The 'open litis principle' in Mexican IP cases
The use of the ‘open litis principle’ in Mexico favours the party that challenges an administrative IP decision. IP rights holders should approach this type of appeal with caution, explains Carlos Hernández.
The Mexican Institute of Industrial Property (MIIP) is the administrative authority that prosecutes and grants patents, utility models, industrial designs, trademarks, commercial names and slogans, as well as every kind of industrial property right covered by the Industrial Property Law. It also resolves, through an administrative proceeding conducted as a full trial, litigation matters related to IP rights, as well as infringement actions against copyright infringers.
In order to defend the interests of IP rights holders and parties to IP litigation from a groundless or illegal decision issued by MIIP, the applicable law foresees that any decision issued by an administrative authority, such as MIIP, can be subject to a further review, by filing a legal remedy or by filing for a corresponding judicial trial.
Though there are differences between the two types of review—namely the time in which the appeal must be filed by the affected party and the period in which the corresponding authority is able to study the appeal—most IP rights holders and/or affected parties in an IP litigation proceeding decide to appeal against a MIIP decision through a judicial trial, instead of appealing using the legal remedy.
Most IP rights holders and parties to IP litigation proceedings consider that by filing a legal remedy with MIIP, they will spend valuable time and money to obtain an unfavourable decision, since MIIP mostly confirms its own decisions, due to the fact that the legal remedy is nothing more than an in-house defence mechanism that allows MIIP to reconsider its own decision.
However, one of the particularities that is often overlooked by the affected parties, or their legal counsels, when they choose the judicial trial to appeal against a MIIP decision is that by filing the legal remedy before MIIP, the affected party has the opportunity—once the decision is issued in such remedy—to appeal both MIIP’s legal remedy decision and MIIP’s original decision under the basis of the so-called ‘open litis principle’ before the Federal Court for Tax and Administrative Affairs (FCTAA).
Therefore, under the open litis principle, the appellant is allowed to formulate novel arguments before the FCTAA, submit proper evidence to sustain its claim and the arguments of the appeal, even if they were not originally offered in the administrative proceeding or the legal remedy.
Under this scenario, when the appellant files an appeal against a MIIP legal remedy decision, and appeals at the same time against MIIP’s original decision, the FCTAA’s magistrates are obliged to analyse and study the arguments sustained by the appellant, independently of whether they are against the legal remedy decision, and also to admit and evaluate the evidence that the appellant filed with the appeal.
“Under the open litis principle, the appellant is allowed to formulate novel arguments before the FCTAA, submit proper evidence to sustain its claim and the arguments of the appeal, even if they were not originally offered in the administrative proceeding or the legal remedy.”
When MIIP decides to deny an applicant its right to obtain a trademark registration under erroneous or inapplicable grounds, and the applicant decides to appeal the decision under the legal remedy and then to appeal against the decision issued in the appeal, the applicant has the opportunity under the open litis principle to prepare a better defence before the FCTAA with new arguments and evidence against MIIP’s original decision and against MIIP’s legal remedy decision in order to obtain its trademark registration.
Even though this scenario seems to provide advantages for the affected applicants, it is questionable whether the open litis principle benefits all the parties involved in an IP litigation procedure decided by MIIP.
In IP litigation procedures before MIIP, not just the applicant or the holder of the IP right is involved, but also the third parties that launch counterclaims or seek the cancellation of an IP right or that have infringed one of the IP rights. As a consequence, a MIIP decision issued in an IP litigation proceeding will benefit one of the parties involved to the detriment of other the parties.
The possibilities granted by the open litis principle to the losing party of a MIIP decision evidently disadvantage the original victor in the case, since they permit the losing party to file a better defence, with new arguments and evidence.
In litigation proceedings, the implementation of the open litis principle gives the trademark holder the opportunity to:
