Mexico Update
By: LUIS G. RESÉNDIZ
January 2012
Class Actions Now Possible in Mexico
Several federal laws in Mexico were amended late last year to allow class actions lawsuits. Class actions will be permitted to protect different legal interests, including: (i) consumers, (ii) the environment, (iii) users of financial services, and (iv) free competition. Several governmental institutions, private organizations, groups and individuals will have standing to file class actions.
The amendments provide for different types of class actions. The remedies will depend on the type of class action filed and may include: (a) have the defendant restore the status to the way things were before the alleged violation; (b) compensatory damages; (c) payment of restitution to the members of the class; (d) injunctive relief; and (e) specific performance.
It is unclear how the possibility of filing class actions will impact litigation in Mexico. However, companies doing business in Mexico, especially those offering products or services that have been subject to class actions in other jurisdictions, must bear this new possibility in mind. Furthermore, companies that may face class actions must be careful when selecting counsel as only a handful of lawyers in Mexico would have experience counseling on how to handle potential class actions.
Regulations to the Privacy Law
Last month’s Mexico Update discussed the necessity to comply with Mexico’s Federal Law for the Protection of Personal Data in Possession of Private Individuals or Entities (the Privacy Law). The Regulations to the Privacy Law (the Regulations) were published on December 21, 2011, and became effective the next day.
The Regulations provide further clarity on several issues including: (i) situations where the Privacy Law and the Regulations will apply; (ii) the type of data that is subject to, and some classes of data that are exempt from, the Privacy Law and the Regulations; (iii) measures that must be taken to protect private data; and (iv) the authority of the organism that will police the application of the Privacy Law and the Regulations. The Regulations also provide details on how the owner of the information may access, rectify, cancel or oppose the disclosure of her/his protected information.
The Regulations seem to confirm that the Privacy Law applies to all employers. The Regulations only exempt some of the information that must be included in employment agreements pursuant to Mexico’s Federal Labor Law. As stated in the previous Mexico Update, it is important that all companies comply with the Privacy Law to avoid the penalties provided by it.
Intellectual Property – Visits from IMPI to Protect Intellectual Property
As part of its ongoing efforts to protect intellectual property rights, the Mexican Institute of Intellectual Property (IMPI) has increased the number of inspections to verify that companies have the appropriate licenses for the software installed in the companies’ computers. In addition, there are a number of associations that represents groups of holders of the copyrights of software or computer programs. These associations have the ability to petition IMPI to conduct audits to certain companies to verify that those companies are not violating the copyrights held by members of the association.
If the company audited cannot demonstrate that it has the applicable licenses for the software or computer programs in its computers, IMPI will likely determine that the company has violated intellectual property rights. IMPI will then proceed to impose sanctions which may be as minimum as requiring the company to pay for missing licenses, but may also include severe penalties and even possible criminal charges.
It is not uncommon to have employees download software or computer programs without verifying whether such downloads violate copyrights. Given IMPI’s stepped up efforts, companies should perform internal audits to verify that the company has the necessary licenses for all the software and computer programs in its computers.