It is widely known that most counterfeit goods are produced in southeast Asia, and that China (PRC) is the largest manufacturer of these illegal goods. Some of the biggest threats to IP owners – particularly in the clothing and footwear, luxury items, electronics, toys, automotive and industrial parts industries – come from counterfeit goods imported from the southeast Asia.
However, it is important to bear in mind that Mexican Customs officials cannot, under their own authority, intercept, detain or seize IP-infringing items. They require an order from a competent IP authority, either the General Prosecutor's Office (GPO) or the Mexican Institute of Industrial Property (IMPI).
Due to the magnitude of the problem and the continued lobbying from various economic bodies, plus the political pressure from foreign governments, Mexican authorities have been trying to address the problem. They are trying to create new mechanisms designed to provide Customs authorities with better tools to combat counterfeiting.
The creation of a database of trade mark registrations for Customs purposes and the amendment of the General Tax Regulations on Foreign Trade (GTrFT), are some of the most relevant legal tools in this area. Even before these amendments were enacted, the Mexican Government had achieved spectacular results. In 2010, the Yolanda Benitez Trophy was awarded to Mexican authorities by the World Customs Organization in recognition of its efforts and unprecedented achievements in combating counterfeiting. However, there are still several issues that need to be addressed.
Trade mark registration database
The first relevant amendments to the GTrFT 2011 were published in the Mexican Official Gazette (Diario Oficial de la Federacion) of July 29 2011. Such amendments created a database of trade mark registrations, administered by the General Customs Administration (GCA) which started operations on January 2 2012. This mechanism was created with the aim of speeding inspection and clearance procedures of registered importers and licensees, for example, and at the same time enhancing inspection procedures that may result in the detection of counterfeit and IP-infringing merchandise. Both will aid in producing the relevant enforcement legal actions.
The creation of a database was an important first step in establishing a full trade mark registry for Customs purposes. In the past, the Customs authorities did not have an official system to consult or review information concerning trade mark holders, licensees, and authenticity of goods; they used to work with an informal database containing information collected from past actions and details which some trade mark owners informally provided about their portfolios. As a result, the creation of this new database has allowed Mexican Customs officials to start gathering information provided by trade mark holders, which is helpful in identifying the importation of operations involving potential counterfeit or IP-infringing goods.
"Even before the amendments were enacted, the Mexican government had achieved spectacular results"
Further to the creation of the trade mark database, on December 9 2013 the Mexican Official Gazette published a series of amendments to the Customs Law that were recently approved by the Mexican Congress. These included the obligation (contained in Article 36-A) for the importer to declare the trade mark or any other means of individual identification of the goods subjected to clearance procedures.
Obligations on importers of branded or trade marked goods
On July 4 2014, the Mexican Official Gazette published another set of amendments to the GTrFT 2013. This time, they included specific cases in which the importer was obliged to declare in the corresponding import manifest information pertaining to the trade mark of the imported goods. Such instances include: when the importer is the trade mark owner; or, has an authorisation or licence for the goods that bear the registered mark; or, if there is no authorisation (granted in favour of the importer) but the goods are considered genuine and therefore no need for such authorisation (under the exhaustion theory).
These last amendments caused a lot of confusion, as they refer to the obligation to include in the corresponding import manifest a new trade mark indicator code (indicador MC) that corresponds to each of the five situations foreseen in the GTrFT, (which we will come to). Consequently, and in order to alleviate the confusion and dispel the idea that the amendments imposed an obligation not to declare but instead to obtain a formal licence or authorisation from the trade mark owner, the General Tax Regulations on Foreign Trade 2014 (GTrFT-2014) were newly-amended and published again on the Mexican Official Gazette of August 29 2014. They established basically the same obligations already contained in the Customs Law: that all importers are required to declare in the corresponding import manifest the brand or trade mark of the merchandise being imported. However, they do not establish the obligation to register such authorised importers as licensees before IMPI; such obligation would be unconstitutional, because the decision to register an entity as a formal licensee before IMPI has various consequences, including fiscal ones, which would have to be addressed before proceeding. Neither do the regulations impose commercial conditions on importers and trade mark owners.
To be more precise, rule 3.1.36 of the GTrFT 2014 has established that importers must indicate if the merchandise being imported bears any trade mark, in the manner described by appendix 8 of annex 22 of the amendments. This appendix establishes how the manifest should be correctly elaborated and issued, plus the information it should contain in each field. It states that the importer is obliged to indicate the brand or trade mark of the merchandise being imported (the MC indicator that the amendments refer to), and if any of the following five hypotheses apply: (i) if the importer is the trade mark rights owner (obligation to indicate the TM registration number); (ii) if the importer has the authorisation to use and distribute trade marked goods; (iii) if there is no trade mark or brand affixed in the imported goods; (iv) if the trade mark affixed to the products is registered before IMPI, but the importer does not have an authorisation or licence; and, (v) if the trade mark is pending registration before IMPI or is involved in a litigation procedure that may question its validity (obligation to indicate pending application number).
