Mexican statutes do not stipulate any provision regarding trademark coexistence agreements and letters of consent. Nevertheless, these instruments have been widely used to prevent or overcome objections from the Mexican Patent and Trademark Office (MPTO) associated to applications for trademarks identical or confusingly similar to earlier registered or applied ones, protecting the same or similar products or services.
The statute provides that the MPTO will reject a trademark application when the trademark is identical or confusingly similar to an earlier registered or applied one, to cover the same or similar goods or services. Owners of existing registrations are allowed to apply for the registration of identical trademark to protect goods/services similar to those covered by the senior registration.
However, the attitude of the MPTO to trademark coexistence agreements and letters of consent has changed, and in the last fifteen months it has been quite hostile. Now the question would be: if they are not regulated, do letters of consent and coexistence agreements actually work in Mexico?
In general, letters of consent and coexistence agreements have two basic purposes: (i) to overcome an objection raised by an examiner, associated to a senior trademark registration or application; and (ii) to prevent or settle a trademark dispute between two different persons.
In general, Mexican practitioners give more importance to the administrative aspect of the letter or agreement (as a mean to overcome an objection from the examiner) and often neglect the second contractual aspect, overlooking the rights and obligations arising from the letter of consent or coexistence agreement.
Consequences of letters of consent and coexistence agreements in connection with the MPTO
As I stated above, letters of consent and coexistence agreements are not regulated in Mexican law, thus they are not binding for the officials of the MPTO.
The Mexican Industrial Property Law states that one of the aims of the statute is “encouraging the improvement of the quality of goods and services in industry and commerce, according to the interest of the consumers”.
With the above in mind, the MPTO started arguing about fifteen months ago that the protection of the consumers must have priority over the interests and wishes of the trademark owners. As a consequence, the approach of the MPTO to letters of consent and trademark coexistence agreements has been lees friendly than it used to be.
In an effort to provide some certainty about how effective a letter of consent might be to improve the chances of having a trademark registered in spite of the existence of earlier registered identical or confusingly similar trademarks to cover the same or similar products or services, the MPTO developed a few guidelines. The guidelines are not actual directives, since they do not appear in any document or internal regulation, and have been communicated orally by the official in charge of the trademarks area of the MPTO in conferences with practitioners, so it also means that they may become more liberal or more astringent at any time and without notice.
Basically, the MPTO will accept a letter of consent or coexistence agreement to dismiss an anticipation, in the following cases:
(i) Similar trademarks covering the same or similar products or services, provided that the distinctive element of one of the trademarks is not identically reproduced in the other trademark; and
(ii) Identical trademarks covering similar products or services, provided that the goods or services listed in the pending application are not implicitly included in the list of products or activities of the senior trademark registration/application, or vice versa.
The MPTO will not accept a letter of consent or coexistence agreement in the following cases:
(a) Identical trademarks covering the same products or services. A word mark would be regarded identical to a word+design trademark if they share the same words.
(b) Trademarks that share the same distinctive element to cover, implicitly or explicitly, the same products or services.
This last guideline is causing problems to corporations that allow different subsidiaries or sister companies to register trademarks using the same house mark or distinctive feature for their specific lines of business, because the MPTO is rejecting such new applications, even when the applicant files a letter of authorization or agreement executed with the proprietor of the senior trademark registration
In a case I found a few minutes ago while browsing in the on-line database of the MPTO, on February 20, 2009, the MPTO rejected the trademark application No. 919,139 “ILT ON SITE” filed by a Mexican corporation to cover “real estate affairs”, due the existence of the earlier trademark registration No. 982,020 “ILT”, also covering “real estate affairs”. The MPTO rejected the application in spite of the fact that the owner of the anticipation is a shareholder of the applicant and that he executed a letter of consent, stating that he authorized the registration of “ILT ON SITE” by his company.
Usually the MPTO does not issue an office action, informing the applicant that it will not accept the letter of consent or coexistence agreement, but issues the final rejection of the trademark application. From there, the only remedies available for the applicant are filing a petition for administrative review by a higher rank officer within the MPTO itself (often a waste of time), or an amparo indirecto or constitutional appeal with a District Judge, or an appeal with the Tribunal Federal del Justicia Fiscal y Administrativa or Federal Court of Tax and Administrative Affairs (FCTAA), which is the most usual way of challenging the MPTO’s decisions.
It is important to state that the non-specialized Chambers of the FCTAA have issued inconsistent decisions concerning the consequences of letters of consent and coexistence agreements; I have no information about any ruling from the specialized Chamber.
Although I am aware of the existence of rulings in different senses, the only two published precedents I found (non-binding) from two of the non-specialized Chambers of the FCTAA*, expressly state that the MPTO should reject an application for a trademark identical or confusingly similar to an earlier registered one for similar goods or services, even if the owner of the earlier registered trademark expressly authorizes the approval of the application.
Therefore, letters of consent and coexistence agreements may not guarantee that the MPTO will approve a trademark application; in the best scenario, they would only increase the chances of success, provided that they follow the current guidelines of the MPTO.
Consequences of letters of consent and coexistence agreements between the parties
When a letter of consent is executed by the trademark owner only, it is only an unilateral declaration, with no binding effects for the applicant. However, once the letter if filed with the MPTO, the applicant is implicitly accepting the terms of the letter, and then it becomes a contract under Mexican law.
Most letters of consent I have reviewed are more or less vague about the rights and obligations of the involved parties. In many cases, the letter only states that the trademark owner ‘authorizes’ the registration of the applicant’s trademark for certain goods or services or in a specific International Class.
A plain authorization granted by the trademark owner must imply at least some obligations for the authorizing party and some rights for the applicant; the problem is that these obligations and rights would be implicit, not explicit. From my perspective, the ‘authorization’ implies the obligation for the trademark owner to not oppose the application, but nothing more. If the letter or agreement only refers to an “authorization”, the earlier trademark owner would be allowed to file a cancellation action against the registration resulting from the so authorized application, claiming that it invades the exclusivity rights arising from the senior trademark registration, because the general Mexican statute that governs contracts, provides that the waiver of any right must be explicit; otherwise it is illegal and unenforceable.
The above is just an example about the importance that a trademark lawyer should give to the contractual aspect of the letter of consent or a coexistence agreement. Further, if the applicant is unsuccessful in obtaining the approval of the trademark application, in spite of the authorization letter or agreement, such letter or agreement could be the only instrument available for the applicant to defend itself in case it decides using the unregistered trademark and, on the other hand, the earlier trademark owner decides to file an infringement action. What I mean is that even if the letter of consent or coexistence agreement was not effective to obtain the trademark registration from the MPTO, the obligations and rights contained therein would still be valid and enforceable between the parties, thus it becomes extremely important that the letter of consent or coexistence agreement explicitly stipulates the rights of the parties and the waivers.
*Journal of the Federal Court of Tax and Administrative Affairs. Fifth Era, Year VII, Volume IV, No. 73, January 2007, Page 1927. Thesis: V-TASR-I-2346.
* Journal of the Federal Court of Tax and Administrative Affairs. Fifth Era, Year VII, Volume IV, No. 73, January 2007, Page 1929. Thesis V-TASR-II-2347.
