Mexican District Court Delivers Groundbreaking Ruling on Preliminary Injunctions
July 13, 2017
On June 17, 2017, a District Court ruled that a provision of the Mexican IP Law allowing alleged patent infringers to lift preliminary injunctions by simply posting a 40% higher bond than the plaintiff is unconstitutional, as it contradicts NAFTA and TRIPS provisions.
Patent holders in Mexico who pursue infringement actions can request preliminary injunctions while the merits of the infringement action are being decided. These injunctions can stop, among other violations, infringing products from being imported, offered, or marketed in Mexico.
To obtain preliminary injunctions, patent holders must submit evidence showing that there is likelihood of infringement and post a bond to cover potential damages to the alleged infringer. The bond for the injunctions is discretionally fixed by the Mexican Patent Office.
The Mexican IP Law allows alleged infringers to lift injunctions by posting a bond 40% higher than the plaintiff’s bond. This amendment has caused much concern over the years, since it allows defendants to lift injunctions by simply posting a higher bond, despite the fact that the harm to the patentee could be severe. Furthermore, litigation often takes a considerable period of time, meaning that the plaintiff’s IP rights would continue to be violated until the case is decided on the merits.
In its June 17 decision, the District Court at the first stage decided that article 199 bis 1 of the Mexican IP Law contradicts the principle of constitutional supremacy provided by Article 133 of the Mexican Constitution. In accordance with the Supreme Court’s case law, international treaties are considered hierarchically at the same level of the Constitution and above Federal Laws, such as the Mexican IP Law.
This ruling is under appeal, but we believe that the court’s rationale has a strong chance of being upheld. If so, it certainly would be a landmark case that considerably improves the enforcement of IP rights in Mexico.
This newsletter is intended only as a general discussion of the addressed issues, and should not be regarded as legal advice.
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