By Procopio Partner Victor M. Felix

For the first time in nearly thirty years, the U.S. is entering into a comprehensive new trade agreement with the two countries with which it shares a common border, Mexico and Canada. U.S. President Donald Trump signed the U.S./Mexico/Canada Agreement (USMCA) into law on January 29, 2020. Mexico has already ratified it, and Canada is expected to in the coming weeks or months. This replacement of the North American Free Trade Agreement (NAFTA) impacts many areas of law, including labor practices, environmental protections, digital trade, and settlement of disputes/enforcement. Of particular note, however, are the varied changes it makes to intellectual property rights (IPR).

While none of the modifications or new provisions related to IPR in Chapter 20 the USMCA requires changes to U.S. law, there are some key rights expansions for IPR holders in Mexico and Canada, and also one significant exception.  Some highlights include:

Copyrights

The USMCA will result in extensions to key elements of copyright protection in Canada and Mexico. Copyright protection terms in Canada are the author’s lifetime plus 50 years, or 70 years from first publication.  Mexico provides author’s lifetime plus one 100 years, 75 years from first performance, or 50 years from first publication. With the USMCA increasing the terms to author’s lifetime plus 70 years, or 75 years from first publication, Canada will enforce an additional 25 years after the author’s lifetime or 5 more years from first publication, and Mexico’s protection after first publication will increase by 25 years.

The USMCA now requires full national treatment of copyrights and related rights so that U.S. authors receive the same protections that domestic authors receive in Mexico and Canada.  The USMCA also establishes a safe harbor similar to the U.S. Digital Millennium Copyright Act (DMCA) that would shield internet companies from liability for infringement due to third-party content on their sites.  Further, it imposes criminal penalties and civil remedies for satellite signal and cable theft, as well as recording of copyrighted movies in movie theaters.

Trademarks and Geographical Indicators

The USMCA expands trademark protections in Canada and Mexico.  This includes the expansion of the scope of protectable marks, such as sounds and scents.  Under the USMCA sounds are protectable when appropriate, and signatories are encouraged to use “best efforts” to register scent marks.  The USMCA incorporates the “likelihood of confusion” standard to determine infringement used in U.S. trademark law, but with a twist—where the offending mark is identical to the registered mark and used for identical goods or services likelihood of confusion will be presumed.  Well-known marks also get expanded protections. They need not be registered, put on a list of well-known marks, or given prior recognition to be recognized as “well-known,” and their reputation need not extend beyond their niche markets.  Well-known marks are also protected against third party use of goods and services that are not identical to the trademark owner’s good or services.  USMCA also grants ex officio authority to customs officials to stop suspected counterfeits at ports of entry.

Obtaining geographical indicators (GI), i.e., a name or symbol used on products that correspond to a specific location or source as certification that the products possess certain qualities, now requires transparency and due process under the USMCA.  Governments must review GI applications and consult a set of guidelines to deter use of common names or GI’s that are confusingly similar to pre-existing trademarks and thus not entitled to protection.  Parties can also submit objections that preclude the registration of a GI without the opportunity for public comment.

Patents, Industrial Designs, Regulatory Exclusivity

The USMCA provides for patent terms adjustments due to unreasonable delays by the patent office or delays in the regulatory review process. An unreasonable delay comprises a delay of more than 5 years from the date of filing of a patent application, or more than 3 years after a request for examination of an application, whichever is later.  Under the USMCA industrial designs, meant to protect the ornamental or aesthetic aspects of a product, now enjoy a 15 year period of protection.

Not all changes in the USMCA will result in expansions of IP protection, however. A proposed 10 year regulatory protection for biologic drugs, i.e., drugs that are produced from living organisms or contain components of living organisms, was stricken from the USMCA during its ratification process in Congress.  Thus, regulatory protection for biologics remains 8 years in Canada and 5 years in Mexico.

Trade Secrets

The USMCA provides enhanced protections and procedures to prevent the misappropriation or theft of trade secrets, including criminal penalties for those acting willfully. The protections are enforceable against private actors as well as state-owned entities.  The definition of a “trade secret” and what constitutes a “misappropriation” closely follows the Uniform Trade Secret Act, widely adopted by many U.S. states in some form. The USCMA also imposes the adoption of procedures to protect the confidentiality of trade secrets during civil, criminal, or other regulatory proceedings.

Conclusion

It’s not every day that three major trading partners negotiate and agree upon a comprehensive new trade deal. The frequent mentions of IP in the USMCA speak to its increasing importance in the global economy. It behooves both IP owners and users to be aware of the extended IP protections on both sides of the U.S. border.