May–June, 2017 Vol. 107 No. 3

Unregistered Trademarks in EU Trademark Law Verena von Bomhard and Artur Geier

Nicht Eingetragene Marken Als Relative Eintragungshindernisse Verena von Bomhard and Artur Geier

Strategies to Avoid Risks Related to Trademark Squatting in China Michele Ferrante

The New Trademark Opposition System in Mexico John M. Murphy

Corrective Advertising in Lanham Act Damages: The Use and Misuse of Past Advertising Expenditures D. Scott Bosworth, Russell W. Mangum, and Eric C. Matolo

Commentary: C-O-P-Y-R-I-G-H-T: What Does That Spell? Star Athletica v. Varsity Brands Reimagines Protection for Useful Articles Jonathan E. Moskin

Commentary: Monetary Recovery for “Infringement” of EU Trademarks In Statu Nascendi Martin Viefhues

Book Review: Trade Mark Law in Europe. Alexander von Mühlendahl, Dimitris Botis, Spyros Maniatis, and Imogen Wiseman Jane Collen

Book Review: The Protection of Intellectual Property in International Law. Dr. Henning Grosse Ruse-Khan Claus M. Eckhartt

INTERNATIONAL TRADEMARK ASSOCIATION Powerful Network Powerful Brands

655 Third Avenue, New York, NY 10017-5646 Telephone: +1 (212) 642-1733 email: wknox@inta.org Facsimile: +1 (212) 768-7796 OFFICERS OF THE ASSOCIATION JOSEPH FERRETTI ................................................................................................................... President TISH L. BERARD ..............................................................................................................President Elect DAVID LOSSIGNOL ........................................................................................................... Vice President AYALA DEUTSCH ............................................................................................................. Vice President TIKI DARE ............................................................................................................................... Treasurer ZEEGER VINK .......................................................................................................................... Secretary MAURY M. TEPPER, III ............................................................................................................... Counsel ETIENNE SANZ DE ACEDO ................................................................................... Chief Executive Officer

The Trademark Reporter Committee

EDITORIAL BOARD EDITOR-IN-CHIEF, CHAIR STAFF EDITOR-IN-CHIEF KATHLEEN E. MCCARTHY WILLARD KNOX

Senior Editors NEIL WILKOF

JESSICA ELLIOTT CARDON RUTH CORBIN GLENN MITCHELL ELISABETH KASZNAR FEKETE RAFFI V. ZEROUNIAN FABRIZIO MIAZZETTO PAMELA CHESTEK CHIKAKO MORI

Staff Editor Staff Editor BEVERLY HARRIS JOEL L. BROMBERG

Editors TSAN ABRAHAMSON MARIA BARATTA MARTIN J. BERAN DANIEL R. BERESKIN STEFANIA BERGIA LANNING BRYER SHELDON BURSHTEIN ROBERT CAMERON JANE F. COLLEN THEODORE H. DAVIS JR. ANNE DESMOUSSEAUX MEGHAN DILLON THOMAS F. DUNN SCOT DUVALL CLAUS M. ECKHARTT SHEJA EHTESHAM KAREN L. ELBURG MATTHEW EZELL NEMESIO FERNANDEZ-PACHECO SALVADOR FERRANDIS ALFRED FRAWLEY ALEX GARENS ALEXANDRA GEORGE DANIEL GLAZER ANDREW J. GRAY IV LESLEY MCCALL GROSSBERG

ANN LAMPORT HAMMITTE GUY HEATH ANNE HIARING HOCKING JANET L. HOFFMAN GANG HU DOMINIC HUI AHMAD HUSSEIN BRUCE ISAACSON AGLIKA IVANOVA E. DEBORAH JAY FENGTAO JIANG HE JING MARIA JOSE JIRON BENDANA SIEGRUN D. KANE SUSAN J. KERI MIKE KEYES ROLAND KUNZE JOI MICHELLE LAKES SCOTT LEBSON NELS LIPPERT MARCUS LUEPKE J. THOMAS MCCARTHY NANCY A. MILLER GEORGE W. MOXON JOHN M. MURPHY PAUL MUSSELL SADAF NAKHAEI

