"Mexico Business Opportunities
And Legal Framework"



VIII. INTELLECTUAL PROPERTY. LICENSING

The Industrial Property Law as amended on August 2, 1994 was the last of a series of amended laws which in their earlier versions acted as obstacles to foreign investment: Foreign Investment Law, Transfer Technology Law and the Patent and Trademark Law of the 1970's.

The Industrial Property Law created the Mexican Institute of Industrial Property, an independent entity dedicated to the enforcement of industrial property rights. The content of the Law may be summarized as follows:


PATENTS

A patent is a right granted to an individual to exclusively exploit an invention for a twenty year non-renewable period beginning from the date of filing the related application.

An invention to be patentable must meet the following requirements:

  1. must be novel, not be comprised in the state of the art, which is defined as the technical information generally available to the public through a written or oral description, through working or through any information means in Mexico or abroad; there is no loss of novelty if an invention is exhibited in a nationally or internationally recognized industrial or trade show;

  2. it must be the result of an inventive activity not readily deduced from the state of the art or which may be evident or obvious to an expert in the subject matter;

  3. it must be capable of industrial application, that is, it must be useful to manufacture a product or to use a process in any type of economic activity; and

  4. it must be a human creation which allows the transformation of matter or energy in a manner which may be used to satisfy a concrete need.

All inventions are patentable except for:

  1. biological processes for production or reproduction of plants or animals,

  2. biological or genetic material as found in nature,

  3. animal breeds,

  4. the human body and the parts or organs thereof, and

  5. vegetal varieties.

The Law incorporates the first-to-file principle. Mexico is a party of, among others, the Paris Convention, and the Patent Cooperation Treaty, thus the date of filing a patent application in another country member is treated as the date of filing in Mexico.

There is no express obligation to work an invention, but the Law does provide that anyone may apply to the Institute of Industrial Property for a compulsory license if the patent is not worked within the longer of three years following issuance of the patent application or four years following the filing of the application, provided the applicant or patentee has not worked it without a valid reason.


UTILITY MODELS

Utility models are objects, utensils, apparatus or tools that, as a result of a modification to their arrangement, configuration, structure or form, perform a different function with respect to the parts forming them or represent advantages with respect to the usefulness of said parts.

Utility models may be registered before the Institute of Industrial Property if they are absolutely new and capable of industrial application. Protection is granted for a non-renewable term of ten years from the date of filing.


INDUSTRIAL DESIGNS

Industrial designs include industrial drawings and industrial models. Industrial drawings are any combination of figures, lines or colors incorporated to an industrial product as an ornament giving it a peculiar aspect of its own. Industrial models are tridimensional models that serve as molds to manufacture industrial patterns giving a special appearance, provided they do not imply technical effects.

Industrial designs may be registered before the Institute if they are new and are used as a type or mold to make industrial products and are granted protection for fifteen non-renewable years.


INDUSTRIAL SECRETS

Industrial secrets are defined as any information capable of industrial application maintained in confidence which may be useful to obtain or to maintain a competitive advantage in the performance of economic activities, which confidence the owner has taken measures to preserve, by labeling information as "confidential" "secret", or in a similar other manner. An industrial secret must necessarily relate to the nature, characteristics or purposes of products, to production methods or processes, or to the means or forms of distribution or marketing of products, or the rendering of services.

Information in the public domain, information which may be obvious to an expert, or information which must be disclosed by law or by court order, is not considered an industrial secret.

Any confidential information shall not be deemed to be in the public domain if such information is disclosed to any authority for the purpose of obtaining any permits, registries, authorizations or similars.

The protected information may be set forth in documents, electronic or magnetic media, optical discs, microfilms, films or other similar instruments.

Industrial secrets may be transferred or licensed to third parties. Individuals with access to industrial secrets may not reveal same without justified cause or consent from the owner or licensee. Individuals or entities hiring employees, or contracting services from competitors, with the purpose of obtaining industrial secrets may be liable for damages. Individuals unlawfully obtaining industrial secrets may also be liable for damages.


TRADEMARKS AND SERVICE MARKS

A trademark is defined as a visible sign or symbol which distinguishes products or services from others of the same species or class in the marketplace.

Trademarks may be:

  1. any name or visible design which is sufficiently distinctive or any other means which may identify certain products or services from other products of the same class;

  2. tridimensional forms;

  3. trade name and corporate names;

  4. personal names unless there is a homonym previously registered.

Some marks are not registerable, such as:

  1. words or designs which are not sufficiently distinctive;

  2. the proper, technical or commonly used names of products or services as well as words which are the usual or generic designation of the products to be covered;

  3. descriptive names or designs;

  4. geographic names or any name designating the place of manufacture of products or rendering of services; names of places which are known for the manufacturing of certain products;

  5. names, figures or designs which are well known in Mexico;

  6. any name, form or design confusingly similar or identical to a previously registered name, trade or service mark or design to cover the same products or services; and

  7. the translation to other languages of unregisterable marks.

