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Risks for not using a Trademark effectively in Mexico

Given the huge demand for trademark registrations in Mexico, the Mexican Intellectual Property Institute (IMPI, Spanish acronym) expounds a series of common obstacles or precedents that hamper the allocation of new trademark registrations, with a view to preventing similar trademarks from confusing consumers and encouraging unfair competition between companies.

These so-called “precedents” can take the shape of trademark applications that are currently in process or of valid trademark registrations that these new trademark applications may violate.

This situation prompts a question that is far from simple, and raises our awareness regarding the latent risk that threatens trademark registrations: how can a new trademark application endanger an existing trademark registration? The easiest answer is framed within several assumptions listed in the Mexican Law which stipulates that a trademark should be used in the manner for which registration was granted, effectively throughout the whole of the national territory.

The holder of a new trademark application which is prevented by an existing trademark registration can contact the IMPI to report the expiration and non-use of a trademark registration by administrative procedure. When this legal action is implemented, the holder of the trademark registration is required to defend the trademark by effectively verifying its use. Effectively means the manner in which the trademark should differentiate products or services on the market; i.e. the holder must demonstrate that the registered trademark circulates freely on the market creating a supply and demand of the goods and services the trademark protects. Trademarks are expected to distinguish proprietary goods and services from others offered by the competition. Therefore, a trademark is only effectively in use when a genuine commercial activity can be proven in the free market; in other words, when the goods and services protected by the trademark are advertised and marketed.

Hence the importance of being in possession of irrefutable proof of commercial activity. Verifying the use of a trademark involves a simple equation in which the effective use of the trademark stands for the marketing of the goods and services it protects. Said marketing must be evident, and the products and services that the trademark protects should be readily available for consumers in the amount and fashion established in terms of trade uses and customs. The products and services should be marketed by the trademark owner or by a licensee or authorised user. Reliable proof of marketing of trademark-protected products and services means original documents that demonstrate commercial exploitation: proof of sale (invoices), advertising, investment in trademark positioning among consumers, etc.

Thus, the effective use of a trademark should always be demonstrable, even in the case of leading trademarks. The use will only be considered effective when the trademark is employed for the purpose it was registered (without modifying its distinctive character), hence the importance of requesting new trademark registrations to incorporate changes and modernizations that trademarks may undergo over time. Lack of use can have a fatal impact on registered trademarks, since it can lead to administrative expiration. To all legal effects, this means that the trademark registration is no longer valid and, consequently, that the exclusive rights of the trademark holder have expired.

Carmen Sánchez-Puelles