Trademark counterfeiting is regulated in the Mexican Federal Law on the Protection of Industrial Property (MIPL), as follows:
Art. 402. The following conducts constitute crimes:
I. Counterfeiting trademarks with the intention of commercial speculation.
For the effects of this Law, counterfeiting will be understood as the act of using and identical mark or in such a manner that it cannot be distinguished in its essential aspects with a previously registered or to one protected by this Law, without the authorization of its legitimate owner or its licensee, to falsely represent a good or service as original o authentic. (Definition of Trademark Counterfeiting)
To prove that it has been counterfeit, it will be sufficient if the mark is used identically or in such a manner that it cannot be distinguished in its essential aspects, as depicted in the trademark registration certificate, or in its case, in the resolution that estimates or declares its notoriety or fame;
II. Producing, storing, transporting, introducing to the Country, distributing or selling, with commercial speculation purposes, objects that bear counterfeits of marks, as well as supplying or providing in any manner, knowingly, materials destined to produce objects bearing such counterfeits.
The following government bodies play different roles in the enforcement of anti-counterfeiting activities:
• Attorney General’s Office,
• Mexican Institute of Industrial Property,
• Special Unit in Charge of the Investigation of Copyright and Industrial Property Crimes,
• National Guard,
• International Police (INTERPOL),
• Mexican Customs.
Federal Criminal Courts,
Supreme Court of Justice.
I. CRIMINAL ACTIONS
Intellectual Property Crimes are investigated and prosecuted ex parte in certain cases, even though according to Criminal Law, these types of crimes are considered felonies.
First of all, a criminal complaint shall be filed before the Attorney General’s Office, an in particular before one of the Attorney’s Offices in charge of Industrial Property as mentioned herein.
The Attorney’s Office will request the Mexican Institute of Industrial Property to prove the ownership of the trademark registration being counterfeited.
Then, Attorney General’s Office will grant a term to carry out an inspection in the premises of the presumed counterfeiter of the trademark registration to seize all merchandise bearing the trademark of interest, thus, serving the alleged counterfeiter of the criminal accusations against him/her. Since this type of crime is considered a felony, the presumed counterfeiter will be held detained in the Attorney General’s Office during the prosecution of the criminal procedure.
Once this is done, the Attorney General’s Office will request the assistance of the Mexican Institute of Industrial Property and an official expert witness, in order to determine if the goods seized in possession of the presumed counterfeiter are considered counterfeit goods, pursuant to Mexican Industrial Property Law by means of a written legal opinion provided by them.
Furthermore, the Attorney General’s Office will have to determine if all the elements of the corpus delicti have been integrated. If all the aforementioned elements have been integrated, then, the Attorney General’s Office will request the assistance of the Federal Criminal District Judge (Control Judge) to issue a resolution, mentioning which criminal penalties has incurred the alleged counterfeiter (the initiation of the trial); whom will have at all times the opportunity to manifest allegations.
The trial shall be carried out before a Federal Criminal District Judge, different from the Control Judge that order the initiation of the trial, performing all the necessary actions and providing the alleged counterfeiter the opportunity to be aware and the right of defense. Such Judge shall issue a resolution within a maximum timeframe of 2 years. (Accusatorial System/Adversarial System).
The above resolutions may be appealed by the counterfeiter before a Federal Criminal District Judge, and this decision may be challenged by a Constitutional Proceeding (Mexican Amparo).
Criminal penalties: According to the Mexican Industrial Property Law, Counterfeit Crimes may be punished by means of:
a) Imprisonment of three to ten years and a fine of two thousand to five hundred thousand units of measurement and update (between USD$12,000.00 and USD$2,900,000.00), in force at the time the crime is committed.
b) Imprisonment of two to six years and a fine of one thousand to one hundred thousand units of measurement and update (between USD$6,000.00 and USD$600,000.00), in force at the time the crime is committed, on individuals that sell to any final consumer in a public place, with ill intentions or with commercial speculation purposes, objects that bear counterfeit goods protected by MIPL.
c) If the sale is carried out in a commercial establishment, or in an organized or permanent form; imprisonment for three to ten years and a fine of two thousand to two hundred fifty thousand units of measurement and update (between USD$12,000.00 and USD$1,450,000.00), in force at the time the crime is committed.
