The Technology Disputes Law Review: Mexico


In Mexico, disputes involving technological assets tend mainly to concern the unauthorised manufacture, use and sale of software and inventions. Unfortunately, Mexico is a country that faces a serious piracy problem, of both national and foreign origin (mainly Chinese).

However, when it comes to technological products or processes, the means for committing infringing conduct require greater sophistication. Such conduct requires not only access to third parties' intellectual property (IP) assets that have been safeguarded, or disclosed on the understanding that they would not be used or exploited without the owner's authorisation, but also the means to ensure that there is no evidence to track the unauthorised use.

For this reason, both national and international authorities and holders of these rights have recognised the necessity of implementing measures and procedures that make right protection viable and accessible. As a result, different legal provisions and solutions have been adopted to modernise regulation of this field in Mexico, as will be described in further detail in this chapter.

Year in review

The course of technology disputes in the field of IP was significantly affected by what was an atypical year in relation to administrative and judicial disputes – because of the covid-19 pandemic.

The activities of the administrative and judicial authorities in charge of resolving these proceedings were completely suspended for almost four months. Most authorities resumed activities in July or August 2020 but suspended them again in late December 2020 because of the increase in covid-19 cases, and then resumed activities in January 2021. Since the first reopening, work has been carried out with reduced staff and working hours, with parties only having limited access to the authorities' facilities, resulting in a considerable backlog in the processing and resolution of cases.

Nonetheless, 2020 was also the year in which new provisions were incorporated into the legal framework for IP rights in Mexico and these will, undoubtedly, have an impact on the resolution of conflicts over companies' technological assets.

The incorporation of new provisions into the legal regime follows the entry into effect of the United States–Mexico–Canada Agreement (USMCA) and for this reason a new industrial property law, the Federal Law for the Protection of Industrial Property (the Federal IP Law), was enacted and the Federal Copyright Law and the Federal Criminal Code were amended. This new legislation and the amended legislation became effective in early July and on 5 November 2020 respectively, on the basis of transitional provisions.

The purpose of Chapter 20 of the USMCA is the protection and enforcement of IP rights, which should contribute to the promotion of technological innovation and transfer and dissemination of technology, as well as providing benefits to producers and users of technological know-how, and balancing rights and obligations related to IP rights. The aim is to provide not only an equal playing field for the treaty signatories, but also greater protection for authors, inventors and other holders of IP assets, taking greater account of current conditions of technological development and regulating these matters in a better way.

The aim therefore of the provisions of Chapter 20 is to modernise the tools for the protection and defence of owners' national IP rights, for the three member countries, including the following items:

  1. Obligation to sign and ratify the following IP-related international treaties: Madrid Protocol, Budapest Treaty, 1991 International Convention for the Protection of New Plant Varieties, Hague Agreement Concerning the International Registration of Industrial Designs, and Brussels Convention.
  2. Elimination of mandatory recordal requirement for licence agreements.
  3. Protection of non-traditional trademarks.
  4. Provision of a 12-month grace period to prevent disclosures by applicants to avoid destroying the novelty or inventive step of the invention, which also applies to disclosures made by third parties that obtained the information directly or indirectly from the inventor or applicant.
  5. Inclusion of an obligation to establish legal measures, against the circumvention of technological protection measures (TPMs), including criminal sanctions if TPMs are suppressed.
  6. Extension of test data protection for biotech drugs, to 10 years for new agrochemicals and five years for new pharmaceuticals.
  7. Criminalisation of acts related to decoding of encrypted (cable or satellite) programme-carrying signals.
  8. Inclusion of strong rules related to trade secrets, covering issues such as definitions of misappropriation and details on the protection of confidentiality of trade secrets.
  9. Establishment of an appropriate dispute settlement procedure based on the principles set out in the Uniform Domain-Name Dispute-Resolution Policy and that provides an expeditious and low-cost way to resolve matters related to domain names. In parallel, there should be a database with the contact information of domain name registrants.
  10. Duty to provide legal incentives for cooperation with and between internet service providers (ISPs), with the aim of deterring the unauthorised storage and transmission of copyright-protected materials.

