In Mexico, as in the rest of the world, trademarks are registered to allow their owners to use them directly orindirectly, through licensing or other authorizations. Consequently, the use of registered trademarks without theowner’s authorization gives rise to a cause of action that may be brought before the competent trademarkauthorities. Moreover, current Mexican law establishes cases, such as so-called “parallel imports”, in which theuse of a trademark may not be denied by the trademark’s title holder to those who use, commercialize ordistribute such trademark, as long as the introduction of the trademark into the stream of commerce was legallyperformed by the owner or authorized licensee of the trademark, so that the trademarked product is consideredlegitimate. The following requirements apply in order for a product to be considered legitimate in accordancewith the applicable legal provisions in Mexico: (i) that the introduction of the products into the stream ofcommerce of such country is performed by the person who owns the trademark in that country or who is alicensee of the registered trademark; and (ii) that the owner of the registered trademark in Mexico and the foreigncountry are the same person or members of the same economic or common interest group or its licensees or sub-licensees on the date of importation of the products. This event occurs, as in other cases, when the owner of thetrademark issues a license or grants an exclusive distribution right with respect to such trademark in variousjurisdictions, and third parties acquire the products bearing the trademark of the owner of the mark or itslicensees or sub-licensees or distributors authorized in other countries for introduction into Mexico, therebyaffecting the licensee or local distributor in Mexico. Consequently, whenever licenses or exclusive distributionsare granted, it is important for the parties to conclude a written agreement to ensure that distributors or licenseesfrom other countries observe the territorial jurisdiction of their sales and, thus, avoid the existence of so called“parallel imports.”

In general, lessors own the real property they lease to their lessees. However, several exceptions provided by thelocal civil codes allow a person other than the owner to lease real property in Mexico based on: (i) instructionsreceived from the owner, in which case the agreement will be considered as if executed by the owner; (ii) theowner’s authorization of a certain person for such purposes, in cases in which the authorized individual will grantthe lease directly without intervention by the owner; (iii) authorization to the lessee to sub-lease, either generallyor by means of specific authorization from the owner; and (iv) the express authorization by law conferred uponindividuals such as guardians, executors and those who have parental custody, in accordance with the limitationsestablished by applicable local civil codes. It is important to review the legal capacity to grant a lease with respectto real property by one who is not the owner, including the temporary limitations and legal effects that this mayimply. For example, numerous civil codes establish that an executor may not lease real property for a periodgreater than one year unless he/she has the consent of the beneficiaries. This limitation is five years with respect to guardians and those with parental custody. In the case of a sublease, it is common for local civil codes toestablish exceptions under which the sub-lessee may assume the obligations of the sub-lessor with respect to thelessor, depending on the form in which the lessor authorized the execution of the sublease agreement. Eventhough the scope and effect of these provisions are greatly debated, they result in practical consequences of greatimportance. Consequently, in the event one is looking to grant or receive real property pursuant to a subleaseagreement, or lease real property from someone other than the owner, it is highly advisable to review theprovisions of the civil code applicable to the location of the real property in order to evaluate correspondingrestrictions, requirements and implications prior to executing an agreement.