The Federal Law for the Protection of Industrial Property (FLPIP or “the Law”) governs trade secrets in Mexico.

The FLPIP entered into force on 1 July 2020 and replaced the former Industrial Property Law that had been in force since 1994. The FLPIP seeks to grant greater protection to industrial property rights, and significantly changes trade secrets protection.

The FLPIP is aligned with the provisions of Article 10bis of the Paris Convention and paragraphs 1 and 2 of Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Likewise, the Law is in compliance with further obligations placed on Mexico as a result of other international agreements, most notably the United States, Mexico and Canada Agreement (USMCA), which entered into force on 1 July 2020.

The FLPIP provides greater clarity on what can be considered a trade secret; states the scope of misappropriation; modifies and increases penalties for misappropriation, use or disclosure of trade secrets; and establishes new lines to enforce rights and obtain damages.

Under the FLPIP, a trade secret consists of any confidential information of industrial or commercial application that is kept by a person exercising legal control over it. This information must enable a trade secret’s owner to obtain or maintain a competitive or economic advantage over third parties. It is also necessary that sufficient means are adopted to maintain the confidentiality of the information.

This confidential information may be kept in documents, electronic or magnetic media, optical discs, microfilms, films or in any other medium known or to be known.

Furthermore, the following will not be considered a trade secret:

• information that is in the public domain;
• information that is generally known or easily accessible to persons within the circles in which said information is used; or
• information that must be disclosed by legal provision or by court order – this excludes information that is provided to any authority by a person exercising legal control over a trade secret, for the purpose of obtaining licences, permits, authorisations, records, or any other acts of authority.

There are no legal precedents yet regarding the types of information that are protectable under the FLPIP.

However, the definition in the new Law of what can be protectable subject matter is much broader than in the previous law. Under the new FLPIP, any confidential information of industrial or commercial application can be considered a trade secret.

In contrast, the previous law was restricted to information related to specific categories: the nature or characteristics of products, their production methods or processes, and the means for commercialising products or services. In addition, it was required that the information was not obvious to a technician in the field, similar to the inventive step requirement for patents. All these limitations were eliminated in the new FLPIP to allow for a broader definition.

The following elements have to be met for information to be protected as a trade secret:

• the information shall be confidential;
• the information shall be related to a commercial or industrial application;
• a person must be exercising legal control over the confidential information;
• the information must serve to obtain or maintain a competitive or economic advantage for its owner over third parties in carrying out economic activities; and
• the owner must adopt sufficient means or systems to preserve the confidentiality of the information and restrict access to it.

In Mexico, a trade secret owner is required to adopt sufficient means or systems to preserve the confidentiality of the information and restricted access to it. Although there is no definitive list, some measures required by Law are:

• the existence of a person exercising legal control over the confidential information;
• keeping the confidential information in documents, electronic or magnetic media, optical discs, microfilms, films or in any other medium known or to be known;
• entering into confidentiality agreements with persons or employees who may have access to trade secrets, specifying the aspects that are considered confidential; and
• prior notice to the third parties that have access to the trade secret informing them of its existence and its confidential nature.

In addition, some good practices may include:

• entering into confidentiality agreements with all persons who may have access to the industrial secrets;
• specifying in confidentiality clauses what information is considered to be a trade secret and what should be considered confidential;
• conducting training with employees who have access to trade secrets;
• marking as confidential all the information that has that characteristic; and
• keeping confidential information in a restricted place.

Under the Law, an employee who has access to a trade secret and who has been warned about its confidentiality, must refrain from disclosing it without the consent of the person exercising legal control over it, or its authorised user.

In accordance with the FLPIP, misappropriation will not be considered in the following cases:

• the independent discovery or creation of the information that is claimed as a trade secret;
• the observation, study, disassembly or testing of a product or object that has been placed on the market/made available to the public or that is lawfully in the possession of the person obtaining the information, as long as it is not subject to any obligation of confidentiality regarding the trade secret; or
• the acquisition of information from another person in a legitimate manner without an obligation of confidentiality or without knowledge that the information was a trade secret.

There is no specific trade secret protection for computer software and/or technology. General trade secret rules apply to computer software and technology.

