Brand infringement, dead-end trap
Expert trademark attorney
Have you ever been accused of trespassing on a trademark? If your answer is no, consider yourself a lucky person.
Trademark infringement is severely punished in Mexico. The new Federal Law for the Protection of Industrial Property provides for fines of up to 21 million pesos and, depending on the circumstances, closure, imprisonment and a sentence for damages equivalent to at least 40 percent of sales can be added.
When a person is accused of trademark infringement, they naturally seek all means to defend themselves. It is not for less. They are litigation that last years, sometimes decades, true ordeals that wear both parties.
As a trial attorney I have been involved in several such matters and I know that some are truly absurd. Sometimes these are revenge or simple fabrications, where a competitor registers someone else’s trademark and, after a few years, files a lawsuit as if they had just learned that the other person existed.
After being notified, the unwary who forgot to register his trademark is immediately placed on the ropes, he must stop using the name in which he has invested years, if he does not want to lose his assets and even his freedom.
For 44 years, Mexican law has provided a defense against this type of case. The defendant can demand the nullity of the trademark registration, if he shows that its granting was illegal, it does not matter if five, 10 or 20 years have elapsed, it is an imprescriptible action, that is, it can be enforced at any time.
Last week, the Second Chamber of the Supreme Court of Justice of the Nation, by a majority of three votes, resolved the direct amparo under review 8247/2019, where it declared article 151 section I of the Industrial Property Law unconstitutional. I cannot comment on the merits of the case, since I acted as lawyer for one of the parties, but objectively it is a transcendent precedent for the matter, in the last twenty years only a couple of articles in the Constitution have been declared unconstitutional. Industrial Property Law, and they were not as relevant as this one.
That article was the one that allowed the cancellation of registrations granted illegally, the problem, according to the Court, was that the precept did not establish a maximum term to demand nullification and that generated legal uncertainty for the owners of registered trademarks.
For a sentence that was intended to safeguard legal security, it leaves many questions unsolved. Can illicit trademark registrations continue to be challenged? How long will you have for this?
The solution adopted by the three ministers seems simplistic, declaring unconstitutional a figure that existed since the 1976 Law of Inventions and Trademarks merited at least a consultation with the specialized authorities: the Mexican Institute of Industrial Property (IMPI) and the Chamber Specialized in Intellectual Property of the Federal Court of Administrative Justice.
Now it will be up to the other courts, specialized bodies and litigants to interpret how this legislative gap can be filled.
While the matter is clarified, my recommendation, dear reader, is to take extreme precautions with the handling of your brands, always register the distinctive signs that your business uses and monitor as far as possible that there are no third parties requesting similar brands. Trademark infringement proceedings are dangerous now more than ever.