The Federal Law on the Protection of Industrial Property (FLPIP) (published in the Mexican Official Gazette on 1 July 2020 and entered into force on 5 November 2020) is the Mexican federal law applicable to trade secrets, along with certain provisions of other laws related to confidential information, as well as certain international treaties signed by Mexico ‒ mainly, T-MEC (formerly the North America Free Trade Agreement (NAFTA)) and the WTO’s Agreement on Trade Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”), which include provisions related or similar to the provisions of the mentioned treaties.

Conflicts between the content of the FLPIP and the international treaties that foresee trade secrets are resolved according to the principle of pro personae.

The FLPIP does not define a trade secret as any particular type of information. Section I of Article 163 of the FLPIP defines a “trade secret” as all industrial or commercial information that is kept confidential by the person who exercises legal control over it ‒ thereby giving them or maintaining a competitive or economic advantage over third parties in the performance of economic activities ‒ and for which sufficient means or systems have been adopted to preserve confidentiality and/or restrict access.

Additionally, Article 163 of the FLPIP mentions that information that is in the public domain, information that is generally known or easily accessible to persons within the circles in which such information is normally used, or information that must be disclosed by legal provision or court order will not be considered a trade secret.

In Mexico, any type of information with industrial or commercial application that provides a competitive or economic advantage over third parties in the performance of economic activities is considered a trade secret. Some practical examples are formulations, production methods, customer information, marketing strategies, product designs, processing technology, financial strategies, documented internal procedures, algorithms, processes that are applied in computer programs, and the computer programs themselves.

As previously mentioned in 1.2 What Is Protectable as a Trade Secret, the elements necessary for trade secret protection are that the trade secret information is kept confidential by the person who exercises legal control over the trade secret, who must adopt sufficient means or systems to preserve the information as confidential and/or to restrict access to it. In practice, it is recommended that the trade secret information is contained in documents, electronic or magnetic media, optical disks, microfilms, films, or any other known or unknown medium.

In Mexico, the identification, maintenance and validation of a trade secret rely on management and legal measures that must be performed on a day-to-day basis within the company or institution. As mentioned in 1.4 Elements of Trade Secret Protection, according to Article 163 of the FLPIP, the person who exercises legal control over trade secret information must demonstrate the implementation or adoption of sufficient means or systems to preserve its confidentiality and/or restricted access to it. The FLPIP does not specify what kind of means or systems can be adopted, it depends on the resources of the company or institution and the nature of the trade secret.

Practical examples of means or systems are:

• marking the information related to a trade secret as confidential;
• keep the information in offices or warehouses with controlled or restricted access;
• technological security means such as the use of passwords, facial recognition, or fingerprints; and
• signature of contracts or confidentiality and non-disclosure agreements with the person who has access to trade secrets.

The disclosure of a trade secret to employees must be made under the signature of an employment contract that includes clauses regulating the disclosure of confidential information and trade secrets and/or under the signature of a specific confidentiality and non-disclosure agreement. It is important to mention that, in practice, it must be an obligation of the employer to warn the employee that – as part of their activities – they will have access to confidential information and trade secrets of the company.

Article 166 of the FLPIP establishes that any person who (by reason of their work, employment, position, professional performance or business relationship) has access to a trade secret – the confidentiality of which they have been warned about – must refrain from disclosing it without the consent of the person who exercises legal control over it or of its authorixed user.

Additionally, Article 167 of the FLPIP mentions that any natural or legal person that hires a worker who is working or has worked – or a professional, adviser or consultant who provides or has provided services to another person – with the intention of obtaining trade secrets from the other person will be considered liable under the terms of the law. A natural or legal person who obtains information that includes a trade secret by any illicit means will also be liable.

According to FLPIP only the misappropriation of a trade secret is considered as a violation of the law.

Section II of Article 163 of the FLPIP defines misappropriation as the acquisition, use or disclosure of a trade secret in a manner contrary to good practices and customs in industry, commerce and services that implies unfair competition. This includes 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 said practices and customs.

