Patent Litigation 2021

Last Updated February 15, 2021

Mexico

Law and Practice

Authors



Basham, Ringe y Correa S.C. has a patent litigation team consisting of 11 professional lawyers and engineers who work together to litigate issues concerning the unconstitutionality of laws and treaties before Mexican federal courts and the county's Supreme Court of Justice, and to design legal strategies to compensate for lost time in the granting of patents. The firm's engineers are specialised in subjects such as chemistry, biology, biotechnology, pharmaceuticals, physics, mechanics and electronics.

In Mexico, inventions can be protected through patent rights, utility models, designs, layout designs (topographies) of integrated circuits and vegetal varieties. These intellectual property rights are based on statutory law. Specifically, they are included in the new Federal Law for Protection of Industrial Property (FLPIP).

A right arises with a granted patent/registration through the filing of a patent application with the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, or IMPI). The application must contain all the information regarding the inventor and, if the right has been assigned, the information of the assignee. It must also contain formal documents such as the assignment and the power of attorney document. The inventor or the applicant may file the application themselves or through an agent. In addition, it is possible to claim priority from a previous application filed in a different country that is a member of the Paris Convention for the Protection of Industrial Property, if the claim is made within the 12-month term provided for such effect. A certified copy of the priority application must be filed within three months from the filing date, and it must include its full Spanish translation.

The application may also be filed as a National Phase Patent Cooperation Treaty (PCT) Patent Application, for which Mexico is a 30-month term country. If the information regarding the inventors, applicants and priority applications is the same as the information found in the International Application’s publication, the assignment and priority document are not required, as they are in Paris Convention applications. The application is studied by a formal examiner at IMPI, who will determine if there are any formal documents missing and if all documents are in good order. The application must contain the invention’s specification, claims and drawings, in Spanish. However, it is possible to file the application in a different language, in order to avoid missing the filing due date.

The examiner requests a Spanish translation during the formal examination. The application must be published in the Mexican Industrial Property Gazette as soon as possible following the expiration of a period of 18 months from the national filing date, provided that all formalities are deemed complete. After the publication has taken place, the application is studied as soon as possible by a technical examiner at IMPI and, if deemed necessary, an official action is issued, requesting clarification or changes to the application. This may be done up to four times and, if the Examiner determines that the application complies with all requirements, a notice of allowance is issued, granting a four-month term to pay the grant fees and five annuities, which include the year of grant and four additional years. Please note that the annuity payment is not required during the prosecution of the application.

The grant procedure currently takes four to five years from the filing date, depending on the number of official actions issued by the technical examination department of IMPIand the complexity of the matter.

In Mexico, either the inventor or the owner of the patent, if it has been assigned by the inventor, may personally initiate the grant proceedings, meaning that they sign the application form, or they may appoint an agent, who does not need to be a patent lawyer, but only needs to have an address in the Mexican territory.

The costs of a grant can vary widely since they depend on a series of factors, such as the complexity of the invention, the number of priorities, the number of claims or the number of official communications issued by IMPI. However, for an average application with 20 pages of 30 lines in English, two priorities and ten claims, the cost would be around USD8,000–9,000.

The term of a patent right is 20 years; that of a utility model is 15 years; of an industrial design, five years (renewable each five years up to a maximum of 25 years), of layout designs (topographies) of integrated circuits, ten years from the filing or legal date, which is the national filing date for Paris Convention applications, or the international filing date for National Phase PCT applications. The FLPIP provides for a compensation procedure although, it is yet to be seen how such a procedure will actually develop.

Term Extensions

When during the prosecution of a patent application, there was an unreasonable delay attributable to IMPI, a supplementary certificate can be sought for IMPI to adjust the term of the patent if it is established that the procedure for granting a patent exceeds five years from the Mexican filing date and the date on which the application is approved for grant.

Within the period of five years, no account shall be taken of the time engaged in resolving the examination of form, the actions or omissions of the applicant tending to delay the procedure or those which are beyond the control of IMPI, as well as the periods attributable to 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.

USMCA

According to the former North American Free Trade Agreement (NAFTA), now replaced by the United States-Mexico-Canada Agreement (USMCA), the owner of a patent could seek compensation for lost patent term time if IMPI took more than three years to grant the patent. The NAFTA treaty is enforced on all patent applications filed before 1 July 2020. In this regard, the authors' firm has successfully obtained a favourable decision in which, according to NAFTA, the lost enforceable time of a patent filed before 1 July 2020 was compensated with three additional years. This new precedent has already been published in the Official Gazette as a relevant case entitled:

PATENTS. WHEN THERE ARE DELAYS ATTRIBUTABLE TO THE ADMINISTRATIVE AUTHORITY IN THEIR APPROVAL, ITS VALIDITY MAY NOT BE LESS THAN SEVENTEEN YEARS COUNTED FROM THE DATE OF ITS GRANTING.

