Mexico and the TPP

The Trans-Pacific Partnership, also known as TPP, is the most ambitious multilateral free trade agreement that has ever existed in the Pacific Rim. This treaty originally became an expansion proposal of the Strategic Agreement Trans-Pacific Economic Partnership (or P4 Agreement), which was part of the free trade agreement between Brunei, Chile, New Zealand and Singapore. Subsequently, the United States looked for the opening and expansion of this treaty in order to achieve a counterweight to the trade generated by China. Currently the member countries of the TPP are: United States, Japan, Australia, New Zealand, Malaysia, Brunei, Singapore, Vietnam, Canada, and – from Latin America – Mexico, Peru and Chile. These 13 countries represent 40% of the gross domestic product globally. The treaty was signed on February 4 2016 in Auckland, New Zealand by the governments of these countries and is pending approval by the Congress of each of these states.

Among the goals that the TPP seeks to accomplish is the reduction in trade barriers, to create a common protection and regulatory framework for intellectual property, to establish and reinforce labour and environmental law standards, as well as the creation of an Investor-State dispute settlement mechanism.

The TPP has 30 chapters that regulate a large number of issues; nevertheless, there is great criticism regarding the way the TPP negotiations were conducted by not being entirely transparent to the citizens, the chapters of the Intellectual Property, Investments and Environment being the only source of information about the content of the treaty.

The chapter on Intellectual Property, number 18, is certainly one of the treaty's most important ones. It seeks to revolutionise and harmonise the protection of such rights. Apparently, the TPP seeks that copyright, patents and trade marks protection be brought to a higher level than the one achieved by the Agreement on Trade-Related Aspects of Intellectual Property Rights.

The TPP chapter about Intellectual Property includes patents, trade marks, copyrights, industrial designs, geographical indications, trade secrets and other intellectual property forms and their enforcement, as well as the areas on which the parties agreed to cooperate. According to Mexico´s Government opinion, the Intellectual Property chapter will help business identify, record and protect intellectual property rights on new markets, which is particularly important for small business.

The search for adequacy and implementation of international treaties into national law is not new for Mexico. For example, the Industrial Property Law of 1991 and its amendment in 1994, as well as the Federal Law on Copyright of 1996, were both laws that were intended to fulfil the obligations acquired by the North American Free Trade Agreement and the Agreement on Trade-related Aspects of Intellectual Property Rights.

Over the past 20 years, such legislation has not been amended substantially because at the time it was signed, the treaties met with the necessary objectives that satisfied the business, commercial and technological needs to the historical time that they were created. However, the impact of the Internet, the digital era, the disappearance of geographical boundaries, the innovative forms of international trade and new technologies have forced the countries to consider and to seek new models of protection for intellectual property rights that would generate certainty and, as far as possible, the assurance of efficient implementation and enforcement of such rights.

For the new legal framework of the TPP, Mexico has adopted two important measures for the protection of trade mark signs, which are related to the adoption of Madrid Protocol in 2013, as well as the implementation of the new and recent opposition model to trade mark registration, which entered unto force in September 2016.

Regarding the trade mark protection and registration system – in addition to the protection given by the international trade mark registration through the Madrid Protocol and the inclusion of the opposition system that avoids, as far as possible, the frequent trade mark kidnapping by others so that its original owner could not enter business in our country – Mexico should implement new protection mechanisms for non-traditional trade marks such as smell, sound and tactile trade marks. Although it is true that this issue can be considered as unknown for most of the countries, it is possible that that our legislation rests on creating a legal framework to protect these new types of trade mark based on the provisions outlined in the Singapore Treaty on Trademark Law, which was adopted by our country on March 28 2006 and is still pending for ratification by the Senate. Without establishing an international obligation to register and protect non-traditional trade marks, the treaty establishes a multilateral framework for the definition of criteria on how trade mark applications and registration should reproduce holograms, colour and position motion trade marks, and trade marks consisting of non-visible signs.

On the other hand, the inclusion of the TPP to the Mexican law will affect how the designations of origin are protected, as well as the new geographical indications, including those recognised through international treaties. This includes the confirmation of understandings between trade marks and geographical indications, as well as safeguard agreements regarding the use of commonly-used terms. This issue is quite controversial because the main reservation the United States introduced to the treaty is to consider certain geographical indications as "generic" or "of common use" and therefore questioning the feasibility of protection for a significant number of designations, which under certain conditions could be qualified for banning. By establishing these limits, it would be unlikely that names like "Parmesano", "Prosciutto di parma" or "Manchego" can achieve recognition in TPP member countries. In this regard, it is important to note that Mexico is a state party of other treaties that seek designation of origin protection, which would impose obligations for such names. Due to such treaties, Mexico has achieved recognition and protection on Europe and Asia of names such as Tequila and Mezcal, finding a legal crossroad in Mexico regarding the treatment of these figures.

