Mar 2024

Mexico

Law Over Borders Comparative Guide:

Fashion Law

Introduction

Fashion is an important aspect of society, and this is certainly the case in Mexico, which has a growing industry. Fashion shows are held throughout the year, allowing Mexican designers to showcase their creations, and Mexican retailers and boutiques to showcase the latest trends.  

The regulatory framework of fashion in Mexico includes a set of regulations and provisions concerning production, distribution, trade and garment post-sale services. These regulations are not only intended to protect designers and trademark holders’ rights, but are also aimed at protecting consumers, manufacturers, distributors, importers, carriers and all supply chain logistics related to the Mexican fashion industry by ensuring compliance with legal and quality standards. 

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1 . What are the main intellectual property rights available to protect fashion products?

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1.1. Summary of IPRs

IPR  DurationTime and modalities for grantPros and cons in the fashion sector
Trademarks10 years/renewable for indefinite successive 10-year periods from the registration date.Time for grant: 4 months – 1.5 years from the application date (on average) with the Mexican Industrial Property Institute (IMPI).

Pros:  

  • Helps to distinguish the brand from that of competitors.
  • Helps to position the brand in the market.
  • Aids consumer association between quality and price.
  • Evidence of exclusive use by the holder.
  • Useful as an indicator of origin.

Cons:  

  • Protection limited to Mexico.
  • Protection costs can be high given the dynamics of fashion trends.
Design5 years, renewable for 5-year successive periods up to a maximum of 25 years from the application date.Time for grant: From 6 – 10 months once the application is filed before the IMPI.

Pro:  product ornamentation protection.

Cons:  

  • Limited effectiveness.
  • Becomes part of the public domain upon expiration.
  • Limited protection scope due to confusing similarity.
Trade secretsUntil revealed/loss of secrecyOnce the information is classified as confidential, the owner of the information must take all necessary steps to keep it in secrecy. Due its nature there are no public records of its existence.

Pros:

  • Can be effective, provided that secrecy is maintained.
  • It can cover issues not subject to protection via other tools such as patents.
  • No authority is involved in the creation and maintenance of protection.

Cons:

  • The lack of involvement of any authority can be a disadvantage.
  • Information leakage risk at the slightest information misuse.
  • Lack of protection against independent discovery by third parties.
Domain names1 year, renewable for indefinite successive 1-year periods from the registration date.

Domain names are protected under a specific figure in Mexico named “Reservation of rights to exclusive use”, under the classification “Periodical dissemination via computer network”. 

The average time to get a reservation certificate is 45 labor days from the application date.

Pros:  

  • Helps to position the brand in the market.
  • Allows for interaction with the public.
  • No retail locations.
  • Allows for product trading at low cost.
  • Justifies the use of several industrial property concepts.

Cons:  

  • Annual fees must be paid to keep it in full force and effect.
  • Anyone can purchase it.
  • There is no specific regulation for domain names in Mexico, they are governed by international law.
Patents20 years but protection is subject to the payment of fees every 5 years.

Patents and utility models can be registered with IMPI.

The average time to be granted a patent is around 4 – 5 years, a registration certificate is around 2 – 2.5 years.

Pros:

  • Protection of product’s novelty.
  • Provides exclusive use to holder.

Cons:

  • Specialized process to obtain it, which is rather slow.
  • Limited effectiveness.
  • Becomes part of the public domain upon expiration.
  • Limited protection scope due to confusing similarity.

 

CopyrightAuthor’s life plus 100 years.

According to Mexican copyright law, protection is automatic on creation, once the artwork is placed in a physical support.

A registration certificate is not strictly necessary to gain protection. The registration certificate is merely in recognition.

A registration certificate for an artwork will take 15 labor days to be granted, from the application date.

Pros:

  • Immediate protection as soon as embodied in any material form.
  • Supports the origin of trademarks.

