Complex issues arising from the opposition system

In the past year, both public officers and private practitioners have learned important lessons about the new opposition system of Mexico, but they will learn many more from the several questions that still cover this system. To understand the present and future challenges for Mexico's opposition system, we must address some of its most peculiar aspects.

Article 120 of the Industrial Property Law, which sets out the procedure for filing an opposition, clearly establishes that the filing of an opposition must be made within a deadline of one month counted from the publishing of the respective application, which according to this same law ought to occur within 10 days of the filing of the application. Moreover, the filing of an opposition will not interrupt the examination of the application. So, we have 10 days to publish the application and one month to oppose it, all while the examiner is supposed to keep on working on the application. It sounds simple enough, but we have learned that there are complex issues hiding in plain sight.

The deadline that the trade mark examiner has for issuing a formal office action, for example if the description of products is unclear, is of four months from the filing. This means that the applications published for opposition are not yet examined in essential aspects for potential opponents such as the class, the description of goods/services or even disclaimed elements. Consider, for instance, the application number 1926565, which was filed without a description of products and published in the Gazette on August 14 2017. How can a potential opponent determine if it is convenient to file an opposition if they do not know what the trade mark will cover? The applicant will receive an office action to request that this omission be corrected and that he indicate which are the products or services to be protected, but this will occur three months or more after the deadline for filing the opposition is due.

The applications published for opposition in the Industrial Property Gazette may lack information necessary for third parties to evaluate if filing an opposition would be convenient. Of course, an opposition may still be filed out of an abundance of caution, but is this a desirable course of action for our opposition system? The essential premise behind Mexico's opposition system is that the examiner will remain in charge of deciding if registration is granted, with the opposition only being allowed to help the examiner notice reasons for refusing registration. As private practitioners, we have had to understand that the opponent in Mexico acts in a merely "advisory" capacity, but this role is difficult to fulfill if important information on the published application is missing or simply will not match the registration that may eventually be issued in aspects as relevant as the class, description of products or disclaimers. Advising clients on oppositions has demanded that private practitioners closely examine sometimes unclear and erroneous applications and try to anticipate potential office actions and changes that are not reflected on the publications in the Industrial Property Gazette.

This issue is related to another very relevant aspect that has been the cause for much concern for advising opponents. The law provides that the opposition does not bind the examiner and that the opponent will not be considered as a party to the application process. For example, if the opponent points out a prior trade mark registration, the examiner is not constrained to issue an office action citing that trade mark; he may cite others, he may grant or refuse registration for an entirely different and unrelated reason. This would also seem to suggest that if registration is granted, then the opponent cannot appeal the issuance of the registration and has no recourse but to pursue the usual annulment or cancellation proceedings.

Articles 151, 152 and 153 of the Industrial Property Law contain a series of hypotheses under which any party with the necessary legal standing (called "interés jurídico") can obtain the cancellation or annulment of a trade mark registration, through an ad hoc procedure indicated in that law. Until the implementation of the opposition system, there was wide consensus that this was the only route to obtain relief in the event of an improperly granted trade mark registration. However, now there is considerable discussion about whether the opponent could be allowed to skip these proceedings and appeal the issuance of the trade mark registration itself.

The applications published for opposition in the Industrial Property Gazette may lack information necessary for third parties to evaluate if filing an opposition would be convenient

The general rule is simple to grasp. In Mexico, when a federal administrative authority such as the Mexican Institute of Industrial Property, the copyright office or the internal revenue office issues a final decision adverse to your legally recognised rights (such as those granted by a trade mark registration) or interests, that decision can be challenged. For instance, if a trade mark application is refused, the applicant can challenge that refusal with the Federal Tribunal of Administrative Justice or, optionally, he can first have the hierarchical superior of the officer that issued the decision decide on its legality. Are these two recourses available for the opponent as well when his opposition is not duly considered and registration is granted? The law seems to express that they are not. By indicating that the opponent is not a party to the trade mark application process, it seems that Article 120 of the Industrial Property Law is attempting to leave the opponent outside the scope of the granting or refusal of the registration and thus, unable to resort to these means for challenging the issuance of registration. But this is hardly the end of the matter.

If instead of having to pursue the annulment or cancellation of the newly-granted trade mark registration as per Articles 151, 152 and 153 of the Industrial Property Law, the opponent could challenge the issuance itself in a manner analogous to the way that the applicant would challenge the refusal of the application, some have stated, approximately up to two years of litigation and expenses could be saved. Therefore, several arguments are being explored in the courts for allowing this "shortcut".

