By José Luis Ramos-Zurita
Uhthoff, Gomez Vega & Uhthoff, S.C.
Remedy.- (n) cure for a medical condition; (legal) A legal remedy -also judicial relief- is the means with which a court of law, enforces a right, imposes a penalty, or makes some other court order to impose its power.
Before we enter into an academic discussion about the intricacies of Mexican Procedural Law on IP cases, we could imagine a very real, and unfortunately, quite frequent case:
Let’s picture a company that has invested a significant amount of resources into developing a concept that is represented by a trademark, one that has been steadily gaining popularity and presence on the market as a direct consequence of both the excellent quality of the products that are sold under its moniker and the marketing efforts made by the organization that owns it, and has achieved a privileged position in consumers’ preferences; this seems all bliss and happiness, but then comes along an opportunistic and parasitic company and/or individual that takes advantage of such situation and starts producing/distributing/selling similar products that are branded with either an identical or very similar trademark that has the intention of unfairly seizing the benefits that were legitimately obtained by the original creator of the mark.
In such a scenario, the company that has worked so hard to successfully position its trademark on the market has already been seriously affected by an obviously illegal conduct, but what can this hypothetical company can do to both put a stop to the infringement of its’ trademark rights and recover what was taken from such parasitic and unlawful conducts?.
Mexican legal system provides several options to effectively enforce and protect trademarks, same that should be determined by the specific characteristics of the case at hand, i.e. how the infringement was and/or is still being done and the goals that the legitimate owner pursues, same that should include the means to put an immediate stop to the infringement conducts and establish the basis for the recovery of the damages suffered.
Once such goals are realistically determined, the next issue in line is to device the best strategy to achieve them, taking into account that besides having to cope with the damages already suffered (specially regarding the loss of image and brand positioning in the market) and having to face the risk of losing the investment made on branding efforts, trademark owners are forced to spend even more resources defending and protecting their trademarks, so they require the best possible strategy that can effectively solve the issue and possibly recover both the damages and the investment made to enforce and guard its trademarks, taking into account the time, costs and the relative effectiveness of each approach.
In general terms, Mexican Law establishes to main types of actions that are foreseen to achieve the above: I.) administrative infringement claims and II.) criminal counterfeit claims; each of these actions has specific characteristics and scopes that should be carefully reviewed in order to achieve maximum efficiency when trying to solve an infringement case.
I) Administrative infringement claims.
Mexican legal system is what is sometimes categorized as an “hybrid” system regarding trademark infringement claims, because the Mexican Institute of Industrial Property (IMPI) is an administrative authority (i.e. an agency that is part of the executive branch of the government) who is legally competent for attending and solving these matters and, at the same time, is responsible for keeping the registry of IP rights (both trademarks and patents), before a formal court can intervene.
The above has a direct impact on how the legal proceedings are carried out and the results that can be expected from this type of legal action, since IMPI is not a court of law and thus it lacks the full legal powers that organs of judicial branch of the government have; this is specially important when the desired goal is to put an immediate stop to the infringing conducts and thus an aggressive approach is needed.
With the above in mind, administrative infringement claims are usually recommended when the actual infringement conduct can not be classified as counterfeiting actions because the infringement consists in copying and/or using a trademark in a manner that is not identical to, but similar enough to a registered trademark (usually a very well known and recognized mark with relevant market presence) to produce an association in the consumers’ mind and thus illegally seize benefits from such actions.
Furthermore, administrative infringement claims can involve certain remedies ordered by IMPI in order to avoid the infringement from continuing and also prevent the suffering of further damages on the offended party; such remedies are foreseen in Mexican Law as “provisional measures” and include the order to immediately stop any or all of the conducts that are considered to infringe plaintiff’s trademark rights (similar to an injunction), withdrawal from the market of the infringing goods, the seizure of such goods performed by the ordering authority and even the closure of the establishment where the infringement is taking place.
In addition to the above, before the administrative authority orders the application of any provisional measure, the law requires the plaintiff to produce a guarantee that should be enough to cover for the possible damages that could be caused to the defendant as a consequence of such measures; the amount of such guarantee is determined by the ordering authority (IMPI) depending on the extent of the requested measures and the specific circumstances of the case, and the usual practice is to post it before such authority in the form of a bond, deposit bill or a similar instrument prior to the enactment of the provisional measures.