Cons:

  • Not protected in case of satire or parody.
  • Proof of authorship of the work is required since registration itself does not grant a right.
  • Difficulty maintaining administrative control in relation to the distribution, exploitation and integrity of the work.
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1.2. Trademarks and non-traditional trademarks

The Federal Law on the Protection of Industrial Property of Mexico sets out the legal framework for traditional and non-traditional trademarks. Traditional trademarks include:

  • Descriptive (letters, numbers).
  • Design (shapes, color combinations).
  • Tridimensional.
  • Slogans.
  • Trade names and company names.
  • Personal names.
  • Mixed (combinations of the above).
  • Well-known names.
  • Famous names.

Non-traditional trademarks include:

  • Collective.
  • Certification.
  • Sounds.
  • Scents.
  • Trade dress (combinations of operation and image elements).
  • Holograms.

An example of a non-traditional trademark is Trademark No. 1086931 “HECHO EN MÉXICO”, owned by the Ministry of Economy. This is the official identifier of products made in Mexico, which allows identification by local and international consumers. This is a non-traditional trademark in that it is a certification mark, and may be used only if the goods meet the requirements established by the Ministry of Economy.

In Mexico, any entity or business can use a trademark, but the exclusive use is granted with registration. Unregistered trademarks are exempt from infringement if its owner can prove continued use in Mexico prior to the alleged affected registered mark.

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1.3. Design as an alternative or addition to TM registration

Industrial designs are protected by the Federal Law on the Protection of Industrial Property. They are defined as any combination of shapes, lines or colors embodied in an industrial or handcrafted product for ornamental purposes, which give it a peculiar and unique appearance.

Textile patterns, finishes or physical or pictorial finishes on items, where such patterns or finishes serve no specific function and are there for entirely aesthetic reasons, are mainly protected as industrial designs.

Industrial designs provide optional supplemental protection. Their validity is limited to 25 years, while the validity of a trademark may be perpetual.

Textile patterns, shoe soles and eyeglass shapes can be protected as industrial designs.

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1.4. Copyright as an alternative or addition to TM registration

One of the key aspects of fashion law in Mexico is copyright and trademark protection. Mexican fashion designers are entitled to protect their creations to ensure that no one else can copy or sell them without their consent. This requires registration of their designs and brands with the Mexican Industrial Property Institute (IMPI), which will grant them exclusive rights over their work.

Copyrights are the precursor to trademarks. The fashion industry is driven by creativity and originality, and sketches, prints on any material, garment designs, photographs and/or pictures, are protected by the Federal Law on Copyright. They can later be protected under a trademark that allows for their industrial exploitation.

The Federal Law on Copyright and its regulations protect original works that can be disclosed or reproduced in any form or way. Such works are protected from the moment they are embodied in any material form, regardless of the merit, destination or means of expression.

The law recognizes the following types of work: pictorial or drawing, photographic, and applied art including graphic or textile design.

The law also provides protection through ‘Applied Artworks’, this kind of protection being granted to an artistic work applied to objects of practical use, whether they are works of craftsmanship or works produced on an industrial scale. Textile patterns may be covered as an artwork, similar to drawings or industrial designs.

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1.5. Any other pertinent IP rights

Patents. Patents in Mexican fashion law play a very important role as they grant a creator the exclusive legal right over their creation, whether it is a product, design or process related to the fashion business (where being creative, original and innovative is an advantage among competitors).

There are several companies that protect their patents for the treatment of textiles, as well as improvements in dyeing treatment or impressions on textiles.

For example, Patent Registration in Mexico No. 395870 for “LASER FINISHING OF APPAREL” and Patent Application No. MX/a/2023/014127 for “BLENDED TEXTILE COMPOSITION WITH IMPROVED DYEING PROPERTIES”.

Industrial designs. This is another way to protect “ornamental features” attached to a good. This kind of protection will only grant protection over the “aesthetic features” and the protection will be in force for 25 years.

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2 . Beyond intellectual property: what contractual arrangements are useful in manufacturing, distributing and advertising fashion products?

Another important element of fashion law in Mexico relates to contracts and trade agreements. Such contracts are crucial to regulating relationships between designers, manufacturers and distributors. The rights and obligations of each party, as well as the terms and conditions of trade are defined in such documents.

The following is a list of the most common agreements used in the fashion industry. It should be noted that each agreement may regulate different aspects, such as manufacturing, distribution and advertising or a combination of these. Negotiations usually begin with a term sheet or letter of intent.

