Located at the southern end of North America, Mexico is one of the most important economic partners to the United States and Canada. Mexico’s rich history and its ever growing economy has turned the country into an appealing destination for digital nomads. The country’s strong university system also makes Mexico one of the best places to recruit developers, marketers, and other knowledge workers.
If you’re considering hiring talent in Mexico, you’ll need to navigate through intellectual property rights in the country.
Intellectual property is a complex issue. When you’re dealing with expanding internationally, the issue becomes even more convoluted because of laws and regulations in Mexico vs. where your company’s headquarters is located. To protect your business and your ideas, you’ll need to make sure you’re following all of the regulations regarding intellectual property in Mexico.
Here we’ll discuss everything your business needs to know about intellectual property in Mexico and what resources you’ll need before you make the decision to outsource or expand in the country.
Intellectual property (IP) in Mexico refers to creations of content in the mind, such as inventions, literary & artistic works, symbols, designs, and images that are protected by Mexican law. In terms of legal jargon, intellectual property is a term used to describe a range of legal rights that are associated with the ownership of intangible assets, such as patents, trademarks, copyrights, and trade secrets.
Guaranteeing certain types of intellectual property rights enable creators and owners to exclude others in that industry and beyond from using, reproducing, or selling their creations without permission.
The Ministry of Economy (Secretaría de Economía) is a federal government agency in Mexico that is responsible for promoting economic growth and development, creating jobs, improving the competitiveness of Mexican businesses, and overseeing intellectual property in Mexico.
The Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial or the IMPI) is a specialized agency within the Ministry of Economy that is responsible for the protection and enforcement of intellectual property rights in Mexico.
IMPI is responsible for granting patents, trademarks, altering existing inventions & tools, and other types of intellectual property rights, as well as overseeing their enforcement and protection. The agency works to promote innovation and technological development by protecting the intellectual property rights of inventors, artists, and businesses, as well as helping to eliminate the distribution of illegal goods considered intellectual assets.
IMPI plays a crucial role in protecting the intellectual property rights of individuals and businesses in Mexico, as well as promoting innovation and economic growth. The agency works closely with domestic and international partners to ensure that intellectual property rights are respected and enforced, and to promote a culture of innovation and creativity in Mexico.
In Mexico, IP is defined by law as the set of rights that protect literary, artistic, and scientific creations, as well as inventions, trade names, and commercial slogans.
Mexico’s intellectual property laws are designed to prevent unauthorized uses of patents, utility models, and industrial designs.
Intellectual property protections are governed by these 3 characteristics:
Exclusivity: The owner is the only one able to sell/use what they have produced
Territorially: Rights are granted in the individual territory the property was produced in
Temporarily: Time frame the produced item is protected and can be used commercially
Patents are exclusive rights granted to inventors for new and useful inventions or processes, allowing them to prevent others from making, using, or selling their inventions without permission.
The exclusive rights granted to authors of original literary, artistic, and scientific works, such as books, music, and films. Copyright laws allow creators to prevent others from copying, reproducing, or using their works without permission.
In Mexico, employment contracts dictate who has ownership to distribute and needs to be agreed upon through an employment contract in writing. Under these contracts, economic activities are divided equally between employer and employee. Employers are allowed to disclose the information on the employee’s behalf but employees are not allowed to do the same.
Without a written agreement, the economic rights belong solely to the employee.
The employee is tasked with protecting all technical secrets of a company to avoid any damage caused to the business where they work.
In Mexico, you can include a non-compete and an exclusivity clause where the intellectual property can’t be used anywhere else but for that specific business.
Trade secrets are confidential information and knowledge, such as formulas, processes, and methods, that are used in business and kept secret to give a competitive advantage.
In Mexico, some types of creations are excluded from intellectual property protection. These include:
Ideas: Intellectual property law protects the expression of ideas, not the ideas themselves. Therefore, ideas alone cannot be protected by intellectual property law.
Facts: Intellectual property law also does not protect facts, as they are considered part of the public domain.
Government works: Works created by the Mexican government or its employees in the course of their official duties are generally not subject to intellectual property protection.
Names, titles, and short phrases: These are not generally eligible for trademark protection, as they are considered too common or generic.
Common knowledge: Works that are common knowledge, such as basic scientific or mathematical principles, cannot be protected by intellectual property law.
Foreign companies have the same intellectual property protections in Mexico as domestic companies.
Mexico is a signatory to several international treaties and agreements that protect intellectual property, including:
These treaties and agreements provide foreign companies with important protections in Mexico, including the ability to file for and enforce their intellectual property rights.
