In Mexico, the authority to investigate criminal activity and indict a case is held by prosecutors within the Attorney General’s Office. IP crimes are all considered to be a Federal crime. There is a Specialized IP Unit within the Mexican Attorney General’s Office. In theory, not all IP matters are managed by this Unit, only the ones that are considered to be “relevant” or where the amount of damages surpass USD 500,000. However, in June 2021 the Attorney General Commissioner ordered that all IP matters should be managed directly by the IP Unit with independence of the existence of local AG’s Offices located at each State. 

Most investigations are pursued ex parte when involving Industrial Property rights, except for the sale of counterfeit products in the streets. In contrast, copyright counterfeiting activities will be pursued ex officio in most cases. In any event, the authority will require that a complaint is filed in both scenarios. 

Documentary evidence to prove the existence of rights should follow the complaint. The prosecutor will order that the facility where the goods are located is investigated and that a sample is obtained. The plaintiff will be required to submit a genuine sample which will then be analysed by an in-house Expert of the AG’s Office, and compared with the allegedly counterfeit product with the aim of confirming the counterfeit status of the goods. The investigation report and witnesses’ testimonies may also be presented to support the case. With all this evidence, the prosecutor may decide to apply for a search warrant to try and seize all counterfeit goods and documents as evidence. 

Once the prosecutor has enough evidence from an individual or company to prove the criminal offense and liability, he may indict the case. The criminal activity should be decided by a criminal Judge. With the “new” accusatory criminal system there is always the possibility to apply for an Alternative Dispute Resolution Mechanism and terminate the process at an earlier stage through a settlement agreement signed by both parties. 

The criminal judicial process is formed by two investigation stages followed by the trial and resolution which may also be appealed by a Criminal Tribunal. If constitutional violations take place, the resolution in the appeal stage may be fought by an Amparo Trial. 

Criminal proceedings can be filed for the protection of trademarks, copyrights and related rights, trade secrets, appellations of origin and geographical indications. Inventions are no longer subject to criminal proceedings.

The offences against IP rights are as follows:

The burden of proof is carried by the prosecutor who is the formal plaintiff in the criminal process. The right holder is considered to be a victim who has the right to collaborate with the prosecutor in providing evidence. However, the last word on what evidence should be presented to the Judge goes to the prosecutors.

All goods confirmed to be counterfeit should be destroyed by the authority.

In addition to the Specialized Intellectual Property Unit within the Attorney General’s Office, there is a Specialized Intellectual Property Chamber as a second instance for administrative proceedings. The Mexican Trademark Office is, in effect, the court of first instance for all non-criminal enforcement proceedings involving industrial property rights and also copyrights whenever there is a commercial profit involved.

Civil actions are not available to enforce IP rights in Mexico, only to quantify damages. However, there is an administrative regime which is used to enforce various types of activities by cataloguing them as infringement. 

Laws involved in civil enforcement are the Federal Law of Industrial Property Protection, the Federal Copyright Law, the Federal Civil Code and the Federal Civil Procedure Code.

Trademark owners are granted with the right of exclusive use of a trademark when obtaining a registration. The laws applied to administrative actions include the Federal Law for the Protection of Industrial Property, the copyright federal law, the administrative procedure law and the Federal Law of Contentious Administrative Proceedings.  

In addition to applying for an infringement action, the right holder may apply for an injunctive relief which includes the possibility of a seizure action, prohibition for commercialization of allegedly infringing goods, publicity, removing from circulation of infringing products and even a temporary and definitive closure of the business.

Resolution of infringement will mean that the infringer is fined. NO recovery of damages may be obtained unless the rights holder initiates a proceeding for claiming damages. 

An IP right holder has access to the following remedies from civil enforcement:

• Injunction reliefs.
• Damages.
• Legal Costs.

Damages deriving from the violation to IP rights, will never be less than forty percent of the legitimate value indicator provided by the affected owner.