Full-service agreements:

  • Franchise.
  • License (master, sublicense, worldwide, regional, limited, temporary).
  • Trade.
  • General terms and conditions.

Manufacturing agreements:

  • License (master, sublicense, worldwide, regional, limited, temporary).
  • Authorization.
  • Service.
  • Garment making. 

Distribution agreements:

  • Distribution (exclusive/non-exclusive/selective).
  • License (master, sublicense, worldwide, regional, limited, temporary).
  • Commercial terms and conditions.
  • Authorized retailer (exclusive/non-exclusive).
  • Development and logistical operations.
  • Supply.
  • Import-export.
  • Logistics.
  • E-commerce.
  • Trade.
  • Consignment.
  • Operation of a “branded corner store” within a department store.
  • Commission. 

Advertising agreements:

  • Marketing.
  • Production.
  • Influencer.
  • E-commerce.
  • Image license. 
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2.1. Manufacturing fashion products

License agreements 

Common provisions contained in license agreements include those relating to:

  • Copyrights/trademark (scope).
  • Product approval.
  • Permitted/non-permitted sourcing countries and prohibited persons.
  • Code of conduct for manufacturers.
  • Facility and merchandise authorization.
  • Eco-friendly raw materials authorization.
  • Product integrity. 
  • Insurance. 
  • Labor.
  • Delivery (shortfall/surplus, applicable incoterm).
  • Transportation.
  • New development (i.e., digital innovations/non-fungible tokens).
  • Guarantee and return policy.
  • Labeling.
  • Certificates of authenticity.
  • Customs clearance.
  • Possible infringement.
  • Confidentiality. 
  • Non-transferable/the inability to assign the agreement to any third parties.

Non-disclosure Agreements (NDAs)

Common provisions contained in NDAs include those covering:

  • Confidential information definition.
  • Non-disclosure.
  • Purpose of disclosure.
  • Channels approved for disclosure (authorized ways any information may be shared).
  • Need-to-know (exceptions to confidentiality/public information/legally required disclosure).
  • Term and confidentiality obligation period.
  • No transfer of rights.
  • Security measures to handle confidential information.
  • Return of information.
  • No warranties concerning accuracy or completeness of information.
  • Equitable remedies.

Subcontract agreements with suppliers/in-house manufacturing

Common provisions contained in these agreements include those covering:

  • Authorization with no transfer of rights.
  • Product approval.
  • Permitted/non-permitted sourcing countries and prohibited persons.
  • Code of conduct for manufacturers.
  • Facility and merchandise authorization.
  • Eco friendly raw materials authorization.
  • Product completeness.
  • Insurance.
  • Labor.
  • Delivery (shortfall/surplus, applicable incoterm).
  • Transportation.
  • Warranty and return policy.
  • Labeling.
  • Certificates of authenticity.
  • Possible infringement.
  • Confidentiality.
  • Non-transferable/the inability to assign the agreement to any third parties.
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2.2. Distributing fashion products

Agency agreement 

In Mexico this is known as a “sales agency agreement” whereby the “sales agent” agrees to carry out, whether on a continued basis, any acts and transactions on behalf of a third party in its capacity as an independent intermediary, assuming no liability for the results of such activity (unless otherwise agreed) in exchange for a consideration or fee.

This type of agreement is expressly governed by Title Three, Chapter I of the Commercial Code of Mexico.

In this case, the sales agent agrees to follow the instructions received from the client. Under no circumstances may the sales agent act contrary to the provisions of the agreement.

Selective distribution online in high-end fashion and trademark protection

Selective distribution agreements are executed based on the reputation associated with a trade name identifying the point of sale or trading channel. They specifically include the following provisions:

  • Authorized points of sale or specific distribution channels (including provisions related to e-channels such as the “Metaverse”).
  • Appointment and authorization of sale.
  • Conditions of sale.
  • Facilities and/or furniture (trade dress).
  • Electronic security.
  • Competition within the authorized point of sale.
  • Display of products for sale.
  • Staff (training, operation).
  • Approval procedure of new points of sale.
  • General conditions of sale.

