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Which courts are empowered to hear trademark disputes?
The administrative authority empowered to hear trademark disputes at the first instance is the Mexican Institute of Industrial Property (IMPI). Although numerous professionals have objected to this in the past, the existing law grants the IMPI both administrative (as a trademark registry) and judicial powers (to solve controversies regarding the invalidity of a trademark registration, cancellation of a registration based on non-use of a trademark, cancellation of a registration based on loss of distinctiveness of a trademark and trademark infringement).
IMPI rulings may be appealed before the Federal Court of Administrative Affairs Specialised Chamber in IP Matters. Rulings issued by the chamber may be challenged through an ‘amparo’ action, which is a type of constitutional rights action prosecuted before a federal circuit court specialised in administrative affairs.
The competent authority in civil actions is a civil judge, whose rulings may be appealed before a chamber of appeals and subsequently through an amparo action prosecuted before a federal circuit court specialised in civil affairs.
Criminal cases are prosecuted by a federal prosecutor from the Attorney General’s Office and decided by a federal criminal judge.
What actions can be taken against trademark infringement (eg, civil, criminal, administrative), and what are the key features and requirements of each?
In Mexico, the following actions can be taken against trademark infringement:
- administrative actions;
- civil actions; and
- criminal actions.
Administrative actions are filed with the IMPI. Where an infringement is declared, the IMPI will impose a fine on the infringer, the amount of which varies depending on:
- the infringer’s intention;
- the infringement’s severity; and
- the infringer’s financial circumstances.
No damages may be granted in infringement proceedings. The fine imposed will be a maximum of 20,000 days of the minimum wage (approximately $80,000).
The appropriate legal action to collect damages derived from trademark infringement is a civil action. However, the Mexican system allows a civil action to be brought only once an infringement has been declared in a previous administrative proceeding and such an administrative resolution cannot be appealed. This system has resulted in most actions ceasing after the administrative procedure, because collecting damages requires initiating two separate litigations (which must be prosecuted sequentially and not in parallel), each of which may have up to three stages (including appeal).
In any case, civil actions are prosecuted before a civil judge whose ruling may be appealed before a chamber of appeals. Subsequently, the chamber of appeals decision may be challenged by way of an amparo action prosecuted before a federal circuit court specialised in civil matters.
The law provides that the amount of damages awarded to a trademark owner must be at least 40% of the value of the infringing goods, as they were sold in the Mexican market.
Finally, criminal action may be brought only in cases relating to what is commonly known as ‘piracy’ or ‘counterfeiting’ (ie, when an individual falsifies a trademark or copyright to use it on goods or services in an attempt to imitate a genuine good or service commercialised by the original mark’s owner). These proceedings are prosecuted in conjunction with an Attorney General’s Office federal prosecutor. Following the amendment of Mexico’s criminal justice system, criminal action faces an accusatory system in which the federal criminal judge is more involved in these cases and will be in charge of analysing alleged crimes. The penalty in these cases ranges from three to 10 years’ imprisonment and a fine of up to 20,000 days of the minimum wage (approximately $80,000).
Who can file a trademark infringement action?
A trademark infringement action can be filed by a trademark registrant or a licensee of a registered trademark (provided that the corresponding licence agreement allows the licensee to do so).
The licensee must also be recorded as such before the IMPI to be fully entitled to file a trademark infringement action.
What is the statute of limitations for filing infringement actions?
Under Article 79 the Federal Law for Administrative Procedure (which is applicable in a supplementary manner to any trademark-related legal action), the IMPI can impose a fine only within five years from the moment the act considered to be an infringement was committed.
If the infringing act is continuous, the statute of limitations of five years will begin from the date on which the allegedly infringing act stopped.
What is the usual timeframe for infringement actions?
The first stage of the infringement proceeding (prosecuted before the IMPI) usually takes approximately one year to be completed.
The second stage (prosecuted before the Federal Court of Administrative Affairs Specialised Chamber in IP Matters) also takes approximately one year to be completed.
The final stage (prosecuted before a federal circuit court) usually takes six months to be completed.
What rules and procedures govern the issuance of injunctions to prevent imminent or further infringement?
The law allows the following preventive injunctions, which may be requested before or when filing an infringement action:
- the withdrawal from circulation or prohibition of the distribution of infringing merchandise;
- the withdrawal from circulation of:
- objects manufactured or used illegally;
- objects, wrappers, containers, packaging, paperwork, advertising material and similar articles;
- signs, labels, tags, paperwork and similar articles; and
- implements or instruments intended or used for the manufacture, preparation or production of any of the articles specified in the above sub-bullets;
- the prohibition with immediate effect of the marketing or use of the infringing goods;
- the seizure of goods;
- the suspension or discontinuation of the acts constituting an infringement; and
- the suspension of the rendering of the service or the closure of the establishment in which the infringement was conducted.
