Industrial Property Consents and Coexistence Agreements. Trademarks Office´s Obligation for Protecting Consumers
Consent and Coexistence Agreements had been a common practice in Mexico while non-binding for the authority for many years, nevertheless, upon the amendments of 2018 to the Mexican Industrial Property Law such agreements are now supposed to be binding as an alternative to overcome an objection upon the existence of a prior application or registration.
The question remains as to what is the authority´s obligation for protecting general consumers from the risk of confusion, even when the involved owners may consider there is no confusion or even when they allow the dilution for commercial or other reasons.
According to Mexican Law, as in many other countries, there is a catalogue of situations in which registration of a trademark is not possile; those as prohibitive norms, should not be subject to interpretation and should be applied striclty, meaning, only if all requirements and specifications are met, whereas the mentioned 2018’s amendment has established an express exception regarding confusingly similar trademarks allowing express written agreements between owners.
Inspite of what the amendment establishes, there are certain aspects that have to be analyzed to determine to what extent private agreements should be mandatory and accepted by the Mexican Authorities.
The will of involved parties against authority´s obbligation
An agreement between parties is ruled first and foremost by the intent of such parties on the terms and conditions they agree to be obliged for that purpose.
Therefore, if the owner of a prior registration or application wishes to grant a consent or execute a coexistence agreement with an applicant, they may do so and on the terms they determine, even if it entails a limitation of their own rights.
Nonetheless, regarding trademarks, which constitute the exclusive right to exploit a determinate distinctive sign granted by the government, there are some factors that have to be pondered into this equation, namely, the consumers.
Whilst individuals may agree on the terms and conditions thereof, there are some grounds of public concern upon which the authority may limit their privileges in view of the greater good, since the risk of confusion could lead to endangering public health or public safety.
The above is evident in some fields such as the pharmaceutical industry, wherein if a consumer purchases the wrong medicine derived from the confusion of the sought trademark the consequences may be dangerous and grave, while other fields may not entail a direct danger for the individual there may still be some hazard for the general public, for example, regarding automotive industry, in which the wrong product may cause the vehicle to operate inadequately and cause an accident.
Those specific examples evidence the need for the authority to grant the general public the safety and certainty of the goods and services they obtain, for which there are some complementary laws for protection of the consumer that should be considered in granting or denying a trademark´s registration.
However, there must be a balance between the protection of the general public and the right of individuals to trade and agree on the terms they consider best for their businesses, allowing a healthy market with fair competition, which ultimately will also benefit general consumers.
Agreements between parties should be binding for the authority, however, there is always the faculty to analyze the general context and decide otherwise denying registration, however, such decision would have to be properly supported and motivated.
Moreover, there are still some specifics that must be ruled for the implementation in Mexico, which may be determined by a further amendment to the Law, established within the regulations to the Industrial Property Law or upon jurisdictional criteria when solving particular matters.
Some solutions that have been implemented abroad might be replicated in our country, i.e.:
- implement specific clauses on agreements whereas parties undertake to take all reasonable actions to avoid confusion in the market; and
- determine specific rules of use in the market along the agreement, i.e. specific use of colors or letters, determined layout of the labels, use of different channels of distribution.
Under these circumstances, it is vital that owners and their counsel work closely together to determine the best way to protect their marks and negotiate the corresponding agreements.
by Gabriela Armas