Jun 2024

Mexico

Law Over Borders Comparative Guide:

Luxury Law

Sections

Scroll down to read the full chapter or click on the headings below to jump to the relevant section.

Contributing Firm

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1 . Trademark

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1.1. Sources of law

In Mexico, the principal sources of law relating to trademarks are:

  • The Federal Law for the Protection of Industrial Property. 
  • The Paris Convention for the Protection of Industrial Property. 
  • The United States-Mexico-Canada Agreement (USMCA).
  • The Nice Agreement Concerning the International Classification of Goods and Services. 
  • The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). 
  • The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.
  • The Vienna Agreement Establishing an International Classification of the Figurative Elements of Trademarks.
  • Accords issued by the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial) (IMPI).

The Constitution does not mention trademark protection, but owners’ rights are protected by it because the Constitution establishes procedural rights and guarantees that apply to trademark application processes, and allow owners to take legal action or defend against it, foe example, the right to due process, which includes the right to be notified of any legal or administrative action, the right for trademark ownership not to be affected without a fair trial, the right to legal certainty, and the right to defend trademark ownership, amongst other Constitutional rights mostly related to human and fundamental rights. International law is important as the Mexican legal framework regarding trademarks has largely been shaped by it, and must accord with it.

Depending on the subject area, specific laws apply, like the Federal Criminal Code, Federal Tax Code, Federal and State Civil Codes or Customs Law.

Court decisions provide guidelines for judges and authorities on how to interpret the sources of law.

Use as a source of trademark rights grants a preferential right while also being a conservation requirement. As a preferential right, a trademark owner can act against someone who registered an identical or similar trademark, subject to the statute of limitation.

Trademark protection is obtained through registration, for which use is not required. However, as noted above, use is required to conserve the right. Three years after registration has been granted, the owner must provide a statement declaring real use of the trademark. If this is not done, the right to the trademark expires and registration is lost. 

Non-registered trademarks are not recognized by the law.

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1.2. Substantive law

Mexican law distinguishes between famous trademarks and well-known trademarks. Trademarks with a reputation are not regulated, but the granting of a trademark is influenced by the IMPI analyst’s understanding of it, so reputation matters. 

Trademarks belonging to the luxury industry do not enjoy a broader range of protection than that provided by the law.

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1.3. Enforcement

Trademarks can obtain broader protection through prior use, distinctiveness, and being famous or well-known. The type of evidence that can be produced to prove that a trademark is entitled to broader protection ranges from examples of goods to online presence, market studies, media coverage or any means that demonstrates the necessity of increasing the spectrum of protection, providing it is not contrary to morality or the law. Statements must be in writing to be valid.

Trademarks are enforceable against domain names, trade names and other distinctive signs if they are identical, similar, misleading or create confusion within the public. Metatags are not regulated in Mexico, so enforcement is trickier.

Enforcement against unauthorized use in social media is possible for trademark owners if the unauthorized use is to promote or commercialize goods and/or services similar or identical to those protected.

Comparative advertising is allowed, but enforcement is possible if the comparison is untruthful, misleading or confuses consumers. 

Trademarks are enforceable in the case of unauthorized use in a parody, especially if there is reputational harm, damages, or if untruthful statements are made. 

It is possible for trademark owners to claim both trademark infringement and unfair competition for the same set of facts, and bring parallel and/or separate proceedings. 

A current issue luxury brands face in protecting their trademark rights is the difficulty of enforcement in the digital age, given the rise of counterfeit products sold through e-commerce and social media.

In addition, interest in trademarks has increased, so trademark squatting is surging. Authorities rarely allow trademark squatters to obtain registrations that would affect luxury brands, but issues may arise for lesser-known brands when expanding their trademark rights to different goods and/or services.

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2 . Copyright

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2.1. Sources of law

The principal sources of law relating to copyright are:

  • The Constitution.
  • The Federal Copyright Law. 
  • The Berne Convention for the Protection of Literary and Artistic Works. 
  • USMCA. 
  • TRIPS. 
  • The Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations.

The governing law is the Copyright Law, and court precedents provide guidance to authorities on how to interpret the sources of law. The Constitution has precedence, however, along with international law where conflicts relate to human rights. Apart from the issue of human rights, the Constitution has precedence over international law. 

