Mexico trademark cancellations: Muddying the water on non-use

In light of national and international developments, Mexico’s law governing trademark cancellations based on non-use has become increasingly complex, says Carlos Hernandez of Becerril, Coca & Becerril.

In Mexico, as in many jurisdictions, the law that regulates trademark registrations sanctions the lack of use by a trademark owner or a licensee with the cancellation of the registration.

For this purpose, the Mexican IP Law establishes that a trademark registration shall be cancelled when its owner or licensee recorded before the Mexican Institute of Industrial Property (IMPI) does not demonstrate the effective use of the trademark for the products or services for which it was registered during the last three consecutive years from the filing of the non-use cancellation action.

"The federal courts must determine whether partial cancellations of registrations in non-use cancellation actions will be applicable for all registrations."

This action starts with its filing, and the burden of the proof completely depends on the trademark owner or its licensee, who must demonstrate the use of
the trademark during the term stated by the Mexican IP Law.

Due to the above, a non-use cancellation action could be considered a non-complex litigation action in Mexico; however, in the last years the federal courts, including the Supreme Court of Justice, have established different criteria related to non-use cancellation actions, due to the different interpretation of the regulations by the Mexican IP Law and international agreements that Mexico has executed which has made filing and prosecution complex.

Examples of the above are:

1. The mandatory criterion issued by the Supreme Court of Justice related to the legal standing for filing non-use cancellation actions, in which the court established that it is an essential requirement for filing said action that the plaintiff demonstrates that it has filed a trademark application and that IMPI has cited as an anticipation in said application the registration sought to be challenged.
2. The interpretation made by some federal courts to the Mexican IP Law and articles 19 of the TRIPS Agreement and 1708 of the North American Free Trade Agreement (NAFTA) related to licensees that can prove in a non-use cancellation action the use of a trademark, in which they accepted that the use of a trademark made by a licensee not recorded before IMPI must be recognised, as it is established in those international agreements that Mexico must recognise the use of a trademark made by a person other than the trademark owner, where such use is subject to the owner‘s control.
3. The interpretation made by a federal court to the Mexican IP Law and to the Joint Recommendation Concerning Provisions on the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet—a treaty related to the use of a trademark through a website—which recognises the use of a trademark online if it can be demonstrated that the goods or services distinguished by the trademark are accessible by Mexican consumers.
4. The interpretation made by a federal court related to the evidence of use of trademarks, and in which the court determined that invoices are not sufficient to demonstrate the effective use of a trademark when they are objected to by the plaintiff and, consequently, other evidence that supports the invoices should be offered.

More complex

In light of the criteria issued by the courts, non-use cancellation actions in Mexico have obtained a higher level of complexity and, over the years, it is evident that these actions will still require the intervention of the courts to set the criteria related to these litigation actions in Mexico, as it will be necessary to set the criteria and interpretation that will arise from: (i) the amendments to the Mexican

IP Law, currently being pushed by IMPI, to have an IP law in the field of the litigation proceedings; and (ii) the new international agreements that Mexico will execute, such as the US-Mexico-Canada Agreement (USMCA).

In fact, along with some of the Mexican associations related to IP protection, IMPI is revising the regulations of the litigation actions established in the Mexican IP Law, in order to have an updated law that can handle IP problems, including a revision and discussion to the legal dispositions of non-use cancellations actions.

In this respect, IMPI is proposing to modify the law in order that it can be available to obtain the partial cancellation of a trademark registration if the trademark owner or its licensee does not demonstrate in response to a non-use cancellation action the effective use of all the products or services protected by the registration.

It is important to mention that when a non-use cancellation action is filed and the trademark owner or its licensee offers evidence of use to distinguish only one single product or service from those protected by the registration challenged, IMPI denies the registration since the Mexican IP Law does not foresee partial cancellations.

If this amendment is pushed by IMPI to the Mexican Congress and this legislative body approves it, even though this new disposition will be clear, it will be necessary that the federal courts issue a criterion regarding its applicability, as it is highly probable that some trademark owners of registrations granted before the amendments will argue and appeal that the amendments cannot apply against them, as they will be affecting their acquired rights and are retroactive and unconstitutional.

Consequently, the federal courts must determine whether partial cancellations of registrations in non-use cancellation actions will be applicable for all registrations or for those granted after the amendment.

On the other hand, even though it seems that the USMCA will not affect in any way the current filing and prosecution of non-use cancellation actions, as its provisions seem to be in accordance with the actual practice and criteria issued by the Mexican federal courts, it is important to indicate that article 20.C.10 section (b) recognises that Mexico shall not require a recordal of trademark licences as a condition for use of a trademark by a licensee to be deemed to constitute use by the trademark owner in a proceeding that relates to the acquisition, maintenance or enforcement of trademarks.

Although the above disposition is clear, the possibility exists that someone in Mexico will appeal its applicability by IMPI through the federal courts.

In light of the above and, in the author’s opinion, non-use cancellation actions are indeed one of the simplest litigation actions in Mexico; however, as mentioned before, over the years they have been obtaining a level of complexity that arises from the criteria issued by the federal courts.

Moreover, it is evident from the possible amendments to the Mexican IP Law and the
new international agreements that Mexico will execute, that the federal courts’ criteria will be necessary for the clarity and guidance in filing, defending and prosecuting non-use cancellation actions. However, it is of utmost importance that attorneys in charge of non-use cancellation actions are familiar with the federal courts’ criteria on benefit of their clients.

Carlos Hernandez is a junior partner at Becerril, Coca & Becerril. He manages IP litigation issues, revision of projects, client consultations, the coordination of appeals and litigation actions filed before the authorities and courts, as well as contentious IP strategies designed for clients. He can be contacted at: chernandez@bcb.com.mx