New Law For Federal Mexican Protection Of Industrial Property

In November 2020, Mexico passed a new federal law that gave businesses more protection when it comes to industrial property rights.

The law is called Federal Law for Protection of the Industrial Property (IPPL or the new IP Law). Mexico enacted the law on July 1, 2020 as a result of the United States-Mexico-Canada Agreement (USMCA). The law took effect on November 5, 2020. The new law replaced the Mexican Industrial Property Law (from 1994).

The goal of this law was to update the Mexican industrial property system. In a nutshell, it provides more protection and enforcement for industrial property rights. It was great news for American and Canadian businesses that nearshored their manufacturing to Mexico.

The Major Changes Brought On By This Law

The updated IP law establishes a more protective legal framework for industrial property (called intellectual property in the US). This law greatly benefits innovators and foreign companies that have moved their manufacturing to Mexico.

This law is a beefed up version of the previous law.

• IPPL increased protection for industrial property in various ways.
• IPPL updated ways to carry out more effective enforcement against those who breach the law

Below are some of the major changes brought on by this law:

1. Extended Validity Of A Utility Model

If your company registers a utility model (patent), it’ll be valid for 15 years from the filing date. Under the old law, it would have been valid for only 10 years. So your part design(s) will be protected longer than before when patent it in Mexico.

The new law also extended the validity of trademark registrations. A trademark used to be valid for 10 years from the filing date of the application. Now it’s valid for 10 years from the registration date.

2. Violations Of Trade Secrets As A Cause Of Infringement

This is a huge step in the right direction for any company that’s manufacturing in Mexico. Theft of trade secrets is now a cause of infringement. The updated law allows companies to pursue penalties and damages from anyone who has violated its trade secrets. That means improperly acquiring, using, and disclosing trade secrets. Companies are allowed an option to claim damages.

This law clarifies the scope of protection and exceptions for misappropriation of trade secrets, as well.

3. Increased Enforcement

The new law gives the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, or IMPI) more power to enforce any violations of the law.

To be more specific:

• IMPI can use public force to enforce any breaches of the updated law.
• IMPI can suspend the free circulation of any goods that violate the updated law.
• IMPI can suspend, block, or remove any digital content that violates the updated law.
• IMPI can suspend or close down any establishment that violates the updated law if other precautionary measures are proven to be insufficient.
• IMPI can destroy any preserved goods that infringe the updated law.

4. Increased Penalties

Another great change of this updated law is increased penalties. The law establishes two different procedures your company can use to get compensation for damages:

• Through the Mexican Federal Courts, without the need of a prior administrative declaration
• Through IMPI, through an incidental procedure delineated under the updated law

The law now allows you to request a penalty of up to about $1 million USD per infringement.

This Updated Law Provides More Reasons To Nearshore Your Manufacturing To Mexico

There are many good reasons to move your manufacturing to Mexico. One of the biggest reasons is that it’s easier to find an honest contract manufacturer in Mexico than in Asia. Intellectual property theft is quite common among Asian manufacturers. Many Asian countries don’t have stringent intellectual property laws in place.

If you contract with a manufacturer in an Asian country, there’s a risk that the manufacturer may steal your intellectual property and become your competitor. The chances of that are much, much lower in Mexico. It’s all thanks to Mexico’s stringent laws against intellectual property theft. Since the implementation of IPPL (the new law), it’s going to be harder than ever for Mexican manufacturers to steal your intellectual property.

You can rest easy knowing that the Mexican law is on your side.