Mexico focus: A big step forward
“The Trans-Pacific Partnership (TPP) agreement will transform the state of the Mexican IP world,” argues Tomas Arankowsky, partner at law firm Avah Legal in Mexico City. Provisions on copyright, plant breeders’ rights and trademarks are part of the rich brew of changes, he says.
After many years of deliberation and discussion between the 12 countries, an agreement was reached in Atlanta, Georgia at the beginning of October. As with any negotiations there were sticking points and red lines; compromises had to be reached and ideas thrown out. The length of copyright protection (‘life-plus 70 years) and the period of data exclusivity for biologics (five years), for instance, were hotly debated by the parties involved.
With the TPP covering fields as diverse as labour laws, intellectual property and import taxes, it’s impressive that a consensus was reached.
“Twenty-plus years have gone by since the last amendment to the Mexican IP laws. From what we have seen it is something we would welcome in the IP industry in general. The TPP will bring a major refresh in terms of our approach to IP, and that may drive businesses from the EU, US, Japan or other supra-national entities to file trademark or patent applications in Mexico,” says Arankowsky.
He says one of the key aspects of the deal is the harmonisation of 12 economies’ laws. He compares it to Mexico’s participation in the 1994 TRIPS Agreement, in which many aspects of Mexico’s patent, trademark and copyright law were harmonised with those of many of the world’s leading economies. As a result, Arankowsky says, a number of businesses were attracted to obtaining protection for their ideas within Mexico.
What is perhaps more significant about the TPP agreement is that it was completed entirely in secret. The 12 countries—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam—engaged in the talks represent approximately 40% of the world’s annual gross domestic product. Almost 800 million people will be affected by the agreement.
The full deal was published by activist group WikiLeaks only a couple days after the agreement was reached in Atlanta on October 5. The US government released the full agreement on November 5.
“The fact that the negotiation was conducted in secret is something to be concerned about,” says Arankowsky. Adolfo Athie, partner at law firm Basham in Mexico City, shares a similar disquiet.
Their concerns were echoed by WIPR readers in a poll published in May. More than 90% of the respondents said there should be more transparency in the talks.
Despite this, Arankowksy concedes, openness may have slowed down the discussions. But what they may have gained in speed, they have arguably lost in putting together changes that may be really beneficial for patent owners.
He says: “They have left out the input of innovators and IP practitioners. Two heads are better than one, or as the Americans say, the more the merrier. The majority of the countries entering the talks are democratic republics and the cornerstone of democracies is transparency. What is there under discussion that you need to keep secret?”
Adjustments required
Politicians across all 12 nations are now going to have to start explaining what is in the agreement and convincing their population it is the right step forward. One of the busiest groups of politicians will be in Mexico as they begin to ratify the agreement. To be compliant, its IP legal framework will have to be adjusted.
One of the key changes in the agreement is the extension of rights for plant varieties. Under the TPP provisions, countries have to provide rights for plant varieties under the 1991 International Union for the Protection of New Varieties (UPOV) agreement.
Currently Mexico is only a member of the 1970 agreement, so an update will be needed.
“Entering the 1991 agreement should be beneficial since it implies a broader scope of protection, which might attract further protection in Mexico. Plant varieties in Mexico are constantly increasing and it is likely they will continue to do so in the future,” says Arankowsky.
If enacted, rights will be afforded to plant breeders from the moment they file a provisional application, meaning protection will be given during the period of experimentation with plant breeding. The term of protection for plant varieties will extend to 20 years and for trees and vines, to 25 years. Currently in Mexico, the length of protection for plant varieties is 15 years, whereas for trees and vines it is 18 years.
It is in the digital realm that the TPP will have an important impact on copyright, says Bernardo Herrerias, partner at law firm Baker & McKenzie in its Mexico City office. Under the TPP, internet service providers (ISPs) will be protected from assertions of online piracy by a safe harbour status. That status is not contingent on the ISP actively monitoring for infringing activity.
Speaking about the legal incentives for ISPs to cooperate with copyright owners, Herrerias says the TPP offers real “protection for copyright owners and that doesn’t mean the ISP has to be the police. There should be a mechanism where if you’re a copyright owner and you need the ISP to take down the content, the ISP provides assistance, because it is one of the players. The ISPs have to be part of the solution and not part of the problem”.