Co-branding and co-marketing 

Some of the most important provisions of these agreements include those relating to:

  • Authorization or license of the use of distinctive marks between the parties.
  • Handbooks or guidelines for the use of trade dress for such distinctive marks.
  • Definition of the use of beneficiary trademarks for the sole and exclusive benefit of the holder.
  • The degree of liability of each trademark holder to consumers, with respect to the supply offered to the general public and the responsibility for compliance with warranties provided, if any.

Franchising and alternative sales model agreements 

In the case of franchises, corner store agreements, consignment store agreements, pop-up stores and flagship stores, there are common provisions, such as those concerning:

  • Trademark licensing;
  • Standardization of operating, trade and administrative methods;
  • Definition of location or territory (distribution channels, including digital channels and the “Metaverse”).

“Trade dress” is the main target of protection and licensing because the location or venue where a product is sold or where services are provided must be fully relatable to the brand and the business must be operated identically, regardless of the location of the venue.

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2.3. Advertising fashion products

Employing fashion models 

The following types of agreements are typically used in relation to the employment of fashion models:

  • Modeling services agreement.
  • Image use and exploitation agreement.
  • Professional services agreement.
  • Authorization letter.
  • Disclaimer letter regarding the use of an image.

Some of the provisions contained in the above-mentioned documents include:

  • Identification of the individual.
  • Scope of authorization (i.e. territory, product/service, seasonality, exploitation channels).
  • Activities to be carried out.
  • Consideration.
  • Events of default.
  • Indemnity in the event of default.
  • Title of the finished work.
  • Rights transferred and reserved by the model with respect to their image and activities to be carried out.
  • Model restrictions (i.e. lifestyle or public demeanor, change of image, involvement with competing products/services).
  • Final authorization by the employee regarding final works.
  • Use and exploitation of non-final works.
  • Confidentiality.

In relation to social media, influencers and brand ambassadors/celebrities, agreements should contain provisions on the following:

  • Product or service to be represented.
  • Exclusivity. 
  • Scope of social media/minimum followers required.
  • Characteristics of the service (i.e. number of posts, time, content).
  • Non-compete with similar products/services.
  • No misleading information or comments that may damage the service or product subject matter of the agreement.
  • Production and scope of support if any.
  • Special features to be emphasized.
  • Influencer restrictions (i.e. lifestyle or public demeanor, change of image, involvement with competing products/services).
  • Title of resulting content.

Advertising standards, relevant authorities and advertising practice 

Issues can arise in the fashion industry regarding labeling and misleading advertising. Consumers have the right to receive clear and accurate information about the products they are buying; thus, fashion brands must adhere to certain rules in regard to the information they include on labels and in advertising.

The Federal Consumer Protection Agency of Mexico (PROFECO) is the competent authority regarding advertising activities and is in charge of protecting consumers from misleading and abusive advertising, and coercive and unfair commercial methods, as well as against abusive or imposed practices and clauses in the supply of products and services (Article 1, section VII of the Federal Law on Consumer Protection). However, the Federal Law on Industrial Property Protection also provides protection to all consumers.

Information or advertising related to goods, products or services disseminated through any means or form must be truthful, verifiable, clear and free of text, dialogue, sounds, pictures, brands, designations of origin and other descriptions that induce or may induce error or cause confusion by being misleading or abusive. 

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3 . What regulations govern online marketing and how are the rules enforced?

The main regulations governing online marketing are:

  • Federal Law on Consumer Protection. This law’s main purpose is to promote and protect consumer rights and culture and to ensure fairness, certainty and legal security in the relationship between suppliers and consumers. These powers are exercised through PROFECO.
  • Federal Law on Telecommunications and Radio Broadcasting. This regulates the balance between the advertisement and content of concessionaires, advertising content and advertising targeting children.
  • The Ministry of the Interior regulates the content of advertisements, while the Ministry of Health regulates advertising related to medical, cosmetic and health products.
  • The standard NMX-COE-001-SCFI-2018 includes a list of recommendations regarding digital trade. This standard was published in the Federal Official Gazette on 30 April 2019 and the Federal Consumer Protection Agency is in charge of enforcing it.
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3.1. Consumer protection regulations

Chapters V and VIIIbis of the Federal Consumer Protection Law define the rules on sales out of a business location, including remote or online sales.