Rights

The patent holder has the right to an injunction and may claim damages from third parties even if the illegitimate use of their patent was made before granting, provided that the application had already been published.

If the subject matter of the patent is a product, the patentee has the right to prevent others from making, using, selling, offering for sale or importing the patented product without their consent.

If the subject matter of the patent is a process, the patentee has the right to prevent others from using that process and from using, selling, offering for sale or importing a product obtained directly by that process, without their consent.

Obligations

The owner must use the patent in the Mexican territory, within three years of the grant date or four years from the filing date, whichever comes later, in order to avoid a third party requesting a compulsory licence before IMPI.

No further means of protection are currently available under the FLPIP for patented inventions after their 20-year term has lapsed. If the patent application took more than five years to be granted, a litigation strategy could request compensation for the time lost because of the administrative delay, based on NAFTA/USMCA. No further protection after lapse is provided (ie, there is no clinical data protection, although same are currently treated as industrial and/or business secrets).

According to Mexican patent law, third-party observations can be made within two months of the patent application being published. The observations may or may not be taken into consideration for the examination of the patent, depending on the examiner’s criteria.

Against a refusal to grant a patent, two actions may be used. The first is a reconsideration appeal, which is filed before IMPI, and the second is an appeal filed before the federal courts.

The failure to pay annuities will result in the loss of the patent right. The maintenance fees are paid every five years after the grant of the patent and must be paid five years in advance. If the inventor is also the applicant, they may pay one annuity at a time. The first five annuities are paid together with the grant fee. The annuity payment must be done in the anniversary month that corresponds to the filing or legal date. There is a six-month grace period to pay the annuities. If the annuities are not paid during the regular term or the grace period, there will be an additional six-month term to file a reinstatement request.

The current costs of annuities are:

  • a professional fee of USD250 every five years;
  • an official fee for patent annuities from the first to the fifth year of USD80 each year;
  • an official fee for patent annuities from the sixth to the tenth year of USD92 each year; and
  • an official fee for patent annuities from the 11th to the 19th year of USD105 each year.

As mentioned, a post-grant proceeding can be:

  • a complementary certificate – akin to the EU's supplementary protection certificate – to adjust the term of the patent is established  for cases in which the procedure for granting a patent exceeds five years from the filing date, where this is directly attributable to IMPI due to unreasonable delays;
  • a licence agreement; and
  • the payment of annuities to keep the patent in force.

Infringement actions and temporary restraining orders are available.

Damages

A rights-holder 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 IMPI, 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 judgment is entered.

To warrant the damages before the judiciary or IMPI, it is necessary to demonstrate wrongful conduct, the harm caused and a direct causal relationship between the two.

Criminal Actions

Criminal action is also an option when there are trade marks or trade secrets. Repeated administrative infringements of the Law are no longer a crime; a definition of trade mark forgery and a test to demonstrate such crime have been included. Crimes related to industrial secrets have been modified.

There are two potential remedies available to third parties. They may:

  • file a counterclaim requesting the cancellation of the intellectual property rights; and/or
  • post a counterbond to neutralise the injunction filed against the defendant.

In some specific cases, a compulsory licence could be an option.

Jurisdiction in intellectual property matters is as follows.

  • First instance at IMPI.
  • Second instance at IMPI and/or the Federal Court (IP Specialised Court).
  • Third instance at the Circuit Court of Appeals.
  • Exceptionally, a fourth instance before the Supreme Court of Justice (SCJ) in case of an unconstitutional provision of the FLPIP.

The first instance of dispute resolution is IMPI and the second is a court specialised in intellectual property matters called the Specialised Intellectual Property Chamber. The third instance is a constitutional court which is not specialised in the field of intellectual property.

When a lawsuit is filed, it must be accompanied by a power of attorney, the payment of government fees, intellectual property rights and evidence. The owner and/or its licensee is able to file the lawsuit as long as the licence agreement is recorded with IMPI, unless the parties have agreed otherwise. In the latter case, only the patent holder can bring the legal action.