Regarding the enforcement of rights, the TPP extends the provisions about procedure and criminal penalties, which must include imprisonment and sufficiently high fines in order to discourage future violations. The Federal Penal Code provides such penalties for those who with commercial or profit interests "manufacture a device or a system whose purpose is to deactivate protection electronic devices of a computer program", with a fine of 250,000 to 2.8 million pesos (between 14,000 and 165,000 dollars) and a penalty of three to 10 years in prison. Also, such penalties should be extended to other cases regarding technological protection of books, music or videos; including fines to those who try to unlock "digital locks" of their own belongings.

Article 18.74 of the TPP establishes that judges should have the power to at least: i) impose precautionary measures, including assurance or other measures that would allow custody of devices and products allegedly involved in a prohibited activity; ii) order the types of compensations applicable to copyright violations; iii) order the payment of costs or court costs; and iv) order the destruction of devices and products that are involved in a prohibited activity. These faculties should be adopted by our legislation.

It should be noted that the amendment to Article 213 of the Federal Law on Copyright in 2013 provides the existence of civil, administrative and criminal penalties that can be carried out together, so that the affected owner could seek for criminal penalties and administrative fines, regardless the compensation for damages, which may not be less than 40% of the sale price under the Article 216 bis of the same law.

In regard to patents, great news cannot be expected. Patent Cooperation and work sharing with respect to patent registration systems, as well as simplifying and streamlining the procedures and processes of the patent offices, have been announced. However, they have not been detailed beyond sharing search results and examination results that already exists in terms of the Patent Cooperation Treaty. It is also believed there will be cooperation in the area of Traditional Knowledge associated to genetic resources but subject to the availability of resources. No further opening of the patentability criteria can be expected, although new criteria has been provided as to Patent Revocation because of fraud, misrepresentation or inequitable conduct that could be a basis to cancelling, revoking or nullifying a patent or holding a patent unenforceable when in basis to article 5a of the Paris Convention.

On the other hand, it has been agreed there is a need to encourage the agility of customs and border processes, for which state members must make transparent rules, which implies the publication of laws of each state member and their customs regulations. State members also agreed to have the clearance of goods without unnecessary delay and "under bail" or "payment under oath", as well as the obligation to empower customs officers in order to detect possible intellectual property violations. This is one of the biggest changes that must be made in the Mexican law, since currently there are no specific rules on customs procedures. Therefore, it has been impossible to protect intellectual property rights due to the existence of a large a number of gaps in Mexican law that have generated legal uncertainty regarding the measures to be taken, as well as the times and responsibilities of the parties involved.

The pharmaceutical industry in terms of patents, aims to produce dispositions that will result in new innovative medicaments to save lives and improve living, as well as the availability of generics considering the time frame on different jurisdictions to comply with relevant standards. The TPP provides for Protection of Undisclosed Test or Other Data for Agricultural Chemical Products that are filed to obtain a Health Permit for the commercialisation of new agricultural, pharmaceutical and chemical products. It is understood that all jurisdictions will not be impeded to adopt measures to protect public health, even in case of epidemics such as HIV/AIDS. The above is intended, on the one hand, to provide Patent Term Adjustments to compensate the patent owner for administrative delays occurred during the prosecution of an application before the Mexican Institute of Industrial Property or with the Federal Commission against Sanitary Risk (Cofepris), to limit the original period of protection, wherein delay is understood as longer than three years as from the filing date of the respective application.

Additionally, Protection of Undisclosed Test or Other Data is provided for five years from the date of marketing approval for a new pharmaceutical product, at least three years with respect to new clinical information submitted as required in support of a marketing approval of a previously approved pharmaceutical product and eight years to bio-comparable – which is the term for bio-similar or similar biotechnological products. At least it seems that that the alternative where in the case of epidemic the exploitation of a patent can be released during the emergency period of time.

Regarding the terms of copyright protection, TPP countries should increase by 20 years the monopolistic exploitation of works. The current international standard established in the Berne Convention is of 50 years post-mortem. In this regard, the Federal Law on Copyright provides a term of protection of 100 years post-mortem in Mexico, which means that there will not be amendments on this issue.