SAURABH NANDREKAR AMANDA NYE JENIFER DEWOLF PAINE JEREMY B. PENNANT NEAL PLATT MICHIEL RIJSDIJK RACHEL RUDENSKY JEREMY SCHACHTER MATTHEW R. SCHANTZ MARTIN SCHWIMMER JENNIFER SICKLER AARON SILVERSTEIN GIULIO ENRICO SIRONI WENDI E. SLOANE JERRE B. SWANN, JR. SCOTT THOMPSON CHINASA UWANNA ANJALI VALSANGKAR EDWARD E. VASSALLO MARTIN VIEFHUES CHARLES WEBSTER JORDAN WEINSTEIN JOHN L. WELCH JOSEPH WELCH BRYAN K. WHEELOCK JOSEPH YANG

Advisory Board MILES J. ALEXANDER WILLIAM M. BORCHARD CLIFFORD W. BROWNING LANNING G. BRYER SANDRA EDELMAN ANTHONY L. FLETCHER ARTHUR J. GREENBAUM

ROBERT M. KUNSTADT THEODORE C. MAX JONATHAN MOSKIN VINCENT N. PALLADINO JOHN B. PEGRAM ALLAN S. PILSON

ROBERT L. RASKOPF PASQUALE A. RAZZANO SUSAN REISS PIER LUIGI RONCAGLIA HOWARD J. SHIRE JERRE B. SWANN, SR. STEVEN M. WEINBERG

The views expressed in The Trademark Reporter are those of the individual authors and do not necessarily reflect those of INTA. The Trademark Reporter (ISSN 0041-056X) is published electronically six times a year by the International Trademark Association, 655 Third Avenue, New York, NY 10017-5646 USA. INTA, the INTA logo, INTERNATIONAL TRADEMARK ASSOCIATION, POWERFUL NETWORK POWERFUL BRANDS, THE TRADEMARK REPORTER, and inta.org are trademarks, service marks, and/or registered trademarks of the International Trademark Association in the United States and certain other jurisdictions.

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THE NEW TRADEMARK OPPOSITION SYSTEM IN MEXICO

By John M. Murphy∗

CONTENTS

I. Overview of the Trademark Registration Process Before the Amendments ................................................................. 747

II. Limitations of Ex Parte Examination ................................ 749

III. Overview of the New Opposition System ........................... 750

IV. Will Trademark Oppositions Delay the Registration Process? ............................................................................... 753

V. Will the New Opposition System Be Friendly to Small Business? ............................................................................ 755

VI. How the Opposition System Can Be Improved .................. 756

VII. Conclusion ........................................................................... 758

∗ Of Counsel, Arochi & Lindner S.C., Mexico City, Associate Member, International Trademark Association.

Vol. 107 TMR 747

For the first time in its history, Mexico has a formal trademark opposition system. The recent amendments to the Industrial Property Law that created the system1 were a compromise, and the result is a system with room for improvement. Nonetheless, it is an important step forward for trademark protection in Mexico.

This article will briefly describe the trademark registration process in Mexico before the amendments, and the shortcomings that led to the adoption of an opposition system. Next, the article will describe the new opposition procedure, which differs in important respects from those in most other countries. Following that discussion, the article will consider criticisms by opponents of the new system, namely, that it will unduly delay registration and disadvantage small businesses. Finally, the article will propose improvements to the opposition system.

I. OVERVIEW OF THE TRADEMARK REGISTRATION PROCESS BEFORE THE AMENDMENTS

Until the recent amendments, applications that survived ex parte examination proceeded directly to registration. The steps were as follows:

• Applications were filed electronically or on paper with the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, or “IMPI”) and assigned to an examiner.

• The application underwent “formal examination” to ensure that it met the minimum requirements of the Industrial Property Law (Ley de la Propiedad Industrial, or “LPI”)2 and the Regulations under the Industrial Property Law (Reglamento de la Ley de la Propiedad Industrial, or “RLPI”).3

• In the case of any deficiencies the examiner issued an office action. The applicant had a term of two months, counted from the day after receipt of the office action, to file a response and correct the deficiency.4 This term was extendable to four months.5 In practice, most office actions

1. Diario Oficial de la Federación [Official Journal of the Federation, or “DOF”], June 1, 2016. 2. DOF, June 27, 1991, as amended. Except as otherwise indicated, the article quotes the most recent WIPO translation of the Industrial Property Law available at http://www.wipo.int/wipolex/en/. Other translations are the author’s, unless otherwise noted. 3. DOF, November 18, 1994, as amended. Regarding the requirement of formal examination, see LPI Article 119. 4. LPI Article 122. 5. LPI Article 122bis. No request for an extension of time is necessary; the applicant pays the fee for the extension when the response is eventually filed.

