STATUS OF ADMINISTRATIVE (& CIVIL) REMEDIES IN MEXICO

Session II of the TRINATIONAL INTELLECTUAL PROPERTY COMMITTEE

Richard E. Neff

Legal Adviser for Latin America, Business Software Alliance

Senior Partner, Neff & Associates, Los Angeles, CA

tel. (310) 5404760 fax (310) 540-0305 email: richard@nefflaw.com

1. ADMINISTRATIVE REMEDIES (from Software Industry Perspective)

IMPI, Instituto Mexicano de la Propiedad Industrial, has been at the heart of the Business Software Alliance's enforcement strategy in Mexico, and has functioned very well. Curiously, although the software industry considers itself one of the four major copyright industries (the others being the book publishing industry, the recording (music) industry and the film industry), we have relied until the present on IMPI's TRADEMARK enforcement powers.

Under the Mexican Industrial Property Law, IMPI, the former Patent & Trademark Office, has enforcement powers--powers to conduct investigations and inspections, secure or seize infringing materials (such as computers and infringing software), the power to close businesses for up to 90 days and impose substantial fines Historically, the Copyright Office has not had similar enforcement powers.

More importantly, IMPI has the advantage of excellent, well qualified personnel under the leadership of Lic. Jorge Amigo Castaneda, and a strong commitment to the enforcement of intellectual property rights. IMPI has even been willing to conduct inspections of trademark users for potential violation of trademark rights, which has enabled the computer software industry to protect its rights in Mexico to a significant degree.

II. IMPACT OF NEW COPYRIGHT LAW

A. Advantages of New Copyright Law

From the perspective of the computer software industry, the new Copyright Law has many positive features. Specifically (numbers refer to articles):

102 Computer programs are protected as literary works.

103 Very good work-for-hire provisions.

104 Good provisions on rental right (prohibition against rental of software).

105 Reproduction right limited to the license, or 1 copy.

106 Very good exclusive rights of the copyright holder:

I. Reproduction right for permanent or temporary copies

II. Distribution right

IV. Strongest exclusive right of decompilation, reverse engineering in the world

107 Good database protection

112 Prohibition of the importation/distribution/manufacture of devices intended to eliminate technical protection of computer programs

113 Works transmitted electronically will be protected

B. Principal Disadvantage Associated with the New Copyright Law

The principal disadvantage associated with the new Copyright Law (although technically it is an amendment to the Penal Code) from the perspective of the computer software industry is the decriminalization of most software piracy, except for production, distribution, importation of protected works with criminal intent (dolo) on a commercial scale.

C. New Expanded Role of IMPI

In an encouraging development, Infracciones en Material de Comercio may be enforced by IMPI:

231 If direct or indirect commercial purposes (fines de lucro), the use, reproduction or exploitation of a computer program without the consent of the rightholder is an infraction/violation

232 IMPI may apply a fine in the amount of 5000-10,000 times the minimum daily salary in DF for this infraction (max. would be about $33,000 at current exchange rates)

234 IMPI will sanction these infractions in accordance with procedures set forth in the Industrial Property Law (IPL)

-IMPI can use the provisional measures set forth in IPL

-IMPI will have the powers to conduct investigations, order and realize inspection visits, require information and data

-IMPI can suspend the free circulation of foreign goods at the border

There may only be a few negatives to IMPI enforcement:

(1) lMPI procedures can take 1 to 1-1/2 years to a resolution

(2) IMPI fines are payable to the Government, not the injured rightholder

(3) Right now there is an excellent administration and enforcement team at IMPI, but are we assured that this will always be the case?

III. Is Mexico Meeting Its NAFTA Requirements with the New Copyright Law?

A. Civil or Administrative Remedies (Art. 1715 of NAFTA)

Given that Mexico has provided good administrative remedies (although enforcement of commercial copyright infractions by IMPI has not yet occurred, as the authority only came into existence on March 24, 1997), we need not spend too much time on the apparently inadequate civil remedies in Mexico.

However, the copyright industries believe that the ability to order a party to desist from an infringement (and to do so, if necessary, on an ex parte basis) does not clearly exist in the area of intellectual property rights in Mexico (a right apparently limited to real property). Art. 1715 requires that this right exist either under civil or administrative law.

In addition, Art. 1715 requires that the infringer of an intellectual property right be ordered to pay the rightholder damages adequate to compensate for the injury. Given the apparent lack of this right (in simple, transparent manner) on the civil side, Mexico must provide this right administratively. Given that the fines go to the Mexican Government in IMPI proceedings, I would maintain that Mexico fails to fulfill this NAFTA requirement.

B. PROVISIONAL MEASURES (Art. 1716 of NAFTA)

NAFTA requires that governments give an injured party have the right to prevent infringements, and even to order provisional measures on an ex parte basis if necessary to prevent irreparable harm or to preserve evidence. Again, as with Art. 1715, because of the faculties given to IMPI under the new Copyright Law, it appears that Mexico meets these requirements.

C. FINAL THOUGHTS

(1) Is IMPI prepared to enforce copyright now, as the new Copyright Law took effect on March 24 of this year? Are the personnel ready and trained?

(2) Will IMPI face any constitutional or structural obstacles in the enforcement of commercial copyright violations?

E-mail