Protecting IP in a brave new world

December 3, 2010

BY LUIS C. SCHMIDT

PARTNER

MANAGING INTELLECTUAL PROPERTY, SEPTEMBER 1998

THE INTERNET POSES MANY NEW CHALLENGES FOR IP OWNERS.  BUT, SAYS LUIS C. SCHMIDT, MEXICO CITY, EXISTING PROTECTION IN MEXICO SHOULD PROVE SUFFICIENTLY POWERFUL.

The purpose of this article is to analyze the challenges posed by cyberspace and digital technology in view of the Mexican copyright, trade mark and unfair competition laws.

COPYRIGHT LAW

There is no doubt that the medium used for the copying or communication of a work of authorship has produced an impact and influence on the way that it is protected by the law. Copyright and other laws dealing with IP rights have thus faced challenges for keeping up with the pace of technology development, to provide with the proper tools of protection and enforcement. The digital age has been especially challenging as it now permits the possibility of reducing images, text and sounds into codes that homogenize and compress the information, allowing its transmission through a network.
Two of the most significant expressions of digital technology are represented in multimedia productions and information superhighways. Both have transformed the form of using works raising legal questions of many sorts.
As to multimedia, it has been asked whether they should be regarded as independent works or if they only represent new forms of using works. Similarly, would it be possible that a work has been reproduced and communicated, in the traditional sense, when it has been subject to a prior digitalization.
The Mexican Copyright Law of 1996 addressed these questions to some extent. Concerning multimedia, it appears to be in favour of protecting them as a separate category; however, it would be so only if represented as a “program” integrated by text, visual and sound “elements” and the program “being original in itself, independently from the underlying elements”.
On the other hand, the Copyright Law understands for fixation “the incorporation of letters, numbers, signs, sounds, images and other elements by which a work of authorship has been expressed, or of the digital representation of those, in any form or medium, including the electronic, allowing its perception, reproduction or any form of communication”. Also, the Copyright Law provides a right of transmission, which is different from the right of distribution, the distinction being first that in the case of transmission, the transmitted work would be reduced to digital codes, and second that it would not be exhausted after a “first sale”, as is the case under the right of distribution.

TRADE MARK AND UNFAIR COMPETITION LAW

Nowadays products can be sold and services rendered through the Internet and consequently trademarks may be used and misused in this context. The question is whether the rules of trade mark protection and enforcement would be applicable in those cases.
The Law on Industrial Property (LIP) provides various different causes of action against violation of trade mark and other rights, including the right to compete. One of the said causes, of action is trade mark infringement. The basic premise is that the mark or confusingly similar one is used by a non-authorized third party as applied to the same or similar products or services. The regulations of the LIP understand for trade mark use the fact that it is applied to products that are then sold, or services are rendered.
As to unfair competition, in accordance with the LIP, the Mexican Industrial Property Institute (IMPI) is empowered to repress those acts that harm the good and honest practices in industry and commerce and the laws of Congress. In particular, the LIP provides causes of action against unfair competition, which find support in Article 10 Bis of the Paris Convention. The scope of that provision is broad and in general would tend to stop and sanction any act that would induce or lead the public to believe or presume, mistakenly about the existence of an association, relationship, licence or authorization between establishments, products or services or on the use of false indications of origin on products.
Under the doctrine of unfair competition, it is not necessary that the trade mark or trade symbol is registered or even registrable. What is required is that the infringer sells its own products, services or establishments, passing them off as if they belonged to the party that is being affected.
The foregoing principles of trade mark infringement and unfair competition should be applicable to violations committed on the Internet. At least there is nothing in the law that would impede it. Under the said principles it would be consistent to think that if a non-authorized third party uses the mark be a violation would occur despite the fact that such a violation happens to be made in cyberspace. The same would happen if a more general unfair competition violation is committed, such as imitation or copying of a trade dress.

DOMAIN NAMES

The case of domain name theft would be a somewhat different problem and would require a different approach, as there are no clear actions in the Mexican laws for requesting the user of a domain name consisting of a trade mark to stop using it, as well as for seeking cancellation of a domain name registration that is granted by the mark in Mexico, and for obtaining declaration of trade mark infringement if the domain name is being used as a trade mark except as the identifier of a web site. The LIP and regulations of NIC Mexico need changing to reflect all the foregoing.

Concerning infringement actions involving domain names, it can be said that the LIP contemplates a provision, which considers as infringement the fact that trademarks are used in trade names, without the authorization of the trade mark owners. The provision states as follows:
Article 91. A registered trade mark or a confusingly similar trade mark that has been previously registered may not be used nor may it form a part of the trade name, corporate or firm name of an establishment or corporate person, in the following cases:

• In the case of establishments or corporate persons whose activity is the production, import or marketing of commodities or services equal or similar to those to which the registered trade mark is applied; and
• When there is no written consent of the holder of the trade mark registration or of the person empowered to do so.

A violation of this precept will lead to the application of the sanctions referred to in this law, and a judicial claim may be filed to suppress use of the registered trade mark or to the trade mark confusingly similar to one previously registered, of the trade name, of the respective corporate or firm names and payment of harm and damages.
The provisions hereof will not apply when the trade names, corporate or firm name included the trade mark prior to the date of filing or of the first declared use of the registered trade mark.
It has been thought that such a provision could be changed to include domain names besides trade names. This may represent a solution to the problem, giving relief to trade mark owners whose property is taken by users of domain names. Of course, such a change would need, additionally, that the regulation of NIC MEXICO are changed to adopt the following points, many of which AIPPI has already sanctioned in a recent resolution adopted in its Congress in Rio de Janeiro:
(1) Requiring the domain name applicant to identify itself sufficiently to enable the service of legal documents on the registrant of the domain name.
(2) Requiring a domain name registrant in its application to attest that their domain name does not knowingly conflict with another party’s intellectual property rights.
(3) Requiring a domain name registrant to submit disputes regarding the domain name to a particular arbitral or judicial tribunal.
(4) Requiring that a domain name registrant establish within a defined period of time a working website, or adequate link, with respect to that domain name.
(5) Requiring that a domain registration is only valid for a specific period of time (one to two years) and must be renewed upon payment of a fee.
(6) Requiring a domain name registrant to resolve disputes regarding the domain name in accordance with the laws of a particular jurisdiction.
(7) Requiring that a domain name correspond to an existing trade mark, trade name right or personal name.
(8) Restricting the types of entities that may register domain names in certain sub-domains.
(9) Restricting the number of domain names registrable by a single party.
(10) Providing for an objection procedure whereby the domain name is placed on-hold at the request of a third party-pending disposition of the merits of the request by an arbitral or judicial tribunal.
(11) Providing for an objection procedure whereby the registrar, or its appointee, alter examining the merits, may delete or assign the domain name to a party with a superior right.
(12) Providing for a waiting period of provisional domain name registration, affording third parties an opportunity to object to the registration of the domain name within the waiting period.