Moreover, Article 164 of the FLPIP establishes what is not considered misappropriation:

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

There is no protection for trade secrets uniquely applicable to software and technology. As is mentioned in 1.2 What Is Protectable as a Trade Secret, the definition of trade secrets is applicable to any type of information with industrial or commercial application that provides a competitive or economic advantage over third parties in the performance of economic activities. The scope of protection of a trade secret is equally applied as long as the requirements are satisfied.

The protection of a trade secret is maintained indefinitely as long as the information is kept as confidential and complies with the other requirements of the law, as mentioned in 1.2 What Is Protectable as a Trade Secret and 1.4 Elements of Trade Secret Protection.

The disclosure of any information (intentional or accidental) changes the nature of the information from confidential to public and, therefore, it can no longer be considered a trade secret. Even controlled disclosure can affect the existence or duration of a trade secret, given that the information loses the confidential nature required to be considered and protected as a trade secret.

Nevertheless, Section I of Article 163 of  the FLPIP also mentions that only information provided to any authority by a person exercising legal control over the trade secret, when provided for such purpose, will not be considered to be in the public domain or to have been disclosed by legal provision.

Owners must be prepared to implement and maintain all needed means and measures to protect their trade secrets and prevent their intentional or accidental disclosure. The disclosure of a trade secret must be made in a conscious and strategic manner, considering the interests of the business and with the knowledge that once disclosed it will no longer be considered a trade secret. The management and decision of which information must be considered and maintained as trade secret is crucial for companies and institutions.

According to Article 165 of the FLPIP, the person who exercises legal control over the trade secret may transmit it to or authorise its use by a third party. The authorised party will be obliged not to disclose the trade secret by any means.

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

The main difference between trade secrets and other IP rights is that trade secrets are not registrable and therefore they are not limited by time or territoriality. Additionally, because maintaining a trade secret depends more on the implementation of good practices for managing confidential information, it is more difficult to demonstrate the misappropriation of the trade secret in a trial.

It is important to mention that a technology or invention can be protected by several IP rights, including trade secrets, as each right protects different aspects of the invention.

It is possible for a plaintiff to assert trade secret rights in combination with other types of IP rights in Mexico. This is because each IP right related to a technology or an invention provides different scope of protection, depending on the aspects of the technology or the invention.

However, it is important to mention that, should a plaintiff assert trade secret rights in combination with a different type of IP right, they must demonstrate and file suitable evidence in order to prove the violation of each right.

According to the FLPIP, claims related to trade secrets must turn on misappropriation, which is defined in Article 164 thereof (see 1.7 Independent Discovery).

Article 368 of the FLPIP foresees the following infringement conducts:

• misappropriating information that is considered a trade secret ‒ ie, using it without the consent of the person who exercises legal control or its authorised user ‒ in order to obtain a competitive market advantage or performing acts contrary to good practices and customs in industry, commerce and services, thereby potentially leading to unfair competition; and
• producing, offering for sale, selling, importing, exporting or storing products or services that use a trade secret, when the person who carries out such activities knew or has reasonable grounds to know that the trade secret was used without the consent of the person who exercises legal control or its authorised user and in a manner contrary to good practices and customs in industry, commerce and services, thereby potentially leading to unfair competition.

These conducts are sanctioned with a fine imposed by the Mexican Institute of Industrial Property (MIIP) after an infringement action proceeding. The can amount to UMA250,000, which is equivalent to MSN28.25 million (approximately USD1,375 million). The fines are collected by and paid to the MIIP.