A trade secret will be valid for as long as the requirements for its protection remain in force and the information does not enter the public domain.

The Law establishes that information that is in the public domain or that turns out to be generally known or easily accessible to persons within the circles in which said information is used will not be considered a trade secret. The Law does not distinguish between deliberate disclosure by the person who has legal control of the information or accidental disclosure.

The person who exercises legal control over a trade secret may transmit or authorise its use to a third party. The authorised user will have the obligation not to disclose the industrial secret by any means.

In the agreements through which technical knowledge, technical assistance, or provision of basic or detailed engineering are transmitted, confidentiality clauses may be established to protect trade secrets. These clauses shall specify the aspects that are to be confidential.

One of the main differences between trade secrets and other industrial property rights, such as patents, is that it is not necessary to register the trade secret before any authority to obtain protection, reducing costs. In addition, trade secrets are confidential and will not be made public by the authority; however, a trade secret cannot be enforced against a third person who obtained the information by means of discovery or reverse engineering.

On the other hand, unlike other intellectual property rights, a trade secret can protect commercial information (not necessarily industrial, technical or aesthetic) that is confidential and that represents a competitive advantage over third parties for its owner.

It is possible for a plaintiff to assert trade secret rights in combination with other types of intellectual property rights. Since the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial or IMPI) is the authority in charge of resolving, in the first instance, administrative offences related to trade secrets, patents, utility models, industrial designs, trade marks, and geographical indications, among others. It is possible submit an infringement request to IMPI involving these rights. In practice, it is common to file separate lawsuits according to the type of rights.

The FLPIP imposes particular penalties for breach of fiduciary duty against an employee who steals a trade secret and for companies who hire an individual, whether an employee, ex-employee, consultant or someone in a similar position, with the purpose of obtaining industrial secrets. In addition, the rightful owner of the trade secret may sue for civil damages.

The FLPIP imposes criminal penalties in a number of different circumstances:

• disclosure of an industrial secret, which is known by reason of one’s work, position, performance of one’s profession, business relationship or by virtue of the granting of a licence for its use, without consent, having been warned of its confidentiality, with the purpose of obtaining an economic benefit or causing damage;
• taking possession of an industrial secret without right and without consent, with the purpose of obtaining an economic benefit or with the purpose of causing harm;
• using an industrial secret, which one knows by virtue of one’s work, office or position, exercise of one’s profession or business relationship, without having the consent of the person exercising their legal control over the secret or of the authorised user of the secret, or which has been disclosed to by a third party who did not have the consent of the person exercising their legal control over the secret or of the authorised user of the secret, for the purpose of obtaining an economic benefit or with the purpose of causing harm; and
• appropriating, acquiring, using or unduly disclosing an industrial secret through any means, without consent, with the purpose of causing harm or obtaining an economic benefit for oneself or for a third party.

The provisions of the FLPIP are of public order and of general observance throughout Mexico; therefore, they do not have extraterritorial application. In addition, Mexican courts are only competent to assess a claim based on misappropriation that happens in Mexican territory.

In Mexico, misappropriation means the acquisition, use or disclosure of a trade secret in a manner contrary to good practices and industry standards involving unfair competition, including the acquisition, use or disclosure of a trade secret by a third party who knew, or had reasonable grounds to know, that the trade secret was acquired in a manner contrary to such practices and standards. Therefore, the owner is required to show that its trade secret was actually appropriated, used or disclosed, as it would not be sufficient to show that the defendant accessed the trade secret without permission. However, taking possession of a trade secret without having a right to do so and without consent, to use it or disclose it to a third party, with the purpose of obtaining an economic benefit for oneself or for the third party or with the purpose of causing harm to the owner, is considered a crime.

The FLPIP explicitly recognises an employee’s obligation to protect trade secrets. However, it is important that employees are notified of the nature of the information and of their confidentiality obligation. The burden of proof that the employee was so-informed falls on the employer.

Similar to the obligations for employees, any person who, in the course of their business relationship, such as joint ventures, has access to a trade secret of whose confidentiality they have been warned, must refrain from disclosing it without consent.