Additional sources of law include the Federal and State Civil Codes, the Criminal Code, and those regulating specific areas of law, like tax law, customs and foreign trade law, advertising law, and others. 

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2.2. Substantive law

In Mexico, artistic and literary works are copyrightable. The Copyright Law contains a non-exhaustive list of copyrightable works and defines what constitutes a work of authorship.

The list includes:

  • Literary works.
  • Musical creations, with or without lyrics.
  • Drama.
  • Dance choreographies.
  • Drawings.
  • Sculptures and plastic works.
  • Comics and caricatures.
  • Architectural works.
  • Cinematographic and audiovisual works.
  • Radio and television shows.
  • Computing programs.
  • Photographs.
  • Applied artworks.
  • Compilations.
  • Analogues to the above works. 

Objects of industrial, fashion or accessory design are copyrightable if they meet the requirements for originality and creativity under the Copyright Law. 

Copyright covers economic and moral rights. Economic rights consist of the right to determine how to profit from the work created.

Moral rights are inalienable, irrevocable, unseizable and cannot be waived. They grant the creator the right to: determine if a work is divulged and how; demand recognition as the author; oppose changes; make modifications; and remove the work from commercial sale. 

An entity can acquire the rights in works created by employees, consultants, shareholders, directors, or suppliers, through a written agreement. The wording and nature of the agreement might differ depending on the relationship between the creator and acquiror but in general it must be signed by both parties and precisely set out the terms and conditions by which rights are acquired. 

For a copyright assignment agreement to be valid and enforceable it must be in writing, allow identification of the parties, and be precise about the scope of the assignment and consideration. Its registration with the Copyright Public Registry is not mandatory but recommended, since that is how it gains effect against third parties. 

Moral rights cannot be waived or transferred.

Copyright protection lasts for the life of the author plus 100 years after their death. Where there is more than one author, copyright lasts for 100 years after the death of the last author.

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2.3. Enforcement

To enforce copyright and/or obtain damages or other relief, registration is not needed, but it is recommended that a copyright deposit be made with the Copyright Public Registry. 

A copyright notice must be displayed. Failure to do so can be penalised by a fine, but does not make the copyright unenforceable.

An object of industrial design can be protected by copyright if it is an artistic work, which depends mostly on the originality and creativity of the work. 

To establish copyright infringement, actual copying is not required, but it is important to assess if the new work is substantially similar, since the degree of similarity and the way it is used are determining factors to assess infringement.

Copyright can be enforced against trademarks, registered patents, domain names, pseudonyms, or other IP rights, although there are particular requirements in relation to each, as not all copyright is enforceable against all IP rights, nor will all IP rights infringe copyright. For instance, enforcement action can be taken against domain names or trademarks that infringe a name protected under copyright law, but if the same name is registered as a trademark for a completely different product category, it won’t necessarily be infringing anything. Copyright can also be enforced against patents if it is provable that the patent’s creation came from a previously created work protected by copyright, but it may be possible to prove that the patent does not infringe copyright, depending on its likeness with the copyrighted work.

Copyright is enforceable against unauthorized use in social media when an unauthorized party uses the copyrighted work to profit from or harm the work or its author. Social media sites allow users to request enforcement through the platform, and they usually remove infringing content when requested.

Copyright can be enforced against unauthorized use in comparative advertising when the comparison is without authorization, untruthful or aimed at confusing the market. 

It is also enforceable against unauthorized use in parody if this does not differentiate itself from the copyrighted work.

An alleged infringer could argue as a defence that monetary benefit is not being pursued, that the work is being used in news reporting, teaching or research, that the work is within the public domain or that it is not copyrightable. This is the extent of the fair use or fair dealing defence.

Valid copyright can be deemed unenforceable due to the statute of limitation, the work not being copyrightable, the claimant not having the rights assumed or because the infringing action falls within the defences listed above.

The time limit for bringing an infringement action depends on its nature, as administrative, civil, and criminal laws have different statutes of limitation for different types of action. (Copyright infringement could breach criminal law when copyrighted works are produced, reproduced, imported, stored, transported, distributed, sold or leased without the authorization of the author or whoever represents the author’s rights. There is a chapter of the Federal Criminal Code regarding copyright crimes such as these.)

