Trademark Registration Invalidity Actions

August 13, 2020

The Federal Law for the Protection of Industrial Property will come into force on November 5, 2020, and it contains several changes that will have a direct impact on trademark registration invalidity actions. These changes are detailed as follows:

• Regarding invalidity causes of action based on prior use and prior existing registrations, partial invalidity actions are incorporated and regulated but only in connection with the goods and services covered by the trademark registration.

In these cases, it is established under the current IP law that if the Mexican Patent and Trademark Office (IMPI) issues a ruling declaring the partial invalidity of a trademark registration, a marginal record would be included in the registration certificate stating the modifications and the reasons for them.

Partial invalidity actions of trademark registrations are declared exclusively in connection with the products or services covered by the trademark registration and not over the elements conforming the marks, which would constitute an ungrounded sectioning, in violation of the basic likelihood of confusion analyses principles.

The new Law also regulates partial invalidity actions, providing additional legal certainty to trademark titleholders, who will not be facing the risk of suffering the loss of their trademark registrations in their entirety for the mere coincidence or similarity in one of the goods or services covered by the registrations.

• The invalidity cause of action based on false data was completely modified to only sanction the lack of veracity in the declaration of the date of first use contained in the trademark application, and it is expressly indicated that the burden of proof is reverted to the defendant.

This is a significant change because the current invalidity cause of action based on false data is too broad, since it does not specify the basis upon which a trademark registration could be invalidated. Case Law has narrowed the scope of protection by stating that the invalidation of a trademark registration could only be declared if the statements could fall within the genre of information considered as essential to trademark applications.

The date of fist use should be considered as the only essential date having substantial legal implications on trademark applications in regards to the date to overcome an invalidity action based on prior use or on a defense based on prior use in connection with an infringement action. Limiting the scope of protection of the referred invalidity cause of action should be considered necessary.

Additionally, it is also significant that the burden of proof concerning the veracity of the date of first use is reverted to the defendant, since recent case law mistakenly concluded that the burden of proof corresponds to the complainant, resulting in the current invalidity causes of action being effectively useless or meaningless.

• The “bad faith” definition contained in the Law is modified having implications on the invalidity cause of action based on bad faith. Now, it should be understood that, among other cases, applying for the registration of a sign with the purpose of obtaining an inappropriate benefit or advantage in prejudice of the legitimate owner is considered bad faith. 

Not introducing a restrictive definition for bad faith is positive, and the inclusion of an accurate concept for bad faith should also be considered as an improvement, considering that the definition contained in the current Law is quite ambiguous.

• It is stated that invalidity actions will not be admitted if they are based on the same arguments and evidence submitted in the opposition proceeding already resolved by IMPI.

This is a troubling change from a legal perspective that will have negative impacts within the Mexican industrial property system, because in those cases in which an opposition has been filed but was not successful, it will not be possible to further try to invalidate the conflicting registration using the same arguments and evidence, giving infallibility to IMPI and making meaningless the invalidity causes of action specifically designed to attack registrations granted by error, inadvertence or difference of appreciation.

• The effects of the of the declaration of invalidity of a trademark registration are clearly specified, expressly stating that the invalidity will retroactively destroy the effects of the registration back to its granting date.

The effects of the invalidity action of a trademark registration are not expressly specified in the current Law. Although, they are defined by supplementary legislation. However, the fact that an express provision is included in the new Law stating the effects of the invalidity is constructive, so as to avoid incorrect interpretations that were already becoming in issue in the Courts.

Finally, it is important that all the ongoing litigious proceedings will continue their processes and will be decided pursuant to the superseded Industrial Property Law. Moreover, pursuant to the transitional articles of the Federal Law for the Protection of Industrial Property, the new invalidity causes of action can only be brought against the registrations that were applied for and granted under the new Law.

OLIVARES will be keeping you updated regarding the interpretation and criterions derived from these changes once the Law has entered into force.