The documents can be signed by the company's representative directly. Even in legal proceedings before the courts, writs can be signed by the company's representative; however, if the company does wish to be represented by somebody else in court, that person must be a lawyer whose licence is duly recorded at the court.

The infringement of an IP right gives the right to request an injunction. The injunction will be granted by IMPI if the plaintiff proves:

  • the existence of an intellectual property right;
  • the infringement of an intellectual property right;
  • the posting of a bond; and
  • the public existence of an intellectual property right (recordal).

The opponent may post a counterbond to release the seizure of products. However, if the defendant loses the case, the plaintiff may collect the counterbond.

If the plaintiff wishes to ask for damages before the IMPI (now it is allowed), they will have to follow an administrative procedure to obtain a declaration of infringement, which will take around four years of litigating. Once the declaration of infringement is obtained, the plaintiff will be able to ask for damages before the IMPI, which will take another three to four years. This is considered to be, effectively, a limitation period for compensation for IP matters, as compensation will take from six to eight years considering the administrative and civil proceedings together. In other words, the legal proceeding to obtain compensation takes too long to recover the damages caused by the infringement of an intellectual property right.

It should be noted that according to the new FLPIP damages can be asked before a civil court directly, without first obtaining the declaration of infringement by the IMPI, which can save time, although, in the event of a counterclaim for invalidation, the damages proceeding will be suspended until the counterclaim is resolved, which can take four years. Therefore, the potential time-saving benefit disappears by suspending the procedure instead of solving everything in one procedure.

The FLPIP establishes a legal mechanism for the parties to request that IMPI gather information and data that is owned by third parties. If the request is related to the merits of the case, IMPI can request information or data to resolve the case. The plaintiff and/or defendant are able to request the support of third parties that have evidence proving the facts of their action or exception. IMPI may order third parties to produce said evidence, subject, if necessary, to conditions that guarantee the protection of confidential information. The evidence issued by third parties must be requested with the filing of the legal action or in the response.

The preparation of a lawsuit requires an account of facts that put the case into context. Each statement must be proved, except when it is made under oath. Negative facts are not subject to proof; only positive facts or negative facts with positive effects are subject to proof. Once the lawsuit, or the response to it, is filed, allegations follow. At that point details may be added to the case. The procedures for tangible and intangible (eg, intellectual property, privacy and data protection) claims are different. Tangible cases (eg, property rights) are resolved before civil courts and intangible matters are resolved before administrative courts.

Once the legal action has been filed, the defendant will have a one-month term within which to respond to the legal action, which may include a counterclaim requesting the nullity or expiration of the plaintiff's IP right. Subsequently, IMPI will grant a three-day term for the objection of evidence, and ten days for final pleadings. It should be noted that these terms of three and ten days are not regulated by the FLPIP, but by the Federal Law of Administrative Procedure and the Federal Code of Civil Procedure, which IMPI applies in a supplementary manner.

Collective actions are not allowed for intellectual property matters.

The right conferred by a patent does not have effect against:

  • any third party who is engaged in the private or academic sphere and not for purposes of profit;
  • a third party that uses, manufactures, offers for sale or imports a product with a valid patent, exclusively to generate tests, information and experimental production necessary to obtain medical registrations;
  • any person who markets, acquires or uses a patented product or a product obtained through a patented process after that product has been lawfully introduced into commerce;
  • any person who has used the patented process, manufactured the patented product or initiated preparations necessary to carry out said use or manufacture prior to the date of filing of the patent application or an application for acknowledged priority;
  • employment of the corresponding invention in transport vehicles of other countries, or forming a part thereof, when such vehicles are in transit in national territory;
  • any third party who, with regard to patents relative to live matter, uses the patented product as an initial source of variation or propagation for the obtainment of other products, unless said use is in a reiterated manner; or
  • any third party who, in respect of patents relative to products consisting of live matter, uses, places in circulation or markets the patented product for purposes other than multiplication or propagation, and after the product has been lawfully introduced into commerce by the patent holder or by a licence of the latter.

In accordance with the FLPIP, an infringement action may be initiated ex officio or ex parte. In the latter case, any party with legal standing and a founded claim may file the infringement action.

Therefore, an infringement action may only be filed by the owner of the intellectual property right, or any other person who may be authorised to carry out actions to protect it on the owner’s behalf (including a licensee authorised to do so), or initiated by IMPI.

However, the law also allows for any third party to inform IMPI of circumstances that may constitute patent infringement, and such allegations may be considered by IMPI in its decision to initiate a proceeding.

The FLPIP does not differentiate between direct and indirect patent infringement.

