New technologies in Mexico – IP Overview
Introduction
In recent years, Mexico has emerged as a vibrant hub for technological innovation, witnessing cutting-edge advancements that are reshaping numerous sectors of its economy. From ground-breaking gadgets to innovative software solutions, the Mexican tech landscape is vibrant with creativity and potential.
Nevertheless, amidst this rapid technological evolution, the slow legislative process in Mexico has led to a lack of clear regulatory framework governing these innovations to date.
This article serves as an update to our publication from last year, offering new insights and perspectives for businesses interested in innovating or investing in new technologies in Mexico so they are aware of the latest IP trends in the jurisdiction. We will discuss the current efforts to regulate technological tools and examine how the associated issues are currently being addressed in the IP field.
Legislative breakthroughs in Mexico
In Mexico, a wave of legislative initiatives focusing on AI has emerged since mid-2023 and early this year. These initiatives encompass diverse sectors and aim to outline and integrate AI within specific contexts.
For example, in the public health sector, an ongoing initiative seeks to regulate AI's application in the medical industry, prioritising transparency, users' rights protection, and data privacy. Additionally, proposals to amend the Federal Penal Code address concerns like AI-generated content, such as child pornography and deep fakes. Efforts are also underway to refine and update copyright laws for AI-generated works, with delineations in certain sectors while safeguarding intellectual property rights ("IP rights").
There are also two pivotal initiatives centred on establishing governmental oversight bodies. The first proposes the creation of the Mexican Agency for the Development of Artificial Intelligence, entrusted with formulating a National Strategy on AI and advocating for national interests. The second advocates for regulation through official Mexican standards (a form of specific regulations) and proposes the creation of the Mexican Council of Ethics for Artificial Intelligence and Robotics, comprising multidisciplinary experts, to ensure adherence to governmental standards and ethical protocols.
Another noteworthy proposal is the Federal Law that Regulates Artificial Intelligence, currently under review by the Congress, which addresses AI systems' development, commercialisation, and consumer rights, drawing inspiration from the European Union's recently approved AI legislation. It categorises AI systems based on risk levels and introduces consumer notification requirements for AI interactions.
In terms of IP, there is an initiative that provides that any work made using artificial intelligence must be declared as such to the National Copyright Institute (INDAUTOR) when registration is sought. It also points out that AIs will only be able to train their language models with databases authorised by the owner of the IP rights. Unlike previous initiatives, this one designates the existing Federal Telecommunications Institute as the authority for deciding AI matters, suggesting the formation of a National Artificial Intelligence Commission inside such federal authority.
However, as finalised legislation is still being discussed by the Congress, stakeholders are encouraged to adhere to existing Mexican regulatory frameworks to resolve any disputes that may arise from the use of AI or any other technological tool. Therefore, in the following sections, we will analyse the guidelines that government entities such as the Mexican Intellectual Property Office (IMPI) and INDAUTOR, aligning with current legislation and international standards, have adopted to foster a favourable environment for businesses that develop and/or use AI and other ground-breaking technological tools in their operations.
Generative AI tools
AI tools have transcended mere replication of existing things, enabling the creation of content that blurs the line between reality and simulation, often mimicking human-like qualities. Among the most impressive achievements in this area is the development of generative algorithms capable of producing lifelike images and videos. Models such as BigGAN and StyleGAN have propelled image generation to unprecedented levels, crafting photographic portraits of fictional individuals and breathtaking landscapes seemingly plucked from the depths of imagination. Also, algorithms equipped with natural language processing capabilities have gained increasing favour among scholars and professionals, allowing them to generate written content in a matter of seconds.
While these tools can undoubtedly benefit businesses in terms of time and cost savings, the absence of regulation and the dilemma of copyright ownership paradigms around them may jeopardise or even cause them to face economic and legal problems.
The foregoing because generative AI algorithms typically draw content from extensive datasets of pre-existing content, raising concerns about potential copyright infringement. Instances have arisen where AI-generated content closely resembles existing works, precipitating disputes over ownership and originality. Furthermore, the ease with which AI replicates existing designs may cause apprehensions regarding the safeguarding of industrial designs and trade secrets. Additionally, the capacity of generative AI to fabricate persuasive counterfeit content poses risks of IP infringement. The proliferation of AI-generated counterfeit goods, for instance, may threaten to undercut the market for genuine products, inflicting economic losses upon companies and IP rights holders.
