Under Mexican law, trade mark litigation is conducted through various administrative and judicial authorities, the choice of which depends upon whether a person seeks to overturn an administrative decision or desires judicial review of an intellectual property agency decision.

Overcoming an adverse administrative decision

If a trade mark registration or renewal is denied because another mark is cited as having priority, the applicant may seek to have the decision overturned through one of three administrative proceedings: 1) nullification, 2) forfeiture and 3) cancellation. When any of these proceedings is instituted, the IMPI (Instituto Mexicano de la Propiedad Industrial) notifies the owner of the mark subject to the action, who has one month to respond.

The holder of a registered mark or an applicant for the registration of a mark may file with the IMPI for the nullification of a trade mark registration, within five years of the registration date, if:

• the registration was granted in violation of the provisions of the law in force at the time the registration was granted;

• the mark is identical or confusingly similar to another that has been used in Mexico or abroad before the application for the registered mark was filed, and is applied to the same or similar products or services;

• the registration was granted based on an application containing false information;

• the registration was granted due to error, inadvertence or a difference of appreciation, with respect to an identical or confusingly similar mark, which is applied to the same or similar services or products; or

• the agent, representative, user or distributor of a mark registered abroad, applies for and obtains the registration in their name, without the express consent of the holder of the foreign mark.

An action for forfeiture can be brought when the trade mark that is registered has not been used for three consecutive years before the action was filed. A period of non-use is not a basis for forfeiture if use of the mark has resumed.

An action for cancellation of a registered mark may be filed at any time if the mark has become a generic designation for one or more of the goods or services covered by the registration.

Enforcing trade marks rights

Mexican law provides three avenues for enforcing trade mark rights: 1) administrative infringement proceedings (pursuant to Title VII, Chapter II of the Industrial Property Law of 1991); 2) civil unfair competition actions (pursuant to Title VII, Chapter II of the Industrial Property Law and Article 6bis of the Federal Commercial Code); and 3) criminal proceedings (pursuant to Title VII, Chapter III of the Industrial Property Law and Article 2 of the Federal Act against Organized Crime). IMPI has jurisdiction over administrative infringement proceedings and the Federal Courts have jurisdiction over civil and criminal actions.

Article 213 of the Industrial Property Law lists various trade mark violations that constitute administrative infringement, including:

• committing acts that are contrary to accepted usage and customs in industry, commerce and services that imply unfair competition and that are related to intellectual property matters;

• placing products and services for sale or in circulation, indicating that the mark on the products or services is protected by a registration when this is not the case;

• using a mark that is confusingly similar to a registered mark for the same or similar products or services;

• using, without the consent of the owner of a registered mark, an identical or confusingly similar mark as an element in a commercial name, when the business of the establishment is identical or similar to the products or services registered mark;

• using, without the owner's consent, a registered mark or one that is confusingly similar as a commercial name of a real or fictitious person engaged in the production, import or commercialization of goods or services that are the same or similar to those of the registered mark;

• using, without the consent of the owner, a registered mark on products or services that are the same as or similar to those for which the mark is registered;

• offering for sale or placing in circulation altered products with a registered mark; and

• offering for sale or placing in circulation products with a partially or totally altered, substituted or covered mark.

The action for an administrative declaration must be filed in the IMPI, in writing and in Spanish, signed by the interested party or that party's legal representative, and accompanied by proof of payment of the filing fee. A complaint must contain:

• the name and domicile of the plaintiff and/or the legal representative;

• the domicile for receipt of notices and/or summons;

• the name and domicile of the defendant or of the legal representative;

• the basis or cause for the action, set out in clear and precise terms;

• a description of the facts and circumstances; and

• the legal basis for the action.

In an administrative proceeding, the original or certified copies of the documents on which the action is based, as well as the respective evidence, are presented. This may include all kinds of evidence, except testimonial and confessional evidence, unless it is contained in a written document. Evidence that is illegal or immoral is prohibited. Evidentiary value is given to invoices and the inventories compiled by the owner of the mark or licensee.

After receiving the complaint, IMPI prepares an official notice to the alleged infringer. IMPI may require the defendant to hand over documents or information, and conduct an inspection of the defendant's premises. The defendant is then given an opportunity to respond to the complaint and present evidence on its behalf. The alleged infringer is notified of the action when the IMPI personnel carry out an inspection procedure. This occurs after the official document is drafted, setting out why such measures are being carried out by IMPI personnel.

After reviewing the parties' submissions, IMPI issues its decision for resolution of the case, which is then served upon the parties. Additionally, when indicated, the respective sanction is set out in this written resolution.

In cases where an administrative infringement is declared, the IMPI is empowered to order injunctive measures that can:

• prevent the circulation and sale of goods or services that infringe the rights of the mark owner;

• order that the infringing goods be removed from circulation, as well as the objects, wrappers, containers, packaging, advertising material and similar items such as signs, bill boards, stationery, as well as utensils or instruments used to manufacture or produce infringing goods;

• immediately prohibit the commercialization or use of the infringing products;

• order the seizure of goods;

• order the alleged infringer or third parties to cease the infringement;

• order the suspension of the infringing service or closure of an establishment when the preceding measures are not enough to prevent or stop the infringement.

Other penalties for administrative infringement can include:

• fines of up to 20,000 days of the general minimum salary payable in the Federal District (about $85,000). If the infringement persists there can be an additional fine of up to 500 days of the general minimum salary payable in the Federal District (about $2,100);

• administrative arrest for up to 36 hours;

• temporary closure of the defendant's business for up to 90 days; and

• permanent closure of the defendant's business.

