By Marco Tena
In Mexico, the phenomenon of ” Trademark Squatters ” continues to represent a significant challenge for foreign companies that are relatively famous but not necessarily seeking to establish a presence in a country.
Under this phenomenon, some people register trademarks in little explored niches, such as craft beers, taking advantage of the low cost of registration (approximately $150 USD per trademark) and the fact that the trademark system in Mexico is governed by the principle of first in time, first in right.
Subsequently, they demand disproportionate sums, between $10,000 and $20,000 USD, to voluntarily assign the trademark rights and avoid protracted litigation.
The industrial property system in Mexico operates under the “first in time, first in right” principle, established in the Federal Law for the Protection of Industrial Property (LFPPI). This principle grants the exclusive right to a trademark to the first applicant, without requiring proof of prior use in the country. While this approach simplifies the registration process, it also leaves room for Trademark Squatters to register trademarks with the intention of blocking their legitimate use by companies that have a better right.
To combat these practices, companies may resort to the nullity proceeding provided for in Article 258, section II of the LFPPI. This procedure allows challenging the registration of a trademark when it is identical or confusingly similar to another previously used in Mexico or abroad, provided that it is applied to similar products or services.
In order for the procedure to succeed, companies must demonstrate:
A better right: Evidence that the mark has been used before the application date of the challenged registration.
Uninterrupted use: Documentation proving continuous and legitimate use of the trademark, such as invoices, contracts, advertising campaigns and other relevant documents.
The 2018 Reform to the Industrial Property Law introduced the obligation to file a declaration of use three years after trademark registration. However, this provision has limitations, as it does not require proof of actual use; a declaration under oath is sufficient, which does not curb the actions of squatters.
In our firm, we offer preventive and corrective strategies to address this problem:
- We advise registering trademarks in Mexico as soon as possible, even before doing business.
- We monitor the registration of trademarks with IMPI to identify infringements.
- We represent our clients in nullity proceedings, building strong cases based on evidence of prior use.
- We design comprehensive plans to protect your industrial property rights in Mexico.
The “Trademark Squatters” phenomenon puts a company’s most valuable assets at risk: its trademarks. Acting quickly and strategically, accompanied by a specialized legal team, is fundamental to protect your interests and guarantee a successful expansion in Mexico.
Do you need advice to protect your trademarks? Contact us today for a personalized consultation.
