Measures to participate in the Mexican domestic market

16/11/2020

Mexican law provides the necessary means to defend the interests of those who decide to invest in the country. This article provides information on the rights and requirements for the protection of trademarks and the quality you must have to participate in the Mexican market.

When making investment decisions, an entrepreneur must take into account issues such as the trademarks it will use to distinguish itself from its competitors and the patents to protect the exclusive exploitation rights on some invention.

Mexican law provides the necessary means to defend the interests of those who decide to invest in the country. In order to make use of these mechanisms, the requirements and obligations imposed by the law and administrative authorities must be met, as well as the quality standards required, and the rights of final consumers must be prevented from being violated, while their information and privacy must be protected from third parties.

Trademarks, patents, licenses, and franchises

Trademarks

A trademark is any distinctive sign capable of differentiating and distinguishing goods and services from others of the same genus, species, or class in the market. In Mexico, the Industrial Property Law and its Regulations regulate trademarks; the authority in charge of overseeing their compliance is the Mexican Institute of Industrial Property (IMPI). According to Mexican law, trademarks can include the following:

Names: those made up of literary elements, letters, or words that may contain orthographic signs that help their reading and give them distinctiveness.

Unnamed: those that identify products and services through images, figures, or drawings.

Three-dimensional: wrappings, containers, packaging, or the way in which the products are presented to the public, configured three-dimensionally (height, depth, width).

Mixed: those that are constituted by the combination of some of the other types of trademarks.

Mexico has a registration system, which means that the rights to the exclusive use of a distinctive sign derive from the registration granted by the IMPI. A registered trademark is valid for ten years and can be renewed for similar periods.

To register a trademark it is necessary to file an application indicating the distinctive sign, the description of goods and/or services, name and address of the owner and, if any, the date of first use. Additionally, the corresponding fees must be paid. The application may be filed at the IMPI offices or electronically through www.gob.mx/impi.

Mexican legislation provides for various types of distinctive signs by virtue of which it is possible to recognize or identify particular characteristics of the trademark or the products or services it protects:

Collective mark. A co-owned trademark that may be used exclusively by a group of companies or associations. The purpose of this distinctive sign is to distinguish in the market the products or services of the members of a group of companies or associations from the products or services of third parties.

Commercial notice. It consists of phrases or sentences that serve to announce to the public the goods or services covered by a mark with the intention that it is individualized and recognized by the consumer public.

Denomination of origin. It is the name of a geographical region that serves to associate and declare a product as originating in a specific territory because of its unmistakable attributes and membership, which are conferred exclusively by the geographical environment.

The advantages provided by trademark registration are clear. When registering a trademark:

The right to exclusive use of the distinctive sign is acquired.

You get the power to prohibit the use without their consent.

It can be granted to third parties through licenses or franchises.

It positions the mark in the market.

In case of invasion of trademark rights, the owner can initiate an administrative procedure of infringement before the IMPI. In such a procedure, precautionary measures may be requested, such as the securing of assets. Once the administrative resolution declares that the infringement is firm, it is appropriate to claim damages in the civil procedure.

Patents

A patent is a right granted to a person for an invention to use or exploit it exclusively for a limited time. Protection can be requested for any invention, such as products, production processes, and inventions to transform energy or matter.

The Industrial Property Law regulates patents and related figures to inventions, being the IMPI the competent authority for this. The patent is valid for twenty years; once this period has elapsed, the invention is considered to be in the public domain.

In order to obtain a patent, it is necessary to file with the IMPI an application for an invention that includes the drawings or diagrams, as well as the claims, that is, a precise and specific description of the essential characteristics of the product or process whose protection is claimed. Based on that application, the IMPI will make an evaluation of form and substance for the granting of the patent. This procedure can have a duration of one to four years. To obtain a patent, an invention must meet the following conditions:

Innovation. The creation or invention to be protected must have unpublished characteristics, not known or published before by another person.