Under the FLPIP, individuals or companies are prevented from hiring an employee who is working or has worked – or a professional, advisor or consultant who provides or has provided services for – another person, with the purpose of obtaining industrial secrets from the latter. In addition, under the Criminal Code anyone who, without just cause, to the detriment of another and without the consent of the person who may be harmed, discloses any secret or reserved communication that they know or have learned because of their employment, office or position would be responsible for the commission of a crime. Increased penalties are available where such disclosure is made by anyone rendering professional or technical services or by a public official or employee, or when the secret disclosed or published is of an industrial nature.

Because, even in cases of compliance with the legal nature of the trade secret (being secret, confidential and providing a competitive advantage), the burden of proof (that the recipient was duly informed of the nature of the information and its confidentiality) lies on the owner of the trade secret, it is highly recommended to do the following:

• Warn the recipient of the nature of the information as a trade secret – this can be achieved through the use of stamps in documents (eg, “confidential information” or “trade secret”).
• Produce evidence of the receipt of the same and an acknowledgement by the recipient of the nature of the same – this can be achieved through the execution of a receipt, signed by both the owner of the trade secret and the recipient.
• Maintain the confidentiality and secret nature of the information – in this respect, the owner should:
1. have the necessary mechanisms, technological or not, to maintain the secrecy and confidentiality (eg, passwords, locks or vaults); and
2. execute non-disclosure or confidentiality agreements with the recipients.

It is worth mentioning that because the nature of the trade secret requires the owner to have control over its disclosure, the legal obligation to maintain the confidentiality of a trade secret must not be term-limited and should be effective indefinitely or for as long as the trade secret remains secret. Otherwise, at the end of the term of the confidentiality obligation, the owner of the trade secret would be left with no control over the information.

The nature of exit interviews and the assurances employers seek from departing employees depends on the industry, the size of the company and the position that the employee is leaving. While it is common practice for employees to sign a non-disclosure or confidentiality agreement when they first join a company, this is not the case when they leave. Nonetheless, employees in regulated industries, such as the financial or pharmaceutical sectors, often execute agreements with regard to their confidentiality obligations when they leave their employers.

Considering that employees are often required to execute non-disclosure or confidentiality agreements when they first join a new job, it is also somewhat common that those documents include a clause which provides that they must not reveal, disclose, use or share any trade secrets from their past employers.

Considering the legal definition of “trade secret” under the FLPIP, trivial information and the experience and skills gained by employees in the normal course of their work is likely to be excluded from the scope of trade secret protection, as is information that is generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question and information that is not likely to help obtain or maintain a competitive or economic advantage over third parties in the conduct of economic activities.

In addition, there is no relevant Mexican case law or jurisprudence addressing the doctrine of “inevitable disclosure”.

Considering that the individual or legal entity that hires an employee, with the purpose of obtaining industrial secrets is considered liable under the FLPIP, it is common for companies to include wording in the employment agreement, or execute a non-disclosure or confidentiality agreement with the employee, that specifically obliges the employee not to disclose or use any trade secrets of their previous employers.

Under the Mexican legal framework, and subject to the contractual framework available, a trade secret owner having standing to initiate a trade secret misappropriation administrative infringement action before IMPI, which has jurisdiction over trade secrets disputes, will need to demonstrate the following factors through appropriate supporting evidence:

• ownership and legal control over confidential information, through deploying appropriate measures;
• information which has a commercial or industrial application;
• legal control over the confidential information;

• the existence of confidentiality and the measures taken to preserve it, such as confidentiality policies, non-disclosure agreements and clauses, and mechanisms and training intended to preserve confidentiality;
• competitive advantage obtained or maintained through the confidential information;
• prior notice or notices given to the third party who had access to the trade secret, informing that party of the trade secrets and their confidential nature;
• evidence showing, to a reasonable standard, the likelihood of trade secret misappropriation or unauthorised disclosure; and
• evidence showing the potential damage caused as a result of the misappropriation or unauthorised disclosure.

Formally speaking, it is not necessary to take any prior steps to filing a trade secret infringement action. In the event of potential misappropriation, unauthorised disclosure, or other kinds of detected infringing activity, prior to filing the claim, it is advisable to deliver notice to the infringing party, informing the latter of the alleged infringement, as well as requesting that the party in question attend a meeting to remedy the situation, before engaging in formal litigation.