Also, the TPP restricts the adoption of exceptions and limits to copyright upon the expansion of the three-step test. Article 18.65 of the TPP does not impose a catalogue of possible exceptions, but leaves to each country the option to decide, as long as those exceptions "do not impinge with a normal exploitation of the work, performance, execution, or phonogram and not causing unreasonably prejudice to the right holder's legitimate interests." Therefore, there is an open interpretation, as well as the possibility that Mexico could change its legislation in favour of the figure of fair use.

As for satellite signals, the TPP proposes in Article 18.79 to punish with imprisonment and a fine not only those "who produce, modify or sell systems designed to decode satellite signals" but also those who use the signal, which not only punishes the production of devices that decode satellite signals but also punishes the user. But such a situation is not provided in our legislation.

Finally, the TPP proposes in Article 18.82 a system of liability regime for intermediaries that is very similar to the DMCA. This means the implementation of notification mechanisms following the DMCA model without holding responsible intermediaries for third-party content in their platform, providing "legal incentives to internet service providers in order to cooperate with copyright holders to discourage unauthorized storage and transmission of materials protected by copyright or, alternatively, take other actions to discourage storage authorized storage and transmission of materials protected by copyright."

Mexico was formally invited by the United States to join the negotiations in October 2012, since the inclusion of this trade agreement would "ensure" preferential access to the most important economies in the world. Mexico would achieve to an exportable supply of more than 150,000 million in automotive, electrical, food processing, chemical, steelmaking, perfume and cosmetic sectors. This is joined to the fact that domestic exports would grow by 150,000 million dollars in five years. It also ensured that this agreement would not replace or modify the North American Free Trade, because the TPP will strengthen the integration of production chains in Mexico, Unites States and Canada, contributing to the goal of turning North America into the most competitive region in the world, according to information from the Federal Government. Without judging on the possibility that these benefits are realised in the productive and economic field, the TPP opens the possibility of reviewing how the intellectual property rights are protected, and above all, generating effective and flexible mechanisms in order to claim compensation resulting from the violation of these rights, which today translates into extremely long judicial disputes and that do not comply with the purpose that the right holder, either of a patent, trade mark or copyright can enforce them.

Jorge Vega
		Jorge Vega is a partner of the firm in the Intellectual Property area in the Mexico City office. He has extensive experience in all the related aspects of trade mark, copyright and patent prosecution, and specializes in trade mark and copyright law. He provides legal consultancy in many different areas such as: trade mark searches (availability for use and registrations of new marks); trade mark and copyright prosecution; contracts, franchises, license agreements, trade mark use and trade mark annulment and infringement litigation, among others. He is currently handling several IP portfolios for national and multinational corporations. Mr Vega is a member of the trade mark committee of the Asociacion Mexicana para la Proteccion de la Propiedad Industrial (AMPPI), a member of the license committee of the Asociacion Interamericana de la Propiedad Intelectual (ASIPI), and active member of the International Trademark Association (INTA). He can be reached at vega@basham.com.mx

Eduardo Castañeda
		Eduardo Castañeda is an associate at Basham in the Intellectual and Industrial Property area in Mexico City. His practice has been developed in the areas of planning, consulting and strategy for defending rights such as patents, trade marks, trade secrets, copyright, reserved rights, domain names, licenses, franchises, contracts, unfair competition, product counterfeiting, piracy and use of intellectual property rights and industrial social media and internet, distinguishing his career in administrative litigation before administrative authorities and judicial courts ( Federal Court of Tax and Administrative Justice, District Courts, Circuit Courts Circuit and Supreme Court of the Nation), both national and international (World Intellectual Property Organization), among others. He can be reached at ecastaneda@basham.com.mx

Guillermo Gonzalez
		Guillermo González has been Chemist and Pharmacist associate at Basham Ringe and Correa since January 2010. Mr Gonzalez specialises in the filing and prosecution of intellectual property (patents, industrial designs, utility models and plant varieties). He has a minor in biochemistry and microbiology along with a specialisation in Intellectual Property. Mr González started his practice on 1988, and since then has advised large organisations such as Bayer, GlaxoSmithKline, AstraZeneca, Sanofi Aventis, Genentech, Bristol Myers Squib and Eli Lilly. Mr Gonzalez’s experience also includes advising medium size clients and independent inventors on technical aspects. His work ranges from revision of inventions to render opinions concerning patentability, validity patents, questionnaires and several different opinions in patent litigation along with freedom to sell/operate, from a technical point-of-view. His relative amounts of matters attended to are 30 to 50 monthly. He can be reached at ggonzalez@basham.com.mx