the ‘specialty’ principle regarding the scope of trademark protection. However, the IMPI has begun to consider highly related classes when conducting the likelihood of confusion exam. Therefore, rights holders should discuss related classes for expanding the search with local counsel.
A thorough search will provide a global snapshot of what to expect during prosecution and should reveal marks that could be cited as impediment or opposed by third parties. From the outset, local counsel can offer strategies to cover limitations, negotiations and litigation in order to improve the likelihood of registration.
Specific or broad?
As opposed to countries where applicants must draft a specific description of goods and services, the practice in Mexico allows rights holders to use broad descriptions, even claiming that the class heading is admissible. In addition, a mark can be registered for goods or services in which there is no use, but which are highly related.
Rights holders and local counsel should discuss the best description of goods and services to use in order to obtain the necessary scope of protection. A broad albeit admissible list may not always be the best strategy, as the application could be subject to opposition on the grounds that it includes goods which are not significant to the applicant.
Provided that the mark is used in relation to a single good or service listed in the application, the registration will be upheld in full, as partial cancellation actions are not admitted under Mexican law.
However, proposed amendments to the Industrial Property Law could change this long-admitted practice. The changes being considered include introducing partial cancellation actions, as well as ensuring that applications are more specific.
The opposition system provides interested third parties with a non-extendible term of one month in which to oppose the registration of a trademark published in the Industrial Property Gazette.
The Industry Property Law also provides applicants with a non-extendible term of one month in which to file arguments against such opposition.
One advantage of the filing system in Mexico is that the registration process will not be suspended while opposition proceedings take place.
In practice, filing an opposition action against a future registration is more efficient and less expensive than filing a non-use cancellation action against the registration.
In addition, responding to an opposition action – although not mandatory – helps rights holders to avoid the preliminary refusal of a mark based on the likelihood of confusion with a third-party mark, which would otherwise delay and increase the expenses derived from prosecution of the mark.
Who can apply for registration?
Individual rights holders often adopt filing strategies that involve registering their marks in the name of a local branch or several entities.
This is due to the fact that the IMPI will preliminary refuse registration for marks that incorporate similar elements. Consent documents are generally inadmissible, even where they provide evidence of a corporate relationship.
The coexistence of marks incorporating identical or similar elements is therefore inadvisable. Coexistence dilutes the distinctiveness of a mark, creating the potential for non-related parties to obtain protection for similar elements.
As a result, rights holders should file marks that incorporate identical or similar elements under the same entity. This strategy avoids unnecessary expenditures and delays when obtaining protection.
It also reinforces the distinctiveness of the mark when exercising rights against infringing third parties.
Register nationally or via Madrid Protocol?
The Madrid Protocol provides rights holders with certain advantages, including a simplified way to record assignments and changes of domicile. These advantages make the process of registering trademark and service mark portfolios less complex to administrate.
However, when designing a filing strategy, consulting local counsel is key – regardless of whether the rights holder is using the Madrid Protocol or the national filing system.
Practice has proven that obtaining registration on a national basis is faster than via the Madrid Protocol, as office actions can be prevented. Further, communication between applicants and the IMPI is direct, avoiding using the World Intellectual Property Office (WIPO) as an intermediary for designations under the Madrid Protocol.
Spanish is an official language of the Madrid Protocol. However, the IMPI receives designations translated into Spanish by the WIPO which can be confused, resulting in unnecessary delays and expenditures.
The accuracy of WIPO translations is a key concern for Mexican rights holders. Since Spanish is spoken across South America, expressions can vary between countries. Therefore, the WIPO translation may be inadequate in Mexican territory.
Indeed, WIPO translations of a specification for highly sophisticated goods or services may not provide the necessary scope of trademark protection.
For instance, an unsuitable specification of goods or services may result in the loss of rights or make it impossible for the rights holder to assert them.
When considering a national filing strategy, applicants may benefit from local practices, obtain a broad scope of protection and prevent third parties from using identical or similar marks for goods or services pertaining to the same class.
By considering the requirements and scenarios specific to Mexico, local counsel should play a key role in determining whether to file a trademark on a national basis or through the Madrid Protocol.
Other aspects should also be discussed with local counsel, including whether the mark should be filed as a word mark, composite or both, and whether related classes should be included in the application.
Local counsel’s responsibility does not end with the registration of a mark. Key aspects such as advice on use and preventive actions should be kept in mind in order to avoid losing trademark rights or being involved in long and expensive litigation proceedings – the outcome of which is often unpredictable.