Litigation / Foreign Patent Litigation / Mexico

Patent Litigation in Mexico

In the past, enforcement of intellectual property rights in Mexico has sometimes been thought of as rather lax. However, recent changes in the law and in the general attitude of the country to intellectual property, particularly since the Law for the Development of Industrial Property was enacted in 1991[1], have sought to improve the status of intellectual property generally in Mexico and also the ability of a patentee to enforce its patents in Mexico. Mexico is rather unusual in that infringement actions must be brought before the Mexican Institute of Industrial Property (IMPI)[2] rather than the courts, the courts becoming involved only after the Patent Office has determined whether an infringement exists and, if its validity has been brought into issue, that the patent is valid. If such requirements are met, then the patentee may bring an action before the courts to obtain criminal penalties or a civil remedy against the infringer. Additionally IMPI has the right in an administrative action to impose certain sanctions on someone it has found to be an infringer depending on the seriousness of the infringement and the sanctions requested.

Scope of Protection given by patent claims

Claim interpretation is fairly literal, Article 21 of the law specifically stating "(t)he right conferred by the patent shall be determined by the claims as approved. The description and drawings, or where applicable the deposit of biological material ... shall be used to interpret them."

Contributory infringement is probably not actionable since the statute is silent on the subject. However, utilization of a patented process and use, sale, offer for sale or importation of the direct product of a process patent is an infringement of that process patent.[3]

Article 22 of the Industrial Property Law sets out a number of general limitations on the patent right, including:

1) private or academic non commercial research or teaching;

2) acts in respect of a patented product or the product of a patented process that has been lawfully placed on the market; and

3) rights of continued use by prior users or those who have "made the necessary preparations" for such use before the filing date of the patent application on which the patent is based.

Other restrictions apply in respect of transportation vehicles of other countries and in respect of live materials.

Litigation Procedure

In Mexico, patent infringement is an administrative wrong with civil consequences and if repeated is a criminal offense. A key element in patent litigation is a determination of infringement and, if validity is challenged, of validity by the Patent Institute.[4] In administrative actions, suits are started before the IMPI for an administrative determination of infringement. Once the declaration of infringment exists, the patentee can go to the civil courts to claim damages and other rights. Criminal actions are started by filing a complaint with the Federal Prosecutor. In this case, if no determination of infringement already exists, the Prosecutor then seeks a determination of infringement from IMPI. IMPI also has the right to issue provisional and final orders that infringement should cease.[5]

Any further remedy of a civil or criminal nature is a matter for the courts having jurisdiction over the infringer. Decisions of the IMPI are subject to judicial review by an amparo suit before the District Courts whose decision may be appealed in a revision appeal to the Circuit Courts, whose decision is final.

The defendant in a patent infringement suit can counterclaim that the patent is invalid. If this is done, the validity of the patent will be decided before deciding on the infringement action. The IMPI can issue a decision of total or partial nullity.[6] In the latter case, the scope of patent may be limited by amendment of the claims, specification or drawings. The previous requirement that a nullity action could only be brought within the first 5 years of the grant of a patent has been abolished except for situations where the action is based on an allegation of abandonment during prosecution or on the ground that the patent grant was caused "by serous error or inadvertence" or that the patent was granted to someone who did not have a right to it.

Voluntary limitation of the claim by the patentee is also possible[7]. Changes authorized are published in the Gazette.

Proceedings before the IMPI are primarily in written form. Where a party has submitted sufficient proof of an alleged fact on the basis of what is reasonably available to it, and further evidence is in the hands of the other party, the institute may order that the other party supplies the evidence in question.[8]

In Mexico, inspection orders for obtaining evidence of infringement are possible. If "irrefutable proof" of infringement is found during an inspection the infringing articles and other materials relating to the infringement may be confiscated at once.[9] In such a case, the plaintiff may have to post a bond to cover possible damages to the defendant if he is finally found not to have been an infringer.

The burden of proof is on the plaintiff. However, reversal of burden occurs in respect of a patented process for producing a novel product in that there is a presumption that the patented process was used to prepare the product.[10]

Damage awards in Mexico should be no less than 40 percent of the public selling price of the infringing products.[11] Damages have to be claimed in an independant civil action once the administative action before the IMPI has reached its decision that infringennt haas taken place and no further action can be raised against that determination.

Mexican patent applications are published 18 months from their filing date or any claimed priority.[12] Under Article 24 of the Industrial Property Law, once a patent has been granted, the patentee may demand from the courts an award of damages for exploitation of the patented invention back to the date of that publication.

The main purpose of an administrative patent infringement action is to obtain an order to stop the infringer from using the patented invention and to impose sanctions the infringer. Such sanctions can be as severe as ordering the closing of the plant in which the infringement has been carried out. Repeated infringement is subject to imprisonment for from two to six years.[13] There is no provision for increasing the award in cases of willful infringement. Although in theory it may be possible for the prevailing party to recover its attorney fees, this is very rare since they have to be sued for in an independent new civil procedure.

There is no limitation period for damage claims. However an estoppel may arise if the plaintiff delays too long from the time on which it first knew of the infringement.

An infringement action in Mexico typically takes about three years. A further year and a half may be needed if an amparo is filed. Costs are, however still relatively modest and are unlikely to exceed the $50,000 to $100.000 range.

Since 1991 it has also been a crime to misappropriate trade secrets.[14]