Any company manufacturing in the US is right to enquire into the current state of IP protections in Mexico. Manufacturing in a foreign country carries with it certain risks and vulnerabilities, making it absolutely critical to understand what protections are in place and how they work.
Intellectual property laws in Mexico are handled differently than in the US. But the Latin American country has long pursued protection for industry and industrial property in an aggressive bid to grow manufacturing. And two recent developments have further strengthened Mexico IP laws: the USMCA and the new Mexican Industrial Property Law of 2020.
The History of Intellectual Property Protections in Mexico
Mexico’s long track record of ensuring protection of intellectual property (IP) goes all the way back to the 1832 “Law on property rights for inventors,” which was later superseded in 1889 by the “Law of manufacturing trademarks” in 1889, the ““Law of Patents and Privilege” in 1890, and the “Law of Industrial Property” in 1943.
At first, the 1943 law was criticized for giving “exaggerated protection.” It has gradually been modified to bring it up to international norms. Eventually, these modifications came to be known as the 1976 “Law of Invention and Trademarks” until being overhauled in the form of the 1991 “New Law of Industrial property.”
This law was later modified through international treaties like NAFTA and the later USMCA to protect designs, processes, and branding for manufacturers in Mexico in the present time. These protections encompass everything from patents to trade secrets to trademarks. However, last year, the Mexican government passed a new law to expand on these IP protections especially in the area of industrial protections.
Any substance, component, or composition is patentable, so long as its use is new.
Several items are not patentable, including anything harmful of the public, people, plants, or animals; plants and animals, biological procedures for obtaining plants or animals; medical procedures; any part of the human body, including its genetic sequence.
Double patenting is forbidden.
Patents registered with the Mexican patent office do not forbid third-party testing of drugs for human health.
Utility models are now enforceable up to 15 years.
At least every six months, the Mexican Institute of Industrial Property (IMPI) must publish patents related to inventions used in allopathic drugs.
Relating to trade secrets:
Exceptions to misappropriation include independent discovery or creation, testing or disassembling a product either legally owned or available to the public, and legally acquiring information from a person without a confidentiality agreement.
Violations of trade secrets are now listed as causes of infringement.
Parties suffering from violation of trade secrets are entitled to damages.
Relating to trademarks:
Bad faith in applying for a trademark now includes doing so for the purpose of gaining an undue advantage at the detriment of the true holder of a trademark.
Consent may be obtained to register confusingly similar or even identical trademarks for products that are similar.
Validity for trademarks is now ten years from granting.
A declaration of notoriety or fame does not require disclosure of confidential information.
Linked trademarks may be unlinked when the holder determines there is no longer confusion between them.
Relating to Appellations of Origin:
When a declaration is issued protecting an appellation of origin, it will enjoy a specific Official Mexican Standard.
Legal entities may certify compliance of geographical indication rules per specific requisites.
Relating to enforcement:
IP protections in Mexico may be enforced by any public or civil organization; IMPI may request assistance from any armed institution, whether federal, state, local.
Goods in transit suspected of violating intellectual property or industrial property laws in Mexico may be stopped from proceeding in transit to customs.
The IMPI may destroy any goods that are preserved as a cautionary measure in the case an administrative infringement or violation is declared.
Infringements may be penalized to about $1 million USD per unit up to 250,000 units.
Counterfeiting is now defined as using a trademark in an identical manner or in such a way as to represent a good as authentic that is false or unauthorized.
IP Protections in Mexico Under the USMCA
The USMCA also further strengthened IP protections in Mexico. Updating these protections were a key component of the trade deal. Essentially, the new provisions raise Mexico’s level of IP protection to that of other countries like the US. Among the notable aspects of this historic agreement between the US, Canada, and Mexico, are the following:
Damages for trademark infringement must be predetermined; Mexico currently imposes a fine of at least 40% of the revenue from infringing products payable to the damaged party.
Mexico has ten years to establish a formal body of legislation for protecting biologics up to a certain time period; the country is expected to establish a protected period of about five years.
The USMCA will require Mexico’s IMPI to allow changes and corrections to patent applications after examination.
The definition of agricultural products must include protection for agricultural products that contain a chemical not yet approved for use in agricultural products, and protection must extend to ten years.
Mexico will soon implement a notice-and-takedown system for ISPs servicing copyright safe harbors.
Mexico has a short period to sign on to the UPOV 1991, the Singapore Treaty, and the Hague Agreement to satisfy USMCA requirements.
Mexico is also working on providing civil remedies for trade secret thefts and protecting trade secrets during the litigation stage.
As Mexico grows into one of the most advanced manufacturing hubs in the world, protecting the trade secrets and industrial processes of the manufacturers doing business there is crucial. Mexico has a long history of enforcing strict protections and continues to pursue improvement.
IP protections in Mexico are extremely thorough and strong. But there is room for the many improvements being made in the country’s legal and enforcement framework. US manufacturers nearshoring there will continue to find Mexico a secure location for strengthening their competitive manufacturing advantage.