The Mexican Institute of Industrial Property must respond to the opposition, as article 8 of our constitution provides that any respectful petition to any authority must be responded to in writing. They are fulfilling this obligation by issuing a single-page office action informing opponents if registration was granted. Some lawyers are attempting to challenge these office actions to try to reverse the issuance of the trade mark registration itself, with mixed success. Some cases have been admitted for processing, some have been rejected and the effect that their decision could have in respect to the registration initially opposed is unclear. In the end, if opponents and their lawyers persevere through both the Mexican Institute of Industrial Property and the Federal Tribunal of Administrative Justice, a case may end up in one of the 20 Federal Circuit Courts on Administrative Matters residing in Mexico City and an interpretation of the subject that may become binding may be issued. In the meantime, the question will be who is willing to go through this less explored route.

Another subject of much debate is the basis on which an opposition may be filed and what supporting documentation, if any, should be submitted. So far, the text of Article 120 means what it states, namely that anyone can oppose an application and that the opponent may, but not must, submit it along with any documentation they deem relevant. This is in accordance with the non-binding nature of the opposition where the opponent merely points out to the examiner reasons to deny registration. Consider for instance, one of the oppositions submitted against the application number 1857860, by a man claiming to be a dentist and that he had a prior use of the trade mark, which he claimed was inspired as an anagram from his spouse's name and only had a bank statement enclosed to prove the argument. It may seem unusual to find an opposition such as this or that it was admitted for processing, published in the Industrial Property Gazette and duly responded to by the authority; but the text of the law supports the conclusion, many would say correct, that anyone can oppose a trade mark application.

However, an effect that has not been considered so far is the effect that the documents submitted in support of an opposition would have in another proceeding. As per the evidentiary rules of the Federal Code of Civil Procedure, applicable not just to civil procedures but also to some administrative procedures, such as those for cancelling a trade mark registration, provide that a private document, which means a document not issued by an authority in fulfillment of its duties, will demonstrate the facts it contains either when they are contrary to the author of the document or when it is not duly objected. Under these terms, the question remains whether an opponent will be able to submit documents in support of an opposition and then, in another proceeding against the applicant, argue that he should have objected the documents in the reply to the opposition and that failure to do so in that moment means that the opportunity has precluded.

Also, the official fees have been subject to some controversy. They are considerably higher than those for prosecuting a trade mark application. Supporters would argue that higher fees deter frivolous oppositions. Others would counter that the high fees are a deterrent only for less affluent trade mark owners, small and family businesses for instance, to enforce their rights. What has been the reality, however, at least from a numeric perspective?

Up to the end of October 2017, 3,971 was the number of oppositions that had been submitted against trade mark applications since the implementation of the opposition system in Mexico and fulfilled the requirements to be published in the Industrial Property Gazette. By contrast, nearly 181,000 thousand applications have been published during this same period (according to information obtained from a request of public information made to the Mexican Institute of Industrial Property on November 9 2017). This means that the ratio of oppositions to applications is of only 2.19% (these numbers provided by the authority do not take into account the fact that a single application can receive multiple oppositions. In reality, the percentage of applications that receive an opposition may be even lower) or that a considerable majority of applications are not receiving an opposition that fulfills the minimum requirements of Article 120 of the Industrial Property Law. What role, if any, did the applicable government fee have in these results? It is not easy to tell.

For instance, because the opposition system relies on potential opponents reviewing the Industrial Property Gazette, or at least being timely contacted by a firm or watch service that does, a considerable number of potential opponents may never find out that a relevant application has been filed. Also, parties potentially affected by a trade mark application may not fully understand the process and benefits of filing an opposition, especially in a country where oppositions did not exist and where the examiner in charge of an application has historically played a most important role in determining if registration is granted or not. In this context, relatively high government fees may be a factor in the apparent scarcity of oppositions filed and published in respect to the number of applications but a lack of knowledge of the system must be accounted for too.

As lawyers in Mexico, we have spent quite a few decades informing clients that there was no opposition system in our country, that trade marks are not published until they are registered and that, usually, the only option they had to assert their rights against a trade mark application was to bring an action after it was issued registration. Now we are having to work and communicate with clients in innovative ways to help them understand the proceeding and its potential benefits. The issues for all parties involved are a lot more complex than just the amount of government fees.