Inventive activity. The owner of the invention must have created something whose result cannot be deduced or appreciated; this means that the technical or professional sector to which the invention belongs is unaware of the existence of said element and the practical advantages resulting from its application.

Industrial application. It is the possibility that the invention is executable and is capable of satisfying some function of benefit to mankind.

The patent grants its owners the exclusive right to the invention. In case someone invades this right, an administrative procedure of infringement can be carried out before the IMPI, through which the conduct of invasion of rights on a patent is denounced so that this invasion is suspended and the corresponding administrative sanction is applied. If the administrative resolution of the IMPI is favorable to the holder of the patent, it is possible to request indemnification for damages by civil means.

Licensing and Franchising

By means of licenses and franchises, the owner of a trademark or patent (and other figures related to industrial property) grants authorization to one or more beneficiaries so that they can exploit, use or exploit the material protected by the trademark or patent.

In order to be effective and have legal and commercial validity, both the license and the franchise must be recorded in a private document (contract). The specific characteristics of each of these figures are described below.

License. It is a contract by which the owner of a trademark or patent - and other figures related to industrial property - gives one or more persons the right to use, exploit or market the products or services protected by the trademark or patent. It may be exclusive or not.

Franchise. It is a contract by which the grantor, called the franchisor, offers to a subject called the franchisee, the right to use, exploit or market the trademark of which he is the owner, on the condition that the franchisee submits to the operational, commercial and administrative methods established by the franchisor, to ensure the quality, prestige, and image of the products or services to which the trademark is applied.

Commercialization of products in Mexico

Labeling

The Federal Commission for the Prevention of Health Risks (Cofepris) is the agency responsible for monitoring compliance with the standards for the labeling of products related to health and consumption in general established in the General Health Law and the Federal Law on Metrology and Standardization, as well as the Mexican Official Standards.

Cofepris and the Federal Consumer Protection Agency (Profeco) monitor that the information on the labeling of goods, products, and services is not presented in a false, exaggerated, partial, or biased manner, to avoid misleading or confusing consumers.

Advertising

In Mexico, advertising is regulated by the Federal Law of Consumer Protection; and in the case of medicines, food, and beverages in general, by the Regulations of the General Health Law on Advertising. Profeco and Cofepris are the ones who regulate and supervise advertising.

The data shown by the products, both of national and foreign origin, and the respective advertising must be expressed in Spanish and their price in national currency in understandable and legible terms according to the general system of units of measurement, without prejudice to the fact that, in addition, they are expressed in another language or another system of measurement. In general, all information expressed on the products must comply with the applicable Mexican Official Standards.

In addition, all advertising related to any good, product, or service must avoid, induce error or confusion of the consumer due to the false, exaggerated, partial, or biased way in which it may be presented.

Mexican Official Standards

In Mexico, standardization is established in the Mexican Official Standards (NOM) and in the Mexican Standards (NMX). Based on the Federal Law on Metrology and Standardization, the Ministry of Economy, through the General Directorate of Standards, is responsible for operating the Mexican Standards Catalog.

The Mexican Standards Catalog is permanently revised and updated in accordance with the publications related to the NOM and NMX that are notified through the Official Gazette of the Federation, such as declarations of validity, draft standards, cancellations, modifications, and responses to comments. According to the Federal Law on Metrology and Standardization, there are basically three types of standards:

Mexican Official Standards (NOM). These are technical regulations of a mandatory nature. They regulate products, processes, or services when these may constitute a risk for people, animals, and vegetables as well as the environment in general, among others. They are prepared by federal government agencies.

Mexican Standards (NMX). They are prepared by a national standardization organization or by the Ministry of Economy. They establish the minimum quality requirements for products and services, with the aim of protecting and guiding consumers. Their application is voluntary, except in cases where individuals state that their products, processes, or services comply with them, and when a NOM requires compliance with an NMX for specific purposes.

Reference Standards (NRF). They are prepared by public administration entities to apply them to the goods or services they acquire, lease, or contract, when Mexican or international standards do not cover their requirements or their specifications are obsolete or inapplicable.