Moreover, Article 402 of the FLPIP also foresees the following criminal actions:

• a person disclosing to a third party an industrial secret (that is known by reason of said person’s work, post or position, or through the performance of their profession or business relationship, or by virtue of the granting of a licence for its use) without the consent of the person exercising legal control thereof or of its authorised user – having been warned of its confidentiality – with the purpose of obtaining an economic benefit for the third party or for the third party or with the purpose of causing harm to the person keeping the secret;
• a person taking possession of an industrial secret without the right and without the consent of the person exercising its legal control or of its authorised user, in order to use it or disclose it to a third party, with the purpose of obtaining an economic benefit for themselves or for the third party or with the purpose of causing prejudice to the person exercising its legal control or to its authorised user;
• a person using the information contained in a trade secret (which said person knows by virtue of their work, office or position, or through the exercise of their profession or business relationship) without the consent of the person exercising legal control thereof or of its authorised user – or using trade secret information that has been disclosed to him by a third party, who did not have the consent of the person exercising legal control thereof or of its authorised user – with the purpose of obtaining an economic benefit or with the purpose of causing prejudice to the person exercising legal control of the trade secret or to its authorised user; and
• a person appropriating, acquiring, using or unduly disclosing a trade secret by any means – without the consent of the person exercising legal control thereof or of its authorised user – with the purpose of causing prejudice or obtaining an economic benefit for himself or for a third party.

These conducts are sanctioned with imprisonment of two to six years and a fine that amounts to between UMA1,000 to UMA300,000, which is equivalent to MXN113,000 to MXN33,900,000 (approximately USD5,512 to USD1.653 million).

Finally, the violation of a trade secret can be pursued in a civil claim in order to obtain compensation for damage.

In Mexico, it is possible to bring a claim based on misappropriation of trade secrets that happens in another country, as long as the trade secrets comply with the legal requirements to be considered as such. This is possible because trade secrets are not limited by the territory, given that they are not registered before any authority. Nevertheless, it is necessary to demonstrate the misappropriation of the trade secret.

In general, Mexico follows principles of private international law, which address situations where the facts or legal relationships have a cross-border dimension. By way of  example, a claim based on misappropriation that happens in another country can be pursued in Mexico if the defendant is located in Mexico, the damage was caused in Mexico, or if the trade secret is related to assets in Mexico.

It is important to bear in mind that Section II of Article 163 of the FLPIP defines misappropriation as the acquisition, use or disclosure of a trade secret in a manner contrary to good customs in industry, commerce and services and that involves unfair competition. This includes 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 contrary to such customs and usages.

Therefore, the owner must prove that the defendant gained access through unlawful means (in a manner contrary to good customs in industry, commerce and services). Moreover, as misappropriation includes the acquisition, use or disclosure of a trade secret, there is no need to prove that the trade secret was actually used.

Finally, it is important to recall that the infringement actions foreseen in the FLPIP require that the misappropriation relates to obtaining a competitive market advantage or implies unfair competition.

Article 166 of the FLPIP establishes that any person who (by reason of their work, employment, position, professional performance or business relationship) has access to a trade secret ‒ the confidentiality of which they have been warned about ‒ must refrain from disclosing it without the consent of the person who exercises legal control over it or the consent of its authorised user.

According to the foregoing, the elements of a trade secret misappropriation do not differ where the misappropriation involves an employee of the owner and the only obligation is refraining from disclosing the trade secret without the consent of the person who exercises legal control over it or the consent of its authorised user.

Mexican law does not recognise the existence of obligations between joint venturers with regard to trade secrets.

Industrial espionage is not specifically regulated in Mexico. However, the claims and penalties that are unique to trade secrets in Mexico are described in 1.14 Criminal Liability.

Some recognised best practices for safeguarding trade secrets are:

• to create and promote within the company a culture of protection of confidential information and trade secrets;
• to define internal policies to define which information will be considered as trade secret since not all confidential information is a trade secret;
• to define internal levels of authorisation to obtain confidential information and trade secrets, depending on the position and activities of the employee;
• to identify internally the important assets for the company that shall be considered as trade secret – create an assets inventory;
• even though it is no longer a requirement by law, it is recommended to document the trade secret in physical or electronic media;
• to mark all confidential information and trade secrets as confidential;
• to sign confidential and non-disclosure agreements with all people that need to access to information related to trade secrets;
• to adopt sufficient means or systems to preserve the confidentiality of and restrict access to information related to trade secrets; and
• to warn any person in the company that they will have access to information related to trade secrets.

