The CCN Mexico Report™ is now available in audio format. Listen to the podcast and follow us on Spotify or wherever you get your podcasts.
In Mexico, there are three figures that may be protected in the field of inventions: (i) patents; (ii) utility models(modelos de utilidad); and (iii) industrial designs, including industrial drawings and models. In this note, we willdiscuss the registration of utility models, which entails the issuance of an exclusive right to an invention,allowing the owner to prevent non-authorized commercial use of the protected invention by a third party for alimited time period. According to its basic definition, which may vary according to the country providing theprotection, a utility model is similar to a patent. Utility models are sometimes called “petty patents” or“innovation patents.” The Mexican Intellectual Property Law (Ley de la Propiedad Industrial) defines a utilitymodel as the “objects, utensils, apparatuses or tools that display a different function with respect to their parts orutility as a result of a modification to their design, configuration, structure or form.” The main differencesbetween a utility model and a patent are the following:1. The requirements to obtain a utility model are less strict than those to obtain a patent. While the“novelty” requirements must always be met, the requirement for “inventive activity” is much more laxor does not exist for utility models. In practice, protection by means of a utility model is used forminor innovations that may not satisfy the patentability criteria;2. The term of protection for utility models is shorter than that of patents and varies by country(generally varies between seven to ten years), with Mexico having a term of ten years;3. It is more economical to obtain and maintain utility models than patents. In some countries, protectionby means of utility models may only be obtained in certain fields of technology and only applies toproducts and not processes.Since this figure is not recognized in all countries, it is worth determining whether the country in which the itemwill be used in recognizes the utility model concept before attempting to register such.
On June 27, 2011, an amendment to the Penal Code for the Federal District (Código Penal para el DistritoFederal or CPDF) was published in the Official Gazette of the Federal District (Gaceta Oficial del DistritoFederal), which included, among others, the modification to article 343 bis with respect to using real property ina manner that is different from the authorized land use. Previously the law sanctioned the unlawful use of realproperty contrary to the authorized land use, while the new amendment imposes sanctions of three to nine yearsof imprisonment and a fine on the persons who intentionally use land in a manner other than that which isauthorized, making this a serious crime under which one is not eligible for release on bail. The offense is deemedmore serious in the event it is committed with respect to real property located on natural preserves, protectedareas, ravines or green areas within urban lands. The same amendment modified article 254 of the CPDF tosanction criminal organization, which is defined to be when three or more persons participate in a permanent orrepeated manner to commit an unlawful act resulting in imprisonment from four to ten years. While it is true thatthe effective application of the plans, laws and regulations as to urban development in Mexico is very important,the amendment to the CPDF has some significant deficiencies. As a general rule, the improper use of realproperty has been administratively sanctioned with closure, demolition and fines, among other measures.However, as a result of the apparent inability and refusal of the authorities to enforce the laws, those whocontinue to engage in unauthorized land use, will be subject to more serious sanctions. . As a result of thissituation, it is important to verify that any real property located in the Federal District is being properly used, especially those properties to be developed for commercial and industrial purposes, in order to take adequatemeasures when necessary.
Recently, the Third Collegiate Court on Administrative Law from the Sixth Circuit published decision numberVI.3o.A. J/80 under the title, “Surety Bond. When such is issued to guarantee performance of each and all of thecontractual obligations, and in an amount equivalent to 10% of the amount of the principal obligation, it isunderstood that the principal obligation is of an indivisible nature pursuant to agreement by the parties.” In suchdecision, the Third Collegiate Court determined that in those cases where the surety bond is issued to guaranteeeach and all of the obligations deriving from a contract, and in an amount equivalent to 10% of the principalobligation, it is understood that the parties agreed that the obligation was of an indivisible nature and, upon anydegree of non-compliance by the obligor, the bond is enforceable in full. The foregoing is a result of theimpossibility of partial performance of the obligation when the principal obligation is indivisible by nature,pursuant to agreement by the contracting parties, or because it is determined as such by the trier of fact, in theevent of a legal proceeding. Consequently, this Court decided that in such cases partial performance is not adefense of the obligor or the bonding institution, and, therefore, any failure to perform results in the ability toenforce the total amount of the bond. Accordingly, it is recommended that parties carefully review contractualclauses entered into in order to determine the true nature of surety bonds that have been issued.
