An update on Mexico’s trademark opposition system

The first reaction most people have when they receive a letter threatening to file an opposition against a trademark application is to assume that the challenge is somehow personal.

We usually hear expressions such as “I do not know this other company”, “we do not even operate in the same market”,or“wehavedifferentdistributionchannels”… However, they do not realize at first sight, the interest of the owner of the prior filed registry or application to safeguard their intellectual property rights.

Although one reason that trademark oppositions are filed is a perceived infringement on the rights of the opposing party, there are often other issues at play, such as the interest of business owners to help their products stand out and to gain consumers loyalty to their trademarks, to avoid confusion of others that could be considered as similar in the market.

In Mexico, according to the Law of Industrial Property, manufacturers, traders or service providers may use marks in industry, trade or in the services that they provide1. In fact, trademark use is not required to secure a mark’s registration, however, the right to its exclusive use shall be obtained, only through their registration with the Mexican Institute of Industrial Property.

The first party to file an application may acquire ownership of a trademark and the right to exclusivity, even if it is not using the mark. However, any party that can show prior uninterrupted use, may challenge the eventual registration within a three-year statute of limitations prescribed by Law.

In the past, Mexico did not have a trademark opposition system and applications that were approved by the examiner proceeded directly into registration. In fact, brand owners did not have the legal opportunity to officially oppose the application with the purpose of trying to prevent its registration when they believed that it was confusingly similar to theirs because our legal system functioned as an in-depth examination of an application that was carried out by the Institute based upon the information or documentation at hand, which may or may not be complete.

Unilaterally, the Institute took the decision as to whether the proposed application might conflict with prior registrations or pending applications and, if it was the case, issued office actions only served on the applicant, who had to answer them in a period of a two months term with an extension of an additional two months provided by law2.

Those office actions were not served to the owners of any application or registration that had been considered relevant by the examiner, which constituted a disadvantage for them because they could not pronounce themselves against the granting of such application, as well as to let the examiner know of other relevant aspects such as the fame or notoriety of the trademarks. In fact, registrations sometimes were granted without the authority being fully informed regarding third parties’ rights that might be infringed or affected.

The lack of the opposition system at that time became a step back in relation to other jurisdictions that allowed trademark oppositions, that is why the Senate and the Chamber of Deputies noted the need to harmonize Mexican Law in relation to other countries’ legislations that have a well-grounded opposition system.

In light of the above, on April 28th, 2016, a Decree was approved amending the Law of Industrial Property to incorporate a trademark opposition system in Mexico, which was published in the Official Gazette of the Mexican Federation and it came into effect on 3 August 30, 2016 .

In the implementation of this system in Mexico, new provisions were added and amended in relation to the Law of Industrial Property. One of these provisions includes the law that once the application has been received by the Institute, the authority shall proceed, within ten business days, with its publication in the Gazette and it will carry out a formal examination of the same, as well as the documentation filed, to determine whether formal requirements specified in this law and its regulations are complied.

In addition, it officially grants the opportunity to anyone who considers that the proposed application violates the Mexican Industrial Property Law provisions, to file an opposition within one month of the date of its publication in the Gazette, making special emphasis on the fact that after that one-month opposition period expires, a list of those applications that were opposed shall be published in the Gazette within the following ten business days.

This opposition system has several benefits both for the Mexican Institute of Industrial Property and for the owners of trademarks registrations/applications that might consider its rights infringed, for which we could mention the following as the most important:

(i) It gives any person the opportunity to point out to the Institute that an application or registration incurs in any of the prohibition contained in the Law of Industrial Property;

(ii) The Institute has the faculty to determine if an application incurs in any prohibition of the applicable legislation and the opposition will not result in any suspension of the registration process, since it shall not automatically determine the outcome of the substantive examination carried out by the Mexican Industrial Property Law4;

(iii) The opposition helps to warn the examiner in charge that the proposed mark is confusingly similar to another with prior rights and protecting colliding goods/services;

(iv) The examiner now has more elements to cite anticipatory references and pay more attention to other preexisting marks which may be affected if the proposed mark is granted into registration; and

(v) Another advantage consists on letting the examiner know of the existence of foreign equivalents or marks that are similar in meaning but dissimilar in appearance and pronunciation that are not identified by the Mexican Database of Trademarks (MARCANET), with the phonetic search an algorithm that finds the marks in the database most similar to the mark being searched.

Now, while the implementation of the opposition system in Mexico has shown several advantages, the main disadvantage that has emerged is that it has no binding effects on the Institute and the oppositions will be considered by the same examiners conducting the corresponding novelty examines and not by an independent body, which implies that an opposition will not prejudice the result of the substantive examination undertaken by the Institute regarding an application.

The above could make us think the Institute does not give oppositions the importance they deserve, added to the fact that the dismissal of the same will not be subject to an administrative recourse and that the examiners do not have the obligation to explain the reasons for dismissing an opposition.

All the above mentioned, added to the fact that in other countries an opposition is a proceeding distinct and independent from examination litigated before a specialized body, makes us believe that while the current opposition system has provided certain tools to brand owners, it still needs to be adjusted to reinforce its effectiveness.

In light of the above, and taking into consideration the growing number of filed oppositions in Mexico, on March 1st 2018 a proposal to amend the recently implemented opposition system was presented before the Permanent Commission of Congress that, if approve, will come into force and effect within sixty working days of its publication in the Gazette. Being the most relevant, the change of the nature of the opposition in order not to be as a protest against pending trademark applications but a legal procedure where evidence and final pleadings will have to be submitted, for which we can mention the following considerations.

The Mexican Institute of Industrial Property will notify the applicants of any opposition that may have been filed through a publication in the Gazette giving them a one-month term to file an answer brief and to offer evidence.

All kind of evidence would be admitted with the exception of confessional and testimonial evidences (unless the testimony or confession are contained in documents), which would have to be studied by the examiner in charge of the opposition.

After the period of one month to respond after the opposition has lapsed, the applicant of said opposition would have the opportunity to make final pleadings in a period of two days, same that would have to be taken into consideration by the examiner.

The Institute would issue a resolution in relation to the received oppositions, expressing the reasons for dismissing or taking into consideration the same.

While oppositions would still not prejudice the result of the substantive examination undertaken by the Institute regarding the application, with these amendments we can perceive a change on the nature of the oppositions giving them a binding effect on the examiners, which will have the obligation of making a full study of the arguments and evidence submitted in the proceeding when issuing its decision.

In conclusion, Mexico has handled an opposition system that provides an additional defense mechanism, mainly in the benefit of trademark owners, without the authority leaving aside its protectionist function, but working together by providing elements to enforce its internal analysis, with a healthy respect for industrial property law.

Author:
Marisol Balandra