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during the formal examination phase concerned the identification of goods or services.

• After any formal issues were resolved, the application proceeded to substantive examination.6 As part of this examination, the examiner searched the IMPI trademark database (Marcanet) for confusingly similar marks.

• The examiner issued a preliminary refusal (anticipación) if the search disclosed any prior applications or registrations for confusingly similar marks, or the examiner identified any other substantive grounds for refusal. Again, applicants were given two months from the day after receipt to respond, extendable to four months.7

• Once any substantive issues were resolved, the examiner granted registration, and the registration was published in the Industrial Property Gazette (Gaceta de la Propiedad Industrial, or “Gazette”).8

In the absence of formal oppositions, IMPI allowed the filing of informal third-party observations (observaciones de terceros) against pending applications, akin to Letters of Protest in the United States.9 However, IMPI did not require examiners to respond to or even consider such observations.10 Moreover, since pending applications were not published in the Gazette, trademark owners who relied on commercial watch services usually did not learn of a problematic mark until after the registration issued.

The advantage of the system was that it was simple and fast. IMPI typically met its goal of processing applications within six months. The disadvantage was that ex parte examination has inherent limitations. Inevitably, IMPI granted registrations that should have been refused. These problems were especially serious because trademark rights under Mexican law are based primarily (albeit not exclusively) on registration, rather than use.11 6. LPI Article 122. 7. LPI Articles 122 and 122bis. 8. LPI Articles 125-127. 9. United States Patent and Trademark Office, Trademark Manual of Examining Procedure (April 2016), § 1715. 10. One nonbinding judicial decision states that in rare cases, IMPI may be required as a matter of constitutional law to consider third-party observations to avoid contradictory decisions in co-pending trademark registration and infringement proceedings. [TA], 9a Época, TCC, Tomo XXV, Enero 2007, p. 2265, tesis 1.4o.A.552 A. 11. Article 87 of the LPI states that, “the right to [the] exclusive use [of marks] shall be obtained through their registration with [IMPI].” A registration may be declared invalid under LPI Articles 92.I and 151.II if another party has continuously used an identical or confusingly similar mark for the same or similar goods or services since prior to the registrant’s application filing date, foreign priority date, or declared date of first use (whichever is earlier). Since registration confers the right of exclusive use, the registrant may not be sued for infringement until and unless the registration is cancelled or declared invalid.

Vol. 107 TMR 749

The lack of formal oppositions became a minor international embarrassment. The United States Trade Representative complained of it in his 2015 Special 301 Report.12 In statements of legislative purpose that accompanied the recent amendments to the Industrial Property Law, both the Senate and Chamber of Deputies noted the need to harmonize the LPI with the laws of Mexico’s principal trading partners.13

II. LIMITATIONS OF EX PARTE EXAMINATION There are limits to what ex parte examination by IMPI can

reasonably accomplish. Some of these are inherent in trademark examination generally, and others result from the procedures and technology used by IMPI. For example:

• Under the Mexican system (or practically any other system), examiners can issue refusals based on only prior marks that are registered or the subject of pending applications. Examiners have no means of identifying prior unregistered marks.

• Examiners must assume the validity of prior registrations. For instance, an examiner may not decline to cite a registration against a pending application because he or she suspects the prior registered mark is not in use.

• Examiners are limited in their ability to identify marks that are descriptive, generic, functional, or otherwise inherently incapable of registration. Most examiners would likely refuse an application to register LAGER for beer or ROMAINE for lettuce, but few would know that a certain word or phrase is a term of art in neurosurgery or petroleum engineering.

• Mexican law recognizes that famous and well-known marks are entitled to broader protection than marks in general,14 but examiners usually have no way of knowing which prior marks are famous or well-known. In 2005, the LPI was amended to allow IMPI to issue declarations of fame and notoriety, essentially creating a “super register” of famous

12. Office of the United States Trade Representative, 2015 Special 301 Report, p. 16 (“the lack of [trademark] opposition procedures or effective implementation of such procedures in countries such as Mexico and Russia deprives legitimate brand owners of a key tool to challenge bad-faith registrations”). 13. Gaceta del Senado [Senate Gazette], No. 49, Tomo I, November 10, 2015, pp. 135-136; Gaceta Parlamentaria, Cámara de Diputados [Parliamentary Gazette, Chamber of Deputies], 4518-V, April 28, 2016, p. 81. 14. LPI Articles 90.XV and 90.XVbis.