The following main amendments have been incorporated into the Mexican IP framework, drawing on the obligations set out in Chapter 20 of the USMCA:

  1. Inclusion of technological enforcement measures for the protection of works and neighbouring rights.
  2. Implementation of a notice and takedown system in which: (1) ISPs will have no responsibility for the content uploaded by users (provided that the ISPs cooperate and remove infringing material); and (2) it is possible to submit a counter-notice to evidence a lawful right and restore the content.
  3. Introduction of partial non-use lapsing and nullity actions, whereby partial use of trademarks may be challenged or trademarks and patents may be partially invalidated, respectively.
  4. Empowerment of the Specialised Chamber for Intellectual Property, of the Federal Court of Administrative Justice, to rule on the validity of copyright certificates, marginal notes and recordal changes.
  5. Elimination of the requirement to record licence agreements with the Mexican Institute of Industrial Property (IMPI) for them to be binding on third parties.
  6. Extension of validity of utility models to 15 years.
  7. Admissibility of second-medical-use patents.
  8. Inclusion of the Bolar exemption, allowing the importation of active ingredients to conduct tests during the final three years of protection over a patent.
  9. Inclusion of a specific settlement proceeding for disputes arising from infringement actions.
  10. Admissibility of damages claims lodged within an infringement action before the IMPI.
  11. Inclusion as a criminal offence of the illegal recording of films in a cinema, known as 'camcording'.
  12. Extension of patent validity because of unjustified delay in the protection process. (Criteria have been recently issued in connection with this provision of the new Federal IP Law, establishing that the applicability of the extension of the protection granted by a patent is at the discretion of the administrative authority.)

Claims and remedies

Mexico is not a litigious society per se, because litigation is quite expensive (even though courts do not charge filing fees). Proceedings tend to be quite lengthy and it is quite difficult to recover legal fees. Obtaining a judgment for damages and lost profits is not an easy endeavour; usually, punitive damages are not awarded; however, a precedent of the First Chamber of the Mexican Supreme Court (the Mayan Palace case) has started changing this trend.

One common adage in Mexican practice is that 'a bad settlement is better than a good lawsuit'. Settlements do not usually occur at the beginning of litigation, but rather during or almost at the end of an action. Since there is no discovery stage, as there is in common law countries, it is more common to receive a formal complaint rather than a preliminary call seeking to settle the case. Parties should be aware that most civil and commercial cases could end up in a criminal court, as part of a strategy by one of the parties to put pressure on the other to settle.

A particularly notable change, and one that marked a major watershed in Mexican practice, was the 2011 amendment to the Mexican Constitution making it mandatory for the courts to protect fundamental human rights, and not only the rights contained in the Constitution, but also those related to human rights recognised in international treaties that Mexico has executed and ratified. In this context, Mexican courts may interpret the Constitution and provide a broader control of fundamental rights under the pro personae principle – protection of the individual.

Moreover, Mexican law provides different sources for trying cases: civil, commercial, administrative, labour and criminal law; however, trial practice has not reached the degree of complexity and specialisation currently seen in other countries. Thus, a civil lawyer could cover family, inheritance and monetary issues, real estate, product liability, professional malpractice and other related matters. Commercial law practice could encompass corporate law matters, litigation, bankruptcy, agreements and collateral foreclosures.

There has been an increasing trend towards specialisation and new cases since specialised courts for antitrust and telecoms matters were created. Furthermore, specialised federal courts for commercial class actions and insolvency matters and specialised courts for commercial disputes and setting-aside, recognising and enforcing arbitral awards will be created shortly. Legislative changes have created a new direct and objective state liability in federal, state and local spheres. Unfortunately, this liability only encompasses 'irregular administrative acts' and does not include acts, omissions or errors of a legislative or judicial nature.

Another area that has experienced a degree of empowerment is the protection of minorities, through actions pursued not under labour laws, but rather under civil laws.

Furthermore, a constitutional amendment to Article 17 has paved the way for secondary legislation to introduce newer and more effective rules for class actions. The constitutional amendment established federal jurisdiction and procedural law to deal with class actions arising from consumer protection, antitrust matters, financial services and environment-related activities.

Following the entry into effect of the applicable supplementary and implementing legislation, the Congress decided to devote an entirely new chapter of the Federal Code of Civil Procedure to class action litigation. This new chapter seeks to follow a Latin American trend, although there are several principles in the Mexican legislation that have been modelled largely on the US experience. The new class action legislation will serve to restore a measure of balance between the parties to litigation.