Luxury brands face different issues when expanding and protecting their rights in copyright. Depending on the work, the ability to protect copyright could be affected by trademarks or designs previously registered.

In addition, since the publication of the Federal Law for the Protection of Cultural Heritage of Indigenous and Afro Mexican Communities, luxury brands must consider the risk of cultural appropriation, which may result in public and legal backlash.

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3 . Design

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3.1. Sources of law

In Mexico, the principal sources of law relating to designs are:

  • The Constitution.
  • The Federal Law for the Protection of Industrial Property; 
  • The Paris Convention for the Protection of Industrial Property; 
  • USMCA. 
  • TRIPS. 
  • Accords issued by the Mexican Institute of Industrial Property.
  • The Geneva Act of the Hague Agreement concerning the International Registration of Industrial Designs.
  • The Locarno Agreement Establishing an International Classification for Industrial Designs.

Court decisions provide guidelines for judges and authorities on how to interpret the sources of law.

In the case of conflict, the Constitution takes precedence, followed by international treaties and Federal law, specifically the Federal Law for the Protection of Industrial Property, which sets out procedures for protection, enforcement, and prosecution. 

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3.2. Substantive law

Products protectable by way of registered design are industrial designs, which Mexican law categorises into industrial drawings and models.

Unregistered designs are not protected by law, but depending on the design, copyright might grant a degree of protection over the artistic portion of the product.

To obtain a valid registration an owner must complete the registration process, and the design must be new and susceptible of industrial application. Unregistered designs do not obtain rights.

Legal entities can acquire rights in designs created by employees, consultants, shareholders, directors, or suppliers, through a written agreement. The wording of the agreement depends on the nature of the relationship between the entity and the creator, but should state the rights acquired. 

For a design assignment agreement to be valid, it must be in writing and signed by both parties. Registration is recommended for enforcement.

When drafting a design assignment agreement, the design assigned must be precisely described, as must the rights and obligations of both parties. The signing of a non-disclosure agreement and the implementation of confidentiality policies is recommended.

Moral rights cannot be waived or transferred. They can only be transferred via mortis causa (a transfer that takes effect on the death of the right holder). The law does not provide for moral rights over designs, but these should be considered, as copyright could extend to designs.

Protection for registered designs lasts five years. Registration is renewable for five-year periods up to a maximum of 25 years, when the design goes into the public domain.

Unregistered designs have no other protection than what copyright may grant. 

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3.3. New technologies

In relation to new technologies, so far, the protection of the rights of luxury brands and goods remains unaffected by non-fungible tokens, although their increasing use could result in more copyright infringement cases.

The same applies in relation to artificial intelligence, as there has been no known case of it having an impact on the luxury market in Mexico, but it is not far-fetched to think that it poses a real risk given the rise of generative artificial intelligence. For this reason, the law should be revised to address possible challenges that may arise (there are no official proposed reforms at present). 

In relation to cryptocurrency, however, Mexico has enacted a law (the Law Regulating Financial Technology Institutions, or Fintech Law) that regulates the use of cryptocurrencies.

Also, cryptocurrencies and virtual assets have been included in laws regarding money laundering. Consequently, brands intending to use cryptocurrencies should implement good compliance practices.

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3.4. Enforcement

To assess infringement, actual copying is not necessary as substantial similarity is enough to establish infringement. Registered designs are protected by law, unlike unregistered designs.

A design can be enforced against trademarks, patents, utility models, or artistic works, if these use, involve, imitate, or are not substantially different from it, without authorization. 

Designs can be enforced against unauthorized use in social media. Conditions for enforcement are not precise, so technically all that is needed for enforcement is unauthorized use. 

Designs are also enforceable against unauthorized use in comparative advertising. Conditions for enforcement are not outlined, so all that is needed for enforcement is unauthorized use. 

Designs are enforceable against unauthorized use in parody that does not differ substantially. 

An alleged infringer could use any of the following as a defence: the design is not entitled to industrial design protection; substantial differences; the statute of limitation; and loss of rights. There is no repair clause but something similar does exist. 

Valid designs can be deemed unenforceable if the rights have expired, someone else claims priority, or if the registration process is voided.