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and well-known marks.15 However, relatively few trademark owners have taken advantage of this system.

• Marcanet employs a “phonetic search” algorithm, which in theory identifies the marks in the database most similar to the mark being searched. While the algorithm does a reasonable job of identifying visually or phonetically similar marks, it does not identify foreign equivalents, or marks that are similar in meaning but dissimilar in appearance and pronunciation.

• Mexican courts have long recognized that the Nice Classification System makes arbitrary distinctions, and that goods and services in different classes may be commercially related.16 However, Marcanet does not offer a convenient means of searching for similar marks across multiple classes.17

• Examiners cannot be expected to identify every possible instance in which consumers would perceive a commercial relationship between goods or services falling in different classes. This is a particular danger in the case of goods sold to specialized consumers. An examiner can be expected to know that toothpaste and toothbrushes are often sold side-by-side at the supermarket, but cannot be expected to know whether the same medical supply companies sell sutures and catheters.

In short, ex parte examination will invariably fall short, even if examiners are conscientious and are given the best possible training and technology. The person best suited to identify and prove infringements of a mark is the owner of the mark. This is why the vast majority of jurisdictions have formal trademark opposition proceedings.18

III. OVERVIEW OF THE NEW OPPOSITION SYSTEM The new opposition system was designed with two goals in

mind: first, to minimize delays in the processing of trademark

15. John M. Murphy, Famous and Well-Known Marks in Mexico: Past, Present, and Future, 105 TMR 1060, 1120-1135 (2015). 16. Id.; John M. Murphy, The Confusing Similarity Standard in Mexican Trademark Law, 96 TMR 1182 (2006). 17. Marcanet allows users to search for identical marks without regard to classification. A phonetic search in one class will sometimes return marks in other classes, but these marks are rarely considered by examiners, and in any case, it is not clear how the algorithm determines which marks in other classes are relevant. 18. The exceptions are Algeria, Belarus, Curaçao, Kyrgyzstan, Lebanon, Malta, Monaco, and Serbia. John M. Murphy, Famous and Well-Known Marks in Mexico: Past, Present, and Future, 105 TMR 1060, 1149 (2015).

Vol. 107 TMR 751 applications,19 and second, to minimize changes to the previously existing registration process.20

In effect, the new system formalizes the practice of observations against pending applications. This is reflected in the legislative history, which states that the main purpose of the new system is to improve the quality of ex parte examination.21

In Mexico, as elsewhere, the refusal of a trademark application must be legally and factually supported by the examiner.22 The opposition system assists examiners by creating a formal means by which interested parties can advise IMPI of potential bases for refusal that they might otherwise miss, and supply them with evidence to support refusals that would otherwise be overturned on appeal.

The principal differences between the Mexican opposition system and those in most other jurisdictions are:

• Oppositions are decided by the examiner assigned to the application, and not by a separate body such as the Trademark Trial and Appeal Board in the United States or the Opposition Division of the European Union Intellectual Property Office.

• There is no distinct opposition proceeding. Oppositions are considered during the substantive phase of ex parte examination.

• Examiners are not obligated to consider oppositions, and unsuccessful opponents have no right of appeal.

19. Gaceta del Senado [Senate Gazette], No. 49, Tomo I, November 10, 2015, p. 138; Gaceta Parlamentaria, Cámara de Diputados [Parliamentary Gazette, Chamber of Deputies], 4518-V, April 28, 2016, p. 81. 20. Gaceta del Senado [Senate Gazette], No. 49, Tomo I, November 10, 2015, p. 136. 21. Gaceta del Senado [Senate Gazette], No. 49, Tomo I, November 10, 2015, p. 135 (“with the incorporation of the opposition [procedure], we may provide IMPI with elements which permit it to better evaluate the elements of a distinctive sign and thus avoid the granting of titles that would invade a previously granted right, or in some cases, remove from the public domain denominations that are common in a given industry”); see also Gaceta Parlamentaria, Cámara de Diputados [Parliamentary Gazette, Chamber of Deputies], 4518-V, April 28, 2016, p. 81. 22. [TA], 8ª Época, TCC, SJF, Tomo XV-2, Febrero 1995, pág. 405, Tesis I.4º.A.827 A; [J], 6ª Época, RTFJFA, Año II, No. 24, Diciembre 2009, p. 71, Tesis VI-J-SS-51.