Litigation in Mexico differs from litigation abroad, especially from that found in common law countries. There are no jury trials. Proceedings are based on written documents rather than on 'having one's day in court', as is the case in common law countries. Pretrial discovery is limited. Procedural rules are considered a matter of public order and the ability to modify statutory rules is very limited. In contrast to these established traditional ways, class actions are providing a new impetus in the trying of cases in Mexican courts and, in recent years, Mexican courts have implemented oral trials for criminal and de minimis commercial matters to make trials faster and more efficient.

Preparing a complaint (or a response) is the most significant activity undertakin in the course of a proceeding because once the complaint or response has been filed, it cannot be modified or amended (unless, in the case of the complaint, there has been no service of process to the other party, or new circumstances have arisen). Mexican courts do not grant extensions to answer a pleading or otherwise, and legal deadlines are mandatory. Cases are more document-based than oral and it is important to draft pleadings with clarity.

Mexican courts will not normally award punitive, consequential or indirect damages in civil or commercial disputes. Mexican law follows a 'direct and immediate consequence of the breach' test. This applies to both damages and lost profits. Notwithstanding this, a landmark case identified as the Mayan case, dealing with moral damage, provided a new theory whereby effective damage redress could extend to an award of damages that would be known as 'punitive' in other jurisdictions.

In practice, it is difficult to obtain multimillion-dollar awards of damages unless there is a liquidated damages clause that does not require proof of the existence of damage, but rather is aimed at evidencing the existence of a breach and, hence, the application of the penalty. Arbitration cases offer a little more flexibility in relation to awarding damages but are also always subject to the requirement for a liquidated damages clause. Furthermore, the awards that are made for legal costs are outdated and do not cover current fees. Additionally, trying cases outside the three major cities of Mexico City, Guadalajara and Monterrey becomes much more challenging because of the judiciary's lack of experience of certain complex business contracts or torts and litigation (even if tried at state court level) can end up before federal courts in amparo or constitutional proceedings.

The amparo is a legal tool for protecting constitutional rights, in the form of an appeal heard by federal courts when a party claims that there has been a violation of individual and fundamental human rights. Thus, the amparo can not only become the final stage of litigation, but also it can often be the very first means of challenge. Likewise, it is an appeal process that can be invoked against actions by all authorities – whether judicial, legislative or executive.

Protection against discrimination and corresponding litigation is a new area that has grown slowly but effectively in the past few years. The National Council for the Prevention of Discrimination is the administrative agency entrusted to initiate actions and investigate and sanction those individuals that discriminate against others in Mexico. Although effective since 2003, the relevant discrimination law was amended a couple of years ago to give it teeth by providing for the imposition of harsh penalties and the award of damages to deter discriminatory behaviour. Furthermore, discrimination has been criminalised in more than 20 states, and in the Federal Criminal Code.

Irrespective of this, in practice the provisions of the Federal IP Law build a system through which right holders can seek compensation for damage and IP infringement through the award of damages in an effective way, the latter through granting the IMPI powers and authority to: (1) order the payment of damages to affected owners in proceedings regarding IP rights infringement; and (2) quantify the amount of this compensation.

Because these measures have only recently been introduced (in the new Federal IP Law, with effect since 5 November 2020), it is difficult to assess the benefits that this amendment will bring, particularly in view of the novelty of the IMPI being granted the ability to determine whether a ruling for damages is appropriate for a specific infringement of IP rights.

However, without a doubt, it is positive for IP right holders to now have two channels for claiming damages arising from IP disputes, namely the established civil channel and the new administrative one.

Courts and procedures

In Mexico, there are two administrative bodies that hear and resolve IP disputes: the National Copyright Institute and the IMPI. Proceedings in the form of a trial are conducted before these administrative authorities as a first instance in IP disputes, as detailed in the following sections.

The first materially judicial authority charged with reviewing the legality of resolutions adopted by the National Copyright Institute and the IMPI is the Specialised Chamber for Intellectual Property, of the Federal Court of Administrative Justice, specialising in intellectual property matters. The Chamber hears and resolves second instance proceedings by means of a federal contentious administrative lawsuit in which it assesses whether the resolutions adopted were correct and legal.