The infringement procedure must be started once the patent has been granted. However, if there was an infringement prior to the granting of the patent, pursuant to the new FLPIP, a retroactive claim can be made for the use of the patent without the proper authorisation, which could have a defect of unconstitutionality due to retroactive application.

Patent Owner Prerogatives

In accordance with the FLPIP, the scope of protection of a patent is limited to its claims – ie, only the subject matter of the granted patent. The owner holds exclusive rights to exploit its patent’s claims, or to authorise third parties to exploit them. These exclusive rights carry the prerogatives of preventing unauthorised parties from exploiting a patented process or invention, as follows.

  • If the subject matter is a product, the owner may prevent third parties from making, using, offering for sale, selling or importing a patented invention.
  • If the subject matter is a process, the owner may prevent third parties from using the patented process or from making, using, offering for sale, selling or importing the resulting product of a patented process. 

The owner’s prerogatives are further detailed by the FLPIP as the following specific forms of patent infringement.

  • The unauthorised manufacturing of products covered by a patent.
  • Offering for sale or selling products covered by a patent, knowing that they were manufactured without authorisation by the patent holder.
  • Using patented processes, without the authorisation of the patent owner.
  • Offering for sale products resulting from the use of patented processes, knowing that they were used without the patent owner’s consent.

In addition to these specific patent infringement hypotheses, the FLPIP sets forth a broader premise for infringement, consisting of any acts that go against traditions and customs in industry and commerce that involve unfair competition and are linked to industrial property rights.

In deciding a patent infringement action, IMPI will analyse the circumstances brought before it and must then determine whether any of the above hypotheses is met. To do this, IMPI will evaluate whether the whole patent or any of its independent claims is identifiable in the activity that has been brought to the IMPI’s attention.

Equivalents

The general rule that works in the field of intellectual property is the strict application of the rule – ie, the literal application of the content of the legal precept. For example, the doctrine of equivalents is not expressly regulated in Mexican legislation and, therefore, theoretically an action based on that doctrine could not be successful. However, Section 33 of Article 386 of the FLPIP opens the possibility of seeking other grounds for infringement (constituting a generic “catch-all” ground) contained in other legal provisions, which could be an action other than those mentioned in Article 386 of the FLPIP. In respect of the doctrine of equivalents, there was a legal decision, in 2016, that could be applied to legal actions involving the same, regardless of the fact that the statutory provisions do not include such provisions.

Defendants will also usually seek to counterclaim the invalidation of the patent that has supposedly been infringed, through claims of lack of novelty, non-patentable subject matter or any other argument that may lead to the revocation/cancellation of the patent, and/or neutralise a potential injunction by posting a counterbond with which the precautionary measure is suspended releasing the seized merchandise or allowing the manufacture of products to continue.

Parties may offer expert opinions as evidence; in which case they must provide IMPI with the name and qualifications of their designated expert. In turn, the opposing party may designate their own expert, and IMPI will designate a third expert. Each expert must clarify their position before IMPI in order to participate in the proceedings.

Each expert submits a report based on questionnaires submitted by the parties (as opposed to live examination and cross-examination in other jurisdictions). The reports are then added to the evidence to be judged by the appointed officials.

The claims of a patent can be limited through voluntary limitation.

Revocation/cancellation actions are available and may be initiated ex officio or ex parte. Any third party or a federal public prosecutor (where there are federal interests involved) may bring an action before IMPI.

A patent shall be revoked/cancelled if:

  • the patent was granted in violation of specifications and requirements regarding patentability;
  • the patent was granted in violation of the Mexican industrial property law in force when the patent was granted;
  • the application was abandoned during prosecution; or
  • the patent was granted by mistake or inadvertently, or was granted in favour of someone who has no right to have it.

When the revocation/cancellation only affects one or some of the claims, or a part of a claim, the revocation/cancellation will be declared solely for the affected claim or claims. Thus, the revocation/cancellation will be declared in the form of a limitation concerning the revoked/cancelled claims.

Generally, applicants are only allowed to make amendments before the patent is granted. However, claims may be limited at any time, including during revocation/cancellation proceedings. This could happen if the owner of the patent subject to revocation/cancellation voluntarily limits the claims.

It is possible for revocation/cancellation actions and infringement actions to be decided together. This may happen when, for example, an infringement action is counterclaimed with a revocation/cancellation action seeking to invalidate the patent that is claimed to have been infringed. To successfully link the two actions, the counter-claimant will argue the revocation/cancellation of the patent as an exemption against the infringement action (forcing IMPI to analyse the revocation/cancellation action before going forth to the substantive analysis in the infringement action).

