Conciliation Procedure

July 29, 2020

With the entry into force of the new Federal Law for the Protection of Industrial Property, new frameworks for legal action become available. Such is the case of the Conciliation Procedure.

In the new law, the Conciliation Procedure is formally introduced as an alternative dispute resolution mechanism, expressly indicated for infringement proceedings, being ambiguous or to be tested as to whether it will also apply to isolated cancellation proceedings or cancellation proceedings filed as counterclaims.

According to the text of the law, the conciliation process will be as follows:

• It can be requested in writing, by any of the parties and at any time before a resolution is issued. This possible conciliation stage will not suspend the prosecution of the contentious proceeding.
• The interested party will file a conciliation proposal, with which the opposing party will be served within a period of five business days.
• The party receiving the request for conciliation has the possibility to accept the counterpart’s proposal; to refuse to negotiate; or, to file a counterproposal.
• If no response is submitted, it will be understood that the conciliation has not been accepted, putting an end to the conciliation procedure.
• If the counterpart files a document accepting the applicant’s proposal for conciliation, the Mexican Institute of Industrial Property (IMPI) will require the parties to exhibit a duly formalized agreement.

• If there is a counterproposal, the parties will be summoned to up to two negotiation meetings, in which IMPI will try to mediate between the parties. If any of the parties does not attend these negotiation meetings for unjustified reasons, they will receive a financial penalty. If neither party attends, the negotiation will be understood as rejected.
• If preliminary injunctions are imposed within the infringement proceeding, there must be an agreement regarding the destination of the bond posted and/or the seized goods.
• The agreement reached by the parties may not be contrary to public order, public health or the general interest of society, and shall have the character of res judicata, and should be implemented.

This new conciliatory stage before IMPI can be useful to reduce timing in the resolution of controversies, in which the circumstances of the conflict allow it, and should help to reduce IMPI’s backlog within the issuance of resolutions related to contentious procedures, especially if it can be applied to cancellation proceedings or non-use cancellation actions filed as counterclaims. Otherwise, the entire framework could be innocuous.