II. ADMINISTRATIVE ACTIONS
Please be advised that the MIPL states that the following shall constitute administrative infringements:
a) Engaging in acts contrary to proper practice and customs in the industry, commerce and services which imply unfair competition and which relate to the subject matter regulated by the MIPL;
b) Performing, in the course of industrial activities or trade, acts that confuse, mislead or deceive the public by causing it wrongly to believe or assume:
(a) that a relation or association exists between a given establishment and that of a third party,
(b) that goods are manufactured according to specifications, licenses or authorizations from a third party,
(c) that services are rendered, or goods sold according to authorizations, licenses or specifications from a third party,
(d) that the goods come from a territory, region or locality different from the true place of origin, in such a way as to mislead the public as to the geographical origin of the goods;
c) Offering for sale or bringing into circulation goods or offering services, indicating that they are protected by a registered trademark without it being registered. If the trademark registration has expired or has been declared null or cancelled, the infringement would occur after one year of the expiration or in its case, from the dated in which the corresponding declaration is enforceable:
d) Using a confusingly similar mark to another registered one, to protect goods or services identical or similar to those protected by the registered mark;
e) Using a registered mark or one confusingly similar thereto without the consent of its owner as an element of a trade name or business name, domain name or vice versa, provided that said trade names, domain names or business names are related to establishments related to the goods or services protected by the mark;
f) Using as a mark the denominations, signs, symbols, abbreviations or emblems referred to in sections VII, VIII, IX, XII, XIII, XIV, XV, XVI, XVII and XX of article 173 of the Law, as well as the ones that are contrary to public order and contravene any legal provisions;
g) Using a previously registered mark or confusingly similar to a trade name or business name, domain name or part of such names, an individual or legal entity whose activity is the manufacturing, importation or commercialization of goods or services identical or similar to those to which the registered mark is applied without the written consent of the owner of the trademark registration or of the individual entitled to grant such consent;
h) Using a registered mark without the consent of the owner thereof or without the appropriate license on goods or services identical or similar to those to which the mark is applied;
i) Offering for sale or bringing into circulation goods to which a registered mark is applied and which goods or packaging have been altered;
j) Offering for sale or bringing into circulation goods to which a registered mark is applied after having partially or totally altered, replaced or deleted said mark;
k) Using a combination of distinctive signs, operative or image elements, that distinguish goods or services identical or confusingly similar to other protected by the Law, and that cause or induce the public consumer to believe or allege an existing association with whom proves the right;
l) Using a registered slogan or a confusingly similar, without the consent of the owner or the appropriate license to announce goods, services or establishments identical or similar to the ones applied by the slogan;
“USING” is defined by the Law, as: manufacturing, producing, imitating, storing, distributing, importing, exporting, offering for sale, selling, transporting or bringing into circulation.
III. CIVIL ACTIONS
Regardless of the institution of criminal proceedings, the aggrieved party in any of the offenses referred in the MIPL may demand from the perpetrator or perpetrators thereof compensation and the payment of damages, for the prejudice sustained as a result of the said offenses. Compensation for material damages or indemnification for damages and losses due to violation of the rights conferred by Mexican Industrial Property Law shall in no case be less than 40 percent of the indicator of the legitimate value submitted by the affected owner.
The compensation may be claimed, as elected by the affected owner before:
I. The Mexican Institute of Industrial Property, once the administrative procedure has concluded; or
II. The Courts directly, as provided by the Law, and without the need of a previous administrative infringement resolution.
The indicator of legitimate value, shall include:
a) The value of the goods or services infringed, calculated by its market value, or its manufacturer suggested retail price;
b) The profits the affected owner did not receive as a consequence of the infringement;
c) The profits the infringer obtained as a consequence of the infringement; or
d) The price the infringer should have paid to the affected owner for the granting of a license, taking into account the market value of the infringed right and the contractual licenses that have already been granted.
a) A writ must be filed before the Federal Civil Courts requesting remedies in view of damages and losses caused to the owner of an Industrial Property registration.
b) The defendant will have to file a reply to the initial writ providing all the proof pertaining it’s good faith in using the alleged Industrial Property registration.
c) Once this is done, a period of exhibitions will be done to convince the judge of the parties rights and allegations.
d) Furthermore, a resolution will be issued in this behalf.
e) The losing party is entitled to appeal the aforementioned resolution before the Federal Civil District Judge, and in turn, this resolution may be challenged by a Constitutional Proceeding (Mexican Amparo).
In order to be entitled for the exercise of the civil and criminal actions, the holder of the registration should apply to the products, wrappings, or packing of the products covered by an IP right the statements and indications of registrations such as TM, , or otherwise have declared or announced to the general public consumer that the products or services are protected by an IP right.