"Politicians across all 12 nations are now going to have to start explaining what is in the agreement and convincing their population it is the right step forward."
The TPP also requires that all countries provide a trademark opposition system. At the moment the Mexican Institute of Industrial Property (IMPI) does not provide such a service. However, the introduction of such a system has been on the agenda of the Mexican Congress and many lawyers are hopeful that one can be introduced soon. Athie says such a change would help IP owners save money on litigation.
Arankowsky says it would strengthen the trademarks in the registry by enabling parties to challenge weak marks. One of the strengths of IMPI’s trademark processing system is that it approves trademark applications rapidly. Herrerias sees the introduction of the opposition framework as a positive move, but he “doesn’t want it to slow down the system”. He says the opposition regime will need to balance these concerns.
One of the biggest sticking points in the negotiations between the 12 countries was how long the period of data exclusivity for biologics should be. In Mexico, the current period is five years, but the US was gunning for 12—as stipulated under US law. In the final agreement, Australia and New Zealand fought for five years and won, although parties have the option of eight years. The argument focused on balancing the public need for affordable drugs with an incentive for biopharmaceutical companies to conduct the time-consuming and expensive research for such treatments.
Copyright changes
The US was successful on the issue of copyright protection. The agreement requires countries
to provide protection for ‘life plus 70 years’, which for some, such as Australia and Japan, means an extension of 20 years of protection. Not so for Mexico, however, as its laws currently allow protection for ‘life plus 100 years’.
Arankowsky decries this protection term as “too long”, and Herrerias agrees it is “excessive”. With the TPP’s ‘life plus 70 years’ rule, it is perhaps unclear how the Mexican government will deal with the change. The government can choose to keep the status quo of ‘life plus 100 years’ or knock off 30 years of protection in line with the TPP, which may risk the wrath of authors’ and other creative societies.
For Mexican IP lawyers, the TPP agreement offers several positive changes for patent, trademark and copyright owners. The sense is that all the changes will radically transform IP in Mexico and create a modern system that will attract businesses big and small, domestic and international, to apply for protection.
While the new rules are being written, it is how they are implemented and then function that is a big concern for IP lawyers.
One existing big issue is the speed of proceedings.
“We need to speed up damages proceedings to recover them,” Athie says.
“The regular time to get damages in Mexico is eight to ten years. In this regard, we need to avoid the requirement of declaration of infringement issued by the administrative authority and allow IP owners to ask for damages directly before civil courts.”
Furthermore, the processing of patent applications can be quite slow. Athie says this should be compensated with an extension of the protection term for patents.
In addition to speed, Herrerias would like to see trademark rights extended to stopping counterfeit goods in transit.
“The problem with stopping goods in transit is that the criteria require that they are intended for Mexico or have a commercial use here. If there is no commercial use there is no crime.
“I want to see the criteria change to stop goods in transit. IP owners need to stop merchandise once they are detected and destroy them before they reach the final destination.
“IP owners need to be able to stop the container in this country, sue the groups involved and look for a quick way to destroy the products,” he adds.
There is agreement among Mexican lawyers that the TPP changes will result in a radical transformation of IP law. However, the deal provides time for legislators to introduce the reforms.
For instance, Mexico has been given four years to join the 1991 UPOV agreement. For adopting the provisions outlined for ISPs, the country has three years.
The TPP agreement has attracted praise and criticism alike, but the consensus among IP lawyers is that it will benefit businesses and inventors seeking protection and enforcing existing rights.
The North American Free Trade Agreement was passed in 1994 and its legacy has been debated by many ever since. The TPP is likely to have a similar impact, so it is understandable that a lot of ink has been spilt on this issue across a number of international publications.
The current debate has been limited by the agreement not being published through official channels. Instead, those not involved in the discussions have relied on WikiLeaks and sporadic statements from those involved.
The lack of transparency is certainly a concern and it is questionable whether it serves as a model for how such talks should be conducted. For IP lawyers in Mexico, the changes are needed and the TPP agreement is a positive step forward.