Once an administrative resolution has been issued by the IMPI in trade mark and related matters, there is no ordinary recourse for revoking that decision. After the resolution is notified, and in accordance with recent Supreme Court decisions, the losing party can only file for an annulment trial at the Federal Fiscal and Administrative Justice Court. After an unsuccessful annulment trial, the losing party could appeal to the District Courts in Administrative Matters, which are part of the Federal Judicial System, but must file an amparo (an extraordinary writ) within 15 working days. Once the Federal Circuit Courts have decided on the disputed matter, the losing party could not present any other action in order to overturn the judgment.

Enforcement through unfair competition: administrative versus civil

Article 213 of the Industrial Property Law also contains general prohibitions against unfair competition that can constitute administrative infringements, which may be used to protect unregistered trade marks, trade names, and trade dress, and which include:

• engaging in acts contrary to proper practice and custom in industry, commerce and services that amount to unfair competition and that relate to intellectual property;

• using, within the geographical area of the effective clientele a trade name that is identical or confusingly similar to another already being used by a third party to protect an industrial, commercial or service establishment in the same or a similar field.

• performing, in the course of industrial activities or trade, acts that confuse, mislead or deceive the public by causing it wrongly to believe or assume: a) that a relation or association exists between a given establishment and that of a third party; b) that products are manufactured according to specifications, licences or authorizations from a third party; c) that services are rendered or products sold according to authorizations, licences or specifications from a third party; or d) that the product concerned comes from a territory, region or locality different from the true place of origin, in such a way as to mislead the public as to the geographical origin of the product.

• pursuing or achieving the aim of denigrating the products or services, the industrial or commercial activity or the establishment of another party.

• using a trade name or a name confusingly similar without the consent of the trade name's owner without the appropriate licence to distinguish an industrial, commercial or service establishment in the same or a similar branch.

For the purposes of a civil action, Article 6bis of the Federal Commercial Code defines unfair competition as any act that:

• creates confusion, by whatever means, regarding the establishment, the products, or the industrial or commercial activities of another business enterprise;

• discredits, through false statements, the establishment, the products or the industrial or commercial activities of another business enterprise;

• induces an erroneous belief among the public as to the nature, method of manufacture, characteristics, efficacy or quantity of products; or

• is otherwise defined as unfair competition by law.

The primary purpose of a civil action is to obtain indemnification for damages. Article 221bis of the Industrial Property Law states that an award of damages will not be less than 40% of the retail price of each infringing product sold. To proceed with a civil action however, an aggrieved party must first secure a declaration of administrative infringement from the intellectual property authorities.

Enforcing trade mark rights by criminal proceedings

Under Article 223 of the Industrial Property Law, it is a criminal offence to:

• falsify marks on a commercial scale; or

• repeat any of the acts defined as administrative infringement once the first administrative sanction has been enforced.

The attorney-general prosecutes criminal actions at the request of the aggrieved party. A finding of guilt carries with it the possibility of two to six years' imprisonment. The court may also issue a fine corresponding to 100 to 10,000 days of the general minimum wage payable in the Federal District (about $425 to $42,500).

Federal Act against Organized Crime amended

In amendments approved and published by the Mexican Congress in February 2004, the Federal Act against Organized Crime creates additional punishment for the crimes listed in its new Article 2, which distinguishes between a person who has a directive, managerial or supervising position and a person who has not.

Any person who holds a directive, managerial or supervising post and commits a piracy or counterfeiting activity could be punished with eight to 16 years' imprisonment and a monetary fine of 500 to 25,000 days of the general minimum wage (about $2,125 to $106,250). Any person who does not hold such a position and who commits piracy activities could be punished with four to eight years' imprisonment and a monetary fine of 250 to 12,500 days of the daily minimum wage (about $1,062 to $53,125).

Trade mark litigation is a delicate matter that, unfortunately, in many cases has been misused. Under the provisions of the Industrial Property Law, a trade mark registration can be cancelled if it was granted based on false data in the application. This cancellation ground has been widely employed to attack trade mark registrations in anticipation of infringement or other actions. A plaintiff simply claims that the declared first use is false and the burden moves to the registrant to prove the contrary. The consequence has been that many valid registrations that have early dates of use that are not well documented have been cancelled. Recently, however, the owner of a registration that was placed in this situation successfully argued before the Federal Tribunal of Administrative and Fiscal Justice that the burden to prove a false date of first use should be on the party making the claim. The decision was affirmed by the First Collegiate Court in Administrative Matters. As a result, the registration was protected. Hopefully the IMPI will now apply the court's criteria and end abusive cancellation claims.

Overall, trade mark litigation in Mexico can be conducted through various paths. Depending on the results that are sought, someone defending their trade mark could choose: administrative actions, administrative infringement declarations, annulment trials, administrative amparos, civil actions and criminal prosecutions.

Roberto Arochi

Roberto Arochi is a founding member of the law firm Arochi, Marroquín & Lindner. With over 25 years of experience, he is considered an authority in the fields of trademark and copyright law (authors' rights), and has been called as a trademark and copyright expert witness before the US Federal Court on issues concerning Mexican Law and as a patent expert before WIPO on issues concerning patent law in the Americas. Mr Arochi handles trademarks, patents, copyrights, anti-counterfeiting, licensing and unfair competition matters, as well as complex patent and trademark litigation. He has experience with technology transfers and litigation in matters requiring extraordinary writs under Mexican law ("Amparo"). A frequent speaker at intellectual property seminars, he has presented at conferences organized by leading IP organizations in both the United States and Mexico. He was named in the 2004 Guide to the World's Leading Trade Mark Law Practitioners as the top trademark practitioner in Mexico. He received more individual nominations than any other practitioner in Mexico. He can be reached at rarochi@aml.com.mx or at +52 55 5095 2050.