These measures can be used in any industry.

When an employee leaves a company, it is recommended to warn them that they had access to information related to trade secrets of the company and that they cannot disclose the information to any third party without the consent of the person who has legal control of the trade secret even when they no longer work in the company. In some cases, it can be useful to sign a letter of understanding or a non-disclosure agreement establishing in writing the provisions of confidentiality and protection of trade secrets that must be aligned with the employment contract.

It is also a best practice to have employment contracts that include clauses related to the non-disclosure of information and trade secrets, as long as the confidential information and the trade secrets are considered as such according to the requirements of the law.

Article 163 of the FLPIP foresees what a trade secret consists of. Trade secret means any information of industrial or commercial application kept confidential by the person who exercises legal control over it, which gives or maintains a competitive or economic advantage over third parties in the performance of economic activities and in respect of which said person has adopted sufficient means or systems to preserve its confidentiality and restricted access. Therefore, any information that is not included in that definition can be considered an employee’s general knowledge and skills (ie, non-protectable).

In addition, it is important to mention that information that is in the public domain, information that is generally known or easily accessible to persons within the circles in which such information is normally used, or information that must be disclosed by law or court order will not be considered an industrial secret.

It is important to mention that Article 167 of the FLPIP states that the individual or legal entity that hires a worker who is working or has worked ‒ or a professional, adviser or consultant who renders or has rendered services ‒ for another person, with the purpose of obtaining industrial secrets from the latter, will be considered liable under the terms of this law. Therefore, it is important for the employer to confirm the confidential information to which the employee had access and whether this information is related to obtaining a competitive market advantage or implies unfair competition.

As mentioned in 1.14 Criminal Liability, the FLPIP foresees both infringement and criminal conduct.

A civil lawsuit alleging theft of trade secrets can be initiated by filing an infringement action before the MIIP. Prior to or during the infringement action, the plaintiff can request preliminary injunction measures until the proceeding is resolved with a final decision.

The preliminary injunction measures will be granted and implemented by the MIIP if the plaintiff, among other things:

• posts a bond to cover possible damages and losses to the infringer should the plaintiff fail to obtain a declaration that an infringement has been committed;
• proves the existence of their IP right;.
• proves the marking requirement (this can be done with a publication in a newspaper); and
• proves that:
1. the IP right (trade secret) has been violated;
2. it is highly probable that the IP right will be violated;
3. the evidence proving such violation will be destroyed; or
4. irreparable harm may be suffered as a result of the violation.

For details of the types of provisional measures available in a trade secret litigation and their duration, please refer to 7.1 Preliminary Injunctive Relief.

The proceeding of the infringement action consists of the following.

• Statements in connection with the implementation of injunction measures – once the preliminary injunction measures are implemented, the MIIP will grant to the infringer a term of 10 business days to file its statements in connection with the implementation of the injunction measures.
• Initial brief – the plaintiff must file within the term of 20 business days, counted from the date of the conduction of the inspection visit, the initial brief of the infringement action; otherwise they will be obliged to respond for the possible damages and losses to the alleged infringer by the implementation of the preliminary injunction measures.
• Brief of response – after the admittance of the infringement action brief, the defendant (alleged infringer) will be served notice with the initial brief, granting them a term of ten business days to file its brief of response.
• Rebuttal arguments against the response – the MIIP will serve notice to the plaintiff with the brief of response filed by the defendant (alleged infringer) and will grant the plaintiff a short term of three business days to file a rebuttal arguments brief against the response.
• Final pleadings and issuance of the administrative decision – following the admission of the rebuttal arguments brief against the response and if there is no pending evidence to be admitted or analysed, the MIIP will grant to both parties a term in which to file their final pleadings before the MIIP renders its decision.

The party affected in the infringement action procedure may file a review recourse before the MIIP and two further appeals (see 8.1 Appellate Procedure).

For details of the procedure for initiating criminal proceedings, please refer to 9.1 Prosecution Process, Penalties and Defences.

