Good news for IP in Mexico?
The Trans-Pacific Partnership (TPP) is a multilateral agreement now being negotiated by 12 countries in the Asia-Pacific region: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
The TPP can be regarded as ‘the 21st century trade agreement’ and seeks to promote innovation, investment and economic growth, as well as the creation of more jobs, for the countries’ respective nationals. Although the TPP’s agenda is very demanding, it tries to cover crucial topics in order to achieve the goals set by the participating nations.
This agenda includes the following topics: access to the market for goods, customs administration, agriculture, legal and institutional issues, e-commerce, trade and environment, government procurement, investment, sanitary and phytosanitary measures, financial services, information technology, IP, textiles and transparency.
The TPP’s negotiations started in 2005 between four countries: Brunei, Chile, New Zealand and Singapore. The US joined in in September 2008 and countries such as Australia, Malaysia, Peru and Vietnam announced their entry into the negotiations in 2010. Canada and Mexico joined in 2012, and Japan in 2013.
According to some commentators, a noteworthy weakness of the TPP is that it has been negotiated secretly and without any transparency for stakeholders other than the contracting parties. Nevertheless, the Mexican academic fora have been very active in discussing it and explaining the significant implications if the treaty were to be implemented into the Mexican legal system.
“A question that must be answered is whether these measures can be used as an effective tool to pursue those objectives and at what cost."
A full version of the draft of the TPP’s IP chapter was made available to the public via the Wikileaks website in November 2013. This chapter addresses very interesting and controversial issues regarding patents, trademarks, copyrights and geographical indications, as well as the enforcement of such IP rights. According to the published version on the Internet, the IP chapter suggests, in general terms, granting more patents, extending the terms of protection of patents and copyrights, providing more privileges to IP holders, and increasing the penalties derived from IP infringements; topics in which the Mexican government has been very active.
Legal requirements
The TPP will certainly mean considerable amendments to local Mexican IP legislation, as it contains more restrictive requirements than those already in place in the international community. According to the published version on the Internet, the contracting countries have agreed to:
a) Extend the term of a patent: the TPP proposes to adjust the term of a patent to compensate for unreasonable delays that occur during the prosecution of a patent. According to the TPP, an “unreasonable delay” is to be construed as a delay of more than four years in the issuance of a patent, or two years after a request for examination of the application has been filed, whichever comes first. As currently the Mexican patent system does not contemplate patent term adjustments (not even for pharmaceuticals), this topic will be one of the big issues when discussed locally.
b) Extend the term of a copyright: the TPP suggests extending the copyright protection provided by the Berne Convention, which is the life of the author plus 50 years. In this respect, the TPP would extend that term to the life of the author plus 70 years for natural persons (a real human being, as opposed to a legal entity). Mexico is proposing 100 years, which is the term of protection now provided by the Mexican legislation, while a term of 120 years was proposed by the US for works owned by corporations.
c) Use the ‘three-strikes’ test: the TPP would request Internet service providers (ISPs) to implement measures such as the ‘three strikes’. This measure provides that an ISP would have the authority to disconnect repetitive infringers from the Internet pursuant to the ISP’s terms of service provisions without allowing any legal process to take place in which the infringer could be heard prior to a final decision.
d) Increase the penalties derived from copyright infringement: the TPP intends to adopt criminal sanctions for minor copyright infringements with no financial gain. The contracting parties would be required to provide criminal penalties in their respective legislations in case of unauthorised use (“piracy”, in the text of the TPP) “on a commercial scale” of a copyright or related right.
Such unauthorised use may include: “(i) significant wilful copyright or related rights infringements that have no direct or indirect motivation or financial gain”; and “(ii) wilful infringements for a commercial advantage or financial gain.”
e) Increase penalties derived from patent infringement: concerning patent infringement, the TPP provides that the judicial authorities shall have the authority to increase damages to an amount that could be up to three times the amount of the injury assessed—in contrast to the current Mexican Industrial Property Law, which provides that such damages shall in no case be less than 40 percent of the public sale price of each infringing product.
Furthermore, the TPP provides that, at the conclusion of civil judicial proceedings related to the infringement of IP rights, the prevailing party shall be awarded payment of court costs and attorneys’ fees by the losing party, and any other applicable expenses.
The TPP would be the only agreement spanning countries across the Asia-Pacific region. Even though it lacks transparency, it would be worth discussing its potential legal and economic implications for Mexico, and assess how it might change the country’s current IP laws and practices.
Creating harsher penalties for the violation of IP rights and expanding their term of protection is the way the TPP drafters have chosen to achieve the objectives mentioned. However, a question that must be answered is whether these measures can be used as an effective tool to pursue those objectives and at what cost, considering that innovation may be notably affected by the proposed provisions.
Such questions have not yet been answered. However, in the near future, discussions related to that treaty will restart.It will not be until an official version of the TPP becomes available that it will be possible to determine its real implications within the Mexican legal system.
Jorge Gomez is partner and head of the trademark, litigation and corporate and regulatory affairs practice at Dumont Bergman Bider & Co. He can be contacted at:
jgomez@dumont.com.mx
Jonathan Rangel is a lawyer at Dumont Bergman Bider & Co. He can be contacted at: jrangel@dumont.com.mx