There is no applicable statute of limitations for raising a claim derived from a trade secret misappropriation or unauthorised disclosure. However, IMPI has a five-year limitation on enforcing administrative infringement claims, and the sooner the claim is brought the better, especially when seeking injunctive relief to prevent further disclosure or unauthorised dissemination.

Pre-litigation

Preparation and protection prior to allowing access to the trade secret is of the utmost importance to have sufficiently strong evidence to bring a successful claim. Generally speaking, vagueness and isolated elements, such as a generic non-disclosure agreements or clauses, will be deemed insufficient to reach the reasonable standard requested or sought by IMPI, as it is a fact and evidence-intensive claim. Consequently, the trade secret owner should have as many supporting documents as possible to enhance their chances of success in the event of a potential litigation action. Examples of such documents include:

• detailed and to-the-point non-disclosure agreements or clauses, specifying the trade secret and its confidential nature;
• periodic policies and training for handling, managing, and preserving confidential information, including trade secrets;
• prior notices provided to the authorised users concerning the trade secret protection, its scope, and the necessary training and policies to be followed for protecting and managing the confidential information; and
• supporting documents showing the implemented measures to protect trade secrets, such as training, encryption, passwords, two-step identification authentication and monitoring access logs.

While it is possible to start a claim without these documents, an owner should consider that the claim’s chances of success are likely to be directly related to the amount and quality of the documents that the owner can use to provide evidence of preparedness, protective measures taken, and training/education efforts concerning the awareness of the trade secret’s users when they were handling the owner’s trade secrets and confidential information.

Litigation

As mentioned, the trade secret owner will need to demonstrate the following factors through appropriate supporting evidence, in a written claim to be filed before IMPI:

• the detailed arguments supporting the trade secret misappropriation, misuse, or unauthorised disclosure, including the date and time at which the infringement occurred;
• ownership and legal control over the confidential information, through deployed appropriate measures;
• information which has a commercial or industrial application;
• the existence of confidentiality and the measures taken to preserve it, such as confidentiality policies, non-disclosure agreements and clauses, mechanisms and training intended to preserve confidentiality;
• the competitive advantage granted or obtained through the confidential information;
• prior notice or notices given to the third party who had access to the trade secret, informing them of the trade secrets and its confidential nature;
• evidence showing, to a reasonable standard, the likelihood of trade secret misappropriation or unauthorised disclosure – relevant evidence could include expert appraisals, forensic reviews, log records and prior notice;
• evidence showing the potential damage caused as a result of the misappropriation or unauthorised disclosure – relevant evidence could include expert appraisals, forensic reviews and accounting reports; and
• payment of IMPI’s fees, which are around USD150, plus any and all legal and expert fees, which are the parties’ burden.

Once the plaintiff files the claim, IMPI will review its contents to determine whether to admit it, to issue an official requirement for clarification purposes or to comply with a formal requirement. If IMPI admits the claim, the agency will order the delivery of service to the defendant. IMPI practises service to the defendant at the designated address, who in turn will have a ten business days to prepare and file its written reply in a brief before IMPI. The defendant has the right to present evidence, including expert witnesses and appraisals, as well as any forensic reviews or other technical evidence as needed to defend its position.

The competent authority for hearing trade secret cases, from a purely administrative scope, is IMPI, as trade secret enforcement is seen as an administrative infringement action under the applicable statute, the FLPIP. While it may be theoretically possible to pursue a civil claim before a local civil court, this will be subject to the contractual framework specifying civil enforcement, in addition to the administrative course of action. Such a claim would likely allege violations of contractual obligations related to confidential information’s protection, as opposed to trade secret protection, which is the exclusive jurisdiction of IMPI.

At the appellate level, the Federal Administrative Court (Tribunal Federal de Justicia Administrativa or TFJA) has a specialised jurisdiction for all intellectual property-related matters, including trade secrets.

