After the United States and Mexico reached an agreement to update the commercial relationship contained in the North American Free Trade Agreement (NAFTA), the US Embassy in Mexico disseminated the key points of digital commerce and intellectual property they will benefit

It is an agreement whose intention is to lead to more free markets, fairer trade and robust economic growth in North America, according to the press release from the diplomatic representation in Mexico.

While the full terms of the agreement have not been fully revealed, we can anticipate that the new chapter of digital commerce contains the strongest disciplines on this subject of any international agreement, providing a solid foundation for the expansion of trade and investment in innovative products and services where the United States has a competitive advantage.

In the new stage of digital commerce between the United States and Mexico, customs tariffs are prohibited and other discriminatory measures are applied to digital products distributed electronically (electronic books, videos, music, software, games, etc.).

Intellectual Property

In terms of intellectual property, both governments included stronger measures against counterfeiting and piracy. In this sense, for the first time was included in what is still a bilateral agreement, the need for more aggressive legislation against piracy, including the need for the authorities responsible for the clearance of goods, have the ability to stop the products suspected of being counterfeit in all areas of entry and exit.

This is quite significant given that one of the conditions imposed by the United States on the negotiation issues was that Mexico imposed stricter and more effective policies in the fight against piracy, since one of the most critical issues was the transit of merchandise and the lack of action on the part of the Mexican customs authorities to suspend or immobilize free transit when it is presumed that said merchandise is counterfeit.

Current Customs Policies in Mexico

During recent administrations, governments adopted a position aimed at not taking any action against counterfeit or pirated products in transit, limiting themselves exclusively to diplomatic means informing the country of destination of the presumably apocryphal goods, following the criteria of the Attorney General’s Office.

However, this criterion contrasted with the diverse one exposed by the Central Administration of Customs Regulation, stating that there is no provision in national legislation or international treaties that obliges the country to ignore measures to the transit of goods on which there is a suspicion of violating rights of industrial property.

In spite of the fact that the Attorney General’s Office decided in an official letter that the criminalization foreseen in the Federal Criminal Code in connection to traffic in transit of illegal merchandise is admissible, in practice prosecutors do not conduct the investigation and prosecution of the crime, on the one hand, because the customs authorities do not currently have the power to take ex officio measures to confiscate and destroy those goods at the border or to adopt such actions for the goods in transit; and, on the other hand, the same Attorney General decided not to act against the goods in transit unless there is a definition of the economic impact on the country, which is virtually impossible to establish given the nature of the movements in transit.

Finally, on January 2018, the Attorney General’s Office issued an official communication allowing prosecutors to investigate goods in transit only when a criminal complaint is made by the holder of the industrial property right, giving them also the faculty to cease merchandise if same is presumably counterfeit.

Despite the above, based upon the guidelines set out by the US Embassy in Mexico with respect to the key points in the bilateral negotiations between Mexico and the United States for the renewal of the North American Free Trade Agreement, it is expected that Mexico adopts a stricter, more reliable and above all effective customs policy for the detention of counterfeit merchandise in Customs, including those that are in transit, through legislation that expressly provides for the faculty of the customs authorities to stop the counterfeit merchandise , also providing for legal procedures that respect the fundamental human rights of the parties involved.

Legislative CHALLENGES for Mexico

However, the legislative work to be developed by Mexico to strictly comply with the agreements reached with the Government of Donald Trump, will encompass several branches of intellectual law of which, also highlight the following:

• Demand a full nation treaty on copyright and related rights so that American creators are not deprived of rights in foreign markets that national creators receive.

• Provide strong patent protection for innovators through the establishment of patentability standards and best practices of the patent office to ensure that innovators in the United States, including small and medium-sized companies, can protect their inventions with patents.

• Include strong protection for pharmaceutical and agricultural innovators.

• Extend the minimum term of copyright to 75 years for works such as the interpretation of songs and ensure that works such as digital music, films and books can be protected by current technologies, such as technological protection measures and rights management information.

• Establish a system for notification and removal of content from secure ports of copyright for Internet service providers (ISPs) that provides IP protection and predictability for legitimate technology companies that do not directly benefit from the infringement, in accordance with United States legislation.

• Provide important procedural safeguards for the recognition of new geographical indications (GIs), including robust and comprehensive rules for protection against the issuance of geographical indications that would prevent US producers from using common names.

• Improve provisions for the protection of trademarks, including well-known marks, to help companies that have invested effort and resources to establish the goodwill of their brands.

• Include 10 years of data protection for biological medicines and greater scope of products eligible for protection.

Data Protection for Biological Medicines

From the foregoing, we can highlight that another of the most critical issues of the negotiations is the one referring to a preliminary agreement in which a protection to clinical data of biotechnological medics was determined for a period of ten years; these being the studies carried out by the large pharmaceutical companies to check the safety and efficacy of their products.

Until now, generic companies have access to this information without any restriction and hence the medicines can be replicated at a price less for the public.

Generic products arise after the expiration of the patent that lasts twenty years and with the protection of clinical data the generic manufacturers assure that the arrival of the biosimilar medicines will be delayed because there will be less time available to replicate the drug.

The Mexican Association of Generics, said that generic manufacturers agree with the protection of clinical data for biotechnology, but consider that the maximum period they would accept for this restriction would be eight years, as agreed in the Trans-Pacific Partnership Agreement.

In conclusion, intellectual property and its enforcement plays a transcendental role in the new text of the North American Free Trade Agreement, which also involves a profound adaptation of the legal provisions of Mexico for the due compliance of preliminary agreements, without at the moment a balance can be made of the advantages or disadvantages of the negotiations; however, at this point it is not known if, in the end, Canada and the U.S. will agree that the aforementioned Agreement will evolve into a trilateral treaty, which is the only one that really matters for the region to remain the most competitive in the world.

David Zamores

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