The most important special procedural provisions for intellectual property rights proceedings are as follows.

  • Intellectual property rights proceedings are heard by a specialised branch of IMPI.
  • Intellectual property rights proceedings in Mexico may be initiated ex officio.
  • It is not possible to offer testimonials (regarding the actions of other individuals or entities) or confessions (regarding one's own actions) as evidence in intellectual property rights proceedings in Mexico.
  • Expert opinions are presented in writing, answering the questions submitted by the parties, and not in direct examination or cross-examination, as is the case in other jurisdictions.
  • Mexican law makes no distinction between cancellation, revocation or invalidity actions, so a single action may contain claims attributable to revocation and invalidity actions.
  • There is a specific proceeding to request the complementary certificate.

A case is determined by officials appointed by IMPI in the first instance. Such officials have legal a background and are supported by people with technical knowledge. The parties have no say about who will be the decision-maker.

At the second instance, there is a federal court specialising in intellectual property, through which parties are able to challenge IMPI's decisions. Also, parties are able to challenge a federal court's decision before a constitutional court named the Circuit Court of Appeals through an Amparo action; however, there is no specialised circuit court in IP.

Exceptionally, cases can be resolved in the Supreme Court of Justice when the unconstitutionality of a provision of the law is challenged, or when a case raises a question regarding the interpretation of the Mexican Constitution.

The parties may reach an agreement at any time before a final and conclusive decision is made. IMPI may also suggest and/or assist the parties in finding an amicable solution to a contentious matter through a conciliation procedure.

A proceeding may be stayed when its procedural matters or substance are subject to the resolution of a different proceeding. For example, if the legal standing of the plaintiff in a specific infringement action depends on a patent, and the patent is subject to the resolution of a revocation/cancellation proceeding, the infringement action will be stayed until the revocation/cancellation action has been solved.

A patent-holder may claim damages through two different procedures: (i) 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 (ii) through a motion before IMPI.

If a counterclaim for the annulment of the respective patent, registration or publication is filed, the court shall suspend the procedure until the respective judgment is entered.

To warrant the damages before the judiciary or IMPI, it is necessary to demonstrate wrongful conduct, harm as well as a direct causational relationship between the two.

If the plaintiff does not prove the damages in the lawsuit, the defendant may request the payment of legal expenses incurred by the matter being taken to trial without good cause.

The remedies are the same for all technical intellectual property rights. Usually, remedies apply to damages proceedings. In the administrative courts, IMPI is able to impose sanctions and fines.

If the patent is valid and infringed by the defendant, IMPI will impose a fine on the defendant and order the infringement to be suspended, unless the defendant appeals and requests the suspension of IMPI's decision before a federal court. In this case, the defendant must post a bond to suspend the execution of the payment of the infringement and may continue using the patent until a final decision is issued by a federal or circuit court.

Appeals challenging IMPI's decisions are regulated in a generic form in another law that applies to a variety of subjects, including intellectual property.

The appeal is limited to the arguments made by the appellant. Therefore, if they do not challenge a specific issue or illegality identified in the decision, IMPI and/or the relevant federal court – depending on the type of challenge – are not bound to resolve it. As a result, the facts, articles or interpretations of articles not contested by the appellant are interpreted as having been consented to.

The estimated cost for filing a cancellation or infringement action, or for responding to either, is approximately USD9,000. Preparing and sending a cease and desist letter costs USD500. The estimated costs for preparing and filing pleadings are USD2,500.

Government fees are paid only at the first instance before IMPI; no government fees apply for the rest of the litigation until the final instance.

The plaintiff may claim compensation in civil proceedings for damages and legal expenses. If the legal procedure is not raised in civil proceedings, neither of the parties can claim payment of legal expenses, and each party will pay their own expenses without the possibility of reimbursement.

It is not common but, if the parties agree, alternative dispute resolution may be implemented through a mediator or arbitrator.

An assignment of an intellectual property right must be recorded at IMPI, by filing the assignment document, duly signed by both parties, bearing original signatures or a copy duly certified and authenticated with the Hague Convention apostille, or by a Mexican Consulate. If an authorised agent makes a request for the recording of the assignment, that request must include the corresponding power of attorney document.

