Protection of unregistered trademarks and other commercial signs - Uhthoff

Protection of unregistered trademarks and other commercial signs

By Gerardo Parra

Uhthoff, Gomez Vega & Uhthoff, S.C.

Introduction

Trading under an unregistered mark is never a good decision. However, there are certain rights which under Mexican law may allow you to continue its use.

The way in which commercial signs are protected may vary from country to country. However, all legislations follow common objectives:  protect commercial signs by being a source of indication of goods and services, avoid confusion among the public consumers that may be deceived when acquiring goods or services and secure a punishment against infringing conducts.

Aspects such as priority of adoption, use and registration will play a different role in each country. For instance, in Common Law countries the right to use a mark is granted by its use and not its registration.

On the other hand, generally speaking, in Civil Law countries the exclusive right to use a mark and prevent others from using it, derives from its registration.

Mexico by being a Civil Law country is not the exception. In this regard, the Industrial Property Law clearly establishes that the exclusive right to use a mark is granted by its registration before the Mexican Institute of Industrial Property.

However, priority of adoption and continuous use of an unregistered mark also plays and important role as will be discussed below.

In Mexico, under the Industrial Property Law, words, devices, three-dimensional shapes and combinations thereof can be protected as trademarks. On the other hand phrases can be registered as well as commercial slogan, (the substantial difference between a mark and a slogan is that the first functions as a source of indication of origin for goods or services, while a commercial slogan intents to advertise said goods or services).

Claiming rights based on prior use

As previously mentioned, the use of an unregistered mark furnishes the user with a certain degree of protection.

In this regard, the user of an unregistered mark is entitled to file a cancellation action against a trade or service mark registration based on prior use, regardless if it was conducted in Mexico or abroad.

The reason for filing a cancellation action against a registration versus filing an opposition against an application, is precisely because the Industrial Property Law does not contain opposition proceedings. Consequently, the user of an unregistered mark will not be able to challenge an application until it matures into registration.

The possibility of filing a cancellation action based on prior use conducted abroad, provides with an enormous advantage to foreign companies that when expanding their businesses into Mexico find out that the same or a confusingly similar mark is already registered and hence constitutes a bar for registration.

Notwithstanding the above, the possibility of filing a cancellation action based on prior use is not perpetual. The user of the unregistered mark will have a three years term for filing the cancellation action, counted from the date in which the registration which cancellation is seek is published effectively in the Industrial Property Gazette issued by the Mexican Institute of Industrial Property.

When considering the filing of a cancellation action based on prior use, it is important to consider the type of evidences that are necessary.

Materials that may be produced and would work as solid evidence are: Invoices, shipping order and publications, provided said documents contain the mark, the user, the goods or services to which the mark is applied and a date.

It is also important to consider that the party filing the cancellation action must be the same that conducted said use. In this regard, the use by related companies, even if they have a common control would not be admitted.

Use without registration

But, what happens when the user of an unregistered mark does not file the cancellation action during the statutory term? The answer is simple, but the consequences are significant. The Industrial Property Law establishes that a registration is not effective against a third party who in good faith has used the same or a confusingly similar mark in Mexico, provided said third party had begun to use the mark prior to the filing date of the application for registration, or the date of first use declared in the application of a third party.

In spite that prior use may be a defense against infringement, a prior user will not have the privileges that arise from a registration. In this regard, said user will not be able to initiate actions to prevent the use of the same or a confusingly similar mark. In other words, the user will always be exposed to be damaged by the use conducted by any other user of an identical or confusingly similar mark without the possibility of initiating any legal action.

In addition to the above, the user will not be able to license the rights derived from the use of an unregistered mark and neither would be able to assign them.

Conclusion

In conclusion, my advise will always be to register the marks in Mexico before conducting any use or in the case of foreign companies when their expanding business plans contemplate Mexico.

The above in the understanding that the lack of use for three consecutive years would make vulnerable the registration towards a cancellation action on grounds of lack of use initiated by a third party.

If filing applications and obtaining registrations in Mexico is not possible for any reasons, I suggest to hire a watch service to detect the publication of any registration that may be in the future an impediment and with the assistance of local counsel determine the feasibility and chances of filing a cancellation action based on prior use before the expiration of the mentioned statutory term.

When an entity has been using a mark in Mexico continuously without registration and later files an application, is entitled to claim a date of first use in the application. However, we must emphasize that said use has to be conducted continuously and by the applicant. The use of predecessors or related companies should not be claimed.

On the other hand, in spite the date of first use does not have to be proved when filing the application, is important to have evidence to support said date since a common strategy to cancel a registration is to argue that it was granted based on false information.

Claiming a date of first use when filing an application has a very important advantage for the applicant. In case a third party considers to have a better use, he would have to prove that his alleged prior use started before the date of first use claimed in the application which cancellation is sought.

Protection of other elements

Contrary to Trade and Service marks, Trade Names which are also protected in Mexico are not registered, but rather published.

Said publication establishes a presumption of good faith in the adoption and use of the trade name. The scope of protection for Trade Names however is limited compared to the scope of marks, since the protection shall cover the geographical area of the actual clientele of the establishment to which the trade name is applied, and shall only be extended to the entire country if the name is widely and consistently publicized at the national level.

In order to apply for the publication of a Trade Name it is necessary to prove use of same. Contrary to a mark where the registration can be granted without effective use.

As for the use of non traditional marks, such as sounds, holograms or colors, which in my opinion may indeed serve as a source of indication, unfortunately Mexico does not provide any protection. In this regard, the user of any of these elements has to seek protection through other alternatives such as Copyright.

In spite, Copyright may furnish a certain degree of protection, the biggest downside is that the artistic work will someday fall in public domain.

Trade Dress constitutes an importance source of identification of goods and services as well. In this regard, Mexican law does not clearly regulate protection of the overall appearance of goods or services.

In spite of the above, in the area of franchising certain degree of protection is furnished where the Industrial Property Law establishes that the use of distinctive signs, operation and image elements likely to cause confusion in commerce is a punishable conduct on grounds of unfair competition.

Regarding the overall appearance of goods under Mexican Law, they could be subject of protection as the three-dimensional marks.

The legal standard for registration of trademarks, service marks or commercial slogans in Mexico is inherently distinctiveness. Contrary to other countries where it is possible for a sign that was initially descriptive to become distinctive through continuous use. The doctrine of secondary meaning or acquired distinctiveness is not regulated in Mexico.

In view of the above, the user of a non distinctive mark in spite of the attempt to make it distinctive through advertising campaigns, will not be able to obtain a registration and consequently would not have the possibility to enforce any rights against parties using the same or a confusingly similar mark.

The above contrary to countries where acquired distinctiveness is possible in accordance with their domestic laws or even countries like the United States that includes a Supplemental Register where non inherently distinctive marks can be registered and once they have acquired distinctiveness are subject of being protected in the Principal Register.

In this train of thoughts, my advise for foreign companies and investors is to confirm with local counsel if the mark or slogan which will be used in Mexico meets the standards for registration.

In conclusion, in spite the continuous use of non registered sign is a source of rights, said rig hts are limited to file a cancellation action based on said prior use or a defense against infringement.

Consequently, attending to the provisions of the Industrial Property Law, my advise is to register the marks or slogans that are or will be in use in Mexico.

As for the use of other commercial signs such as trade dress or non traditional marks we consider important to approach the local counsel to discuss the best alternatives for protection and explore the benefits of the other branches of the Intellectual Property.

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