In Mexico, there have not been any significant cases of this nature yet, therefore we still do not have judicial precedents on the matter. Although existing regulations such as the Federal Law for the Protection of Industrial Property and the Federal Copyright Law may offer some guidance on how to handle potential infringement cases and establish that artwork created by AI is not subject to protection since by statutory mandate the creator can only be human, in practice, entities lack a clear means to differentiate with precision between AI-generated works and counterfeit products or works made with the assistance of or by AI in its entirety.
Based on the aforementioned challenges, it is advisable for entrepreneurs to proactively engage with legal experts specialising in IP to navigate the complexities surrounding AI-generated content and counterfeit detection. Developing robust strategies for monitoring and protecting IP Rights, alongside implementing advanced technological solutions for authenticity verification, can help mitigate risks and safeguard business interests effectively.
Updates on the metaverse and its regulation in Mexico
The metaverse represents a virtual landscape where users interact with one another and with a multitude of digital elements, and where the digital realm emulates the physical and traditional environment. Within this expansive digital world, users have the capacity to craft and possess a diverse array of virtual assets, spanning from clothing and luxury items to artworks, weaponry, and even virtual real estate. These digital creations, manifested as encoded data, find existence within the virtual space upon execution by compatible hardware.
While the widespread embrace of the metaverse is still in early stages, there is a growing interest among Mexican enterprises, public figures, and individuals to be part of it. This increasing curiosity is driving them to seek information and explore opportunities within this virtual realm, yet it seems that there are more questions than answers at this stage. However, the advances that have been achieved are as follows.
Trade mark registration
As might be obvious, trade mark registration in the metaverse presents unique challenges compared to traditional trade mark registration in the physical world. In the digital realm, trade marks can encompass not only traditional brand names, logos, and slogans but also virtual assets, avatars, and other elements that contribute to a brand's identity within virtual environments.
One of the primary challenges in trade mark registration within the metaverse lies in defining the scope of protection for virtual assets and experiences. Traditionally, trade mark registration has focused on tangible goods and services, but in the digital realm, the lines between physical and digital assets blur, demanding a re-evaluation of traditional trade mark frameworks.
Furthermore, the global nature of the metaverse poses jurisdictional challenges for trade mark registration, as virtual environments transcend physical borders and traditional legal jurisdictions. Therefore, businesses operating in the metaverse must navigate varying legal frameworks and requirements across different jurisdictions to ensure comprehensive trade mark protection for their brands. For instance, in Mexico, the protection for virtual assets and experiences within the metaverse has been resolved by adopting a similar criterion as the one used by the United States: virtual goods or services should be registered under classes 09, 35 and 41. Class 09 is for downloadable virtual assets, such as footwear, clothing, hats, glasses, handbags, sports bags, backpacks, sports equipment, art, toys, and accessories for online use, while class 35 is for retail store services with virtual goods and class 41 for entertainment services, namely online virtual goods.
Trade mark infringements in the metaverse
Another important concern in the metaverse revolves around the potential infringement of IP rights. For example, if a user creates a virtual object that closely resembles or directly copies IP-protected forms from the physical world, such as trade marks or copyrighted works, does this constitute infringement? Or should the principles of freedom of expression and artistic creativity take precedence?
In the realm of Mexican legislation, the metaverse is acknowledged as a virtual marketplace where IP rights hold control, and competent authorities are tasked with resolving any ensuing disputes. Moreover, prima facie, platforms hosting such content could face liability for facilitating the dissemination of infringing material, while users may themselves incur legal consequences for their actions.
Nevertheless, the absence of clarity and formal mechanisms has spurred self-regulation within the metaverse. Platforms within the metaverse, often referred to as "worlds", have taken it upon themselves to implement measures like notice-and-takedown, which empower IP owners to request the removal or disabling of infringing content in the digital sphere.
Therefore, companies should remain vigilant and proactive in protecting their IP rights in the metaverse. This includes not only utilising self-regulatory measures provided by digital platforms but also leveraging legal avenues available through the IMPI. By combining both approaches, businesses can better safeguard their creations and assets in the evolving digital landscape of the metaverse.
