Letters of Consent in the Mexican Trademark System

17 September 2021

As many of you will already know, Mexico’s trademark system has recently undergone a modernization process. One of the most important updates is the inclusion of letters of consent, which, until just a few years ago, were rejected out of hand. IMPI argued that the will of the parties could not go against the law and, above all, against the protection of the consumer public, who could fall into error or confusion as to the origin and quality of the products or services offered in the market.

The likelihood of confusing similarity is one of the most common objections raised ex officio by trademark examiners at the Mexican Institute of Industrial Property (IMPI). In short, confusing similarity constitutes the risk of consumers mistakenly believing that certain goods/services come from the same source when, in fact, they are being marketed by two different entities.

In principle, Mexican Law establishes that a trademark identical or confusingly similar to another pending application or prior registration, if applied to the same or similar goods or services as these, will not be granted.

For many years, IMPI refused to admit letters of consent, coexistence agreements, and even consents signed by companies belonging to the same group, such as a parent company, to overcome an objection based on risk of confusion due to similarity. It was not until August 10th 2018, that the reforms to the Industrial Property Law (now repealed) came into force, which provided as follows:

Article 90.- They shall not be registrable as trademarks:

Section XVIII.- Signs that are identical or confusingly similar to a trademark pending application filed earlier, or to a registered and valid trademark applied to the same or similar goods or services. This includes those that are identical to another trademark already registered or pending registration by the same owner, to distinguish identical goods or services;
…
The provisions of Sections XVIII, XIX and XX shall not be applicable in respect of confusingly similar marks under this Article, where express written consent is given in accordance with the Regulations under this Law.

As we can observe from the simple reading of the last paragraph of article 90 of the Industrial Property Law, when the owner of an earlier filed application or valid registration grants its consent in writing, IMPI cannot object such consent and, consequently, if there is no other cause of impediment for the granting of the registration, the authority will grant protection.

Well, as of August 2018, applicants facing a provisional rejection of their trademark application based on confusing similarity to a previously granted trademark application or registration have the possibility to respond to IMPI’s rejection by filing a letter of consent to overcome such legal hurdle.

Undoubtedly, this has been a tool that many applicants and their agents have used. Filing a letter of consent is often a remedy that increases the chances of overcoming an objection raised by the examiner and is also much less costly than attempting to cancel a trademark registration previously acquired by a third party, as well as avoiding future conflicts.

In our experience, the owner of a previously registered trademark tends to grant consent when the scope of application is different even though the marks (the registered and the intended mark) may target the same international class. For example, if a registration covers accident protection clothing and an applicant intends to apply its mark to virtual reality game software, both in international class 09, there is a good chance that the prior owner will be inclined to grant consent.
The approach to the owner of a registered trademark can be a door to the negotiation of a coexistence agreement. Through such instrument, the rights and obligations of each party can be specifically delimited, as well as specific clauses can be added to avoid future conflicts such as oppositions, cancellation, or infringement actions, either in Mexico or in other jurisdictions, or even the conditions can be given to negotiate an agreement for the transfer of rights over the registered trademark, in exchange for an economic benefit.

Despite the updates that the local legislation has undergone, IMPI continues to have a strong influence from the past, since although letters of consent are foreseen and accepted in the Law, IMPI has denied trademark applications even with the owner’s express written consent. In this sense, let us go through IMPI’s arguments issued on December 20th 2020 refusing grant:

Considerations:

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SEVENTH. Now, it should be pointed out that although it is true that the filing of the document signed by the representative of XXXX, current owner of the trademark registration XXXX, in favor of the owner of the trademark file whose number is mentioned above, was in order to obtain the registration of the proposed sign, a situation that shows that there is no affectation to the rights of such company, in this respect it should be mentioned that it should not be lost sight that the scope of protection of the distinctive signs has as purpose on the one hand to avoid the invasion of the rights of the owner of a trademark cited as prior, that is to say, the safeguard of the right constituted in favor of the owner of a registered trademark, and on the other hand, to avoid that the consumer public incur in error or confusion as to the origin and quality of the products or services offered in the market, and it is precisely in this last assumption that the prohibition contemplated in section XVIII of article 90 of the Industrial Property Law was fully complied with.

In this sense, even though in consideration of the interested party the grant of the proposed sign could not cause prejudice to the holder of the trademark registration cited as prior, since it expressed its conformity for the registration of the same, the truth is that such situation would generate confusion in the consumer public with respect to the holder, as well as the quality of the services covered by the signs under study, since it does not make a detailed examination of the trademarks circulating in the market as to determine with accuracy that they come from different holders.

In this order of ideas, it is necessary to point out that such document could not under any circumstance invalidate the legal impediment that motivates the present resolution, since the Mexican Institute of Industrial Property is the only competent authority to determine on the origin of a trademark registration, according to the provisions of the Industrial Property Law, where there is no authorization to register trademarks similar or identical to others by a different owner, and therefore, notwithstanding the will of the parties, since the aforementioned provision is of public order, it must prevail; Thus, the proposed sign being similar in degree of confusion to the previously registered trademark, applied to similar services and belonging to a different owner of the registration, it is that it actualizes the prohibition of trademark registration, foreseen in section XVIII of article 90 of the mentioned Law.

As can be seen, IMPI examiners continue to argue the consumer public’s protection, who could be misled or confused as to the origin of the goods or services and their quality in the market. In fact, in many other jurisdictions, consumer protection is often the main argument for the rejection of a mark that is confusingly similar or identical to a previously registered mark.

Letters of consent are a tool to increase the chances of success of a trademark application.

In my view, while letters of consent can now be filed with IMPI, their acceptance is still at the discretion of the examiners.

Finally, with the repeal of the IP Law and the recent entry into force of the new Federal Law for the Protection of IP, the possibility of filing a letter of consent to overcome a provisional refusal is also contemplated. In fact, the new text is much broader since it refers to confusingly similar or identical trademarks. In this regard, the new Law states the following:

The provisions of Sections XVIII, XIX and XX of this Article shall not be applicable in respect of confusingly similar or identical marks for similar goods or services, where express written consent is given, in terms of the Regulations under this Law.

However, we are awaiting the issuance of the regulatory provisions related to the new Law and, above all, to find out whether the IMPI and the Mexican authorities will issue new criteria regarding letters of consent, which may be difficult, given the existing criteria issued by the IMPI and by our highest courts.

However, the inclusion of letters of consent in the Mexican trademark system is undoubtedly a great step forward. Compared to the past, IMPI is now much more open to receive and consider express consents.

In conclusion we can say that letters of consent are adequate in some cases and are a tool to increase the chances of success of a trademark application, if you receive a provisional refusal from the IMPI, we recommend you to analyze the particular circumstances with an expert in order to file a proper response.