By Saúl Santoyo
Uhthoff, Gómez Vega & Uhthoff, S.C.
It has been well publicized in the Mexican media over the last few months that the General Customs Administration (AGA)and the Mexican Institute of Industrial Property (IMPI) are planning to launch a customs trademark registry, as a short-term solution to increase protection for trademark owners against the import of infringing and counterfeit products.
Although details have not been disclosed, available information indicates that the intended registry, would be an important part of a larger collaboration effort between these two Mexican Authorities to combat counterfeiting.
Apparently, the customs trademark registry would allow IMPI to share with AGA general information and particular information of trademarks registrations in records (i.e. products covered, corresponding class, trademark owners, legal representatives, etc.). AGA would try to process and synchronize such information with the harmonized schedule tariff codes and other relevant information contained in the import manifests, with the intention of developing intelligence that may enable such Authority to detect counterfeit items that are trying to be imported into Mexico.
In addition, it seems that the collaboration effort would be supported by a team conformed by specialists that would travel to the different customs offices so as to impart specialized training programs to customs personnel, intended to identify and detect counterfeit products.
When the presence of counterfeit products may be presumed or detected AGA would use the relevant information so as to contact and alert the legal representatives or trademark owners, so that they may be in a position to file the corresponding legal action intended to, at least, obtain the seizure of the counterfeit products before they clear customs.
Current state of affairs
At the present time, AGA does not have a registry of trademarks. Even more, AGA can not order the seizure of counterfeit or infringing products by itself, and may only take action if it receives an order from a competent Authority, i.e. the IMPI, the General Prosecutor’s Office (PGR) or a Judge.
According to article 148 of the Mexican Customs Law (MCL), when dealing with merchandise of foreign origin subject of a decision ordering the suspension of free circulation issued by an administrative or judicial authority competent in intellectual property affairs, customs authorities will proceed to retain such merchandise and hold it in custody of the competent authority at the warehouse that said authority may assign for such effects.
Moreover, article 149 of the MCL states that the above mentioned would only be applicable when the decision in which the competent administrative or judicial authority orders the suspension of free circulation of the foreign products, contains the following information:
1.- Name of the importer.
2.- Detailed description of the merchandise.
3.- The customs office through which the merchandise is expected to enter into Mexico.
4.- The period during which the merchandise is expected to enter into Mexico, which would not exceed fifteen days.
5.- The place in which the products shall be stored, same that should be located within the territorial circumscription of the corresponding customs office.
6.- The appointment or express acceptation of the charge of the depositary.
While obtaining the seizure of counterfeit products, the Customs Office should make an official minute in which it must detail the name of the ordering authority, the reason that motivated the seizure, an inventory of the seized merchandises, etc.
As you may see, the system used in Mexico has numerous requisites, that are usually difficult to comply.
It is well worth mentioning that according to article 58 of the AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS), customs authorities could act ex officio, if the member country requires competent authorities to act upon their own initiative and to suspend the release of goods in respect of which they have acquired prima facie evidence that an intellectual property right is being infringed.
However, as mentioned before, our country has not legally authorized Customs Authorities to act in such manner, hence such authorities currently lack the authority to deal with this issue by itself and may take action only if there is an order issued by a competent authority.
The paths to enforce the trademark rights
Mexican legislation stipulates basically two legal procedures for the enforcement of trademark rights against counterfeiters, which namely are:
I.- Administrative infringement actions before the IMPI; or
II.- Criminal actions before the PGR.
I.- Administrative actions
The trademark owners or their recorded licensee could try to stop the importation of an alleged infringing product, by requesting the IMPI to issue a provisional or preliminary administrative order (similar to a preliminary injunction) intended to seize infringing products at customs.
The provisional measures are set forth in article 199 Bis of the Mexican Industrial Property Law (IPL), thus the seizure order would be comprised in this legal provision.
On the other hand, the administrative trademark infringements are established in article 213 of the IPL. For instance, it is an administrative infringement to use a mark that may be confusingly similar to a registered trademark, in relation with the same or similar products or services as those covered by the registered trademark, as provided in section IV of article 213 of the IPL.
Furthermore, according to article 199 Bis-1 of the IPL, in order to determine the implementation of provisional orders, IMPI will require the petitioner to:
i. Demonstrate the corresponding ownership of rights and any of the following conditions:
a.- The existence of a violation of its trademark rights;
b.- That the violation of rights is imminent;
c.- The existence of the possibility of irreparable damage being suffered;
d.- The existence of a well-founded concern that evidence may be destroyed, concealed, lost or
ii. Post a bond intended to guarantee the possible damages that may be caused by the seizure. iii. Provide the necessary information for the identification of the infringing goods.