Having concrete evidence of misappropriation is recommended before bringing a claim to increase chances of successful enforcement, and lack of evidence may affect the admissibility of a claim. While it is possible to bring a claim based “on information and belief”, with the expectation of obtaining the hard evidence through technical evidence, such as an expert appraisal review of the misappropriation obtained during trial, it is necessary to meet a reasonable threshold concerning the evidence of misappropriation. Similarly, it is important to have relevant evidence to demonstrate that the confidential information grants the competitive advantage to its owner to meet the “trade secret” standard, which is assessed by IMPI upon reviewing the claim.

The seizure of accused products or evidence, directly related to the claim, can be requested, granted, and executed by IMPI, as part of injunctive relief, as it is foreseen as part of its prosecution powers. The seizure should be requested before IMPI at the time when the claim is filed and can last throughout the entire proceeding. In considering such requests the IMPI will balance different factors: (i) whether the request is bona fide, (ii) whether it is in the public interest, (iii) the seriousness of the matter, and (iv) the request’s nature.

The plaintiff must also demonstrate the trade secret’s ownership through appropriate evidence, as well as:

• an infringement of the right;
• that the infringement or violation will be imminent;
• the likelihood of suffering an irreparable harm; and
• a well-founded fear that the evidence could be destroyed, hidden, lost, or altered.

Further, they must provide the relevant and necessary information to identify the goods, services, or physical or digital platforms where the infringement takes place.

Additionally the applicant may need to file a bond or certified deposit to compensate the respondent for any harm suffered during the seizure in the event that it is later determined that it had been wrongly granted. The bond’s amount will be set by IMPI after assessing the merits of the case and the request’s scope. FLPIP also foresees that defendant may file a counterbond to respond for any potential harm against the plaintiff. The counterbond, subject to IMPI’s discretionary decision, may be sufficient lift such measures during the trial.

FLPIP grants powers to IMPI to obtain certain evidence from a third party for any type of claim, including a trade secret infringement claim, subject to a written and reasonable request made by a plaintiff. The available mechanisms are:

• an information request from a third party, which is materially linked to the claim; and
• an on-site visit to an establishment to verify compliance with FLPIP.

Generally speaking, while IMPI has reasonably strong powers through these fact-gathering mechanisms, which do not require court assistance, these actions may not be sufficient to support a trade secret claim by themselves. Consequently, these activities should be considered to be ancillary to the evidence showing the infringement, which the plaintiff needs to prepare and have ready before filing the claim.

The parties can request measures to preserve confidentiality of the trade secrets at issue through the special structure available under the Federal Administrative Procedural Law (Ley Federal Procedimiento Administrativo), through which a party can request IMPI to designate the documents and any other element related to the trade secrets claim as confidential due to its nature. In turn, IMPI’s officers will store the specified documents in a private chamber, with access restricted to the involved attorneys.

The following defences are available under FLPIP:

• the information at issue is in the public domain;
• the information is generally known or is easily accessible for individuals within the circles in which the information is regularly used;
• the information must be disclosed due to a statutory mandate or a judicial order;
• the information at issue has been discovered or created independently;
• the information was obtained through the observation, study or disassembly of – or the experiment on – a product or object that has been made available to the general public, or that it is in the lawful possession of the individual who obtains the information, as long as they not been under a confidentiality obligation regarding the trade secret; and
• lawfully acquiring information from a third party, without a confidentiality obligation, or unaware that the information was a trade secret.

Dispositive motions are not available under Mexican Law.

The costs will vary depending on the case’s complexity, the evidence prepared and filed, as well as the duration. Typically, the cost of a trade secret litigation case in the first instance can vary from USD15,000 to USD25,000 plus expert appraisals, notary public fees, and other fees relating to evidence preparation, which can vary from USD10,000 to USD30,000.

While theoretically it is possible to seek to fund litigation on a contingency basis, including through law firms, in practice this is seldom used, due to a trial’s extensive duration, which can be over five years in the administrative phase, as the Mexican damages system is still being developed, especially where it concerns IP rights.

Trade secret trials are decided by IMPI only, which functions akin to a judge, in the first instance. Subsequently, the federal courts will have jurisdiction over the case.