Foreign companies can apply for and obtain patents, trademarks, and other forms of intellectual property protection in Mexico, and they can also enforce their rights through civil and criminal legal actions. Mexico's legal system provides a range of remedies for intellectual property infringement, including damages, injunctions, and seizure of infringing goods.
Your company needs to make sure they register with the proper local authorities for IP as soon as you outsource in Mexico to ensure compliance.
When you’re hiring in Mexico but your business is based in another country, there are a few different approaches you can take to ensure you protect your business’s intellectual property: use an independent contractor, set up your own entity, hire a third-party staffing agency, or partner with an EOR service like Via.
You may decide to either work with an independent contractor or outsource to a third-party staffing agency, but both options can cause internal problems protecting your IP at your company.
When you give an independent contractor access to your intellectual assets in Mexico, they can claim and register property over anything that they created while working for you.
If you want to set up your own entity in Mexico to support and hire your own employees, you can do this and manage all of the administrative details to protect intellectual assets. However, setting up an entity can be costly, time consuming, and you must be registered with the right governmental authorities.
Another option is to partner with a third-party staffing agency. Many are located in larger cities like Mexico City, Guadalajara, and Monterrey. This option can risk your intellectual property being exposed to those outside of your company, as the staffing agency acts as the employer for your employees.
Another option to avoid entity setup and problems with intellectual property is to work with a global EOR provider like Via.
A Mexico employer-of-record can help you manage the security of your assets. An EOR helps you draft an employment contract highlighting exactly how your intellectual assets will be used by the employees you hire and who will have the rights to them.
All businesses expanding abroad should write a solid intellectual property agreement to protect themselves.
Some important benefits of intellectual property agreements include:
Protection of intellectual property: An intellectual property agreement provides legal protection for intellectual property rights, such as patents, trademarks, and copyrighta. This helps to prevent unauthorized use or infringement of these rights and allows for legal action to be taken if necessary.
Promotion of innovation and creativity: Intellectual property agreements help to promote innovation and creativity by providing a legal framework that encourages investment in research and development. This can lead to the creation of new products, services, and technologies.
Economic: Intellectual property agreements can have economic benefits, particularly for companies that rely on intellectual property for their business. If you don’t register a new product or service, you could risk one of your competitors rolling it out before you. These agreements can help to create a more stable business environment, encourage investment, and promote economic growth.
Protection of consumers: Intellectual property agreements also help to protect consumers by ensuring that they are not deceived by counterfeit or infringing products. By requiring products and services meet certain standards and are properly labeled, consumers can be confident that they are getting what they paid for.
The North American Free Trade Agreement (NAFTA) was a free trade agreement between Canada, Mexico, and the United States that went into effect in 1994. NAFTA includes provisions related to intellectual property that have had a significant impact on intellectual property protection in Mexico.
NAFTA included protections for:
However, concerns in all three countries arose about policies under NAFTA being outdated when protecting intellectual property in the 21st century. In 2020, NAFTA was replaced with the United States-Mexico-Canada Agreement (USMCA) to address some of these concerns.
Under the USMCA, intellectual property policies were only strengthened in Mexico to meet the needs of today’s landscape, given the large number of US companies that outsource here.
Some of the key changes include:
Patent protection: Requires Mexico to provide protection for patents for a period of at least 10 years from the date of filing.
Trademark protection: Requires Mexico to provide protection for trademarks for a period of at least 10 years, with the possibility of renewal for subsequent 10-year periods. This protection applies to both domestic and foreign trademarks, providing greater certainty for companies seeking to protect their brands in Mexico.
Copyright protection: The USMCA requires Mexico to provide protection for copyright for a period of at least 70 years after the death of the author, or in the case of works made for hire, for a period of at least 75 years from the date of creation.
Digital trade: Most importantly, under the USMC new provisions were included related to digital trade that provide greater protection for intellectual property in the digital sphere. This includes provisions related to the protection of trade secrets, the enforcement of intellectual property rights online, and the protection of technological protection measures.
Companies can build a hub in (country) of 1 to 100+ workers using a global EOR provider like Via. We manage local HR processes for direct employment like work visas, permits, benefits, payroll, background checks, and much more. Our team of local labor lawyers and experts ensure that your company always remains compliant while expanding abroad. We handle the responsibility side of things so you can focus on what matters: recruiting and managing your team. Our transparent prices allow you to pay full-time employees and contractors with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums.