Unlocking One of Mexico’s Little-Known Advantages: Intellectual Property Protection

By Isaías Rivera | Mkt & Business Development Director at American Industries Group®
Published 07/05/2023

Mexico is quickly becoming a go-to location for manufacturers because it is a hub for international trade and favorable economic policies. However, one advantage often goes overlooked: strong intellectual property (IP) protection. In recent years, Mexico has reformed and updated laws to further strengthen IP protection and enforcement to encourage innovation and investment in the country.

International and US companies manufacturing in Mexico can be confident that their industrial property—including patents, trademarks, and trade secrets—will be protected. This article will explore the importance of IP protection for manufacturers, Mexico’s advantages over China in IP protection and enforcement, IP measures related to the USMCA and other international agreements, entities and processes regulating IP in Mexico, and the importance of partnering with experts for tailored advice.

The Importance of Intellectual Property (IP)

Though IP protection may not be the first factor that comes to mind when thinking about relocating operations internationally in the industrial and manufacturing sectors, it is important to consider. IP protection serves as a vital safeguard for proprietary information and technologies that grant a competitive advantage, providing legal rights that prevent others from copying or exploiting their innovations without permission.

In addition, it is crucial for attracting investments and fostering partnerships in the industry and manufacturing sectors. Companies with robust IP portfolios show a dedication to innovation, differentiating them from competitors and ensuring long-term sustainability. IP protection also facilitates technology transfer, which is becoming increasingly important with today’s rapidly evolving innovations in manufacturing 4.0 and logistics.  

Foreign and US companies manufacturing in Mexico can benefit from the country’s robust IP regulations, allowing them to concentrate on continuous innovation without worrying about the theft of their intellectual property.

Foreign and US companies manufacturing in Mexico

Mexico’s advantages over China in IP protection and enforcement

In Mexico, companies have the confidence that their ideas, trade secrets, and designs will be safeguarded. In contrast, in China IP protection has long been an issue, with IP rights being often viewed as negotiable. Many manufacturers have faced challenges related to counterfeit products, patent infringement, and copyright violations, leading to lost revenue and damage to reputation, and reduced market share.

Some of these issues have stemmed from the fact that trademark ownership is determined on a first-to-file basis, the country does not have a process in place for patent opposition, nor does it recognize trademark registers in other countries. This allows Chinese companies to file for trademarks that are well known in other countries, resulting in trademark disputes for companies like Apple and Tesla that are difficult to make claims against.

On the other hand, Mexico has made considerable progress in recent years in strengthening its IP protection regime. In 2018, the country passed the new Federal Law for the Protection of Industrial Property, which brought its IP laws in line with international standards and provided more comprehensive protections to manufacturers.

While China may be a dominant player in manufacturing, Mexico’s robust intellectual property (IP) protection laws offer substantial advantages. Companies that choose to manufacture in Mexico can enjoy favorable business and labor conditions, attractive tax incentives, and, most importantly, a secure legal framework for protecting their IP rights. This combination of benefits makes Mexico an enticing option for multinational and US companies looking to manufacture in Mexico.

US companies looking to start up in Mexico

IP protection under the USMCA and other international measures

The United States-Mexico-Canada Agreement (USMCA) contains several updated provisions regarding IP protection in Mexico. These include the recognition and legal validity of electronic signatures and contracts, facilitating digital trade and e-commerce activities. It also mandates that Mexico implement a patent term adjustment mechanism to address delays in processing, ensuring that owners are granted sufficient effective terms. For the pharmaceutical industry, the agreement includes provisions for establishing a patent linkage system aimed at safeguarding pharmaceutical products. Furthermore, the USMCA provides additional protection for trade secrets through strong criminal and civil penalties in cases of its theft.

Additional international IP protection measures Mexico adheres to include the Patent Cooperation Treaty (PCT), Trademark Law Treaty, and ten other IP agreements. It forms part of the World Intellectual Property Organization and is a member of the Paris Convention, Locarno Agreement which establishes an International Classification for Industrial Designs. This means applicants can file a single international patent application through the World Intellectual Property Organization (WIPO), allowing them to seek protection in multiple countries, including Mexico, through a single filing, streamlining processes and reducing the time and effort required for registration.

usmca wipo

Entities and processes regulating IP in Mexico

The Mexican Institute of Industrial Property (IMPI) is responsible for registering and granting patents, trademarks, and industrial designs in Mexico and enforcing IP laws in Mexico, including investigating and prosecuting cases of IP infringement, such as piracy, counterfeiting, and copyright violations. Additionally, Mexico has established specialized IP courts with judges with extensive expertise in intellectual property matters. These courts offer faster and more efficient decisions, which is particularly advantageous for manufacturers who need to protect their IP quickly in a competitive marketplace.

The general procedure for registering IP with the IMPI involves several key steps, starting with preparing and submitting an application with the Mexican Institute of Industrial Property (IMPI). The IMPI then evaluates the application, and if it meets all requirements, the patent is then published in the Official Gazette of Industrial Property, making it available for public inspection. Applicants must then request a substantive examination, followed by an analysis by the IMPI. If the IMPI determines the application meets requirements, then the patent is granted and holders must pay an annual maintenance fee to keep it in force.

Partnering for Success: Importance of partnering with experts for tailored advice and support

Partnering with experts is crucial in ensuring success for global and US companies manufacturing in Mexico. Collaborating with a trusted provider of shelter services allows you to have professionals on your team for all aspects involved with setting up operations, including experts in intellectual property, manufacturing, and industry-specific knowledge.

When selecting a partner, businesses should look for experts with extensive experience and a deep understanding of the local market. By working with professionals with a proven track record of success, like American Industries, manufacturers can gain valuable insights and perspectives to help them navigate the complexities of doing business in Mexico.

Partnering with experts is an essential element of success for manufacturers operating in Mexico. By collaborating with professionals who can provide tailored advice and support, businesses can gain a competitive edge, navigate complex regulatory landscapes, and achieve their business goals promptly and efficiently.

In conclusion, Mexico’s strong focus on IP protection is a vital advantage for manufacturers compared to China. It provides a stable and secure environment where manufacturers can confidently invest in research and development, knowing their intellectual property will be well-protected. As such, manufacturers looking to expand their operations should put Mexico at the top of their list and leverage its favorable IP policies for long-term success.

Isaías Rivera

Mkt & Business Development Director

American Industries Group®

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