Intellectual Property

The foundations of the American economy have shifted away from the traditional industries such as cars, steel, mining, and textiles to high-technology, information based industries. The movie industry employs more people than the auto industry. The software industry, which was negligible before the 1980's, is now growing by 25% per year and is bigger than the auto parts industry. The United States had a $12 billion surplus in its trade in ideas in 1990.

Ironically, the emergence of new technologies has permitted unauthorized copying and counterfeiting on a much larger scale than ever before. The United States has reported losses exceeding $60 billion per year from these activities.

The intellectual property project is investigating all intellectual property rights such as copyright, patent, trademarks and trade secrets. The goal of the project is to improve the protection and enforcement of those rights in the NAFTA countries and throughout Latin-America.

The project's main focus is the protection and enforcement of software in Mexico, the enforcement of intellectual property rights in Mexico in general, and the protection of pharmaceutical in the NAFTA countries and other Latin-American countries such as Argentina and Brazil.

With respect to cross-border registration of intellectual property, the National Law Center plans to establish a registry for Mexican and also other Latin- American copyrights, patents and trademarks.

1. Protection and Enforcement of Software in Mexico.

Art. 7 (j) of Mexico's Copyright Act expressly provides for the protection of computer programs. The Act, however, neither defines the term "computer program" itself nor relates it to any other existing definition. This gives rise to uncertainty about the extent of copyright protection in Mexico.

The bigger problem with respect to the protection of computer software in Mexico is the lack of enforcement of the copyright in case of infringement. High profile cases involving actual pirating of software copyrights owned by big international companies have been enforced during the last couple of years. Subtler cases of infringement, such as source code plagiarism, have so far gone unaddressed.

If one seeks to enforce a copyright the length and unpredictability of the procedures for enforcement can prove to be costly. Contrary to the United States and Canada, no civil remedies are available in Mexico to enable the holder of the copyright to stop the infringing activity. The owner of the software copyright needs to convince the Mexican Attorney General to stop the infringing activity by arresting the infringer. Considering the fact that the Attorney General's Office mainly deals with murders and other major crimes, it is difficult to convince it to become involved in cases of illegal copying of software. Consequently the infringer can sometimes continue his illegal activity to the detriment of the copyright owner.

The goal of the NLCIFT's intellectual property project is to promote the promulgation of civil remedies such as preliminary and permanent injunctions in Mexico to make the timely enforcement of copyrights possible.

Another obstacle to enforcement is the requirement that the copyright owner prove the commercial intent of the infringer. However, the single most egregious form of piracy in terms of the magnitude of losses to computer software authors or publishers, is the "internal" duplication of original programs for internal use, but not for resale.

The requirement of commercial intent should be revised in order to allow greater enforcement of copyright.

Additionally, Mexican Industrial Property Law does not allow any software patents. Consequently, a U.S. patent for computer software is not recognized in Mexico. This fact creates a difference in the legal protection of computer software that might be an obstacle to trade between the U.S. and Mexico.

2. The Enforcement of Intellectual Property Rights in Mexico.

The lack of civil remedies like preliminary and permanent injunctions affects not only the enforcement of copyrights but also the enforcement of patents, trademarks and trade secrets.

The Mexican Industrial Property Law provides administrative and criminal remedies that permit the seizure of the infringers premises. This remedy is, however, so drastic that it is rarely applied. Consequently, the infringer can continue his infringing activity during the time of the trial.

3. Protection of Layout Designs of Semiconductor Chips.

Article 1710 of NAFTA's chapter 17 requires the Member States to protect layout designs of semiconductor chips. The United States and Canada have enacted laws that offer the protection required by NAFTA. Mexico does not yet offer any protection for semiconductor chips. Article 1710(9) of NAFTA provides Mexico a 4 year period from the date of enactment to comply with the terms of Article 1710.

Additionally, none of the other Latin-American countries presently offers protection for layout designs of semiconductor chips.

4. The Protection of Pharmaceutical Patents.

The protection of pharmaceutical throughout Latin-America lacks uniformity. Mexico and the Andean Pact countries extend patent protection to pharmaceutical products for 20 years from the date of filing.

In Argentina, the term of a patent has been increased from 15 to 20 years. Under current Argentine law, patents may not be granted for chemicals with pharmaceutical application. The latest legislation, enacted by the Argentine Parliament will not grant patent protection for pharmaceutical products before the end of a 5-year transition period.

Also, publication of an invention or use of it anywhere in the world in such manner that the public can determine its nature prior to filing in Argentina or to a validly claimed priority date is a bar to the grant of protection. The same is true for Brazil.

Amendments to the Canadian Patent Act have increased protection for pharmaceutical from 17 years to 20 years from the date of application. Moreover, the compulsory licensing provisions, which permitted generic drug companies in Canada to obtain compulsory patent licenses from pharmaceutical companies through an application to the Canadian Patent Office have been eliminated.

Nonetheless, Canadian legislators have attempted to limit the exclusive rights granted to pharmaceutical companies by extended price review and regulation by the Patented Medicines Price Review Board. If the Board finds the price for the patented drug is excessive, it may direct the patent owner to reduce the price or may set the price itself. The Board also has the power to require the patent owners to provide it with details on expenditures made for research and development in Canada.

5. Cross-Border Registration of Intellectual Property.

Europe has developed a uniform registration system for patents and trademarks all over Europe. The advantage is reduced filing costs and a shorter filing-time.

In the NAFTA countries, filing of patents--except for patents filed under the Patent Cooperation Treaty, trademarks and copyright are filed with national institutions. The unification of filing systems within the NAFTA countries and other Latin American countries would streamline the procedures for filing these intellectual property rights internationally and would decrease costs and delays. This unification is being studied as part of the NLCIFT's project.

6. Electronic Research regarding Trademarks and Patents in Mexico.

The NLCIFT has already established an electronic highway to the Mexican Secretary of Commerce and Industrial Development that enables applicants for trademarks in Mexico to conduct research regarding possible confusion with trademarks already registered in Mexico. It also enables the applicant to check whether its trademark has been approved for registry.