Copyright
The creative environment of the metaverse not only permits, but actively encourages users to generate unique virtual objects and spaces. From an IP standpoint, this dynamic raises questions about ownership rights over such creations. Specifically, does the user who crafts these virtual assets hold the rights to them, or could the platform itself, as the facilitator of the virtual world, claim ownership?
Under Mexican copyright law, only natural persons are recognised as authors of copyrightable works and maintain economic rights over their creations, unless explicitly stipulated otherwise. Consequently, users in the metaverse could theoretically assert ownership over their virtual creations, especially in the absence of any agreements to the contrary. However, this scenario becomes complicated by the fact that acceptance of the terms and conditions of the metaverse platform is typically required for participation in the virtual world.
Another aspect to consider is that the platform may change its terms and conditions at any time, or even cease to exist or merge with another platform. This could potentially result in the loss of users' creations or unauthorised uses thereof. Therefore, as the metaverse continues to evolve, it becomes crucial to clarify and establish clear guidelines regarding ownership rights.
Considering the above, companies developing their own virtual worlds must prioritise the rule of law, ensuring that it prevails and is enforced within the framework of the current Mexican legal system. Both service providers and users engaged in activities within the metaverse are obligated to adhere to and comply with applicable legal provisions, just as they would in the physical world.
NFTs
Non-fungible tokens (NFTs) are digital assets stored on a blockchain, a decentralised digital ledger ensuring secure and transparent transactions. NFTs are unique and indivisible, representing one-of-a-kind items that cannot be replicated or divided. While they've gained footing in the art world allowing companies to sell digital products as collectible items, NFTs also have applications across industries, including real estate.
Although still in its early stages in Mexico, some Mexican companies and artists have begun selling digital art and virtual goods through NFT technology, securing the registration of these digital assets.
In Mexico, as well as in all countries that are members of the Nice Agreement, these virtual assets have been defined as authenticated downloadable digital files falling under and classified under Class 9. This implies that companies wishing to register a trade mark to distinguish this type of goods must seek registration within this class.
While the aforementioned represents significant progress, challenges persist in the practical implementation of copyright. The issue lies in distinguishing between digital ownership via NFTs and IP rights tied to the underlying physical elements. For example, when an NFT containing digital artwork is sold, questions arise regarding the buyer's ownership of the artwork's copyright. Likewise, in the case of a musician selling a song as an NFT, does the buyer obtain the song's copyright? Ongoing discussions revolve around whether the artist retains copyright ownership while granting the buyer certain usage rights.
These discussions will likely evolve as the NFT market expands rapidly, extending beyond art and entertainment to various businesses. Therefore, it is crucial for companies to remain vigilant and responsive to the changes that arise, ensuring adaptability and informed decision-making in this dynamic landscape.
Immersive technologies
In recent years, Mexico has witnessed a notable surge in the adoption and advancement of virtual reality (VR) applications. The increasing adoption of virtual reality has been propelled by several factors, including greater accessibility to VR devices. This accessibility has enabled more individuals to experience the immersive technology firsthand, driving its widespread adoption across different economic sectors.
For companies developing VR technologies, protection of their innovations is of great importance. Hardware components can be safeguarded through patents, provided they meet the criteria outlined in Article 41 of the Federal Law for the Protection of Intellectual Property. This entails ensuring that the invention is novel, non-obvious, and involves an inventive step. On the other hand, software components in Mexico are typically protected through copyright laws, which safeguard the expression of creative works.
While seeking protection for products of this type may appear straightforward, it is crucial for companies to adeptly navigate the legal framework to safeguard their IP rights while also fostering innovation within the rapidly expanding VR industry.
Conclusion
In conclusion, while the absence of specific national regulation for groundbreaking gadgets and innovative software solutions might create uncertainty, it does not mean a complete legal vacuum. It is crucial for all stakeholders to acknowledge and meet their obligations under Mexican law. Adopting a proactive approach, focused on prevention rather than solely depending on corrective measures, is prudent. By doing so, businesses and individuals can adeptly navigate the evolving digital landscape until a clear regulatory framework governing these innovations is established.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