Trademarks and service marks must be registered in order to grant exclusive right of use thereof. As a general rule, registration is granted to the first applicant; however, the first user in Mexico or abroad has a preferential right to register. Trademarks may be registered for up to 10 renewable years from the date of filing of the registration application with the Institute. Use of a trademark may not be discontinued for more than three consecutive years without justification, otherwise the registration could expire.

Trade or service marks cover only specific goods or services within a single class of products. There are no multiple class registrations.


COLLECTIVE TRADEMARKS

Collective trademarks may be registered by legally incorporated associations of producers, manufacturers, business people or service providers in order to distinguish their products or services from those of non-members.

A collective trademark may not be transferred to third parties, and its use is reserved for the members of the association.


COMMERCIAL SLOGANS

Commercial slogans are phrases or legends that have the purpose of announcing businesses, commercial, industrial or service establishments to the public, to easily distinguish them from others of their kind.


TRADE NAMES

Commercial names of companies and trade names of commercial, service or industrial establishments are protected without need for registration. The protection is granted in the geographic zone of the effective clientele of the company, or establishment, using the trade name and may be extended throughout the country if there is massive and constant diffusion thereof at national level.

User may apply for publication of the trade name in the Gazette of the Institute thus establishing a presumption of good faith in the use of such name.

Trade names are protected for a specific class of goods or services. The publication is valid for ten years and it may be renewed.


APPELLATIONS OF ORIGIN

Appellations of origin are names of geographic regions used to designate a product that originates from said region, and whose qualities or characteristics stem exclusively from the region. Mexico is a party to the Lisbon Convention.


ROYALTY PAYMENTS

Mexican law does not provide any specific rules governing minimum or maximum royalties. However, tax authorities have the right to adjust the taxable profit of the payer if such royalties are excessive and do not reflect "market value."


TRADEMARK LICENSE AGREEMENTS

Trademark license agreements must be notarized, legalized before a Mexican Consul, and translated into Spanish for registration purposes. The agreement may provide for payment of royalties in foreign currency.

Generally, licensing practices may have significant antitrust implications, i.e., including efforts by the seller or licensor to restrict by territory purchases and sales of the licensee. (See Section IV.C. hereinabove).


COMPARATIVE ADVERTISING

Comparative advertising is permitted in Mexico if the comparison of products or services covered by a trademark is done for information purposes. The Institute may impose fines, close the business, or place under arrest, for up to 36 hours individuals who use comparative advertising and publicity that is misleading, false, or exaggerated, with the purpose of discrediting or trying to discredit products, services or a competitor.

In addition the Consumer Protection Agency may also impose sanctions if the comparison of products is false, misleading or exaggerated, even if it does not have as a purpose to discredit or to try to discredit products, services or a competitor. The sanction in this case could be a fine up to 2,000 times the minimum daily wage in the Federal District.


PARALLEL IMPORTS

Any person may legally import into Mexico products covered by a registered trademark, for their use, distribution or commercialization.

The legal licensee of a trademark registered in Mexico which covers products being imported does not have any action against the lawful importer.


COPYRIGHTS INCLUDING SOFTWARE

Copyright is protected for original intellectual creations without need for registration. There are two types of rights granted to authors:

  1. patrimonial rights to use or reproduce the work of the author for profit. This right is effective during the author's lifetime and 75 years after his death. The protection of posthumous works lasts 75 years counted from the day of first publication; and

  2. moral rights, which include recognition of authorship and opposition to any deformation, mutilation or modification made of the copyrighted work without authorization or opposition to any action which may decrease the value or prestige of the work or the reputation of the author. This right is perpetual, non-transferable, non-waivable and does not expire when an action to enforce it is not exercised.

The protection of author's rights is granted on the following types of works: literary, scientific, technical, legal, pedagogic, didactic, musical, pictorial, design, engraving, lithographic, sculptural, plastic, architectural, photographic, cinematic, audiovisual, radio and television, titles of periodicals, computer programs and on any other work which could be considered comprised within the generic types of artistic or intellectual works mentioned above.

The Copyright Law was amended in 1991 to include computer software within the protected items against unauthorized commercial exploitation or reproduction in the same terms as the rest of the items mentioned in the above paragraph.

Invasion of copyrights may be sanctioned with imprisonment for up to 6 years, and a fine. Violation of moral rights which do not constitute a criminal offense will be sanctioned by the General Bureau of Copyrights with a fine of up to the equivalent of 500 times the daily minimum wage in the Federal District.

Mexico is a party to the Universal Copyright Convention, the Interamerican Copyright Convention and the Berne Convention.


FRANCHISES

(See Section VII.C. hereinabove).