To set the amount of compensation, the date on which the infringement was proven to have taken place, and, at the behest of the affected IP right holder, any legitimate value indicator presented thereby, shall be taken into consideration, including:

• the value of infringed goods or services, calculated at market prices, or the recommended retail price;
• profits that the owner did not receive as a result of the infringement;
• profits obtained by the offender as a result of the infringement; or

the price that the offender should have paid the owner for the granting of a license, taking into account the commercial value of the right infringed and any contractual licenses that may already have been granted.

Unfortunately, no relevant cases have been decided upon the distribution of counterfeited goods in Mexico, due to the length of IP rights protection proceedings.

Grey markets in Mexico are authorized under the exhaustion of rights principle. 

The Federal Consumer Protection Law prescribes against false advertisements that could cause consumers to mistakenly buy counterfeited goods. The General Health Law prescribes against counterfeited drugs which are subject to criminal prosecutions. The Quality Infrastructure Law and the derived quality standards from it, prescribe against any the offering of goods that might affect consumers’ health and safety.

Some of the benefits and challenges of criminal versus civil/administrative enforcement are as follows:

• Criminal enforcement can grant access to dangerous areas as actions are supported by the police authorities.
• Authorization from the defendant is not required to execute a raid under a criminal action while in an administrative proceeding there is the possibility that the defendant will not grant access to the premises and oppose the seizure action. 
• The administrative action requires posting a bond. The bond must cover the value of the goods to be seized or the possible damages that may be caused to the defendant if the injunctive relief proved unwarranted. This results in the impossibility to pursue actions involving larger shipments.
• The administrative process is more formal and requires the intervention of the plaintiff at various stages which results in a more costly procedure. Also, it takes longer to be decided.
• Storage costs may need to be paid in administrative actions while products seized by the criminal authority will be taken to official government’s warehouses. 
• Criminal procedures require the prosecutor’s willingness to evaluate and support the action while the administrative process may be initiated at the rights holder’s convenience. 

The Mexican Customs Service has no power to seize suspicious products related to IP crimes or infringement. According to Mexican Customs Law, it is necessary that the competent authority issues a resolution ordering formal seizure of the goods. 

The same two possible remedies to enforce IP rights are applicable for border measures: administrative action and criminal action. The right holder must initiate either of these two legal remedies. In case of an administrative action, the plaintiff will be responsible for cost of detention, seizure, government fees, travel expenses for government officials (if necessary), posting a bond and sometimes storage. 

When detaining a shipment through a criminal action, the prosecutor and government will take responsibility for the inspection, seizure, storage and destruction of counterfeit goods at their own expense. In the past, depending on budget restraints, they may sometimes ask for the plaintiffs support  in transportation or travel costs. 

In general terms, it is an efficient system. However, the lack of power for Customs to detain suspected goods on their own initiative causes a delay and sometimes may make enforcement activities difficult. Also, historically, in-transit goods and transhipments have been seized through the criminal process. As a result of a disposition from the Internal Affairs Unit within the Attorney General’s Office they now may only be seized through administrative action (which becomes costly because of the bond requisite). 

There have been no significant changes except for the possibility of recording trademarks with Customs and providing training seminars to government officials. Although in the past, the Mexican Trademark Office (MTO) used to execute border measures, the recent Law expressly incorporated this faculty among to other injunctive remedies. 

In terms of the relationship between Customs and other law enforcement, for border measures, Mexican Customs, the Mexican Institute of Industrial Property and the Attorney General’s Office interact constantly because the Institute and the Attorney’s Office must issue the legal order to detain the suspected counterfeited goods.

Customs authorities will provide images of suspected goods, port of entry and approximate amount of suspected goods. Names and addresses of importer and exporter may be obtained if legal action is initiated. Other documents and information may be provided directly to the MTO or AG’s Office. 

Suspected counterfeited goods can be detained at Customs, but the related enforcement proceedings are the real mechanism for obtaining any remedy.

Constant and strong collaboration between IP rights holders and Customs allows the organization of frequent training for the identification of counterfeited goods. Such training is organized throughout the country.