The recording of the assignment is requested in writing by the agent authorised by either of the parties, including the respective power of attorney document to confirm the authorisation. IMPI reviews the documents and issues either an acceptance or an official requirement, if anything is missing, within three to four weeks of the date the request is filed. The official action informing that the recording of the assignment has taken place indicates the recording date and the name of the new owner of the intellectual property.

The licensing of an intellectual property right must be recorded at IMPI, by filing the licence document, duly signed by both parties, bearing original signatures or a copy duly certified and authenticated with the Hague Convention apostille, or by a Mexican Consulate. If an authorised agent makes a request for the recording of the assignment, that request must include the corresponding power of attorney document.

The authorised agent of either of the parties requests the recording of the licence in writing, including the respective power of attorney document to confirm the authorisation. IMPI reviews the documents and issues an acceptance or an official requirement, if anything is missing, within three to four weeks of the date the request is filed. The official action announcing that the recording of the licence has taken place indicates the recording date and the name of the licensee of the intellectual property.

Basham, Ringe y Correa S.C.

Paseo de los Tamarindos
No. 400-A, Piso 9
Mexico, D.F.
05120
Mexico

+52 55 5261 0506

+52 55 5261 0496

ggonzalez@basham.com.mx www.basham.com.mx
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Trends and Developments


Authors



Vila Attorneys at Law specialises in intellectual property. Active across a wide range of sectors and industries – including infringement and prosecution cases involving trade marks – VILA's patent litigation and enforcement of IP rights practice has grown rapidly. Additionally, the team has been engaged in administrative litigation, enforcing clients’ rights before administrative and judicial courts as well as appearing in legal actions before Mexican customs to prevent counterfeiting products entering Mexican territory. Although there are other law firms that cover these practice areas, there is no one in the west of Mexico that specialises in IP to the extent that VILA does.

Patents in Mexico 2020: A New IP Law and Renewed Free Trade Agreements in the COVID-19 Era

Last year, Mexico’s IP legal framework faced one of the most challenging years in its history. Domestic industrial property legislation was harmonised in order to fulfil the obligations and commitments arising from the coming into force of the Free Trade Agreement between Mexico, the US and Canada (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). At the same time, the European Union–Mexico Free Trade Agreement (EU–MX FTA) was also updated, and these goals – among many others – were reached despite the effects of the COVID-19 pandemic.

Commitments derived from international treaties

With formal alliances with fifty countries, Reciprocal Promotion and Protection Agreements with at least 30 others and almost a dozen limited scope agreements within the framework of the Latin American Integration Association, Mexico has one of the largest number of free trade agreements in the world. However, from this universe of trade agreements, there are some that are worth highlighting, particularly because in the framework of their negotiations, Mexico has been requested to ensure a high level of protection for intellectual property rights and strict compliance with international standards, regardless of the existing, robust system in Mexico for protecting and enforcing such rights.

Protection for innovations has been one of the main issues in this process, since new regulations for protecting all main intellectual property rights have had to be introduced, such as those related to pharmaceutical patents, allowing – in some cases – compensation for unreasonable delays in their authorisation and also including explicit protection for trade secrets with attendant procedural rules.

As for industrial designs, the various trade agreements have broadened their definition, including complex designs and established protection terms for their registration for up to 25 years.

In addition, Mexico has also been requested to update its legal framework on copyright protection and related rights to cover all the rights protected by signatories, namely resale rights, in order to mirror the EU’s high standard regarding protection terms.

Finally, it is important to highlight that there are several specific products that were of considerable importance in the negotiations, such as dairy and meat, where updated agreements increase protection to geographical indications (GIs), mainly those distinctive food and drink products from specific regions in the EU.

EU–MX FTA

Mexico and the EU successfully concluded the negotiation of a new Global Agreement on 28 April 2020 that includes political, economic and co-operation aspects to strengthen political dialogue and increase both trade and investment flows as well as technical and scientific co-operation between the parties.

CPTPP

The CPTPP is an agreement that aims to establish a new standard for world trade after the USA decided to abandon the Trans-Pacific Partnership (TPP) in early 2017. The remaining 11 countries seek to complete ratification of the TPP’s successor, the CPTPP, which has since entered into force in Canada, Australia, Japan, Mexico, New Zealand, Singapore, and Vietnam. Brunei, Peru, and Malaysia have yet to ratify the agreement. While Chile has started the process, the country’s senate decided to suspend ratification.

The main obstacle has been the different processes in each jurisdiction related to amending and/or adapting their local legislation. Some signatories have delayed enforcements of 11 IP provisions in the original agreement in order to address concerns expressed by the four countries that have still not ratified it. These provisions are mainly related to protections for rights-holders against the interests of developing countries in subjects such as patentable subject matter, patent term adjustments, and the protection of clinical tests.