These transactions are subject to the following rules, at a minimum:

  • The supplier must process the information provided by the consumer confidentially and securely using any technical resources available.
  • The supplier must provide information to the consumer on filing complaints or requesting clarifications.
  • The supplier must avoid deceiving trade practices regarding the characteristics of products.
  • The consumer is entitled to know all about the products/services offered by the supplier.
  • The supplier must respect the consumer’s choice of purchase.

Suppliers offering, marketing or selling goods, products or services using electronic, optical or any other technology must observe the provisions of the Mexican Standard issued by the Ministry of Economy.

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3.2. Physical store and online store layout

The Federal Law on Industrial Property Protection contains specific provisions aimed at protecting store layout, such as subsection VII of Article 172, which states that the following can constitute a brand: “The plurality of operational or visual elements, including, but not limited to, size, design, color, layout, label, packaging, decoration or any other elements that, when combined, differentiate products or services in the marketplace.”

These elements also form part of the definition of a franchise as set out in Article 245 of the above law.

In turn, the Federal Law on Copyright provides for store layout protection under the concept of design or architectural works, while software is considered a work of art when it can provide digital alternatives to trade products, including the “Metaverse”.

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4 . What are the most relevant unfair competition rules for fashion businesses and how do the courts interpret and enforce these rules?

With respect to unfair competition, the law provides that certain specific conduct amounts to infringement and criminal activity.

The Mexican Trademark Office is the authority in charge of taking infringement action and there is also a specific task force to prevent criminal action related to intellectual property, which is called the UEDAPI (Unidad Especializada en Investigación de Delitos contra los Derechos de Autor y la Propiedad Industrial).

Authors and creators in the fashion industry usually want to provide a unique product/service to the market, The rules on unfair competition, which are designed to combat copying by third parties, are therefore vital. The enactment of specialized laws covering specific issues, such as indigenous rights, copyright, and famous and well-known trademarks, indicates a willingness by the Mexican government to protect the rights of original creators.

The Mexican courts must interpret the legal framework in compliance with the Constitutional rights of citizens. The Mexican Supreme Court has issued jurisprudence in the field of competition law and provided several interpretations of what unfair competition means. 

With that in mind, legal dispositions, courts and administrative authorities work together to diminish the damage caused by unfair action and provide for the legal exploitation of intellectual property rights.

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5 . Is there any regulation specifically addressing sustainability or ESG (Environmental, Social and Governance) in the fashion industry?

PROFECO is in charge of raising awareness of responsible and smart consumption, which is defined as conscious, informed, critical, healthy, sustainable, supportive and active consumption, so that consumers are able to make good and informed decisions regarding consumption of goods and services, of the effects thereof, and their rights.

PROFECO is authorized to verify information on advertising of goods, products or services disseminated through any means or form. Such information or advertising must be truthful, verifiable, clear and free of text, dialogue, sounds, pictures, brands, designations of origin and other descriptions that induce or may induce error or cause confusion by being misleading or abusive. Thus, PROFECO is in charge of preventing greenwashing practices in Mexico, i.e. NOM-050-SCFI-2004 regulates labeling information for general products.

ISO Standards are applicable in Mexico.

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6 . Customs monitoring: do any special import and export rules apply to fashion products?

Trademark holders can be registered in the Customs Trademark Database under rule 2.4.9 of the General Rules on Foreign Trade of Mexico.

The following is a summary of the procedure to be followed with the Mexican Customs Department in the case of possible trademark counterfeiting:

  • The customs authority assumes counterfeiting or piracy based on discrepancies between the information provided by trademark holders (i.e. Customs Trademark Database, training courses, technical sheets) and the visual and documentary inspection of the goods.
  • The piracy office of the Tax Administration Service (SAT) notifies holders and/or licensees of trademarks of the arrival of the goods in containers if by sea and/or by air under an air waybill.
  • The holder and/or licensee has five calendar days to inform the customs authorities if such importation is authorized.
  • Failure to provide notice to the authorities within the five-day period results in release of the goods.
  • If the recipient abandons the goods at the Customs office, then the Customs authority must destroy the goods.
  • If the importation is authorized by the trademark holder, the goods leave the Customs warehouse for their final destination.
  • If the importation is not authorized by the trademark holder, the holder must file a complaint to prevent the goods from leaving the Customs warehouse. This complaint is filed with the Federal Attorney General (FGR). The holder may also file a request for administrative infringement with IMPI.
  • Once the complaint or request for administrative infringement is filed, a copy of this is sent to the customs authorities, who will keep the goods in custody.
  • A sample of the original product will be required from the trademark holder within the following 15 days to conduct the relevant expert analysis.
  • Once the expert analysis is completed confirming that counterfeiting has occurred, the Customs authorities will destroy the products.
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7 . Frequently Asked Questions (FAQs)

In cases where local authorities wrongfully register trademarks similar to brands associated with the fashion industry, what options does the real owner have to nullify or cancel the registration?

In these cases, a full assessment is required to determine the options available to initiate motions for annulment or cancellation, since each case can be completely different and the counterparty may be acting in good or bad faith.

The best option is a motion for annulment, where the real owner uses any prior use of the trademark in Mexico or abroad against the registration wrongfully granted. This is also the case in relation to actions filed on the grounds of prior registration and the possible error or mistake by the authority when authorizing the trademark.

Another option can be a motion for cancellation on the grounds of lack of use, but this option is not available if the holder of the registration wrongfully granted is currently using it.

Exploring options based on copyright infringement is the advisable course of action for the most complex cases. Excessive costs and the lengthy nature of complex strategies, as well as the numerous stages of litigation, may lead clients to seek other alternatives, such as negotiations with trademark holders, which in some cases can have favorable results.

Where a fashion brand is selling products in Mexico, how can it ensure the Mexican partner agrees to contractual provisions, such as the obligation to resolve disputes arising from the agreement before a foreign authority (usually in the United States)?

The most straightforward dispute resolution strategy is to negotiate a concurrent jurisdiction. This means that each party may file actions to enforce the agreement in their own jurisdiction or where the agreement is in effect. However, we strongly recommend including a specific alternative dispute resolution clause, such as referring the dispute to executive-level decision makers or to arbitration.

In the case of unauthorized use of a design that is similar (but not identical) to the one protected by a “big brand”, how should the big brand proceed?

Bearing in mind that the use may be in good or bad faith, and that the design may not be quite the same as that originally owned by the big brand, then the first step would be a cease-and-desist letter, which may be sufficient to stop unfair use.

However, if the products are confusingly similar and sales of the original products are compromised, then the big brand should act to ban such unfair use by filing legal action claiming infringement, seeking injunctions and remedies under criminal law.

Conducting a preliminary search of a design that a business wishes to use is of the utmost importance before starting production, to avoid any infringement of third party rights. 

EXPERT ANALYSIS

Chapters

Australia

Derek Baigent
Ellen Baker
Jennifer Wyndham-Wheeler
Shannon Fati

Belgium

Christine De Keersmaeker
Katrijn Huon

Brazil

Flavia M. Murad-Schaal
Isadora Schumacher Jeong

Finland

Hilma-Karoliina Rozell

France

Floriane Codevelle
Karina Dimidjian-Lecomte

Germany

Ariane Hettenkofer
Gina Maria Ziaja

Greece

Alexandra Varla
Maria G. Sinanidou

Hong Kong

Hank Leung
Harry Wong

India

Radha Khera
Ashwin Julka

Ireland

Patricia McGovern

Italy

Alice Fratti
Beatrice Cazzanelli
Carlo Colaci
Francesca Ferrero

Nigeria

Annie Oti

Singapore

Lorraine Tay
Cheryl Lim

Spain

David Fuentes Lahoz
José Miguel Lissén Arbeloa

Taiwan

Cathy Wang
Huan-Yi Lin
Matthew Lee

Thailand

Chanya Veawab
Michelle Ray-Jones

United Kingdom

Gary Assim

United States

Megan Bannigan

Vietnam

Chi Lan Dang
Diep Thi Bich Le
Hien Thi Thu Vu
Tu Ngoc Trinh

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