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The chart below illustrates how the new system operates:

As the chart indicates, new applications are published in a special weekly edition of the Gazette within ten business days of filing.23 Any person who believes an application should be refused must file an opposition within one month of publication.24 This term will not be extended. Any untimely oppositions will be summarily dismissed.25

The opposition must be filed in writing and may be accompanied by any evidence that the opponent considers appropriate.26 IMPI

23. LPI Article 119. The first was published on September 12, 2016. 24. LPI Article 120. 25. RLPI Article 59ter. 26. LPI Article 120.

Vol. 107 TMR 753 has established a filing fee of $3,733.72 MXN, or $200.96 USD.27 If the notice of opposition is formally defective, IMPI will issue an office action granting the opponent five business days to remedy the deficiency.28 If the opponent does not timely respond, the opposition will be dismissed.29

Within ten business days of the close of the opposition period, IMPI will publish a list of applications that have been opposed in the Gazette.30 It is critical for applicants to monitor the Gazette because it is the only means by which they will be notified of the filing of an opposition.

Applicants have a nonextendable term of one month from the day after publication to respond.31 The opposition and the answer are forwarded to the examiner for consideration during substantive examination. The applicant’s failure to respond is not a tacit admission of the opponent’s allegations.32

IMPI does not suspend examination while the opposition is pending.33 Moreover, the opposition “will not confer upon the person who presents it the character of an interested party, third party or party.”34 This means, in effect, that the opponent has no right of appeal if the opposition is dismissed.

There is nothing to prevent a dissatisfied opponent from filing an invalidation action once the registration issues. However, it is an open question whether IMPI will readily grant requests for invalidation if an opposition based on the same facts and legal arguments has already been dismissed.35

IV. WILL TRADEMARK OPPOSITIONS DELAY THE REGISTRATION PROCESS?

The major criticisms of the opposition initiative were that it would delay prosecution and increase the cost of obtaining a trademark registration. As stated by one Mexican commentator, Mauricio Jalife:36

27. DOF August 26, 2016. The conversion to U.S. dollars is based on the exchange rate on April 17, 2017. 28. RLPI Article 59ter. 29. Id. 30. RLPI Article 59quáter. 31. LPI Article 120. 32. Gaceta del Senado [Senate Gazette], No. 49, Tomo I, November 10, 2015, p. 136. 33. LPI Article 120. 34. Id. 35. But see infra note 46. 36. Mauricio Jalife, Presentan iniciativa de oposición para ley de marcas [An Initiative for Oppositions Under the Trademark Law Will be Presented], El Financiero, February 26, 2015.

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Faced with [a change to the law of] such scope, one should ask whether the implementation of this [opposition] mechanism modernizes our system, or makes it more efficient or better in some way. My guess is no. In fact, I believe that the adoption of such a reform will plunge our trademark system into a complex web of pressures that will affect the time and cost of registration, to the clear detriment of medium-sized and small businesses. . . . What can be predicted is a noticeable increase in processing times, not only as a result of inserting one more stage in the [registration] process, but also a burden on the bureaucracy and system users, who will face unusual complexities in the administration of [applications for] registration, with serious consequences in terms of legal fees and delays in access to markets. As noted above, IMPI granted or refused trademark

applications within about six months on average before the amendments. This compared favorably with other major industrial property offices, as shown by the table below:37

37. The “top 20 offices” are the trademark registration offices with the highest “class count” identified in World Intellectual Property Organization, World Intellectual Property Indicators 2015, p. 86 (Table B10). Figures for application pendency were obtained from INTA’s online Country Guides, available to members at http://www.inta.org/CountryGuides/ Pages/CountryGuides.aspx.