In Mexico, trade secret litigation cases are decided by the papers filed, including expert appraisals. The plaintiff has the burden of proof to demonstrate the facts of the case, with IMPI issuing a determination in the first instance. Both parties have the right to present evidence and arguments during the trial to defend their positions. Testimonies can be brought to the case, as long as the testimony is presented in writing, as there are no depositions or in-person witness testimony available under the applicable statute. Typically, a trade secret trial can take anywhere from one year to three years, subject to IMPI’s workload.

Expert witness testimony or appraisals are allowed in Mexico and can be regularly used to demonstrate facts and technical issues during the litigation to bolster the chance of success. Each party is entitled to name its expert witness, which should be done at the time of presenting the initial brief, for the plaintiff; or at the time of filing the reply brief, for the defendant. The Federal Rules of Civil Procedure foresee certain limitations regarding expert testimony, such as that it cannot be on a question of law, as this will be the judge’s role.

When offering the written testimony, the party presenting the evidence must present a questionnaire and name the expert. Following this, in its reply brief, the defendant will have the right to add questions to the proposed questionnaire, as well as naming its own expert. IMPI will have the right to name a third expert from a list of pre-approved experts. IMPI will then provide the experts with a reasonable term to render their experts appraisals, which will be considered by IMPI in its final resolution. Concerning costs, it is difficult to ascertain potential costs involved in these activities, as they vary widely depending on the field.

The requirements for obtaining injunctive relief are the same as those for seizing accused products and other evidence. See 5.6 Seizure Mechanisms.

Damages are calculated starting at 40% of the legitimate value indicator, as presented by the affected owner. An award of damages can be sought through a damages incident with IMPI or before a civil court, after the administrative procedure, including both rounds of appeal, concludes. IMPI’s recent powers to grant a damages award are yet to be constitutionally tested before the Mexican Supreme Court, so until a decision is taken, it is advisable to file the damages incident before a civil court.

To prove damages, it is necessary for the plaintiff seeking such a remedy to prove the following elements, through appropriate documents:

• that an IP infringement occurred, which can be proven through IMPI’s resolution declaring an infringement;
• that the infringement resulted in economic damage to the plaintiff’s interest, which can be proven through financial appraisals and expert witnesses on accounting; and,
• the factual/causal link between the infringement and the economic effect or loss.

To interpret the legitimate value indicator on which to base the 40% damages compensation, the plaintiff will propose that IMPI or the civil court assess it based on the following:

• the infringed product or service value, calculated through market price, or the suggested retail price;
• lost profits of the plaintiff as a result of the infringement;
• gained profits of the defendant as a result of the infringement; and
• the price that the infringer would have paid the legitimate titleholder for granting a licence, considering the commercial value of the infringed right, as well as the granted and existing licences.

As of today, an owner can only seek the described statutory damages, as punitive damages are not expressly foreseen in the FLPIP, and have not been widely accepted in Mexican case law.

Typically, IMPI has the powers to order a third party to refrain from continuing to violate intellectual property rights after the claim has been definitively resolved. Such orders may include a product recall or destruction of the seized goods, through IMPI, as well as an order to refrain from conducting certain activities. On the other hand, orders restraining individuals from employment opportunities are rare, as the general rule priorities an individual’s right to seek and obtain future employment opportunities. This rule may allow for specific exceptions that can be tied or related to unfair competition practices, but it is unlikely to be enforced in practice, as Mexico tends to prioritise the rights of individuals over those of companies in employment issues.

Under the previous statute, IMPI did not have such the authority to award attorney’s fees. Although there has not been a change in this situation since the FLPIP’s enactment, as the FLPIP foresees a new damages system, it could be possible to claim attorney’s fees through a quantification of damages, as is foreseen under the Federal Rules of Civil Procedure. However, this remains merely a theoretical possibility.

In administrative litigation, each party bears its own costs for litigation and cannot seek an award for costs.

The Mexican Legal system has two different appeals before a decision is final: ordinary appeal and constitutional appeal.

Ordinary Appeal

The first appeal level is with the TJFA, which has a Specialised IP Court with federal jurisdiction over IMPI’s activities, as the latter is a federal authority and IP rights, including trade secrets are regulated at the federal level.