After the infringement proceedings are finished and if the plaintiff obtains a favorable resolution, the posted guarantee is returned independent of the sanctions ordered by the authority as part of that same resolution, usually imposing a fine that can go up to approximately $1’150,000.00 MXP (equivalent to approx. USD $90,000.00), the definitive seizure of the infringing goods and the order to permanent avoid performing any activities that could furthermore infringe trademark rights).
Once the administrative resolution is deemed final and definitive (IMPI’s administrative resolutions can be challenged by Nullity Claims filed before the Federal Court of Administrative and Taxing Affairs -TFJFA- and then by an “amparo” appeal tried before a Federal Circuit Court), the offended party that obtained a favorable resolution can take such resolution as the basis of an ordinary civil claim brought before a civil judge in order to seek the recovery of damages, which will be estimated and, if viable, awarded in an other procedure different than the original infringement claim.
With this in mind, administrative claims are usually recommended in cases where the infringing party is an established business/organization or similar person that can be held liable by the normal course of administrative legal proceedings.
II) Criminal counterfeiting claims
In more serious cases, where the infringement is caused by importing into the country, storing, transporting distributing and/or selling of objects that bear identical or near identical marks when compared to originally registered trademarks, criminal counterfeiting claims may be the best option available.
These actions are filed before the General Prosecutor’s Office (PGR), who is the competent authority to investigate federal crimes such as the criminal infringement or counterfeiting of trademarks, and such authority is legally empowered to apply the necessary remedies, sometimes without even requesting intervention from a court of law.
After filing the claim and providing the available evidence, a Deputy Attorney -Agente del Ministerio Publico- of the PGR is responsible for the investigation efforts made by such entity, which are supposed to properly investigate and produce all the necessary evidence to determine, with the aid of police and expert witnesses, if there actually is a criminal counterfeiting case and/or to either order the application of or request before a judge, the legal remedies that are necessary to stop the illegal conducts from continuing, seize all the materials or evidence needed to support the case when brought before a Federal Court of Law.
As part of the legal remedies available to PGR’s Deputy Attorneys, they can request a federal judge to issue a Search Warrant so that they can enter any place to look for evidence and seize any offending materials, even if the goods are not finished counterfeit products as they can seize almost any material or machinery used in the production of such illegal items; this power includes the ability to secure and order the formal seizure of the place (seizure of real estate) where the criminally infringing conducts have and/or are taking place, added to the arrest of the people responsible for such conducts.
Of course, these remedies are practiced with the support of the Federal Police, and thus the sheer impact caused by the a seizure raid carried out by several heavily- armed and sometimes masked individuals should suffice in most cases to deter any further infringements.
After the criminal investigation file is completed, it is brought before a Federal Criminal Judge who in turn determines the existence of the crime itself and the degree of responsibility of the people involved; If a condemnatory sentence is issued and deemed as definitive and final (similar to administrative infringement resolutions, criminal sentences can be challenged first by means of an appeal before a Federal Unitary Court and then by an “amparo” appeal filed before a Federal Circuit Court), besides the prison term of the people responsible, the Criminal Judge can dictate a quantity to indemnify the offended party as a means “to repair the damage” caused by the illegal conduct.
Furthermore and much alike administrative infringements, the offended party that obtained a condemnatory sentence against the people responsible, can use such resolution as the basis of an ordinary civil claim brought before a civil judge in order to seek the recovery of damages, which will be estimated and, if viable, awarded in an procedure different than the original criminal trial.
As seen previously by these short explanations about administrative and criminal actions, in the Mexican legal system remedies are not treated as independent legal institutions that can be requested and enacted independent of the nature of the particular matter but, on the contrary, legal remedies seeking to stop trademark infringements are strongly linked, and thus limited, by the main legal causes that give origin to them (administrative or criminal), and thus any trademark owner seeking advice on which would be the best option should be aware that such decision should only be determined by the specific merits and circumstances of each particular case, and that can only be accomplished when provided by a reputable professional that has proven experience in successfully handling these matters.