Before using fluid marks, it is important to discuss the potential impact and take action to prevent the loss of trademark rights or lengthy and expensive litigation.
Trademarks and service marks serve as a source of indication for goods and services and are often the subject of diverse marketing techniques.
Traditionally, marks have been used in a single representation. However, marketing techniques are increasingly incorporating so-called ‘fluid’ trademarks – marks that are used in a different way from that in which they were originally registered.
Using marks in a fluid manner has advantages from a marketing and commercial point of view – the essence of the original mark remains unchanged, yet consumers can experience the brand in a new and engaging way. However, fluid use may have negative consequences under Mexican law.
One of the many objectives of marketing is to create awareness and adapt marks to consumer preference. For example, the colour orange is used in some countries (eg, Mexico) in connection with spicy food; however, in some Asian countries orange is used to signify poisons and instead pink is adopted for spicy food.
A primary function of marketing is to find alternative ways in which to extend marks. Consequently, marks are sometimes used in a fluid way; however, IP attorneys should always be consulted in order to determine how fluid use could affect not only existing registered marks, but the company’s entire trademark portfolio.
Article 128 of the Industrial Property Law establishes that a mark must be used as registered, without changes that may modify its distinctive character. This article is subjective and provides no specific criteria by which to recognise when the distinctiveness of a mark has been altered as a result of modifications.
Mexico is a first-to-register country, which means that the exclusive right to use a mark is granted on registration and not on first use, as in other countries (eg, the United States). In light of this, before incorporating new elements into a mark to make it fluid or discontinuing use of the registered mark, it is important to consider whether registration of the new version is justified.
However, if no registration is obtained for the variant, the consequences of fluid use may prove negative and risky. Negative consequences can include:
- a non-use cancellation action;
- the inability to assert rights when filing for infringement; and
- the inability to renew the registration.
If fluid use of a mark results in the variant being confusingly similar to a previously registered third-party mark, this could be perceived as an infringement of third-party rights.
A third party may file a cancellation action based on non-use of the registered mark. In this scenario, the rights holder would have to produce evidence of actual use to prove that its mark has been in use in commerce for at least three years preceding filing of the non-use cancellation action.
If evidence of only fluid use is produced, the competent authority will determine whether the newly incorporated elements modify the distinctiveness of the mark.
In an infringement action initiated by the rights holder of a fluid mark, the infringer may counterclaim with a non-use cancellation action. If the infringement derives from the adoption of elements that were incorporated into a mark after its registration, the rights holder is unlikely to prevail in infringement proceedings.
Fluid use also has consequences when maintaining a registration. Under Mexican law, a renewal application is filed under oath that the mark is currently being used without substantial changes. There is no legal requirement to prove use or submit samples with a renewal application; however, it is advisable to discuss with counsel how the mark is being used before filing a renewal application, as a renewal application cannot be filed if fluid use has modified the distinctiveness of the mark.
Marks are subject to constant evolution and designs are often modified to meet commercial needs; therefore, relying solely on registration of a composite mark is not always a good idea. Designs are periodically refreshed or modernised to keep up with current trends. Therefore, it is inevitable that at some point a rights holder will have to register a new mark, losing the seniority of the original registration.
This may have serious consequences. Under Mexican law, a trademark or service mark registration is vulnerable to cancellation actions based on prior use in Mexico or abroad for three years from the date on which the registration was published in the Official Gazette.
In light of this, if a registrant cannot renew a registration as a consequence of fluid use and files a new application for a new version of its mark, the registration obtained could be vulnerable to a cancellation action. Although in Mexico it is possible to claim first use in such a scenario, it is possible to do so only from the date on which use of the new version of the mark commenced.
In order to avoid unnecessary risks, a viable alternative would be to obtain a word mark registration; this registration (provided that the denomination of the mark remains unchanged) will subsequently maintain seniority and will eventually become incontestable, allowing the rights holder to replace registrations of the mark over time without any major risks.
Slogan marks
Slogans may also be used as fluid marks. Under the Industrial Property Law, phrases that are intended to advertise goods or services can be registered as commercial slogans.
The main difference between a trademark and a commercial slogan is that while a mark functions as a source indicator of goods or services, a slogan advertises those goods or services.
A commercial slogan can be protected on the same terms as a trademark. Consequently, a slogan can be renewed and the rights deriving from its registration are fully enforceable.
Slogans are considered to be ‘phrases’; therefore, when filing an application for registration, no stylisation of the font or other visual elements can be protected. If the slogan includes a design, it should be registered as a device mark.
Since registration of a commercial slogan does not extend protection to the stylisation of the font or any associated designs, a natural conclusion would be to register the slogan as a trademark. In this regard, the Mexican Institute of Industrial Property (IMPI) will refuse to register as trademarks or service marks phrases which are clearly intended to advertise goods or services.
The criteria adopted by IMPI are arguably questionable, but they are nevertheless applied; therefore, rights holders should discuss with local counsel how a distinctive sign will be used in commerce.
It is also possible to claim priority under the Paris Convention for a Mexican commercial slogan application based on a foreign trademark or service mark application; this is because not all jurisdictions have a special registration procedure for slogans.
Conclusion
Fluid use does not always arise as a result of modernisation. Seasonal commercial strategies based on certain events or holidays (eg, Christmas, Halloween) often provide opportunities for the use of fluid marks.
When short-lived seasonal changes occur and the mark will be used as registered after a brief period of time, the risk of a cancellation action based on non- use decreases. However, the possibility of infringing third-party rights still exists.
Best practice would be to register variants of the mark before commercial use, since in Mexico the exclusive right to use a mark derives from registration, not first use.
Depending on the specifics of each case, in addition to obtaining registration for a new version of the mark, other protection mechanisms should be explored, such as copyright. In this regard, copyright would protect artistic elements incorporated into a variant.
One advantage of copyright protection is that the artistic elements incorporated in the work are protected regardless of the goods or services for which the work is used, whereas in the trademark and service mark arena, the rights deriving from registration are limited to the specific goods or services covered under the registration.
Marketing and intellectual property are related disciplines, and specialists in both areas must work together to strengthen distinctive signs and provide rights holders with legal certainty that the rights deriving from a registration are strong enough to be asserted.
The use of fluid marks can have advantages and thus should not be disregarded. However, before using such marks, it is important to discuss with local counsel the potential impact and take actions to prevent the loss of trademark rights or lengthy and expensive litigation, whose outcome is often unpredictable.
Gerardo Parra
Associate
Gerardo Parra was born in Guadalajara, Jalisco, Mexico. He obtained his law degree in 1998 from the Universidad Panamericana, Mexico. He also holds a postgraduate qualification from the same university and graduated with honours from the John Marshall Law School, Chicago, where he obtained an LLM in IP law. He works in the trademark department of Uhthoff, Gomez Vega & Uhthoff and is fluent in Spanish, English and Italian.
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August/September 2013
World Trademark Review