Notwithstanding the above, the collegiate circuit courts (in exercising their powers to resolve administrative disputes in amparo proceedings once the procedural chain has been exhausted) also assess the legality of resolutions issued in IP matters in relation to the Constitution. In this context, if the collegiate circuit courts issue rulings that constitute jurisprudence, these are to be compulsorily adopted by lower bodies.

The following are among the most significant rulings issued this year:

  1. The Federal IP Law, by providing that a nullity action may be brought at any time in the event of a trademark registration being granted contrary to the provisions of the Law, or of the law in force at the time of registration (which means that an action of this kind is not subject to any statute of limitations), violates the principle of legal certainty provided in Article 16 of the Constitution.
  2. The USCMA provides for the option to extend the period of protection of a patent to compensate for delays caused by administrative patent approval procedures (although this is not obligatory for the parties).
  3. In the event of any act whereby a work is made available, directly or indirectly, to a plurality of individuals, whether the original or a modified version, the author of the work is entitled to receive royalties for that public communication.

Exceptionally, the Supreme Court will hear appeals against amparo rulings, provided that there is a constitutional issue in which it is important to establish a definitive ruling.

Furthermore, although previously the district courts were the bodies charged with hearing invalidation actions against copyright registrations and annotations in the registry of the National Copyright Institute, this authority has been assigned to the Federal Court of Administrative Justice following the latest reform of the Federal Copyright Law, published on 1 July 2020.

Evidence and witnesses

As Mexican law has limited discovery and there are strict rules for filing of evidence and cross-examination, and there is no prior taking of witness depositions, procedures tend to follow more formal approaches based on legal defences rather than on disclosures of important facts. Common among those formalities is a challenge to the authority of the attorney-in-fact representing the opposing party. In this regard, powers of attorney coming from abroad, particularly those granted in the United Sates, are a common source of challenge and it is important to pay special attention when drafting and granting these, as specific rules (provided in international treaties) are applicable.

On the basis of the Federal Law of Administrative Procedure, in administrative proceedings conducted in the form of a trial, all means of evidence are admitted except personal testimony. However, in IP proceedings, witness testimony is prohibited as well as personal testimony, unless the personal or witness testimony is contained in a written document. Therefore, in an IP dispute, it is common to request the IMPI in turn to require a report from the person concerned, thereby obtaining the relevant personal testimony in the form of a written response and circumventing the prohibition.

In proceedings involving technological assets, evidence consisting of expert opinions or visual inspections acquires particular significance (for example, the characteristics of works, trademarks or how they are used, as well as the unique qualities of products or inventions, or the absence of these, or the ways in which third parties make unauthorised use of assets). The visual inspections are carried out by the examiner or court clerk in charge of drafting the corresponding resolution or ruling.

If a complex invention or technology is involved in a dispute, the contentious department of the IMPI requests from the relevant internal department a technical opinion that has been agreed by specialists in the corresponding engineering category. This affords the IMPI a better understanding of the characteristics and performance of the invention or technology, allowing it to determine whether there is an infringement or not. This opinion can be supported or contested by the parties through expert opinions. Each party can designate an expert in the lawsuit (in the case of the plaintiff) or in the response writ (in the case of the defendant) or by way of supervening evidence once the technical opinion has been issued.

It is possible for the parties to ask the competent authorities to adopt the necessary measures to preserve the confidentiality of confidential and trade secret information contained in evidence. Such information is usually submitted in a sealed envelope, marked as confidential, and the authority will summon the parties so that they may consult the information, on only one occasion, without the option of making notes or summaries.


Copyright or neighbouring right holders have the right to initiate administrative actions before the National Copyright Institute for copyright infringements (mainly related to moral rights), or before the IMPI for trade-related infringements (economic copyrights, image or likeness rights, reservations of rights, etc.).

Administrative, civil and criminal procedures are commonly used in enforcing IP rights. The National Copyright Institute is the proper forum for resolving copyright and related disputes, through an amicable proceeding in which the Institute's officers act as mediators and help the parties reach a settlement. This procedure is not mandatory; even when the parties have submitted to it, they are entitled to bring further claims before administrative, civil or criminal authorities.

Provisions related to industrial property and copyrights include extensive lists of conduct and actions that, depending on the nature of the conduct, constitute tortious or intentional infringement, such as unauthorised use of any of the rights protected.

