A Changing Landscape for Expert IP Appraisals in Mexico

One anticounterfeiting measure available to brand owners in Mexico in more serious cases where the infringing conduct includes importing into the country, storing, transporting, distributing, and selling counterfeits bearing an identical sign to the brand owner’s trademark registration, is the ability to lodge a criminal complaint before the Federal Attorney General’s Office (FGR), which is the competent authority to investigate such cases, and is also legally empowered to request remedies such as seizure of infringing items before competent courts.

It will come as no surprise to those who have attempted to enforce their intellectual property (IP) rights in criminal proceedings in Mexico that a mandatory IP appraisal issued by in-house experts at the FGR is required as proof of counterfeiting. An investigation by a deputy prosecutor at the FGR can be successful only if an IP expert at the FGR confirms the relevant products to be counterfeit.

But this requirement is not based on a law—in fact, it is an old practice that has been in place for decades at the FGR. However, this mandatory IP expert appraisal has been the subject of controversy for many years in Mexico.

Traditionally, an IP expert appraisal has been considered a crucial part of a criminal investigation, as this document includes a thorough analysis determining whether a product is counterfeit. In practice, prosecutors entirely rely on the in-house expert’s assessment of the products at issue. As a result, the FGR is given complete autonomy and discretion in writing its IP appraisal reports.

Some conservative judges have not only supported but encouraged the practice of solely relying on an IP expert appraisal. However, with a new IP law in force, new interpretations have been considered, and precedents that reject this old practice have developed. Thus, while precedents are not binding in Mexico, and some old school judges still follow the old practice, other judges have begun to hold that an IP expert appraisal using a genuine sample is not a mandatory requirement.

Genuine Samples and Legal Definitions

The FGR’s Coordination of Expert Services (CES) has created internal manuals that set out the guidelines for an expert to follow in an appraisal. In particular, for IP matters, the experts shall have a “genuine sample” to compare with the allegedly fake one and determine if a product is counterfeit. This requirement began as a widely accepted and often useful practice for government officials; but, as it became increasingly relevant over the years, it became mandatory evidence for some judges.

At times, it can be a challenge for IP owners to submit a genuine sample which is identical to the product claimed as counterfeit. Possible scenarios that make the submission of a genuine sample difficult include the following: (1) there is no genuine item identical to the questioned one in the market; (2) the sample results are quite delicate or expensive to obtain; or (3) there are not enough samples to cover all the criminal cases related to the same brand.

On occasion, prosecutors have accepted alternatives to the genuine sample requirement to avoid stagnation of a criminal investigation. For instance, increasingly, prosecutors and police officers are beginning to understand the difficulties in obtaining expensive genuine samples from luxury companies. Instead, they conduct inspection visits to boutiques that offer these luxury goods for sale. In some cases, though, a genuine item which is identical to the counterfeit product simply does not exist, and criminal investigations can stall indefinitely.

Article 402 of the Federal Law for the Protection of Industrial Property (FLPIP) provides in Section II that it is considered a criminal offense to “produce, store, transport, introduce to the country, distribute or sell with commercial purposes, counterfeit goods, as well as to provide in any manner, with knowledge of it, raw material or supplies destined to the manufacture of counterfeit goods.”

Section I of Article 402 provides the legal definition of “trademark counterfeiting”: “The identical use of a registered trademark or in such way that its essential aspects cannot be distinguished as to how it appears in the registration certificate, without the corresponding authorization of its titleholder, to falsely represent a good or service as original or authentic.”

Before the definition of trademark counterfeiting was provided in the FLPIP, which came into force on November 5, 2020, the description accepted by Mexican authorities was grounded in the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), of which Mexico has been a member since 1994.

According to TRIPS, “counterfeit trademark goods” are “any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation.”

Under both the Mexican law and TRIPS definitions, no comparison of the two objects is required, as the analysis does not focus on scrutinizing color, size, and/or quality characteristics of items, but rather on the identical reproduction of the trademark.

The Mexican legal definition requires that appraisals determine if an item is counterfeit by confirming that the claimed good reproduces a trademark owner’s registered trademark. Ideally, a valid trademark certificate would be the only proof that the complainant need submit. This would allow the prosecutor to confirm visually that the registered trademark has been identically reproduced, without the owner’s permission.

Technical Opinion Issued by IMPI

One of the most welcome changes included in the FLPIP is the substitution of the FGR’s in-house IP expert appraisal for an official technical opinion issued by the Mexican Intellectual Property Institute (IMPI) within a deadline of 30 working days.

While a technical opinion was optional under the former Mexican IP Law, under the reformed law, IMPI’s technical opinion must be used as an accreditation of the nature of the original products and the counterfeits as part of investigations under Article 402 Section II of the FLPIP.

The technical opinion consists of a written appraisal that does not rule on whether a criminal offense was committed, nor provide a judgment on the facts that led to a criminal investigation (such as importation into Mexico). It only analyzes the technical aspects of a case, such as the validity of the trademark registration certificate.

This seeks to inform the prosecutor at the FGR on whether the examined trademark has been reproduced in the allegedly counterfeit product.

It is possible that FGR prosecutors may start to feel so comfortable with IMPI’s technical opinions that they may not require an IP expert appraisal from the CES anymore. Indeed, IMPI’s technical opinion is set out in the law, unlike the CES in-house expert appraisal.

However, the possibility of the IP expert appraisal being replaced by IMPI’s technical opinion is, at this point, solely speculation. Thus, what some IP owners may view as good news may, in practice, be just another task that needs to be undertaken for an investigation.

Furthermore, the legal requirement to obtain IMPI’s technical opinion within 30 days of the prosecutor’s request being served on IMPI could delay the criminal investigation procedures currently handled by the FGR. The 30-day period may be too long a period when actions, such as warehouse raids, need to be taken as soon as possible.

IP owners have been pushing to achieve the implementation of new and more practical paths in criminal investigations. Some FGR members are supportive of these new proposals before the CES.

These proposals include the submission of an expert appraisal issued by the brand owner, obtaining an examination directly from the prosecutor, or obtaining the opinion from CES without the need for a genuine sample. However, the requirements must be uprooted by judges, as only they are entitled to make the final call on the requirements for criminal investigations.

Time delays in criminal investigations and the obstacles created by the CES IP expert appraisals have also pushed IP attorneys to explore other paths that can help their clients obtain the required results. Attorneys have consistently appealed against FGR decisions in order to obtain more precedents of decisions that did not rely solely on an IP expert appraisal so that IP expert appraisals are not seen as the only means to prove that an item is counterfeit. While precedents are not binding in Mexico, they do exert pressure.

Authors’ Insight

We hope that in the future, the counterfeit status of suspected counterfeit items will just be based on the comparison between the registered trademark certificate and the allegedly counterfeit product, without the need for a genuine sample.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. 

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