Protection of personal data

Personal data is information related and proper to a natural or legal person, such as name, address, telephone number, family data, or any other data with which a person can be identified. In this sense, people have the right to the confidentiality of the data that identifies them, since they are the owners of such data and decide freely on their destination. Article 16 of the Political Constitution of the United Mexican States recognizes the protection of personal data as a fundamental right.

When making personal data available to third parties, the holder has rights that can be exercised in relation to the processing of such data, in order to avoid affecting other rights and freedoms. These rights are referred to as ARCO rights, and are as follows:

Access. This right allows the owner of the personal data to address the data processor or person responsible for them, so that he or she is provided with information about the processing, destination, and use of the data.

Rectification. The holder of the personal data has the right to request and obtain, free of charge, the rectification of inaccurate or incomplete personal data submitted to the processing of such data by the data controller.

Cancellation. The owner of the personal data has the right to request at any time and free of charge the cancellation of his personal data held by the data processor when he/she considers that they have not been properly used or that the purpose for which they were granted has been fulfilled.

Opposition. The owner has the right to request the data controller to stop using his/her data and to remove them from his/her records, trying to avoid that his/her data are used without his/her consent or that the processing of the data has advertising or commercial prospecting purposes, among others.

All natural and legal persons who have data from a third party are obliged to treat their personal data responsibly and in compliance with the applicable legal provisions, thus ensuring the proper and safe treatment of such data.

What is relevant to personal data is compliance by the persons receiving it, since unauthorized transmission may involve the application of sanctions by the competent authority. In Mexico, the competent authority is the National Institute of Transparency, Access to Information and Protection of Personal Data (INAI).

The law that regulates matters relating to personal data is the Federal Law on the Protection of Personal Data in Possession of Individuals, which aims to protect personal data in possession of individuals in order to regulate their legitimate treatment, controlled and informed, in order to ensure privacy and the right to self-determination information of individuals.

The subjects regulated by this law are individuals, whether individuals or legal entities, of a private nature who carry out the processing of personal data, with the exception as follows:

Credit information companies in the cases of the Law to Regulate Credit Information Companies and other applicable provisions.

Persons who collect and store personal data, exclusively for personal use, and without the purpose of disclosure or commercial use.

The recipient of personal data is obliged to inform the holders, through a privacy notice, also of an obligatory nature, which of the data provided is collected and the purpose for which it is collected and/or used. The omission of a privacy notice implies the imposition of a sanction by INAI. The privacy notice must specify at least the following information:

Identity and address of the person responsible for collecting the personal data.

Purposes of the processing of the data collected.

The options and means which the responsible party offers to the holders of the data to limit their use or disclosure.

The means to exercise ARCO rights, in accordance with the law.

If applicable, the transfers of data to third parties.

The procedure and means by which the responsible will communicate to the holders of the data the changes to the privacy notice that he makes, in accordance with the provisions of the law.

In the case of sensitive personal data, the privacy notice must expressly state that it is such data (e.g., health status, religious beliefs, or sexual preference). The privacy notice must be made available to the holders through printed, digital, visual, sound, or any other technology, in accordance with the following:

When personal data have been obtained in the physical presence of the data subject, the privacy notice must be provided, in a clear and reliable manner, at the time the data are collected, through the formats through which they are collected, unless the notice has been provided previously.

When personal data are obtained directly from the owner by any electronic, optical, sound, visual, or any other technology, the person in charge shall provide the owner immediately, at least the following information: identity and address of the owner and purpose of data processing; in addition, he shall also inform him about the mechanisms to consult the full privacy notice.

If it is impossible to disclose the privacy notice to the holder or if this implies disproportionate efforts in consideration of the number of holders or the age of the data, the person responsible may implement alternative (compensatory) measures, with the prior authorization of INAI.

INAI will supervise the implementation of the privacy notice by means of random inspections of those responsible for the personal data in order to verify compliance with the law.

Source: ProMexico