The IMPI administers and resolves administrative disputes related to (1) industrial property rights (i.e., trademark, patents, utility models and industrial designs – 'design patents') and (2) economic copyrights and reservations of rights. The IMPI can order and carry out protective measures in cases of infringement and may even seize infringing goods or impose economic sanctions on infringing parties.

Criminal actions related to counterfeited goods, production, reproduction and sale of works, etc. are subject to actions before the Attorney General and most IP crimes are considered major felonies.

Alternative dispute resolution

Foreign parties often address the challenges of Mexican courts by opting for arbitration to resolve commercial disputes. Mexico is an arbitration-oriented country that has modelled its Code of Commerce on international standards, primarily on the 1985 Model Law of the United Nations Commission on International Trade Law. Mexico is a party to both the New York Convention2 and the Panama Convention.3

International treaties ratified and adopted by Mexico, current legislation and the increasing and open-minded support of the Mexican courts provide growing confidence that arbitration agreements and awards will be recognised and enforced in the country. There is an increasing awareness that only in exceptional circumstances will arbitration awards be set aside or their recognition and enforcement denied. Foreign judgments also can be enforced, although they follow different rules, as there is no international treaty dealing with these issues in the manner of arbitral awards and the New York Convention.

With effect from January 2011, the Congress passed an amendment that sought to strengthen court assistance to arbitration in the appointment of arbitrators, referrals to arbitration, provisional measures, setting aside and recognition and enforcement of arbitration awards. In this regard, its main purpose was to provide greater legal certainty, and less space for dilatory tactics, when seeking court assistance in the above-mentioned areas of arbitration. There are several domestic and foreign organisations that specialise in arbitration, such as the Arbitration Center of Mexico, the Mexican Chapter of the International Chamber of Commerce, and the Commercial Mediation and Arbitration Commission of the Mexico City National Chamber of Commerce, which have been very active in fostering arbitration in Mexico.

In addition to the above, the new Federal IP Law seeks to promote and strengthen a specialised system of alternative dispute resolution in IP matters by vesting the IMPI with the power to act as arbitrator and resolve disputes concerning the application of laws that fall within its remit (and when the parties concerned expressly designate it as arbitrator). It is important to point out that this innovation adopts the system already developed in the commercial sphere, with direct reference to the Code of Commerce as the framework that provides the general regulatory basis for arbitration in Mexico, as mentioned above.

Additionally, the new Federal IP Law includes a specific chapter on the conciliation process for infringement proceedings, wherein the IMPI helps the parties involved in a dispute to achieve a settlement by steering negotiations towards an amicable conclusion. With the inclusion of this chapter, it is evident that the trend is for alternative means of dispute resolution.

Outlook and conclusions

Mexico continues to be an attractive jurisdiction for investment because of the modernisation of its legal framework, its accession to a growing network of international agreements and its continuous adoption of international standards, all of which provide a reliable and foreseeable landscape for foreign investment.

However, paving the way for a transition to being a major economy appears to be a big challenge, not least because of the effects of the covid-19 pandemic on finance and health, which can also be seen globally in countries with similar characteristics, and which is creating a worldwide crisis. Therefore, strengthening institutions and maintaining an independent judiciary, together with providing a safer environment for business, would certainly help to focus the business community's interest in Mexico as a destination for inbound investment.

Following recent energy, telecoms, antitrust and IP reforms, investment opportunities for national and foreign companies are wider, and these conditions were implemented under the guidelines of established international frameworks. Exploring and capitalising on Mexico's vast resources will require investment in infrastructure (e.g., roads, railways, pipelines, ports, hospitals and telecommunications), the hospitality sector, real estate and the industries that provide services to the oil and gas sector, and particularly importantly in pharmaceutical and biomedical engineering development to meet the challenges of the pandemic and its aftermath. Although it is clear that Mexico is implementing the recommendations of international organisations, work remains to be done, mainly in the implementation of the IP amendments. Over time, precedents will be issued that will define the appropriate interpretation and application of these reforms.


1 Montserrat González is a law clerk and Edgar Mata is a senior associate at Hogan Lovells.

2 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).

3 The 1975 Inter-American Convention on International Commercial Arbitration.

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