Trademark hijacking in Mexico

In a globalised and commercial world where tariffs at borders tend to diminish and even disappear, the international problem of geographic circumscription of trademarks seems to become more acute every day.

Even though there has been progress, with the inclusion of Mexico in the Madrid Protocol, the effects are limited to the method of requesting a trademark application and registration and do not extend to the in-depth procedure for obtaining it.

In response to the principles of sovereignty of each state, where each country is governed by its domestic rules and regulations to obtain the exclusive right of use of a distinguishing mark, there is an interesting phenomenon emerging, that of bullying foreign trademarks.

Kidnapping of foreign trademarks

Commercial procedures are different from legal proceedings. Companies are used to waiting until products and services they have designed have positive results in terms of sales before thinking about registering their brand. The problem arises from the discrepancy between the merchant’s needs and what is stipulated by law. This can result in brands falling victim to a degree of confusion and, in the worse case scenario, of identical trademarks, in which case, there will be financial losses for the brand, possibly even resulting in the loss of the original investment.

"Several characteristics from other cultures have been registered in Mexico. At the IMPI there are more than 10 trademarks for characters such as santa claus belonging to Mexican companies."

This problem is not exclusive to small and medium-sized enterprises—transnational companies are also affected by this phenomenon, but in different proportions.

When there are rumours that a famous corporation is about to launch a new product, consumer expectation can turn into a viral message which in turn reaches ‘trademark speculators’, who then look to register trademarks that take advantage of the anticipation factor.

These initiatives come generally from merchants advised by law students. But because Mexican legislation does not acknowledge commercial speculators as a category of applicant, a brand coming from a corporation with reputation will have the same validity as if it came from the speculators, so it can be a challenge to obtain the invalidity of registration of the first applicant’s trademark.

One of the most notorious recent cases in Mexico covers iFone SA de CV v Apple Inc, a dispute between a Mexican and a US company over the former’s ‘iFone’ trademark. The lawsuit consists of the supposed infringement that the defendant has incurred by the use of a trademark similar in a confusing degree to another trademark registered previously for providing telecommunications services (not the sale of telephone devices).

This case has caused such a commotion that, before its conclusion, speculators already have begun to use the multinational as a target. The first case is the registry of ‘iWatch’, a trademark that, in a calculated way, has gone ahead to Apple Inc asking for the registry to distinguish clocks and televisions.

The second case is a little more absurd and is about applications for registration of the ‘iPhone’ trademark to distinguish pastry and confectionery products, among others.

The Mexican Institute of Industrial Property (IMPI) statistics demonstrate that only four of each 10 cancellation processes are resolved in favour of the plaintiff.

Trademark designs with adverse effects

The current Industrial Property Law is strict. It has a list of impediments to registering a trademark, but registering the names of cultural festivities is not included among them, nor is registering religious personages. The problem for holders of such trademarks is protecting them, due to widespread everyday use of the trademark by others.

In May, Disney Enterprises requested to register a trademark for Dia de los Muertos with the US Patent and Trademark Office (USPTO). The name is a reference to a Mexican festival with pre-Hispanic origins that is celebrated each November 1, and involves honouring the dead. The festival is recognised as a part of the world’s cultural heritage by UNESCO. The news was not well received by many Mexican people, who considered it plagiarism and an attempt to monopolise the Mexican festival in cinematographic works.

Disney’s response was quick, and it cancelled the application for the mark three days later. The trademark ‘Disney Pixar Día de Muertos’ was also requested for registry at the IMPI, perhaps attempting to make it clear that the intention was not to monopolise the festival per se.

The story is paradoxical, because in spite of the Disney case, several characters from other cultures have been registered in Mexico. At the IMPI there are more than 10 trademarks for characters such as Santa Claus belonging to Mexican companies.

Obstacles

The regulatory framework of economic competition between merchandisers is an everyday subject and Mexico is no exception. Monopolies affect private enterprises and the consumer and make the state’s economy inefficient. IP is one of the means that some merchandisers have found not only to steal the fame of foreign trademarks, but also to block the entrance of products from competitors into the country in order to avoid a reduction in their prices and to increase the popularity of their products or services.

The use of a trademark in Mexico is not necessary as a requirement to obtain its registration. Use is necessary to avoid that the trademark expires at the request of an interested party, but this can only happen three years after the holder of the trademark requested it.

The result is that if a foreign trademark has been victim of this commercial practice it will have to initiate a cancellation process or ask for the lapsing of the previous registration. It should be mentioned that neither procedure is guaranteed a favourable outcome.

One example is of a single person who registered more than 60 identical or similar trademarks in Mexico, thus obtaining rights of famous trademarks include ‘Ruehl No. 925’ (of Abercrombie & Fitch), ‘G-Star Raw’ (that at the moment is trying to recover the registration), ‘Jack Jones’, ‘Company 8’ and ‘Paper Denim & Cloth’.

With so many foreign trademarks under the same holder we can hardly think that the design was created by the same person, but the Mexican laws do not condemn this behaviour.

Rafael Giménez is director of Giménez & Asociados Abogados, SC. He can be contacted at: rgimenez@gaa.com.mx