BASHAM NEWS

A broad view of the new Federal Law on Protection of Industrial Property, which will enter into force on November 5th, 2020.

Mexico City, July 10^th, 2020.

On July 1^stThe new Federal Law of Protection of Industrial Property (FLPIP) was published in the Federal Official Gazette. The FLPIP will enter into force on November 5, 2020.^th, 2020.

Preliminary Provisions

1.a.- The Mexican Institute of Industrial Property (known by its Spanish initials as "IMPI"), as an administrative authority, may:

- Set fines, require their payment and collect resulting tax credits.
- Require the payment of uncovered tax credits, through the administrative enforcement procedure, in terms of the Federal Tax Code.
- Determine the payment of damages caused in administrative declaration procedures.
- Request assistance from the federal, state or local public force, civil or armed institution, to comply with determinations of observance of rights.

1.b.- Regulation in the filing of applications through electronic means.

- Electronic documents filed with the use of advanced electronic signature or other means of identification, will produce the same effects as those signed autographically and will have the same probative value.

1.c.- The "Restoration of Rights" is not incorporated due to errors attributable to the Applicant. For example, the untimely payment of annuities, among others.

2.Inventions

2.a.- Patents

Protection for new uses of substances, compounds or compositions included in the state of the art is included, which were not contemplated by some of the departmental Coordination of Merits Examination.
The definition of "essential technical characteristics" is established, being those necessary for an invention to solve the technical problem. This definition corresponds to concepts adopted based on the European Patent Law.
The non-patentability of procedures for cloning, genetic modification in animals or for the development of a human being and the use of human embryos for industrial or commercial purposes is specified. However, it gives rise to the protection of biological material that has been modified by a technical procedure.
The premise of the "Bolar Clause" is included, so that a third party may use, manufacture, offer for sale or import a product with a current patent, to generate tests, information and experimental production in order to obtain health records of medications in order to commercialize them when the patent expires, from the filing of the patent application and throughout the time of its validity.
A third party may use a patent during the rehabilitation period.
A change is proposed in the regulation of the divisionals, referring to the divisionals presented "voluntarily", which must be presented together and in a single exhibition. This excludes the possibility of filing divisional applications in cascade unless the Institute considers it appropriate or requires it.
When an invention or group of inventions has ceased to be claimed due to a division, they may not be claimed again in the initial application or in the one that gave rise to said division, if applicable.
Within the new regulation of divisional applications, the filing of applications is contemplated within two months of the granting of the main application.
- It is repealed that the calculation of terms runs from the business day following the expiration of the two-month period.
No patent will be granted in respect of matter already protected by another, or whose essential technical characteristics are a non-substantial variation of the matter covered by it, even when the applicant is the owner of the first right.
The Institute must make a final decision on the granting or refusal of the patent applied for, once the term to comply with the formulated requirement has elapsed, if the application is not abandoned, or the applicant has not withdrawn it.
The limitation of the right conferred by a patent is established, in order to enable substantive corrections without said corrections seeking to extend the protection conferred.
The biannual publication of the list of patents related to inventions likely to be used in allopathic medicines is included, which was within the Regulations of the Law in force.
The complementary certificate to adjust the term of the patent is established for cases in which the procedure for granting a patent exceeds of 5 years from the filing date, this being directly attributable to the Institute due to unreasonable delays.
- Within the period of 5 years, no account shall be taken of the time engaged to resolve the examination of form; the actions or omissions of the applicant tending to delay the procedure or those which are beyond the control of the Institute; as well as the periods attributable to causes of force majeure.
- The application for a certificate must be made at the time of payment of the final fees for granting the patent and may be requested only once.

2.b.- Utility Models

The period of validity is modified to have a total of 15 years of protection.
The limitation of the right conferred by a utility model is established, in order to enable substantive corrections, without said corrections seeking to extend the protection conferred.

2.c.- Industrial Designs

Industrial designs in an animated sequence or in an animated graphical interface are allowed.
It establishes that the elements that are not part of the claimed industrial design will preferably be identified with dashed lines, blurring, shading or outlines and indicate this in the description.
Conditions of the inventive design concept are established.
Limitation of the right conferred by an industrial design is established, in order to enable substantive corrections, without said corrections seeking to extend the protection conferred.

2.d.- Layout Designs of Integrated Circuits

Greater regulation is established regarding the exclusive exploitation right for layout designs, regarding their reproduction, import, sale or distribution.

Trade Secrets

For the protection of trade secrets, the new law will help clarify the object and scope of protection, as well as facilitate enforcement and increase the risks for potential infringers.
The fines for misappropriation, misuse or disclosure of trade secrets have been substantially increased. It is also easier to obtain awards for damages for these unlawful actions and new procedural routes have been created to enforce the rights over trade secrets.
The new law also clarifies some defenses to the misappropriation of trade secrets such as independent creation and the study of products available in the market.
The obligation subsists for companies to care for the confidentiality of their information with appropriate measures to benefit from industrial secret protection.

4.Trademarks, Geographical Indications and Appellations of Origin.

4.a.- Validity of Trademarks

The validity of trademarks, slogans and trade names, will be counted from the registration date. This will apply only in connection with trademarks granted as of November 5, 2020.