USMCA

In matters of IP, the goal of Chapter 20 of the USMCA, the free trade agreement that was created to update NAFTA, is to create the conditions in which the protection and enforcement of IP rights can contribute to the promotion of technological innovation and the transfer and dissemination of technology, in order to ensure the mutual benefit of producers and users of technological knowledge.

This goal is aligned with the policies that Mexico has followed and, in general, with global trends.

The new Federal Law for the Protection of Industrial Property

A milestone in the history of intellectual property in Mexico was passed on 1 July 2020 with the repeal of the Industrial Property Law of 1991 (IPL) and the coming into force of the new Federal Law for the Protection of Industrial Property (Ley Federal de Protección a la Propiedad Industrial, or LFPPI).

Inventions

In this particular field, the legal term of patents has been updated to comply with international standards. Also, the LFPPI opens the possibility of extending terms for granted patents. It also provides for the use of patented inventions for experimental purposes aimed at medical/marketing authorisations of generic drugs and the protection of therapeutic mixtures, changes of pharmaceutical form and second uses. Additionally, the definition of “novelty” has been expanded to include any substance, compound or composition whose manner of use is new, even if it is included in the state of the art.

New provisions related to patent prohibitions have also been included. Inventions whose exploitation implies a risk of serious damage to the environment, to the health or life of people, animals or plants, will not be patented. Examples include the following.

  • The use of human embryos for industrial or commercial purposes, and in procedures for cloning human beings and their products.
  • Any modification of the germline genetic identity:
    1. of a human being and its products when they imply the possibility of developing a human being; or
    2. of any animals, if it involves their suffering without any medical or veterinary usefulness.

Guidelines to prevent the undue protection of already patented inventions have also been included by specifying essential technical characteristics, while others have been introduced to identify non-substantial variations of the subject matter covered by another. The validity granted to patents, utility model registrations, industrial designs and layout designs of integrated circuits pursuant to the former IPL will be preserved. Of particular note is that a utility model may maintain its term up to a maximum of 15 years.

The LFPPI includes the possibility of extending a granted patent’s term through the issuance of a “complementary certificate” as a way to remedy the term of the patent if its processing exceeded a period of five years to reach a resolution, where this was caused by a lack of diligence on the part of IMPI. This complementary certificate could add the time lost to a patent’s validity if it is caused by unjustified delays in its processing. The partial nullity of patents, utility models and industrial designs is also provided for, as is the option to exercise nullity actions at any time. In both cases, the corresponding granting certificate would be modified to contain a marginal notation indicating the changes caused by partial nullities and their causes.

The LFPPI authorises the use, manufacture, sale and import of a product protected by a valid granted patent for the purpose of generating tests, information and the experimental production volumes necessary to obtain health records of medicines and pharmaceuticals without a time limit (Bolar clause). In addition, the importation of products into the private sphere or any academic field, and for non-commercial purposes, is now a permitted activity.

Allopathic medicinal products: inventions that can be used

The Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, or IMPI) will publish a list of granted patents every six months in the Industrial Property Gazette in order to comply with the provisions of the Health Supplies Regulations. As a result, providing the information required by the authorisation procedure for marketing allopathic medicinal products will be an activity co-ordinated with the Federal Commission for Protection against Health Risks.

Thus, the law opens an avenue towards the effective operation of a technical collaboration mechanism concerning inventions in the allopathic medicine market – not so for patents protecting process – between IMPI and the Ministry of Health.

Procedural changes affecting patent litigation

With the entry into force of the new LFPPI, there are changes in the procedural rules on industrial property, which affect patent litigation in Mexico.

Among the most relevant changes are the following.

  • The owner of a patent may claim the payment of damages in two ways:
    1. before a civil court, whether local or federal, through a direct civil action; or
    2. before IMPI, through an interlocutory proceeding (it is not necessary to obtain a final ruling declaring the infringement to request this compensation as was previously the case).
  • In the case of a counterclaim for the nullity of a patent, the civil court will hold the trial in abeyance until the respective ruling of the counterclaim submitted before IMPI is issued.
  • In order to prove the damages, either before a civil court or before IMPI, it will be necessary to demonstrate the illicit or liability-generating fact, as well as the causal link and the produced damage.

