Update on cascade divisional applications in Mexico.

July 13, 2023

As a follow-up to our newsletter distributed on May 2022, we now have an update on a new criterion that has been recently adopted by the Mexican Patent Office (IMPI) to cascade divisionals that are being filed in Mexico.

In view of the new Federal Law for the Protection of Industrial Property (FLPIP) which entered in force on November 05, 2020, IMPI started denying all voluntary cascade divisional applications regardless of whether the parent case was filed before or after November 05, 2020.

While the FLPIP prohibits the filing of voluntary cascade divisionals, accepting them only when IMPI issues a lack of unity objection, the former law never prohibited or restricted this practice.

IMPI applied this criterion despite the fact that the FLPIP contains transitional articles that specifically state that patent applications filed under the former law, should be prosecuted still under the former law, in which cascade divisional applications had no restrictions whatsoever.

After several months of lobbying efforts, this criterion was modified and in the first months of 2022 IMPI started accepting voluntary cascade divisionals which derived from a parent case filed before November 05, 2020.

We regret to inform you that IMPI has abruptly changed their criteria and since May of this year, they are not accepting any voluntary cascade divisionals if the first parent case has been allowed and has issued as a patent or if it was abandoned.

IMPI is basing this criterion on a Federal Court Jurisprudence that provides that it is not possible to file divisional applications once the prosecution of the parent case has finalized. However, this court decision does not mention the specific case of cascade divisionals and thus, IMPI is misusing this Jurisprudence and applying it wrongfully to all voluntary cascade divisional applications, regardless of the applicable law.

It is important to consider that IMPI is not questioning the validity of voluntary cascade divisionals that were filed before this abrupt change of criteria, but it does leave them in a fragile situation.

In view of this new criterion, if an applicant wishes to pursue a voluntary cascade divisional in Mexico which derives from an issued parent case filed before November 05, 2020, the only path forward will be to answer the two formal office actions issued by IMPI, await IMPI’s rejection of the divisional and challenge IMPI’s decision before the Mexican Courts.

We at OLIVARES strongly disagree with this new criterion that has been adopted by IMPI which from our point of view lacks any legal support. However, we are now facing the reality that IMPI will no longer accept any voluntary cascade divisionals when the first parent case has issued/abandoned, leaving only the possibility of filing cascade divisionals in case IMPI requests them through a lack of unity objection.

This new criterion also opens the door for a landslide of patent invalidity actions that companies could filed against the huge number of cascade divisional applications that were filed and granted since the year in which former law entered into force, that is 1991.

It must be said that currently the Mexican Supreme Court of Justice (MSCJ) has to rule on a case regarding legal standing to file invalidity actions against patents. The MSCJ needs to decide whether a general standing such as being a company doing business with the same or related technology as to the one protected by the patent is enough, or if an infringement action is needed to have legal standing.

The outcome of this decision will impact as well in the possibility of attacking cascade divisional patents.

The OLIVARES patent team will keep you updated on any further development on this important issue.