The FLPIP does not foresee a limitation for filing an infringement action in connection with a trade secret. However, the MIIP’s faculty to impose sanctions is restricted to five years following the date on which the infringement was conducted.

Please refer to 5.1 Prerequisites to Filing a Lawsuit.

As mentioned in 5.1 Prerequisites to Filing a Lawsuit, infringement actions related to trade secrets are prosecuted before the MIIP. The decision issued by the MIIP can be appealed through a nullity claim before a specialised court of the Federal Court of Administrative Affairs and this decision can be also appealed before a federal circuit court.

Moreover, criminal actions related to trade secrets are prosecuted before the FPO and are decided before a criminal federal court.

There are no legal standards related to the evidence that is necessary in order to file an infringement or a criminal action. An owner can file these claims with the available evidence; however, it is advisable that the evidence shows the infringement/criminal conduct in order to have a strong case.

As mentioned in 5.1 Prerequisites to Filing a Lawsuit, the owner of a trade secret owner can request preliminary injunction measures before or at the moment of filing an infringement action, including the seizure of accused products. This seizure is carried out by the MIIP and the requirements in order to request this provisional measure were listed in 5.1 Prerequisites to Filing a Lawsuit.

Note that the evidence necessary to file an action can be obtained through undercover investigations and through public requests for information before any authority. These activities are usually conducted before filing an action, given that the initial brief must contain all the evidence to prove the infringement.

Finally, it is possible to file as evidence a request that in this case the MIIP will order the defendant or a third party to provide certain information in order to prove the infringement

.

The FLPIP states that, if in any judicial or administrative proceeding related to a trade secret or where any of the interested parties is required to disclose a trade secret, the authority hearing the case shall adopt the necessary measures – at the request of a party or ex officio – to prevent its unauthorised disclosure to third parties not involved in the dispute and to guarantee its confidentiality. No interested party may disclose or use the industrial secret.

The main defences available in trade secret litigation are showing that:

• the information is not considered a trade secret, as it does not have an industrial or commercial purpose;
• the information is not considered a trade secret, as it does not imply the obtaining or maintaining of a competitive or economic advantage over third parties;
• the owner did not adopt sufficient means or systems to preserve the confidentiality of and restrict access to the information; or
• there was no misappropriation, as the FLPIP states that the following are not considered to be misappropriation:
1. the independent discovery or creation of information that is claimed as an industrial secret;
2. the observation, study, disassembly or testing of a product or object that has been made available to the public or that is lawfully in possession of the person who obtains the information, provided that the person not subject to any obligation of confidentiality on the industrial secret; or
3. the acquisition of the information from another person in a lawful manner.

In Mexico, the trade secret litigation proceedings do not foresee dispositive motions.

In Mexico, a trade secret litigation as an infringement action filed and prosecuted before the MIIP can amount to between USD25,000 and USD30,000, plus expenses related to the evidence. This estimate of cost concerns the litigation up until the first decision issued by the MIIP; any further instances of appeal can result in a different cost.

Moreover, even though contingency litigation is not common in Mexico, it is recognised.

Finally, litigation financing is not available.

Note that infringement actions are prosecuted and decided by the MIIP. An MIIP official is the person in charge of ruling this type of proceeding.

If the MIIP’s decision is appealed before the Federal Court of Administrative Affairs and further before a federal circuit court, these courts are composed of three magistrates who decide the case.

No jury is foreseen in Mexican law.

The process of an infringement action is described in 5.1 Prerequisites to Filing a Lawsuit.However, note that no testimony from live witnesses is permitted under this proceeding; any evidence must be filed in paper. The length of the proceeding from first instance up to the issuance of a decision can range from one-and-a-half years to two years and this can be extended, depending on the MIIP’s backlog.

In Mexico, expert witness opinions are allowed as evidence in a trade secret litigation such as an infringement action. These opinions are filed on paper at the moment of filing the initial brief and are assessed by the MIIP at the issuance of a decision. The rules for filing this evidence are foreseen in the Federal Code of Civil Procedures.