COVID-19 and 2021

Patents and the healthcare situation

Traditionally, Industrial Property regulations have been seen as a tool to protect innovation and creativity through the protection and enforcement of the exclusive rights provided by such laws, as a guarantee that the market position of those who generate new knowledge will be protected against improper commercial exploitation by third parties. The impact that the pandemic had, from both economic and social points of view, has motivated a decision to change this paradigm, as well as the technological platforms underlying it, in the search for new and accelerated vaccine development processes.

The commitment of multiple companies to support the efforts in the development of the COVID-19 vaccine has been reflected in their own research and in the granting of technological licences that support the development of the vaccine.

Patent rights under review

This health crisis has confronted us with a new paradigm, where it is no longer valid – or at least sufficient – to worry solely about "investment" in the production of intellectual property. Investments made by the public and private sectors in the development of vaccines, treatments, and contact tracing applications underscore the need to encourage and protect innovation.

Innovation is essential for the scientific, technological and health management of the crisis and behind it there are institutions that risk their assets and that deserve to be rewarded. And it is to be celebrated that they do so because without that financial support, technological solutions to everyday problems simply would not be born. However, now that the actual use of medicines from different pharmaceutical companies has begun, it is worth rethinking whether the way in which international regulations facilitate (or prevent) access to necessary medical technologies is appropriate.

The pandemic is no longer a legal or medical issue, it is a matter of humanity. There are already companies that have taken this position to the point of waiving their rights, declaring that their patent prerogatives will not be valid for the drugs they develop.

Others have arranged to grant access to their patents in order to help the World Health Organization in matters of technology and data processing infrastructure.

I) International trends

The World Intellectual Property Organization has created a platform dedicated specifically to the COVID-19 issue where they compile all the public policies on the matter that exist around the world. But from the point of view of the pharmaceutical industry, it is very important to talk about the development of a vaccine against COVID-19.

For its part, the World Trade Organization has accepted that proposals be put on the table so that all useful technologies in the fight against COVID-19 can be copied, including vaccines, treatments and diagnostic tests. The subject sounds humane, even fair, but of course there is lack of consensus.

Making a temporary exception to the obligation to respect patents granted in relation to essential products to end the pandemic is not a proposal that is acceptable to those who have achieved the scientific advances made to fight it, since it is precisely the international system of patents which make it possible – by guaranteeing future benefits – for the pharmaceutical industry to invest the massive resources required for research and development.

II) The Mexican scenario

In Mexico, experience is not abundant, nor are judicial precedents. If anything, the mandatory reference to making an exception to the right to the exclusive use of a patent are the local regulations that provide for licences of public utility for reasons of emergency or national security, including serious diseases declared to be a priority by the General Health Council.

However, it is impossible to know if the authorities of the Mexican health system and IMPI will dare to make use of this legal prerogative. The message that would be sent to the world could be seen as a positive one of protection of the population over and above any particular interest, or as a lack of vision that strips pharmaceutical companies of much needed protections.

Under any scenario, Mexico has proven to be a country committed to the protection of industrial property to such a degree that, in 2020, it introduced the most important reforms to its industrial and intellectual property system in the last thirty years. Since all concerned private and public actors were under lockdown at the time, and Mexico still managed to overcome the fear and uncertainty brought on by the pandemic to accomplish these reforms, there is good reason to believe that the nascent 2021 will present a far more encouraging outlook.

Vila Attorneys at Law

Calle Severo Díaz 38
Arcos Vallarta
44600 Guadalajara, Jal.

+33 1204 0477

comunicacion@vila.com.mx www.vila.com.mx
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Law and Practice

Authors



Basham, Ringe y Correa S.C. has a patent litigation team consisting of 11 professional lawyers and engineers who work together to litigate issues concerning the unconstitutionality of laws and treaties before Mexican federal courts and the county's Supreme Court of Justice, and to design legal strategies to compensate for lost time in the granting of patents. The firm's engineers are specialised in subjects such as chemistry, biology, biotechnology, pharmaceuticals, physics, mechanics and electronics.

Trends and Development

Authors



Vila Attorneys at Law specialises in intellectual property. Active across a wide range of sectors and industries – including infringement and prosecution cases involving trade marks – VILA's patent litigation and enforcement of IP rights practice has grown rapidly. Additionally, the team has been engaged in administrative litigation, enforcing clients’ rights before administrative and judicial courts as well as appearing in legal actions before Mexican customs to prevent counterfeiting products entering Mexican territory. Although there are other law firms that cover these practice areas, there is no one in the west of Mexico that specialises in IP to the extent that VILA does.

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