In the event of the final ruling on the substance of the dispute finding that an administrative infringement has indeed been committed, the Mexican Institute of Industrial Property shall grant the parties a term of fifteen days counted as per the day they are served, in order to manifest their agreement with respect to the fate of the goods, and if no proposal is received, it may order:
(I) The donation of the goods to departments and agencies of the Federal Public Administration, Federated States, Municipal Councils or Public Institutions, Charity or Social Security Institutions, provided that the public interest is not affected thereby;
(II) The destruction thereof, without compensation.
Registration of a mark shall not be effective against any person who markets, distributes, acquires or uses the good to which the trademark is applied after said good has been lawfully introduced to the market by the owner of the registered mark or its licensee.
This case shall include the importation of legitimate goods to which the registered mark is applied, carried out by any person for use, distribution or marketing in Mexico by it, pursuant to the terms and conditions laid down in the Regulations of the MIPL;
According to Mexican Industrial Property Law, all the elements contained on a trademark and its get-up can be registered separately, and any violation of its registrations, including trade dress, may be exercised by Administrative, Civil or Criminal Action.
III. CUSTOMS-BORDER MEASURES-TRAINING
According to the Mexican Customs Law, goods imported into Mexico should bear registered trademarks in Mexico or the invoice of the purchase of a good bearing a foreign trademark. Moreover, the imported goods may be considered legitimate if they comply with the following requirements:
a) That the introduction of the goods into commerce of the country in which it is imported, is made by the individual that is the owner or the licensee of the registered trademark in that Country.
b) That the owners of the trademark registration in Mexico and in the foreign Country should be on the date in which the importation of the goods occurred, the same individual or members of the same economic group of common interest or their licensees or sub-licensees.
There is a formal recordal process of trademarks before Mexican Customs. In view of the foregoing, we recommend our clients to be a part of this formal process, and our intervention is in preparing and filing a brief before the Customs Authority, requesting the recordal of the brand (including all its variations), which includes all relevant trademark registrations (word, design and composite marks); and interviewing with the Customs officials, which includes periodical training sessions.
Moreover, all trademark registrations may be included in the recordal, but for practical reasons (detection of counterfeit goods) we strongly recommend carrying out the recordal of word mark registrations in all corresponding classes, as well as the most relevant trademark registrations (logos). The following information and documentation shall be provided for carrying out the recordal of a brand before Customs:
1.- A list of all relevant trademark registrations, including its particulars (registration number, denomination, design, class and expiration date).
2.- The name, address, phone number, and e-mails of the owner and attorney of record (contact point).
3.- The corresponding tariff (Customs Identification Number-8 digits).
4.- A detailed description of the goods, including specifications, technical characteristics and any other information that can be useful for its identification.
5.- Name and Tax Identification Number (RFC) of the importers, authorized distributors, and licensees, within Mexican territory.
6.- Photographs and images of the original goods.
7.- Power of Attorney duly certified before a Notary Public and legalized through the Apostille. Once we receive such POA we will have to notarize it before a Mexican Notary Public.
Furthermore, please be advised that the recordal of a brand before Mexican Customs, has resulted in a very useful anti-counterfeiting measure and avoid counterfeit-pirated goods to enter Mexican territory, since the attorney of record (contact point) of the owner of the brand is immediately duly informed via e-mail of any goods that might result suspicious or allegedly counterfeit. The interested party is granted a 72-hour term to file a formal complaint. If no complaint is filed with such timeframe, Customs will free the goods.
The actions available against the importer for counterfeit goods are the same actions described in the criminal procedure herein.
The Attorney General leads a group of specialized intellectual property anti-counterfeiting prosecutors, whose faculties are delegated to the Head of the Special Unit in Charge of the Investigation of Copyright and Industrial Property Crimes, whom in turn delegates its functions to a Director in Charge of the Investigation of Copyright Crimes and a Director in Charge of the Investigation of Industrial Property Crimes.
This organic structure is intended to prevent Intellectual Property Crimes in Mexico, which represent very high revenues, to the extent that they could probably be compared to the incomes generated by the narcotics industry, terribly affecting Mexico’s tax incomes and the generation of new employment opportunities.
The actions taken by authorities, law firms, in-house counsel, jointly, and the knowledge of a vast variety of Mexico’s ordinary public consumers to combat the counterfeiting mob in Mexico, will play a very important role in this era in anti-counterfeiting for Mexico.