The time limit for bringing an infringement action depends on its nature as administrative, civil, and criminal laws have different statutes of limitation. (Design infringement doesn’t directly infringe criminal law, but the stages involved in obtaining design protection and rights conservation involve steps where conduct could breach criminal law, for example, revealing confidential information or copyright infringement that is part of the protection of a design.)

A design holder can bring action claiming both design and copyright infringement as well as unfair competition, in parallel or separately as these actions are different, even if the same set of facts is involved.

Current issues that luxury brands face in expanding and protecting design rights relate to the time it takes to complete the registration process (which usually takes longer than it should) and the increase in counterfeited products, mostly sold via e-commerce, unregulated markets, or social media, which complicates enforcement.

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4 . Right of privacy, publicity and personal endorsement

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4.1. Sources of law

Mexican law recognizes the right of an individual to control the commercial use of his or her name, image, likeness, and any other unequivocal aspect of his or her identity.

The principal sources of law relating to the right of publicity are the Constitution, international law, the Federal and most State Civil Codes, the Federal Copyright Law, and court decisions.

In relation to privacy law, Mexican law is similar to the EU’s General Data Protection Regulation. While the General Law for the Protection of Personal Data in Possession of Individuals has not been updated since 2017, it still places compliance burdens on everyone who handles personal information, including luxury brands.

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4.2. Substantive law

The right of publicity arises from being a person, but to enforce it, the person must be mentally capable and over the age of 18. Those who do not meet these requirements must rely on a legal guardian to exercise the right on their behalf. 

The right of publicity survives the death of the individual through transmission mortis causa (a transmission that takes effect on the death of the right holder), but its reach depends on the person whose right of publicity is transmitted. 

An individual can assign his or her right of publicity in whole or in part, through a written agreement that outlines the terms and conditions. However, the individual will not renounce this right entirely as the Constitution provides that the right to identity and one’s personal image are not renounceable. 

The right of publicity can also be licensed. This license can be exclusive or non-exclusive. 

For an agreement or license of the right of publicity to be valid, it must be in writing, signed by both parties and not be contrary to any legal requirement. If a clause is deemed invalid, it will affect the clause but not usually the entire agreement. 

In right of publicity agreements, a licensor can withdraw consent to its use, if this is not in accordance with what was agreed, or if the option to withdraw consent was also agreed. 

In the case of the death of a licensor, agreements signed are still valid until their expiration date. Rights and obligations under that agreement transfer to the heirs and are binding. 

In the case of death of an assignor, all agreements are still valid until they expire, and rights and obligations are transferred to the heirs, although they may have or retain certain rights that were not part of the agreement

If heirs have an independent right over the deceased individual’s name, image, likeness, or other unequivocal aspect of his/her identity, the assignee or licensee can deal with them through the executor (albacea), who represents the rights of the deceased until these are assigned to the heirs. After this assignment, the assignee or licensee should deal with the heir(s) who have ownership of the rights. 

Expiration of the right of publicity transmitted via mortis causa depends on different conditions, given that the right of publicity of a performer has a different reach than that of a person who is not famous, who still has rights. In relation to the right of publicity of people who are not performers, the Federal Copyright Law provides, for instance, that the rights of photographed people last 50 years after their death, meaning that their heirs have 50 years of control over their right of publicity. In relation to performers, their rights are valid for 75 years, starting from the day the performance was affixed (recorded) or performed or from the first transmission of it. These rights are transmittable but limited once affixed.

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4.3. Enforcement

The right of publicity can be enforced against commercial use of the individual’s name, image, likeness, and other unequivocal aspects of his/her identity.

It is not necessary to prove that an individual’s name, image, likeness, or other unequivocal aspects of his/her identity have a commercial value to obtain an injunction or other remedies for unauthorized use.

An infringer could raise the following defences: use occurred while teaching or reporting news; there has been a partial or total loss of the right of publicity or there is a limit to enforcement; and that he or she is not seeking an economic benefit. 

A recent issue that has arisen regarding celebrities’ right of publicity when working with brands in general relates to the extent of the use of a person’s image by the brand, with the result that precedents have been set regarding penalties for the unlawful use of someone’s image. 

Challenges in relation to the tracking of counterfeit products and enforcement against them are not new, but these have increased with the globalization of fakes, the increasing difficulty in distinguishing well-made fakes from originals, and the rise of e-commerce and transactions carried out on social media.