Vol. 107 TMR 755

It is probably true that prosecution time will increase as the opposition system is implemented. IMPI generally met its goal of registration or refusal within six months, in part because a substantial number of applications matured to registration within a matter of weeks. This will no longer happen, given the additional steps imposed by the new system (initial publication within ten business days and a one-month opposition period). It is difficult to imagine how even an unopposed application would mature to registration in less than two months. If the application is opposed, the mark will not register in less than three months, even if the examiner completely ignores the opposition and the answer, as he or she is legally entitled to do.38

On the other hand, long delays are not inevitable. The trademark offices of several jurisdictions listed in the table above (Spain, France, the United Kingdom, and Benelux) process applications more quickly than IMPI, despite having pre-registration opposition systems.39 A detailed investigation of these systems might suggest means of improving the Mexican system. One possibility would be to hire additional examiners to handle the extra workload occasioned by trademark oppositions. Another possibility would be to refer oppositions to the contentious proceedings division at IMPI so that examiners can focus on processing applications that have not been opposed.40

V. WILL THE NEW OPPOSITION SYSTEM BE FRIENDLY TO SMALL BUSINESS?

A moderate increase in prosecution time will not spell the death of entrepreneurship in Mexico, as Jalife suggests. A number of jurisdictions with trademark oppositions and longer prosecution times (e.g., Canada, the United States, Hong Kong, and Australia) are generally thought of as friendly to small business. Further, delays in trademark prosecution are not barriers to market entry, since one need not register a mark in order to use it.41

Finally, an opposition system will not unduly increase the cost of obtaining a trademark registration. So far, only 2.6% of

38. LPI Article 120. 39. In Germany, Switzerland, and Japan, marks are published for opposition after registration. See INTA’s Country Guides, available online to INTA members at http://www.inta.org/CountryGuides/Pages/CountryGuides.aspx. 40. If this suggestion were followed, it would probably be necessary to expand the staff of the contentious proceedings division to cope with the additional workload. 41. In fairness, a Mexican trademark registration confers important defensive benefits; the owner of the registration cannot be sued for infringement until and unless the registration is cancelled or declared invalid, and this is a long and involved process. Since use is not a requirement for registration in Mexico, many applicants postpone the use of a new mark until after the registration has issued.

756 Vol. 107 TMR applications published for opposition have been opposed,42 which is roughly consistent with opposition rates in the United States and the United Kingdom.43

Further, many applicants who are forced to spend money defending trademark oppositions would have spent an equivalent amount defending invalidation actions under the previous system—or more, since the dismissal of an opposition may not be appealed, while appeals in invalidation proceedings are probably the rule rather than the exception.

In short, trademark oppositions will not be a significant burden to legitimate entrepreneurs, who can typically wait a few months more for a registration. The real losers will be pirates, who file infringement actions in bad faith based on trademark registrations that should never have issued.

VI. HOW THE OPPOSITION SYSTEM CAN BE IMPROVED

A weakness of the new system is that oppositions will be considered by examiners and not by a separate body. Since an opposition “will not prejudice the result of the substantive examination undertaken by [IMPI] regarding the application,”44 and the dismissal of an opposition is not subject to appeal,45 it will be tempting for examiners to ignore oppositions, particularly if IMPI is determined to continue processing applications at the current rate without hiring additional staff. Exacerbating this problem, an examiner who sustains an opposition must draft a resolution detailing the factual and legal grounds, while an examiner who dismisses an opposition need only notify the opponent that the registration issued.46 Transferring responsibility to a separate body (e.g., the contentious proceedings division of IMPI) would allow examiners to focus on the 97.4% of applications that are not opposed.

42. By the author’s count, a total of 72,928 trademark, trade name, and advertising slogan applications were published for opposition by IMPI between September 12, 2016 (the first issue of the Gazette in which applications were published under the new system) and March 10, 2017 (applications published after that date were still within the opposition period as of the date of the tally). Of these applications, 1,915 were opposed, or approximately 2.6%. 43. In the United States, less than 2% of trademark applications are opposed. In the United Kingdom, the rate is around 3%–4%. Jeremy N. Sheff, Dilution at the Patent and Trademark Office, 21 Mich. Telecomm. & Tech L. Rev. 79, 113 (2015); Barbara E. Cookson, Nabarro Nathanson and Patrick J. Gallagher, Trademark Oppositions: Effective Proceedings or Procedural Warfare, INTA Bulletin, Sept. 1, 2003, pp. 1, 4. 44. LPI Article 120. 45. Id. 46. Id. IMPI examiners have informally adopted the practice of issuing decisions even in cases where an opposition is dismissed. It is an open question whether this converts a trademark opposition into a contentious proceeding in which an unsuccessful opposer has a right of appeal.