The cost of these types of opinions can vary depending on the case. However, the plaintiff can expect a cost of between USD3,000 and USD8,000.

Prior or parallel to the infringement action, the plaintiff can request preliminary injunction measures until the proceeding is resolved with a final decision. The preliminary injunction measures will be granted and implemented by the MIIP if the plaintiff satisfies, among other things, the requirements listed in 5.1 Prerequisites to Filing a Lawsuit.

Provisional measures will remain during the prosecution of the administrative proceeding and until the issuance of the final decision, unless the defendant files a counter-bond to suspend the effects of the measures adopted. The injunctions may be lifted by the defendant at any time as long as the defendant complies with the requirements provided by law.

The provisional measures that can be requested are for the MIIP to:

• order the withdrawal from circulation or ban the distribution of goods that infringes an IP right;
• order the withdrawal from circulation of:
1. objects manufactured or used illegally;
2. objects, wrappers, containers, packaging, paperwork, advertising material and similar articles that infringe an IP right;
3. signs, labels, tags, paperwork and similar articles that infringe an IP right; and
4. utensils or instruments intended or used for the manufacture, preparation or production of any of the articles specified in the above-mentioned three categories of items;
• prohibit with immediate effect, the marketing or use of goods that infringes an IP right;
• order the seizure of goods;
• order the alleged infringer to suspend or discontinue the acts that constitute the violation of an IP right;
• order the suspension of the rendering of the service or the closure of the establishment if the above-mentioned measures are not sufficient to prevent or avoid the infringement of the IP right; and
• order the suspension, blocking or removal of content or the ceasing of acts that constitute a violation of an IP right through any digital media, whether known or to be known.

According to the FLPIP, compensation for the infringement of an IP right may be no less than 40% of the legitimate value indicator presented by the affected owner.

The indemnity may be claimed, at the option of the affected owner, before:

• the MIIP, once the respective administrative procedure has been concluded, under the terms of the FLPIP; or
• the courts directly, in accordance with the provisions of the common legislation and without the need for prior administrative declaration.

In order to determine the amount of compensation, the date on which the infringement of the right occurred and ‒ at the option of the affected owner – any indicator of legitimate value presented by the latter will be taken into account, including:

• the value of the infringed products or services calculated based on the market price or based on the suggested retail price;
• the profits that the owner would have ceased to receive as a consequence of the infringement;
• the profits that the infringer has obtained as a consequence of the infringement; or
• the price that the infringer should have paid to the right-holder for the granting of a licence, taking into account the commercial value of the infringed right and the contractual licences already granted.

Finally, note that punitive damages can also be claimed. However, this will depend on the case, as the Supreme Court of Justice has stated: “Punitive damages are an exemplary sanction with preventive purposes, which seeks to dissuade similar harmful conduct in the future; therefore, they do not apply in any case, but are an element that is linked to the injured right and the degree of responsibility of the tortfeasor, which may be added only when the seriousness of the conduct deserves a high degree of social reproach that justifies such sanction.”

Permanent injunction measures are not available for a successful trade secret claimant in Mexico ‒ given that, once the infringement action is decided in favour of the plaintiff, the MIIP orders the destruction of the seized product.

Note that it can be difficult to achieve an order that limits an employee’s subsequent employment in order to protect the plaintiff’s trade secrets, as this order can violate the right of this employee to not be prevented from engaging in any lawful profession, industry, trade, commerce or work that suits them. However, this can be assessed on a case-by-case basis.

In an administrative proceeding such as an infringement action, the Mexican law does not foresee the recovery of attorney’s fees. However, if a claim is filed to obtain compensation for damage, this concept can be included as part of the compensation.

The process for obtaining this compensation is the same as the process for obtaining compensation for damage.

Please see 7.2 Measures of Damages for further details of how the amount of compensation that the successful claimant can recover is determined.

Costs may be claimed, at the option of the affected owner, before:

• the MIIP, once the respective administrative procedure has been concluded, under the terms of the FLPIP; or
• the courts directly, in accordance with the provisions of the common legislation and without the need for prior administrative declaration.