In addition, trademark owners seeking the execution of provisional measures, must demonstrate that they have informed the public that the goods are protected by trademark rights, by using the “registered trademark” legend, or the letters “M.R.”, or the Æ symbol, so as to comply with the legal provisions contained in articles 131 and 229 of the IPL.
Likewise, the defendant could request the release of the provisional measures by posting a counter-bond. The party requesting the provisional measures in comment, shall be liable for the payment of damages
caused to the person against whom they have been carried out, when the final decision declares that there was no violation nor threat of violation to the complainant’s rights, or when the provisional measures were requested and the complaint or the trademark infringement action was not filed before the
competent authority or the IMPI, regarding the merits of the case, within a period of 20 days counted as from the execution of the measure, according to article 199 bis 3 of the IPL.
II.- Criminal actions
Trademark owners or their recorded licensee could try to stop the importation of counterfeit products, by filing a criminal action before the PGR, requesting such authority to order the seizure of the counterfeit products at customs.
Article 223 of the IPL establishes the conducts that may constitute crimes. Trademark infringement becomes a crime in case of second offense, as stipulated in section I of same article, and counterfeiting marks, with criminal intent and the purpose of commercial speculation is also catalogued as a crime pursuant to section II of the same legal provision.
However, section III of article 223 IPL has a broader scope and yet is more specific, since it establishes that it is a crime to produce, store, transport, introduce to the country, distribute or sell, with criminal intent and the purpose of commercial speculation, objects that bear counterfeits of trademarks protected by the IPL.
When the conducts denounced in the criminal action may fall within the scope of section III of article 223 of the IPL, there is no need of requesting a technical opinion from the IMPI, since such obligation only relates to actions mentioned in sections I and II of article 223 of the same legal body.
Criminal actions are more severe than infringement actions, and there is no need of posting a bond in relation with them.
Nonetheless, in these cases too, it is mandatory to demonstrate the corresponding ownership of the trademark rights; provide the necessary information for the identification of the counterfeit products and show that the trademark owner has informed the public that the goods are protected by the trademark rights, by using the “registered trademark” legend, or the letters “M.R.”, or the Æ symbol.
Section VII of article 194 of the Federal Code of Criminal Proceedings (FCCP), qualifies conducts specified in sections II and III of article 223 of the IPL, as serious felonies, so the alleged criminal would not have the right to request his release on bail, before or during the criminal proceeding.
The crimes referred to in article 223 of the IPL would only be prosecuted if the trademark owner or its recorded licensee, files a criminal action, thus, the lack of a complaint previously filed by them will translate into the impossibility of seizing any counterfeit products.
Albeit the limitations that both the administrative infringement and criminal actions may have, it is important to point out that progress has been made in the collaboration between some trademark right holders and Mexican enforcement agencies like AGA, since in an effort to contribute to combat the counterfeiters, AGA has been passing information that has allowed a number of trademark owners to raid containers full of counterfeit products before they are imported into Mexico, that is before they clear customs.
To illustrate these positive results, there were at least nine containers, carrying thousands of counterfeit products, that with the collaboration of both AGA and PGR were raided in the port of Manzanillo, Colima, Mexico, during July and August of this year.
The launch of the customs trademark registry with no doubt will help trademark owners to enforce their rights, if it is indeed implemented. Hopefully, this plan will not follow many others that fell into the endless list of good intentions and wishful thinking, that never materialized.
It would be very important to carefully observe how the relevant authorities implement this plan, since it would be imperative to avoid that this measure could transform into an obstacle to hamper legal trade. It is important to remember that AGA has the objective of facilitating trade and not to inhibit it.
It is also well worth mentioning that AGA uses a random inspection system, through which it inspects only about 7% of the merchandise that enters the country, so they could only provide awareness to the operations that are indeed inspected. Added to this fact, we should have in mind that AGA complies with its functions, basing its operations in 49 customs located through the country.
For these reasons, it is urgent and mandatory to amend the domestic law in order to establish a suitable legal frame that may allow trademark owners to be better suited to enforce their rights and combat counterfeiters.
In particular, the Mexican government should amend the contents of articles 148 and 149 of the Customs Law, so that the Mexican Customs may have the legal faculties to seize the imports of counterfeit products ex officio.
It would also be very important to amend the contents of article 223 of the IPL and if necessary other related legal provisions, so that the crimes referred therein may pursued by the judicial authorities ex officio. There is at least one bill intended to address the later, but its progress has been hindered by multiple debates within the Congress. The fact remains that the viability of this bill is in doubt and seems to have reached an impasse, at least for now.
If you need more information feel free to contact Saúl Santoyo at: firstname.lastname@example.org