When it comes to competition between brands, it is normal to think of disputes between large corporations, such as the well-known competition between Coca-Cola and Pepsi, two corporations of similar size and scope; however, in the business world this type of dispute is not always common. Something that may seem insignificant, such as the use of a name or design, could cause a dispute that ends up being resolved in court at a cost of millions of dollars.
Returning to the example of the two soft drink companies, at present the dispute does not seem to be anything other than an advertising competition to conquer as much as possible of the consumer market for cola-flavored soft drinks, but history tells us that the conflict was so great that In 2004, when Pepsi applied to register a figurative trademark for its company, Coca-Cola objected on the premise that one of its distinctive signs was very similar to the one that Pepsico was trying to register.
Something similar is currently happening in our country but with a level of competition that is not similar. In 2018, the international company, Spacex, sued IMPI for the nullity and expiration of the Starlink brand belonging to a Mexican company called StarGroup, arguing that they had not precisely indicated the telecommunications services to be protected or used it, an argument that the IMPI declared wrong, stating that the registration of the Mexican company was clear regarding the scope of its services and that they do use it.
Upon receiving this refusal from the institute, the foreign company met with the Mexican to discuss the possibility of buying it; however, they received another refusal as it was not for sale. In the words of José Aguirre Campos, President of StarGroup, the proposal to do business together was put on the table, but "they were not interested, and they proceeded legally against us."
It was then that Spacex filed a lawsuit in the Specialized Chamber on Intellectual Property of the Federal Court of Administrative Justice (TFJA), a Chamber that granted the company owned by Elon Musk a single concession for commercial services, in accordance with resolution P / IFT / 070721/319. This would cause the nullity and expiration of the StarLink brand granted to StarGroup.
Legal bases for the invalidity of trademarks
Mexican law provides for certain cases in which it is possible to withdraw the exclusive rights of use over a trademark. These are contemplated in article 258 of the Federal Law for the Protection of Industrial Property, which stipulates the following:
I.- It has been granted in contravention of the provisions of this Law or the one that would have been in force at the time of its registration.
II.- that the trademark is identical or similar to a degree of confusion, to another that has been used in the country or abroad prior to the filing date of the registered trademark application and is applied to the same or similar products or services.
On the other hand, article 173 of the same Federal Law in its section XVIII declares that the trademark where the signs are identical or similar in degree of confusion, to a trademark in the process of registration filed previously, or to a registered and registered trademark will not be registrable. current, applied to the same or similar products or services.
If we take these points into account, everything indicates that the declaration of nullity of the StarGroup brand goes against Mexican regulations, this because the Mexican brand was successfully registered with the IMPI in 2015 and has offered its services in the country during the 6 years it has been in the market.
In the case of Spacex’s Starlink, although there are records that the trademark was offered since January of the same year, its registration date in the corresponding intellectual property institute for its country was later than that of Mexico, something that, according to Mexican law , would give preference to the Mexican brand in our country to decide which of the two companies has the exclusive right to exploit it.
What will happen to the brand?
At this time, beginning in September 2021, the Mexican company, StarGroup, has requested an amparo to have its case reviewed and the legality of the TFJA’s decision to be determined. Should it be benefited, StarGroup would recover the Starlink name with the possibility of continuing to exploit it commercially in Mexico. On the contrary, if you lose the protection, you must abide by the provisions dictated by the authority with respect to the case that could be simply the stop using the trademark.
During the period in which it is defined who will receive the final ownership of the Starlink name, neither of the two companies must use the name, preventing some kind of penalty for using a commercial name that ends up not belonging to them. Of course, even if they avoided any monetary penalties, stopping the business activities of both companies represents an economic loss in itself; especially for the Mexican company that has no point of comparison economically with its counterpart led by Musk.
Regardless of the legal battle that the StarGroup company is in, we see your case as positive. Having successfully carried out your trademark registration in the past offers you peace of mind that the process can be concluded without major mishaps such as could have occurred if they had used the unregistered name and then had been sued by the giant Spacex, receiving some kind of monetary penalty impossible to pay for a smaller company.
For reasons like these, we always recommend our clients to register a trademark before they decide to start their commercial work, in addition to formalizing their company from its foundation to prevent any legal situation that they could face in the future.
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