The Mexican Industrial Property Law establishes that technical names or commonly used names of products orservices such as words that in current language or commercial practices have been converted into the usual orgeneric designation of such item, may not be registered as trademarks. This legal prohibition is completelyunderstandable given that if a technical name or commonly used word were permitted to be registered todesignate a product or service, this would grant the acquirer of the mark a competitive advantage against thirdparties by prohibiting the use to such third parties of the words, figures or forms, that are technical or common bynature, to distinguish their products. This would contradict the principle that a registered trademark must bedistinct. Many different strategies have been employed to attempt to register these types of names, figures or three-dimensional forms, so one must keep in mind that from the beginning of a trademark application, even ifthe authorities grant a registration (even if by error, inadvertence or lack of understanding) it is always possiblethat a trademark may be nullified according to the terms of Mexico’s trademark law. In addition, it is worthnoting that trademarks have existed which, at a given time, were distinctive symbols that serve to distinguishproduct or services covering its use in a class or kind, but over the passage of time, such terms becamegenerically recognized in commerce. This latter case is exactly the scenario in which a validly registeredtrademark could be cancelled, based on a loss of its distinctive character, which is a topic to be taken up in futurenotes.

On October 31, 2009 Mexico’s Federal Congress approved the Revenue (Ley de Ingresos) for 2010 with a clearpurpose of increasing government revenue. The so called “Fiscal Package” amends the Single Rate Business Tax(IETU) Law, the Fiscal Code of the Federation, the Income Tax Law, the Value Added Tax Law, the CashDeposits Tax Law, the Federal Law of Fees and the Special Production and Services Tax (IEPS) Law. Importantpoints to keep in mind are as follows:I. Single Rate Business Tax (IETU) Law. Credits and Deductions. In 2010 the possibility of crediting in the sametax year amounts derived from an excess in deductions for purposes of the IETU Law against income tax of thetaxpayer has been removed. Such tax credit may now only be applied against IETU (and not income tax) in theten following fiscal years, until exhausted.II. Fiscal Code of the Federation. Digital Receipts. Various reforms taking effect on January 1, 2011 wereapproved, such as the obligation to issue tax receipts through digital documents as part of the internet webpage ofthe Taxpayer Administration Service (SAT). Various requirements for such process are established, and make it acriminal offense to not follow the new digital receipt procedure.III. Income Tax Law. (i) Tax Consolidation. Taxes deferred as part of a tax consolidation must be paid by theholding company within a period of not greater than five fiscal years from the date on which the consolidationtook effect. Such term may not be renewed through corporate restructurings. The payment of deferred andupdated taxes shall be made in the following manner:a) 25% in the fiscal year in which payment of the deferred tax is due.b) 25% in the second fiscal year.c) 20% in the third fiscal year.d) 15% in the fourth fiscal year.e) 15% in the fifth fiscal year.The reform establishes an option for calculating the deferred tax due in place of calculating such tax inconformity with the current formula used to calculate income taxes for the disincorporation or termination ofconsolidated status. In addition, during fiscal year 2010, the holding company must report the deferred incometax corresponding to tax years prior to 2005 that remains unpaid as of December 31, 2009.(ii) Tax Rates. For fiscal years 2010, 2011, and 2012 the corporate income tax rate will be 30%. For 2013, therate will be 29%, and for 2014 the rate will be 28%. For individuals during fiscal years 2010, 2011 and 2012marginal rates have been adjusted upward to a maximum of 30%, with a maximum of 29% in 2013 and 28% in2014.IV. Value Added Tax. Tax Rate. The general value added tax rate will increase from 15% to 16%, and in theborder region from 10% to 11%.V. Cash Deposits. Tax Law. The amount of exemption received by individuals and corporations from the cashdeposits tax, for amounts maintained in cash deposits in Mexican banks, has been reduced to 15,000 pesos foreach month during the fiscal year.VI. Federal Law Fees. A new section to this law has been added regarding payment of fees for the issuance ofagriculture inspection certificates, as well as a section related to payment of fees for the processing ofapplications and permit issuance related to genetically modified organisms. In addition, the decree establishesthat it will enter into force on January 1, 2012, for concession and permit-holders of radio frequency bands from1710 megahertz through 1770 megahertz and 2110 megahertz through 2170 megahertz, ,when their concessionwas granted later than November 30, 2010, and on January 1, 2013 for concessions granted after December 1,2010.VII. Special Production and Services Tax Law. A tax of $0.10 per cigarette will apply, in addition to taxesalready established in the Law. Furthermore, the amendment establishes a tax rate of 3% for services provided inMexico through one or more public telecommunications networks when all or a part of such services take placeon the network. Exemptions to payment of the tax for the following telecommunications consist of (i) fixed ruraltelephone operations in towns of fewer than 5,000 people; (ii) public telephones; (iii) interconnection services;(iv) Internet access whether through fixed or mobile networks, consisting of all of the services applications andcontents through which said Internet access is provided on a telecommunications network.