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5 . Product placement

Product placement is permitted in Mexico if it complies with the principles of transparency and truthfulness and it is not against public morality; however, the placement of certain products is limited by law. 

Product placement is limited in relation to products that can be harmful to human health, such as alcohol and tobacco, or that relate to beauty, such as perfumes. The General Health Law Regulation on Advertising contains a list of regulated products and imposes specific conditions such as truthfulness. In addition, it specifies that tobacco and alcohol advertising cannot be aimed at people under 18. The Federal Law for Consumer Protection, particularly in article 32, establishes advertising principles that product placement must comply with. 

When drafting a product placement agreement, the parties are free to decide the terms, provided these are not contrary to law. It is recommended that clauses in such agreements include those relating to damages, and interrupting or shutting off the broadcast or streaming of the transmission where the product placement took place or is taking place, given that the options will depend mostly on the terms agreed between the parties.

The main concerns luxury brands should have regarding product placement is the reputation of the partners and compliance with agreements, which should be specific regarding the protection of reputational brand aspects. 

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6 . Protection of corporate image and reputation

The right of publicity does not extend to legal entities; nonetheless human rights are considered by Mexican courts to extend to corporations, so the right of publicity could be extended to them in the future.

Corporations’ right of privacy is not clearly defined in Mexican law, as corporations do not have a right to privacy, but they are entitled to data protection rights, allowing them to control their information and privacy. The extent of this right depends on the corporation’s handling and managing of its data and the implementation of controls to determine how information is or has been shared. 

Due to a growing awareness of the impact humans have on living beings and the environment; environmental, diversity and inclusion issues have resulted in legal reform and an increased risk of litigation; for brands, this mostly translates into increased compliance burdens. Brands sued for non-compliance face public relations issues in addition to the obvious legal challenges.

The Constitution recognizes the right to accessibility by people with disabilities and states that this should be guaranteed by the State and society. Although websites are not regulated in relation to this, physical retail facilities must comply with regulation and meet the conditions determined by municipal and State authorities. 

To protect the corporate image and reputation of a party when signing an agreement, it is recommended that specific clauses governing this be included. Usually, these clauses establish a penalty for infringement, but the law offers a broader range of remedies depending on the damage involved.

Clauses that prohibit the following activities could be deemed invalid under the Federal Economic Competition Law: selling products to re-sellers whose image is below a certain defined standard; selling products below a certain price or outside specific periods; and buying non original spare parts and components.

Liquidated damages and stipulated fines clauses for breach by a party of any provisions protecting the reputation or corporate image of the other party are permissible in Mexico. Liquidated damages or stipulated fines will usually be deemed unenforceable if they are disproportionately high; in this case there is the option of asking the judge to reduce them. Such clauses may also be declared unenforceable if there is a statute of limitation on bringing or enforcing an action.

A concern for luxury brands in secondary markets is resale not being up to brand standards or being done without authorization, which is also a concern in relation to third parties providing repair and reconditioning services. Another concern in secondary markets relates to third parties modifying original products and advertising them as original.

EXPERT ANALYSIS

Chapters

Australia

Belinda Breakspear
Harriet Young

China

Lina Li
Yunze Lian

Germany

Dr Wiebke Baars

India

Dhruv Anand
Nimrat Singh
Sampurnaa Sanyal
Udita Patro
Pravin Anand

Italy

Fabrizio Jacobacci

Japan

Masaki Mikami

Lebanon

Julien Khoury
Nisrine El Haddad
Patricia Seaiby
Rany Sader

Netherlands

Herwin Roerdink
Tjeerd Overdijk

South Korea

Clare Ryeojin Park
Dae Hyun Seo
Won Joong Kim

Spain

Eleonora Carrillo
Ignacio Martínez
Rafael Linage

Sweden

Helena Brännvall
Karin Crafoord
Magnus Henning

Thailand

Adele Marchal
Chanapa Thussanasumrit
Munif Chaipanya
Orranat Suvarnasuddhi
Pawat Varapirom

Ukraine

Dmytro Stefanovych
Ganna Prokhorova
Ilona Boliubash

United Kingdom

Simon Miles

United States

Alan Behr
Tod Melgar

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