PROPOSED NEW IP LAW IN MEXICO: POSSIBLE TRADEMARK CHALLENGES
Disclosure: The discussion of this matter is still developing but actual changes has been suspended until further notice due to the current situation in Mexico regarding the Coronavirus pandemic. Since this article was redacted before the development of this situation, changes may have occurred.
In November 14, 2019 Senator Ernesto Perez Astorga submitted the initiative to issue a new Industrial Property Law in Mexico, which means that the current law published in 1991 will disappear. The proposed new law is also promoted by Juan Lozano Tovar, General Director of the Mexican Institute of Industrial Property (IMPI).
In the general provisions of the initiative the knowledge-based economy, the importance of new technologies, innovation and globalization seem to be the focal points for this new law; however we know that one of the main goals is to concur with the settled terms included in the United States of America, Mexico and Canada Agreement (USMCA).
Despite common fears, doubts and even excitements that a new law carries, in Mexico the discussion for this law has been going on for several months. Many practitioners, members of IP Committees, bars and associations have been raising questions, concerns and suggestions directly to Senator Ernesto Perez Astorga, who has kept a very open-door policy.
Even though this “new law” is at a discussion stage, there are some things that for us, as practitioners are somehow concerned about, especially because of the possible implications that could affect not only the practice in Mexico, but could carry repercussions to people or companies abroad that are looking to have their patents and/or trademarks protected in Mexico.
The proposed new law includes all Industrial Property matters, and even when many things have remained the same as they are in the current law, the list of things that could change if the same is approved as it is, is too extensive, therefore I herein will focus on trademark related matters only, summarizing what personally consider the most relevant changes the new law will carry in case the same remains as it was presented in the initiative:
- Multiclass applications
The current law does not allow a multiclass application; therefore, an applicant will have to file one trademark per class. For International Registrations, once the applicant designates Mexico, the same will be divided into national applications (one per class).
The way that this is being promoted confuses the applicants and especially the Industry, because it seems that payment for one application will cover all designated classes, and the study of the application will be conducted as a summary reducing time, while in reality it would be the complete opposite.
The way the system currently works is what allows Mexican Trademark Office to be one of the quickest IP offices in the world, since one trademark could be granted within 3 to 5 months (if not impediments were issued). Multiclass applications in Mexico will also not represent monetary savings to applicants, because government fees will still be charged for each class, moreover, it will also mean that the study of the application will take exactly the same as it is right now, and probably even longer since the examiner will have to study all related classes in a combined way.
- Examination of the application and deadlines
Once the application has been filed, the same is assigned to an examiner who will first conduct the formal examination during which it will determine whether the application fulfills all formal requirements, including any matter related to the description of goods or services. For this instance, the examiner in chare has up to 4 months to issue an official action regarding any formality.
Once the formal examination is concluded and all of the requirements are fulfilled (if any), the examiner in charge will have another 3 months to conduct the substantive examination. In this instance, the examiner will issue an official action in case there is another confusingly similar mark previously registered, or if the mark is not registrable based on absolute grounds, such as descriptiveness or lack of distinctiveness.
Currently, for each of the above examinations, the applicant has 2 months to file a response, extendable for another additional 2 months, so in total, the applicant will have 4 months to reply to a provisional refusal issued during each of the stages of the examination.
The proposed new law indicates that only one official action will be issued, therefore the examiner will have to, in a period of 4 months conduct both the formal and substantive examinations and issue only one official action. Also, what is startling about this proposal is that the deadline to file a response will be resumed to only 2 months, non-extendable; this means that not only the applicant will have half of the time that currently does to file a response to one provisional refusal, but also means that in half the time will have to respond to probably issues concerning to formal and substantive examination.
This modification has as a purpose to reduce examination and granting times, but what concern us in the practice is that the study of trademark applications should not be a race with time, even though is in the applicants best interest to have a registration in a shorter period of time, is equally important that trademarks are being granted properly and not rushed, because this could also increment the numbers of trademarks granted by mistake, in error, or owing to a difference of judgment, which also could increase the number of nullity actions translating into additional expenses to applicants.
Additionally, the reduced deadline will mostly affect abroad applicants. We as practitioners know that sometimes obtaining instructions in how to proceed after an official action is not that simple, because most of the time we have communications through another agent or representative which also has to contact the actual applicant, this itself could take weeks.
On the other hand, if original documents must be filed, such as power of attorneys, letter of consents or affidavits (just to name some), a deadline of 2 months non-extendable most likely will not be sufficient.
Mexico did not recognize this procedure until August, 2016. This was initially seen as a new alternative to defend the applicant rights, however, we suffered a bit of a disappointment because the procedure in Mexico was not implemented like in other countries. For instance, the opposition does not suspend the study of the application and is not binding for the defendant, meaning that they are not forced to file a response to an opposition. In this regard, the opposition system in Mexico is not only a summarized procedure but also does not forces the examiner in charge to take the same into consideration while conducting the examination of the application.
In other words, the opposition system in Mexico for the past years functioned more as an observation issued by a third party than a proper procedure, and although has had great results in our practice, it still lacks structure.
The proposed new law in terms of the opposition offers a few positives that finally provides this procedure the structure that requires to work a bit better. For instance, now an opposition will force the applicant (defendant) to file a response, otherwise the application will be deemed abandoned.
Also, even though the opposition does not suspend the study of the application even in this case, while the period of the opposition is open, the examiner will have to conduct and conclude the formal examination. Even though this seems reasonable, the examiner will have to conclude the formal examination in what is estimate to be one month, to have enough time to study the opposition, the response of it, along with the substantive examination, since as mentioned earlier, only one provisional refusal will be issued.
Another concern with the proposed new law is that if an opposition was indeed filed, the examiner will have to issue a formal decision regarding the same (even when included in the current Law, in the practice the Authority inconsistently issued formal decisions).
We do not know for sure how this formal decision will work, however from what we have discussed with the Authority and people involved in this new law is that, if the opposition was successful, the examiner along with the formal examination, will cite as impediment the trademark base of the opposition, and any additional absolute and/or relative impediment that comes from the substantive examination. If the opposition was not successful, the examiner will then issue a formal decision to the opponent regarding the same. However, in this scenario it opens up the possibility that the opponent refutes the formal decision and open a proper administrative litigation which then it will have to suspend the study of the application. This possible scenario was completely left out of the proposed new law, and it is probably one of the most concerning matters regarding the changes included herein.
Partial non-use cancellation action
This is one of the points that had the most acceptance in terms of trademarks. In the practice there are still many trademark registrations in force that are covering the heading of the class, since for many years the Authority considered that by covering headings, the registrations were protecting each and every one of the products or services listed in the class.
Until this day, despite the fact that from the latest amendment of the Industrial Property Law in August 10, 2018 the Authority insisted in now being more specific with the list of goods and services, the reality is that there are still many valid registrations that are covering headings that are being cited as impediments for new applications.
The above represents a serious obstacle for applicants that wants to protect a very specific product or service but faces a registration covering the class heading. However, a partial non-use cancellation action seems to be the perfect solution for this matter, since this will allow the applicant to force the defendant (owner of the registration) to demonstrate the use of the products or services that the trademark is actually being used for. As a result, the registration will be limited making it easier for the marks to coexist if in fact they do not cover overlapping goods or services.
Although the proposal of the new law includes positive changes, such as the implementation of the use of technology in processes related to practice, unfortunately the points discussed above, among many others have to be reviewed since the same cannot lose sight of what the main purpose of the Industrial Property Law should be: protect the interests of innovators, creators, and holders of IP rights.