Vol. 107 TMR 757

An even more serious problem is that the potential grounds for opposition are limited to grounds for ex parte refusal under Articles 4 and 90 of the Industrial Property Law.47 Other objections to registration may be raised only through an invalidation action after the registration is granted, namely:

• The registered mark is identical or confusingly similar to another previously used, in Mexico or any other country, for identical or similar goods or services.48

• The registration was granted based on an application containing false information (typically, an incorrect date of first use).49

• The registration was obtained in bad faith and without authorization by an agent, representative, authorized user, or distributor of a person who has registered the mark in another country.50

IMPI declared sixty-three trademark registrations invalid during January–March 2016. The table below summarizes the legal grounds:

47. Article 4 prohibits the registration of marks that are “contrary to public policy, morality, or proper practice” (LPI Article 4). Under LPI Article 90, a mark may not be registered if it is: “expressed in motion” (LPI Article 90.I); a generic term (LPI Article 90.II); in common use, lacks originality, or functional (LPI Article 90.III); a descriptive term (LPI Article 90.IV); a single letter, numeral or color (LPI Article 90.V); a translation or misspelling of an otherwise unregistrable word (LPI Article 90.VI); an imitation of a flag, coat of arms, or emblem of a country or political subdivision (LPI Article 90.VII); an imitation of a coin, banknote, or the like (LPI Article 90.VIII); an imitation of a decoration, medal or prize awarded at a trade show, fair, congress, or cultural or sporting event (LPI Article 90.IX); a geographic term or map (LPI Article 90.X); the name of a town or place known for the manufacture of a certain product (LPI Article 90.XI); the name, pseudonym, signature, or portrait of a living or deceased person (LPI Article 90.XII); the title of an intellectual or artistic work or a character name (LPI Article 90.XIII); or deceptive as to the nature, components or qualities of the products or services (LPI Article 90.XIV). In addition, Article 90 lists various relative grounds for refusal, including: confusing similarity, risk of association, unauthorized appropriation, tarnishment or likelihood of dilution of a prior well-known mark (LPI Article 90.XV); similarity to a famous mark (LPI Article 90.XVbis); confusing similarity to a mark shown in a prior registration or pending application (LPI Article 90.XVI); and confusing similarity to a prior trade name a prior trade name (LPI Article 90.XVII). 48. LPI Article 151.II. 49. LPI Article 151.III. 50. LPI Article 151.V.

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As the table shows, sixteen registrations (25.4%) were declared invalid on the basis of prior use of a confusingly similar mark in Mexico or abroad (LPI Article 151.II). Another four registrations (6.3%) were declared invalid due to false data in the application (LPI Article 151.III). The present opposition system would have been of no help to the plaintiffs in these proceedings.

This is absurd. While in a narrow sense, the opposition system is designed to provide trademark examiners with support for ex parte refusals, the broader goal of the new system is to protect legitimate trademark owners from abusive infringement actions. There is simply no reason why opponents should be prevented from filing oppositions alleging the applicant’s bad faith, false information in the application, or prior use of a similar unregistered mark.51

VII. CONCLUSION The new Mexican opposition system is a welcome development.

The quality of ex parte trademark examination will be improved, and at least some trademark owners will be spared the burden of defending protracted and expensive infringement actions based on registrations that should never have been granted.

51. An expansion of the potential grounds for opposition would likely require the transfer of responsibility for oppositions to the contentious proceedings division of IMPI, since trademark examiners are not required to be familiar with the procedural rules and rules of evidence applicable to contentious proceedings. A opposition decision rendered by the contentious proceedings division would, presumably, be subject to appeal.

Vol. 107 TMR 759

Trademark oppositions will likely delay the registration process and increase the cost of registration for applicants whose applications are opposed. However, the delays should not be excessive once IMPI and the trademark bar become familiar with the new system. Given the simplicity of the process, the cost of defending an opposition should be modest, and many applicants who are forced to defend oppositions would likely have been forced to defend invalidation actions under the former system.

Unfortunately, the opposition procedure has shortcomings that are difficult to defend. There is no practical or doctrinal reason why prior use, bad faith or false data in the application should be grounds for invalidation but not for opposition. The law should be amended as soon as possible to allow for oppositions based on any of the grounds for invalidation stated in Article 151 of the Industrial Property Law.