Once IMPI issues a final decision, the affected party will have a non-extendable term of 30 business days to prepare and file an appeal. IMPI and the winning party will have the right to file a reply brief with the appellate court. At this instance, only the affected party has the right to appeal an unfavourable decision. The appeal’s arguments should challenge all the issues raised in the decision, including formal prosecution mistakes or errors that have affected the losing party’s position. Generally speaking, it is not possible to challenge non-final judgments and orders.

Typically, an ordinary appeal lasts from 10–18 months.

Constitutional Appeal

The constitutional appeal is prosecuted before the Federal Circuit Courts (Tribunales Colegiados de Circuito en Materia Administrativa), part of the Federal Judiciary Power in Mexico. These courts regularly hear administrative litigation cases, including intellectual property disputes, but lack a specialised IP court.

The affected party has a non-extendable 15-business-day term after service of the TFJA’s adverse resolution to challenge it through an amparo, or a constitutional appeal, which will review the constitutional and legal grounds of the ruling, without any admission of new evidence. Contrary to the ordinary appeal rules, the prevailing party has the right to present a recourse against a favourable ruling in the parts that are adverse to its interests, or to present additional, stronger arguments to prevail in the new ruling.

Typically, a constitutional appeal lasts from 10–12 months.

Generally speaking, both appellate courts can only review legal issues, as any and all evidence related to the merits of the case should have been presented and rendered during the trial phase, for the trial authority (IMPI) to hear, analyse, and assess the evidence. Under the applicable statute and case law, the appeal court cannot receive any additional evidence which should have been presented to try the case. It is possible to present evidence intended to challenge what is claimed to be IMPI’s erroneous interpretation or appreciation in the resolution, but not evidence which was meant to demonstrate the facts of the case.

The appellate phase is mostly a written proceeding. Parties can present oral arguments before the court, but this is not a formally recognised hearing in the procedure, so it is an informal practice.

Like its predecessor statute, the FLPIP recognises criminal offences of trade secret theft, misappropriation, unauthorised disclosure, and unauthorised use – requiring the presence of an additional element: that the illicit activity took place with ill-intent, which must be proven beyond a reasonable doubt. This evidentiary burden makes it more difficult to sustain criminal charges against trade secret defendants in practice. Additionally, the success of any criminal action depends on the prosecutor’s expertise and skillset to prepare the case; unfortunately for victims of trade secret violation, federal prosecutors tend to prioritise prosecuting other kinds of criminal complaints having a larger impact on society. Consequently, criminal enforcement is rarely used in practice.

It is likely that these same defences and arguments available in civil trade secret actions may apply in practice to criminal claims. From an evidence preparation perspective, the National Code of Criminal Procedure foresees a broad array of investigation techniques that can be devised and implemented through the federal prosecutor, with and without court orders, to investigate trade secret misappropriation or economic espionage offences. However, for more sophisticated and invasive techniques – such as wiretapping and data extraction from platforms, servers and devices, electronic apparatus, computers and storage devices – it is necessary to obtain a court order, which will be very limited in scope and time.

Finally, for criminal trade secret violations, the FLPIP imposes penalties, from two to six years; as well as economic penalties, from the equivalent of USD5,460 to USD1.638 million, in addition to compensatory damages.

To date, while the possibility of encouraging the use of ADR mechanisms through contractual clauses is anticipated in Mexico, this option is seldom used for intellectual property cases, as it was not expressly authorised under the former statute. However, this changed recently due to the FLPIP’s enactment, which now foresees the parties’ right to open a conciliation procedure, before IMPI, to explore the possibility of reaching a settlement in infringement cases. This right is available to both parties until IMPI reaches a decision in the first instance.

FLPIP also contemplates a conciliation procedure in which IMPI will be conciliator, holding the infringement proceeding in abeyance while the conciliation is ongoing. The party requesting the conciliation must present a written proposal to settle the claim. The other party will have the right to accept it, present a written counterproposal, or reject it. If a counterproposal exists, an IMPI officer will summon the parties to in-person meetings at IMPI’s premises to discuss potential settlements. Due to statutory restrictions, the conciliation procedure is limited to two meetings. If the parties do not reach a settlement, IMPI will resume the infringement proceeding.