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July 11, 2016

Jurisprudence Clarifies Burden of Proof in Trademark Invalidation Actions

By: Aldo de Landa
 

In binding jurisprudence (a contradicción de tesis) published July 1, 2016, a Mexican appellate court resolved a conflict between prior decisions regarding the burden of proof in trademark invalidation actions brought on the basis of false statements in the application.[1] The court held that the burden in such actions falls on the plaintiff, reversing years of practice by the Mexican Institute for Industrial Property (IMPI) and earlier jurisprudence of IMPI’s primary reviewing court.

A trademark registration may be declared invalid under Article 151.III of the Industrial Property Law (LPI) if it was granted on the basis of an application containing false information, regardless of whether the false statement was deliberate or an innocent mistake.  Typically, cases under Article 151.III involve dates of first use.  Although use is not a requirement for registration, an applicant who does not identify a date of first use in the application cannot later claim priority based on use before the application filing date. 

The LPI is silent on the burden of proof under Article 151.III.  However, Article 190 of the LPI states that in contentious proceedings, the complaint must be accompanied by evidence supporting the allegations, from which it may be implied that the burden of proof is on the plaintiff.  Further, under Article 81 of the Federal Code of Civil Procedure, a plaintiff must prove the facts that form the basis of its action.  However, Articles 82.I and 82.II of the Code state that a party who denies a fact need only support the denial with evidence if the denial involves the express affirmation of another fact or if it seeks to rebut a legal presumption.   The application of these principles to cases arising under Article 151.III was subject of great debate between plaintiffs and registrants.

Historically, IMPI has placed the burden of proof on the registrant, reasoning that the documents required to prove the truth or falsity of a claimed date of first use are in the position of the registrant.[2] IMPI’s primary reviewing court, the Federal Court for Fiscal and Administrative Justice (TFJFA), reached the same conclusion in binding jurisprudence published in 2006.[3]  However, the Collegiate Circuit Courts for Administrative Matters of the First Circuit, which review decisions of the TFJFA, have issued conflicting decisions.[4] 

The present decision, published by the Plenary of the Collegiate Circuit Court for the First Circuit,[5] resolves the issue by placing the burden of proof on the plaintiff. The court reasoned as follows:

  • As a general rule, that which is “ordinary” may be presumed, while that which is “extraordinary” must be proven. 
  • An applicant for trademark registration need not provide evidence to corroborate its claimed date of first use.  In other words, the LPI presumes the good faith of the applicant and the accuracy of the date of first use claimed in the application. 
  • Because of this presumption, a plaintiff seeking the invalidation of a trademark registration under Article 151.III is claiming something “extraordinary” (an incorrect date of first use) which must be proven.
  • Further, from a public policy standpoint, placing the burden on the registrant to corroborate its claimed date of first use encourages the filing of baseless invalidation actions under Article 151.III. 

Since there is virtually no discovery under Mexican law, the initial burden of proof often determines the outcome of the litigation.  Thus, the likely effect of the Court’s decision will be to greatly reduce the number of successful invalidation claims under Article 151.III of the Industrial Property Law.

 

[1] Contradicción de tesis 9/2016, published July 1, 2016, tesis PC.I.A. J/78 A (10a.).

[2] Since there is virtually no discovery under Mexican law, the plaintiff usually has no access to the defendant’s business records. 

[3] 5ª Época, RTFJFA, Año VI, Tomo I, No. 61, Enero 2006, p. 30, tesis V-J-SS-90.

[4] The Collegiate Circuit Court for the First Circuit is an intermediate appellate court in Mexico City.  It is the court of last resort for most federal cases within its territorial jurisdiction which do not involve questions of fundamental human rights or constitutional law.     

[5] The Court has various chambers organized by subject matter.  The administrative law chambers hear appeals from the Special Intellectual Property Chamber of the TFJFA.  If, as here, the chambers issue conflicting decisions, the Plenary of the Court can resolve the conflict by publishing a contradicción de tesis.

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