It should also be noted that according to complement 2a) of annex 8, where the importer is the rights holder or has an authorisation to use the trade mark (that is, if the importer is a registered licensee), the number of the trade mark registration or authorisation (the trade mark licence) before IMPI should also be declared. Please note this refers only to the data it must contain, but it does not impose any obligation to be a licensee or trade mark owner in order to import into Mexico.
"The GCA still lacks the legal powers to enforce IP rights by its own means"
Therefore, there is the obligation to declare such information if there is a previous licence granted by the trade mark owner to the importer, but the amendments do not impose the obligation to be a registered licensee before IMPI in order to continue importing merchandise. If we were to interpret the new disposition in this sense, the vast majority of importers would be out of business as most of them, even if they routinely import genuine goods, have no relation with the trade mark owner, and neither do they need to.
Further, please note that the amendment to the general rules was enacted in accordance with article 36-A of the Mexican Customs Law. This lists the information the importer is obliged to declare but it is not directly related to the customs value (for tax purposes) or the compliance with non-tariff regulations of imported goods; such information is deemed to be statistical data from a Customs Law point of view, so it has no direct bearing on taxes or other fiscal significances directly derived from the importation of goods.
More work to be done
While there have been notable advances in Mexican law concerning this specific subject (the myriad amendments to the Customs Law and the GTrFT 2014), it is important to bear in mind that the GCA still lacks the legal powers to enforce IP rights by its own means. The latest legal amendments by which a trade mark owner can officially register its marks before such agency and request the regular monitoring of suspicious goods (suspected of bearing counterfeit or otherwise infringing mark), do not allow the GCA to undertake legal actions against possible infringers or counterfeiters.
Further, Mexican Customs authorities cannot by themselves order the seizure of counterfeit or infringing products, and may only take action if they receive an order from a competent authority (IMPI, the the General Prosecutor's Office or a judge).
Another subject in need of urgent revision by the Mexican government is the official directive issued by the head inspector of the General Prosecutor's Office. This document prevents federal prosecutors and investigation agents to take action against trans-shipments (any shipment that is not destined – on record – to be imported into Mexico); even if the merchandise is physically in the country and is fully credited, the goods are counterfeits. This situation would be akin to discovering a shipment of cocaine being trans-shipped to the US, but if the final destination of the illegal merchandise is not Mexico, federal agents and police would simply close the container and let the shipment continue its journey to its final destination. This is the criteria sustained by Mexican officials and one of the reasons the number of seizures has dramatically dropped since an all-time record in 2010.
It is safe to conclude that for the time being, the success of anti-counterfeiting efforts regarding Customs (border) measures will still largely depend on the collaboration mechanisms between Mexican government agencies and trade mark owners and their representatives. Such collaboration includes providing training for Customs officers tasked with operational duties at each of Mexico's 49 Customs offices and creating networks t ease the task of monitoring and detecting import-export operations involving IP-infringing or counterfeited goods, which in turn provides the means to take appropriate legal measures.
Even if the amendments are a welcome addition to the legal arsenal available to combat pirates and counterfeiters, the truth is that, from both a legal and a practical point of view, the reforms are insufficient until they provide authorities with enough legal powers to effectively prosecute. Perhaps more importantly, they are insufficient to achieve a deterrent effect on the people that control the manufacture, distribution and sale of counterfeits, which are often part of organised crime networks involved in other serious felonies such as drug and weapons trafficking, sexual enslavery, contraband, kidnapping and extortion.
|Saúl Santoyo Orozco|
Saúl Santoyo Orozco is the partner in charge of the litigation department. His main practice focuses on IP litigation and enforcement, anti-piracy and anti-counterfeiting issues, domain name disputes and counselling.
Saúl's experience comprises complex patent and trade mark litigation, including legal action to correct the life term of pipeline patents for the inclusion of use and formulation of pharmaceutical patents in the Linkage Gazette, periodically published by the Mexican Institute of Industrial Property (IMPI). He also designs and implements anti-counterfeit programmes.
Saúl holds a law degree from the Universidad La Salle, México City, and has completed post-graduate studies in intellectual property, international commerce and internet law. He is the author of Well-Known Trademarks (1997) and several articles on IP-related topics. He is an active member of the Mexican Association for the Protection of the Industrial Property, the Mexican Bar Association and of the International Trademark Association (INTA) in the Anticounterfeiting Committee, Latin America & Caribbean and also in the Latin America Roundtables Project Team.
|Jose Luis Ramos-Zurita|
Born in Mexico City, Jose Luis Ramos-Zurita is an associate attorney at Uhthoff Gomez Vega & Uhthoff. He is involved in complex litigation issues, IP enforcement and anti-piracy and anti-counterfeiting. He obtained his law degree from the Universidad Iberoamericana (UIA) with a specialisation in international trade law and Customs law. He also has an undergraduate degree in Latin American studies from the Universidad Nacional Autonoma de Mexico (UNAM).
Jose Luis has more than 18 years' experience in administrative litigation issues, including handling complex matters in the enforcement of IP rights before different authorities such as the General Customs Administration (AGA), the Mexican Institute of Industrial Property (IMPI) and various courts.
Jose Luis has published several articles in the specialised press concerning enforcement of IP rights in Mexico and is an active member of the Mexican Bar Association and the Mexican Association for the Protection of the Industrial Property (AMPPI).