(d) order the infringer of an intellectual property right to pay the right holder adequate damages as compensation for the harm the right holder has suffered as a result of the infringement, where the infringer knew that it was engaged in infringing activity or had reasonable grounds to know that it was engaged in infringing activity;
(e) order the infringer of an intellectual property right to cover the right holder's expenses, which may include appropriate attorney's fees; and
(f) order a party to a proceeding, at whose request measures have been taken and who has abused the defense procedures, to provide adequate compensation to any party wrongfully subjected to or restrained in the proceeding for damages suffered as a result of that abuse and to pay the expenses of that party, which may include appropriate attorney's fees.
3. With respect to the authority referred to in paragraph 2(c), no Party shall be obligated to grant such authority with respect to protected subject matter that was acquired or ordered by a person before that person knew or had reasonable grounds to know that dealing with that subject matter would involve the infringement of an intellectual property right.
4. With respect to the authority referred to in paragraph 2(d), each Party may, at least with respect to copyrighted works and phonograms, provide for judicial authorities the authority to order the recovery of profits or the payment of pre-determined damages, or both, even if the infringer did not know that he was engaged in infringing activity or did not have reasonable grounds to know that he was engaged in infringing activity.
5. Each Party shall provide, with a view to effectively deterring infringement, that its judicial authorities shall have the authority to order that:
(a) goods determined by them to infringe intellectual property rights be, without compensation of any kind, removed from the channels of commerce in such a way as to avoid any harm to the right holder, or be destroyed, provided that it is not contrary to the constitutional provisions in force; and
(b) materials and implements that have been predominantly used for the production of infringing goods are, without compensation of any kind, withdrawn from commercial channels in such a way as to minimize the risks of subsequent infringements.
6. In considering the issuance of the orders referred to in paragraph 5, the judicial authorities of each Party shall take into account the need for proportionality between the seriousness of the infringement and the measures ordered, as well as the interests of other persons, including those of the right holder. With respect to counterfeit goods, the simple removal of the unlawfully affixed mark shall not be sufficient to permit the customs clearance of the goods, except in exceptional cases such as those in which the authority provides for their donation to charitable institutions.
7. With respect to the administration of any law relating to the protection or enforcement of intellectual property rights, each Party shall only exempt public authorities and officials from liability for appropriate remedial action where the action was taken or provided for in good faith during the administration of such laws.
8. Without prejudice to the provisions of Articles 16-39 through 16-43, where a Party is sued for infringement of an intellectual property right as a result of the use, by it or on its behalf, of that right, that Party may provide as the sole remedy available against it, the payment of adequate compensation to the right holder, according to the circumstances of the case, taking into consideration the economic value of the use.
9. Each Party shall provide that where relief of a civil nature may be ordered as a result of administrative proceedings on the merits of a case, such proceedings shall conform to principles that are essentially equivalent to those set out in this Article.
Article 16-41. Precautionary Measures.
1. Each Party shall provide that its judicial authorities shall have the authority to order prompt and effective provisional measures to:
(a) prevent an infringement of any intellectual property right and, in particular, prevent the introduction of goods that are the subject of the alleged infringement into commerce within its jurisdiction, including measures to prevent the entry of imported goods at least immediately after customs clearance; and
(b) preserve relevant evidence relating to the alleged infringement.
2. Each Party shall provide that its judicial authorities shall have the authority to order an applicant for precautionary measures to submit any evidence to which it reasonably has access and which those authorities consider necessary to determine with a sufficient degree of certainty whether:
(a) the applicant is the right holder;
(b) the applicant's right is being infringed or such infringement is imminent; and
(c) any delay in the issuance of such measures is likely to cause irreparable harm to the right holder or if there is a demonstrable risk that evidence will be destroyed.
3. For the purposes of paragraph 2, each Party shall provide that its judicial authorities shall have the authority to order the applicant to provide a bond or equivalent security sufficient to protect the interests of the respondent and to prevent abuse.
4. Each Party shall provide that its competent authorities shall have the authority to order an applicant for provisional measures to provide any information necessary for the identification of the relevant assets by the authority enforcing the provisional measures.
5. Each Party shall provide that its judicial authorities shall have the power to order provisional measures in which the opposing party is not heard, in particular where there is a likelihood that any delay will cause irreparable harm to the right holder or where there is a demonstrable risk that evidence will be destroyed.
6. Each Party shall provide that where precautionary measures are taken by the judicial authorities of that Party in which the opposing party is not heard:
(a) the person affected is notified of such measures without delay and in no case later than immediately after the execution of the measures; and
(b) the defendant, upon request, obtains judicial review of the measures by the judicial authorities of that Party, for the purpose of deciding, within a reasonable time after notification of those measures, whether they shall be modified, revoked or confirmed.
