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INTA Raises Concerns About Proposed Brand Restrictions Legislation in Mexico

01-Nov-2020 | Source : International Trademark Association (INTA) | Visits : 1646
NEW YORK - As governments worldwide continue to explore legislative actions to protect public health by restricting the use of branding elements on products they deem unhealthy, INTA continues to weigh in on this key policy issue in order to protect brand owners’ intellectual property (IP) rights, according to the official website of INTA.

The increasing number of brand restrictions in various regions are putting numerous industries and product categories at risk. INTA has filed submissions with governments on brand restrictions in more than 20 jurisdictions globally.

Adding to this growing list, on July 15, 2020, INTA submitted to the Coordinador General de Proyectos Especiales Encargado de la Comisión Nacional de Mejora Regulatoria (CONAMER), the regulatory agency, its comments on recently proposed brand restrictions legislation in Mexico. The proposed legislation aims to prohibit the use of characters, animations, animated cartoons, celebrities and the like in advertising.

What’s at stake? Companies are constantly searching for opportunities to identify and satisfy consumer needs, introducing new products and developing strategies to position their brands among competitors. They also invest in market research and development, along with educational campaigns. However, with brand restrictions, where there is no room for discretion, economic freedom and free competition are under attack, and impact the healthy functioning of the market.

In the case of recent legislation proposed in Mexico, the most notable and disturbing aspect of these reforms is that they do not consider the rights and principles that govern the ownership of intangible assets. If the use of registered trademarks is prohibited or severely limited by identifying certain types of products or services, they will simply become signs that remain in a public registry without connection or relationship to the market and consumers.

In the July 15, 2020, comments, INTA urged CONAMER to withdraw Article 24Bis 1 and/or to eliminate from it the following words [translated]:

“[C]hildren’s characters, animations, animated cartoons, celebrities, athletes, pets” and leave the article as follows:

Article 24Bis. 1 Advertising of prepacked products which label includes one or more warning labels or sweeteners legend, in accordance with the corresponding standard, shall not include interactive elements, such as special visual games or digital downloads, aimed to children that encourage or promote its consumption, acquisition or selection of those products.

The proposed legislation is in addition to a recently passed amendment that takes effect next year that requires specific mandatory information on prepackaged products consisting of food and non-alcoholic beverages.

Limitation on the use of distinctive elements on product labels as conceived constitutes a restriction on the use of trademarks, particularly those consisting of characters, drawings, and even celebrity and athlete likenesses. This arguably limits a brand owner’s right to use figurative, graphic, or 3D elements under the generally accepted international definition of what constitutes a trademark (Article 15.1 Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS). Some of the prohibitions may also result in limitations on the use of works protected under copyright.

These restrictions could affect the positive benefits of production and/or consumption of products. Industries often stimulate growth in other sectors. The development of a product by a company can create or expand the market for complementary products and related services.

INTA does not object to the inclusion of seals and legends established by the applicable Mexican Official Standards on the advertising of prepackaged products, or the prohibition on including in the advertising, recommendation or recognition of professional organizations or associations, which is under discussion. But the Association condemns the restriction imposed on brand owners’ rights to use their trademarks, which violates international treaties, Mexicans’ fundamental rights, and Mexican laws, considered to be of public order.

Although governments consider these measures a strategic move to achieve public health policy objectives, they introduce restrictions on the use of intangible assets and create a conflict between rights, generating uncertainty as to the impact that these regulations will cause to the market since they restrict economic freedom. High-impact adjustments arguably pose a conflict between rights, such as freedom of industry, commerce or work, right to information, freedom of expression, and IP rights.

INTA’s Board of Directors passed a resolution in November 2019 formalizing the Association’s position on brand restrictions. INTA strongly believes that restrictions on brand symbols are being imposed or considered without due consideration and/or scientific evidence, and that there are other less drastic means of providing equal or greater protection to public health and safety without the need to restrict the rights of brand owners.

“[S]uch restrictions are being imposed or considered without adequate marketplace impact assessments and credible evidence to reasonably demonstrate that such measures will effectively achieve their intended results,” the resolution states. “[R]estrictions on brand symbols are being imposed or considered without due consideration even though there are other, less drastic, means of providing equal or greater protection to public health and safety without the need to restrict the rights of brand owners.”

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