These pre-emptive measures are declared permanent if the infringement is declared at the end of the proceeding.
In order to request an injunction, a trademark owner must post a bond to cover any possible damages that may be caused to the alleged infringer, in case the proceeding is concluded and it is determined that no infringement was committed.
Conversely, the alleged infringer may post a counter-bond (which must be at least 40% higher than the amount covered by the original bond) to obtain the lifting of the preliminary injunction.
Where the IMPI’s final ruling determines that an infringement was committed, the defendant will be liable for any damages caused to the opponent which derived from the suspension of the preliminary injunction.
What remedies are available to owners of infringed marks? Are punitive damages allowed?
As mentioned above, damages can be collected only after the infringement has been declared during the administrative procedure and an additional civil action has been brought against the infringer.
Once the infringement has been declared, a permanent restriction is placed on the infringer, which prohibits it from continuing to commercialise any infringing goods or services. Failure to respect such a restriction results in the imposition of higher fines.
Punitive damages are not recognised in trademark cases under Mexican law.
What customs enforcement measures are available to halt the import or export of infringing goods?
Customs is not empowered to seize alleged infringing or counterfeit products; rather, it is empowered only to inspect such products and inform rights holders about the alleged violation of their IP rights. As such, the actions that Customs can undertake derive from administrative or criminal procedures that can be initiated which allow for the seizure of the products. Further, in such cases, Customs is empowered to work alongside the IMPI with regard to border measures in administrative actions and the Attorney General´s Office in criminal cases.
What defences are available to infringers?
The most common defence is denying the merits of the case at hand (ie, emphasising the differences between the conflicting marks and the scope of products or services).
Article 92 of the Industrial Property Law provides several cases in which a trademark registration is unenforceable:
- A trademark registration is unenforceable against a third party that used the same or a confusingly similar mark in good faith in the same country and for the same or similar products or services, provided that the third party had begun to make uninterrupted use of the mark before the filing of the registration application or the first declared use of the mark.
- A trademark registration is unenforceable against any party that commercialises, distributes, acquires or uses the product to which the registered trademark is applied after said product has been lawfully introduced into the Mexican market by the owner of the registered mark or its licensee. This exception includes ‘parallel imports’ (ie, the import of products that were lawfully introduced into the market of a foreign country and later imported into Mexico regardless of the fact that the importer is not the owner or licensee of the trademark).
- A trademark registration is unenforceable against a natural or legal person that applies its own name or its company or business name to the goods that it produces or distributes, the services that it provides or its places of business. A trademark registration is also unenforceable against any natural or legal person that uses its own name or its company or business name as part of its trade name, provided that it uses it in the form in which it is accustomed to using it and it has features that clearly distinguish it from a homonym already registered as a mark.
If the infringement is brought against a third-party distributor (ie, a third party that did not manufacture the infringing goods, but simply commercialised them in good faith), the infringement may be declared only if it is demonstrated that the distributor was aware that the infringing goods violated a trademark registration.
The Copyright Law established a unique right known as the ‘reservas of exclusive rights’. This right is exclusive to the Mexican regulatory system and can be understood as a trademark of sorts, but is applicable only to:
- the titles of periodical publications (eg, magazines, newspapers and other similar printed media);
- the titles of periodical broadcasts (ie, television, radio or internet broadcasts);
- fictional and human characters; and
- artists’ names and names of groups dedicated to artistic activities.
The courts have held that reservas and trademark registrations, although independent, are of equal standing under the Mexican system and may thus coexist even if they are applied to similar goods or services (eg, a reserva for a specific magazine title may coexist with a trademark registration in Class 16, which also protects magazines). Therefore, if a trademark infringement action is brought against a party that holds a reserva, no infringement may be declared, since it is considered that the holder of the reserva has a legitimate right to use and exploit it and that said right is equal to the rights granted by a trademark registration.
Finally, the infringer may also bring a counterclaim against a registered trademark owner alleging that the trademark was registered illegally, due to either absolute or relative grounds of prohibition. In such cases, both legal actions would be solved in a single ruling in which it could be declared that the trademark registration was invalid and that, therefore, no infringement could be declared and the corresponding registration could be cancelled.
What is the appeal procedure for infringement decisions?
As mentioned above, IMPI rulings can ordinarily be appealed before the specialised chamber and subsequently before a federal circuit court.
There is an optional stage that may be attempted before appeal before the specialised chamber; however, such a stage is seldom attempted in practice, since it is heard by a higher authority within the IMPI and, in most cases, the ruling confirms the resolution issued at the first stage of the litigation.
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