Non-deceptive goods/services and free of bad faith

When filing and renewing a trademark, it must be Declared that the goods/services are non-deceptive and are free of bad faith.
In case the competent authorities determine that such goods/services infringe any law, the Mexican Institute of Industrial Property may initiate an annulment action against the trademark registration.

Declaration of Use

It has been clarified that the third year Declaration of Use will only apply in connection with trademarks granted after August 10, 2018.
The goods/services coverage of the trademark will remain only for those which use has been declared.

Grounds for Objection

The previous law stated that geographical indications and appellations of origin were not registrable as trademarks. The new law states that not only identical signs but confusingly similar signs to geographical indications and appellations of origin will be objected.
Registered Reservations of Exclusive Use such as fictitious, symbolic and human characters or publication titles, are not registrable as trademarks. Unless it is requested by the owner of such Reservation or an authorized third party for doing so.

Bad Faith

The definition of bad faith has been narrowed. Now, bad faith is understood as "having applied for the registration of a sign for the purpose of obtaining an undue benefit or advantage to the detriment of its legitimate owner".

Letters of Consent

Letters of Consent will be acceptable not only in connection with confusingly similar trademarks but in relation with identical as well.

Trademark proceeding and Oppositions

After the examination of a trademark, the examiner will issue only one office action comprising formal requirements, citing substantive objections and informing of any opposition filed against the application. Before the amendment, two kinds of office actions were issued (formal and substantive).
The oppositions should be responded along with the response to the formal and substantive objections. Therefore, the term to respond will be two months instead of one. Such term may be extended.

4.b.- Well-Known and Famous trademarks

Elimination of some requisites for the petition of the Declaration of Well-Known or Famous Trademarks. Specifically, regarding sensitive information, such as investment financial data.

4.c.- Certification Trademarks

Introduction of cancellation grounds for Certification Trademarks.
Only chambers and associations of manufactures and producers, Federal entities, and Local authorities in which territories are produced the goods may own a Certification Trademark for a geographical indication.

4.d.- Geographical Indications and Appellations of Origin

Geographical Indications protected as Certification trademarks are no longer ownership of the Federation.
Specific requisites have been included for applying either for the Declaration of an Appellation of Origin or a Geographical indication.
A Declared Appellation of Origin should have specific Regulations (Norma Official Mexicana-NOM).
A Declared Geographical Indication should have specific Rules.
The IMPI will be responsible of authorizing the Certification entities of a Geographical Indication, and therefore, the law establishes the characteristics and requisites that the interested entities must comply.

5.Litigation Proceedings before the IMPI

5.a.- Cancellation Action.

It is now possible to request the partial annulment of a patent, utility model or industrial design.
Also, requesting the partial annulment of a trademark or slogan is now possible, with retroactive effects reverting to its issuance.
Annulment proceedings against a trademark shall be rejected when an opposition has already been attempted and the arguments and evidence are the same as those submitted in the opposition and the Mexican Institute of Industrial Property has already been judged them on the merits.

5.b.- Non-Use Cancellation Action

It is now permissible to request the partial cancellation of a trademark for lack of use, in respect to the products that are not used. The effects of the cancellation shall arise from the moment that a final decision is issued.

5.c.- Infringement Action

Additional causes of action to claim infringement have been created in respect to industrial secrets.
Preliminary injunctions are now foreseen for the deletion of contents available on the internet or other virtual, digital or other electronic media, including those that may arise in the future.
The possibility of applying preliminary measures against merchandise transiting in the border is now included.
The forced closure of establishments where a preliminary injunction is insufficient to avoid infringement and even a definite closure as punishment for the breach of industrial property rights is now allowed.
Preliminary injunctions awarded in infringement proceedings may be rescinded at the discretion of the IMPI, regardless of the posting of a bond by the alleged infringer.
The IMPI shall have the authority to: impose preliminary injunctions ex officio; destroy seized infringing products; impose and collect fines, direct conciliatory proceedings in respect to administrative infringements; and award damages.

Claim for Damages

A rightsholder may claim damages through two different procedures: directly before the judiciary (either Federal or State), by means of a civil or commercial action and without the need to obtain a definite infringement ruling to make the claim, or through the Mexican Institute of Industrial Property, through a motion.
If a counterclaim for the annulment of the respective patent, registration or publication is filed, the Court shall suspend the procedure until the respective judgement is entered.
To warrant the damages before the judiciary or the IMPI, it is necessary to demonstrate the wrongful conduct, as well as the direct causation and the harm caused.

Criminal Actions

Repeated administrative infringements of the Law are no longer a crime.
A definition of trademark forgery and a test to demonstrate such crime have been included.
Crimes related to industrial secrets have been modified.

The partners of the intellectual property area are at your service for any questions or comments regarding the contents of these new provisions and their implementation.

S I N C E R E L Y,

Martin Michaus

mmichaus@basham.com.mx

Eduardo Kleinberg

kleinberg@basham.com.mx

Adolfo Athié

aathie@basham.com.mx

Claudio Ulloa

culloa@basham.com.mx

Juan Carlos Hernández

jhernandez@basham.com.mx

Eduardo Castañeda