Lockdowns resulted in delays in most processes but no substantial change is expected. Unfortunately, even though medicines, masks and vaccines were treated as a top priority worldwide, the Mexican authorities’ policy of not conducting raids related to IP crimes did not change for Covid related products. Neither the Federal Commission for Preventing Sanitary Risks (COFEPRIS) nor the AG’s Office paid more attention or invested additional resources to tackle distribution and sale of these products. Right owners themselves found evidence of sales of counterfeit vaccines and medicines and tried to execute actions to deter these activities but they received poor support from Mexican authorities. More support from authorities to stop counterfeit Covid related products is needed to seize these items at customs and conduct successful investigations to pursue the sale of goods physically as well as over the internet and social media. 

The 2020 amendments to the Federal Copyright Law and the Federal Criminal Code incorporated express prohibition for online counterfeiting. This was possible thanks to the implementation of several international trade agreements that impose the obligation to count with a legal framework in protection of these types of devices.

The 2020 amendments to the Federal Copyright Law have established rules for Internet Service Providers. Such rules include exceptions for any responsibilities for the sale of counterfeited goods. A notice and take down proceeding was also incorporated with these recent amendments.

Mexico does not have specific legislation addressing the online sale of counterfeit goods, however, the Federal Law of Industrial Property Protection and the Federal Copyright Law includes express provision for taking provisional measures against online markets or web sites.

Intelligence is crucial when faced with an online infringer that also has a physical storefront. All information from the website should be analysed to try to detect any links with other sites or profiles. It is always advisable to conduct test purchases and investigations to try and locate the vendor behind the website. The taking down of an infringing profile or website may allow the infringer to simply open a new profile, unless it has been identified and possibly served with a cease and desist letter to show him that he has been identified and may face actual risk of legal process. Mexican authorities in general are more interested to act against physical stores.

Domain name disputes in Mexico are decided with WIPO’s Uniform Domain Name Dispute Resolution Policy. There are no national legal provisions regarding domain name disputes.

Facebook marketplace is very popular in Mexico, along with Mercado Libre and Amazon. In the last 5 years social media platforms and marketplaces have agreed to collaborate with the authorities by providing information related to infringing vendors or to take down infringing posts or sales. 

So far, we have not experienced any enforcement actions associated with NFTs.

There is currently no national intellectual property law enforcement coordination body in Mexico. It would be desirable to have such a body for coordinating and strengthening IP rights protection.

1. Is it possible to record IP rights in Mexico? How does the recordal process work? 

Only registered trademarks may be recorded with Customs. Recordal is not mandatory but it has proven to be a good way to increase the number of alerts received from Customs. They do not need to be renewed. They remain in force as long as the registration does. No government fees are associated with Customs recordals. 

A motion needs to be filed before the Mexican Customs Service to record the brand owner. A power of attorney for lawsuits and collections with a special clause to file criminal complaints, list with all trademark registrations to be recorded and written confirmation in letterheaded sheet authorizing an individual/company or law firm to manage all the processes before Mexican customs on its behalf need to be attached.

The authority will revise the information and will grant access to the Customs platform. Recordal process is made directly by the applicant. As Customs systems for the recordal is directly connected with the MTO database, registration information is directly obtained from it. Licensee names, authorized importers, exporters, port of entry of authorized products or any other information which helps to identify genuine products may be recorded too. 

The system designates an alphanumerical code to identify each registration once it is recorded.

2. Does any amount of the fine collected through the administrative action go to the right holder?

No, as an administrative sanction, it goes directly to the government.

3. Are there any other type of measures, such as service of Cease & Desist letters? If so, how do they work?

There is no law relating to the C&D procedure but they are always a good way to put pressure on the opposing party. The letter will usually demand that the infringing goods are surrendered for destruction. It is also common practice to demand signature of an undertaking committing to cease the infringing activities. In practice, the opposing party will hardly agree to surrender the goods or sign an undertaking but most of the times will simply cease the infringement. 

C&D letters may be served in presence of a notary with the aim of attesting the sale of unauthorized goods and service of the letter. The notarial deed may be used later as evidence in case the opposing party does not comply.