Mexico jurisdiction report: Changes to invalidation actions

On August 10, 2018, several reforms to the Mexican Industrial Property Law (Mexican IP Law) came into force, substantially modifying our trademark system and affecting other relevant aspects, such as litigation actions whereby the validity of a trademark registration granted in Mexico may be challenged.

The main reforms that altered the trademark litigation actions concern invalidation actions. Particularly, these reforms resulted in the inclusion of invalidation actions grounded on bad faith, as well as the extension of the time period during which it is possible to proceed with an invalidation action grounded on prior use (in Mexico or abroad).

Before August 10, 2018, the statutory term to proceed with an invalidation action grounded on prior use was delimited by the date when the trademark registration subject to invalidation was published in the Mexican Industrial Property Gazette. The invalidation action should be filed within the three years following the publication of the trademark registration.

Now, under the reformed Mexican IP Law, the statutory term for filing an invalidation action grounded on prior use was extended to five years with the aim of granting more legal certainty to the trademark holders and to avoid ‘trademark kidnapping’ practices (also known as ‘trademark hijacking’).

In the author’s opinion, the extension of the statutory term for proceeding with an invalidation action was a positive change, as it refines Mexico’s trademark litigation system.

"This particular amendment has unfortunately left a legal gap that must be solved by the Mexican federal courts."

However, this particular amendment has unfortunately left a legal gap that must be solved by the Mexican federal courts. Now, it is unclear whether the amendment applies to trademark registrations that before August 10, 2018 could have been subject to an invalidation action grounded on prior use.

This is because today, their validity could indeed be challenged through the mentioned litigation action, as more than three years have passed since the date when they were published in the IP gazette and as a result of the term extension in the current Mexican IP Law.

Divided opinions

There are divided opinions among Mexican IP litigation experts. The majority view agrees that if a trademark registration is within the five-year term for an invalidation action, then this action must be allowed regardless of the fact that, prior to August 10, 2018, this invalidation term would have lapsed in accordance with the law under which the trademark registration subject to requested cancellation was granted.

The opposite viewpoint argues that the five-year term provided by the current Mexican IP Law regarding invalidation actions applies only to trademark registrations that have been published in the IP gazette after August 10, 2018. This is in light of the non-retroactivity principle, since in the opposite viewpoint, the reforms to the Mexican IP Law should not be retroactively applied in detriment to the trademark registration owners, who would have to defend their IP right for a longer term from third parties who could claim prior use in Mexico or abroad.

However, the above criterion would have to be questioned, in the author’s opinion, since this particular amendment must apply to every trademark registration that falls in the invalidation action’s scope. Even though it is possible to consider that an application could contravene the non-retroactive principle, the provisions related to this action must be observed and enforced strictly, especially when the current IP Law does not foresee a transitory article that defines and/or regulates the application of the aforementioned litigation action.

Furthermore, it is important to keep in mind that if the non-retroactivity principle prevails over the provisions of the law, then there would be a clear violation to the fundamental rights of the person/company that presumably has a better right over the trademark registration that is sought to be invalidated.

In conclusion, these reforms have left some legal gaps, as in the aforementioned example, which is why we must rely on the Mexican federal courts to establish binding legal precedents and/or jurisprudence that clearly define whether the statutory term to proceed with an invalidation action (contemplated in the current Mexican IP law) shall be applicable to trademark registrations that, prior to August 10, 2018 and in accordance with the reformed law, could not have been subject to an invalidation action, due to the fact that the term stated in the reformed law had lapsed.

Joaquín Esquivel is attorney at law at Becerril, Coca & Becerril. He can be contacted at: jesquivel@bcb.com.mx