By Jorge F. Millan
Texas Border Business –
Almost everybody has read or seen on TV that famous brands are worth millions of dollars. Trademarks such as Google®, Microsoft®, Yahoo®, Coca Cola®, Pepsi Cola® and many more top the million-dollar mark and jump into the billions of dollars.
I received a very interesting article years ago written by a U.S. trademark attorney where I read that companies should pay extra care when assigning a registered trademark. This advice was the result of a precedent originating in a U.S. District Court showing that a trademark assignment included the goodwill associated with the trademark.
Effective protection of trademarks in Mexico began when NAFTA became an important part of Mexico’s legislation. This change was the result of strong political and economic pressure from its main trade partners: The U.S. and Canada.
In addition to economic growth in trade, Mexico started to gain respect in the industrial property (IP) area, when Congress approved the present Industrial Property Law back in 1994. Such new law has been amended a few times during the past 22 years. The basic reason was that if Mexico wanted to become a player in the international global market, Mexico needed to grant more and effective protection to any IP coming from foreign countries.
Before the new IP law became effective, there were many sad cases of trademark piracy especially regarding trademarks that were and still are very famous around the world. Trademarks such as Lacoste® and Cartier®, among others, were registered and used by unscrupulous Mexican companies. The rightful owners of these brands spent years and thousands of dollars trying to recover the ownership of their worldwide famous names. Unfortunately, before NAFTA, the IP law in Mexico was not an adequate tool against trademark pirates.
Some of the companies that suffered such violations were forced to accept very high settlements, and in some cases, they even had to become partners with the infringers.
Still, at this moment, there is a lot of piracy in Mexico, not only in the digital world represented by computer programs, music and video recordings, but also in industries such as clothing, watches, toys, liquor, cosmetics, etc.
The grade of difficulty in taking legal action against IP violators is very high because the sale of pirated trademark products is basically channeled and sold by street vendors. TV and newspaper news issue almost daily reports of police actions against illegal distributors. The result is that police warehouses are almost exploding with confiscated products. When one large pirate distributor or manufacturer is closed, others are opening almost simultaneously in other locations. The street distribution makes it hard to fight piracy. It is called – “distribución hormiga” – “ant distribution” in English.
However, the situation is not hopeless. Mexico has continued to fight pirate brands, and in my personal experience, the pirated products of a client of mine have almost disappeared.
If any foreign investor contemplates doing business in Mexico, it first, needs to obtain the registration of its trademarks. The registration process is simple, but it could take a year or two in case there are confusingly similar or conflicting trademarks.
Jorge F. Millan, a fully bilingual (Spanish-English / English-Spanish) and bicultural attorney at law licensed to practice in México, has vast domestic and international experience as in-house and outside counsel for various corporations and individuals. You can reach him at: lawmillan@serv.net.mx .