Although no official communications other than the final decision can be appealed, the decision issued by the MIIP in an infringement action can be appealed by any of the affected parties before:

• the MIIP ‒ within a 15-working-day period following the date on which they were served noticed of the referenced decision ‒ by filing a review recourse, which will be assessed by the MIIP (this appeal takes approximately one year); or
• a specialised court of the Federal Court of Administrative Affairs ‒ within a 30-working-day period following the date on which they were served notice of the referenced decision ‒ by filing a nullity claim, which will be assessed by the magistrates of the Federal Court of Administrative Affairs (this appeal takes approximately one year).

The appellate courts only review legal issues. The applicable standard mainly consists of analysing whether the prior decision was issued legally; no de novo review is allowed.

Moreover, it is important to mention that appeals are decided only on the papers. Live arguments or testimony are not heard at appeals.

In connection with criminal conduct, proceedings are brought before the Federal Prosecutor Office (FPO) by filing a criminal action. The FPO will prosecute and integrate the official file before such authority sends it to a criminal federal court.

What follows is an outline of a typical criminal action proceeding.

• FPO proceeding ‒ the criminal action starts with the filling of an initial brief (criminal complaint) before the FPO. Once the criminal complaint has been filed, an FPO prosecutor investigates the merits of the case and recovers all the pertinent information, suitable evidence, and expert opinions necessary to determine its prosecution. If the PFO decides to prosecute, the official file will then be submitted to a criminal federal court, which will review all the evidence to determine whether the crime was committed.
• Criminal federal court proceeding ‒ as the federal criminal judge will base their decision on the file submitted by the FPO, it is crucial that such file is developed properly and include all suitable evidence and information in support of the IP rights-holder’s position.

Criminal offences concerning trade secrets are sanctioned with imprisonment for between two and six years, as well as a fine that amounts to between UMAS1,000 and UMAS300,000 UMAS, which is equivalent to between MXN113,000 and MXN33.9 million (approximately USD5,512 to USD1.653 million).

As listed in 5.9 Defending Against Allegations of Misappropriation in the context of trade secret litigation, potential defences available against a criminal charge are that:

• the information is not considered a trade secret, as it does not have industrial or commercial purpose;
• the information is not considered a trade secret, as it does not imply the obtaining or maintaining of a competitive or economic advantage over third parties;
• the owner did not adopt sufficient means or systems to preserve the confidentiality of and restrict access to the information; and
• there was no misappropriation, as the FLPIP states that the following are not considered to be misappropriation:
1. the independent discovery or creation of information that is claimed as an industrial secret;
2. the observation, study, disassembly or testing of a product or object that has been made available to the public or that is lawfully in possession of the person who obtains the information, provided that the person is not subject to any obligation of confidentiality with regard to the industrial secret; or
3. the acquisition of the information from another person in a lawful manner.

However, please note that these defences may differ in a civil case, as this is usually filed to obtain a compensation of damages.

Finally, no specific mechanisms are foreseen in Mexico for trade secret owners to co-ordinate with law enforcement authorities. However, it is usually advisable to request meetings with Mexican authorities and to keep an active position when filing an infringement or criminal action in order to file all the available evidence and/or to help with the investigation.

In Mexico, ADR mechanisms such as arbitration are available for resolving trade secret disputes. This mechanism is foreseen in the Commercial Code.

Timing can vary depending on the particularity of the case. However, in most of the cases the owner can expect a decision in no more than one year.

As regards the estimate of costs, it is important to mention  that costs are generally lower, as the process involves fewer legal fees and fewer procedural steps. However, fees of the arbitrator must be considered.

The main advantages of ADR are the confidentiality, flexibility and enforceability of the arbitration. The arbitration process allows for greater confidentiality, which is critical in trade secret disputes. This can prevent public disclosure of sensitive information.

Finally, please consider that provisional measures can be requested during an arbitration. However, they cannot be requested from the arbitrator and must be requested before the corresponding authority, such as the MIIP or a federal court.