7. Without prejudice to paragraph 6, each Party shall provide that, at the request of the respondent, the judicial authorities of the Party shall revoke or otherwise terminate precautionary measures taken pursuant to paragraphs 1 through 5, if proceedings leading to a decision on the merits of the case are not initiated
(a) within a reasonable period to be determined by the judicial authority ordering the measures, where the law of that Party so permits; or
(b) in the absence of such determination, within a period of not more than 20 working days or 31 days, whichever is longer.
8. Each Party shall provide that, where the precautionary measures are revoked, where they lapse due to an act or omission of the applicant, or where the judicial authority subsequently determines that there was no infringement or threat of infringement of an intellectual property right, the judicial authorities shall have the authority to order the applicant, at the request of the respondent, to provide the respondent with adequate compensation for any damages caused by such measures.
9. Each Party shall provide that, where a precautionary measure may be ordered as a result of administrative procedures, such procedures shall conform to principles that are essentially equivalent to those set out in this Article.
Article 16-42. Criminal Procedures and Penalties.
1. Each Party shall provide for criminal procedures and penalties to be applied at least in cases of wilful counterfeiting of trademarks or copyrighted copies on a commercial scale. Each Party shall provide that the applicable penalties shall include imprisonment or fines, or both, that are sufficient as a deterrent and consistent with the level of penalties applied to offenses of comparable gravity.
2. Each Party shall provide that its judicial authorities may order the confiscation and destruction of the offending property and of any of the materials and instrumentalities predominantly used in the commission of the offense.
3. For the purposes of paragraph 2, the judicial authorities shall take into account, when considering the issuance of such orders, the need for proportionality between the seriousness of the infringement and the measures ordered, as well as the interests of other persons including those of the right holder. With respect to counterfeit goods, the simple removal of the unlawfully affixed mark shall not be sufficient to permit the customs clearance of the goods, except in exceptional cases, such as those in which the authority provides for their donation to charitable institutions.
4. Each Party may provide for the application of criminal procedures and penalties in cases of infringement of intellectual property rights other than those referred to in paragraph 1, when committed with intent and on a commercial scale.
Article 16-43. Enforcement of Intellectual Property Rights at the Border.
1. Each Party shall adopt, in accordance with this Article, procedures to enable a right holder who has valid grounds for suspecting that the importation of counterfeit or pirated goods related to trademarks or copyrights may occur, to submit a written request to the competent authorities, whether administrative or judicial, for the customs authority to suspend the free circulation of such goods. No Party shall be obliged to apply such procedures to goods in transit. Each Party may authorize the filing of such a request with respect to goods involving other infringements of intellectual property rights, provided that the requirements of this Article are met. Each Party may also establish similar procedures for the suspension by the customs authorities of customs clearance of goods destined for export from its territory.
2. Each Party shall provide that its competent authorities shall have the authority to direct any applicant initiating a procedure under paragraph 1 to provide adequate evidence to:
(a) for the competent authorities of the importing Party to satisfy themselves that an infringement of intellectual property rights may be presumed under its law; and
(b) to provide a sufficiently detailed description of the goods to make them readily recognizable to the customs authorities.
3. Each Party shall provide that its competent authorities shall communicate to the plaintiff, within a reasonable period of time, whether they have accepted the application and, where those competent authorities so provide, the time limit for action by the customs authorities.
4. Each Party shall provide that its competent authorities shall have the authority to order an applicant under paragraph 1 to provide a bond or equivalent security sufficient to protect the respondent and the competent authorities and to prevent abuse. Such bond or equivalent security shall not unduly deter the applicant from resorting to such procedures.
5. Each Party shall provide that the owner, importer or consignee of goods involving industrial designs, patents or industrial and trade secrets shall have the right to obtain customs clearance thereof upon the posting of a security in an amount sufficient to protect the right holder against any infringement, provided that:
(a) as a result of an application made in accordance with the procedures of this Article, the customs authorities have suspended the release for free circulation of such goods, on the basis of a decision not issued by a judicial or other independent authority;
(b) the time limit stipulated in paragraphs 8, 9, 10 and 11 has expired without the competent authority having issued a provisional suspension measure; and
(c) the other conditions for importation have been complied with.
6. The payment of the security referred to in paragraph 5 shall be without prejudice to any other remedy available to the right holder, and shall be returned if the right holder does not exercise his action within a reasonable period of time.
7. Each Party shall provide that its competent authority shall promptly notify the importer and the applicant of the suspension of customs clearance of the goods referred to in paragraph 1.
8. Each Party shall provide that its customs authority shall proceed with the customs clearance of the goods provided that all other conditions for the importation or exportation of the goods have been met, if within a period not exceeding ten working days after the applicant has been notified by notice of the suspension, the customs authorities have not been informed that:
(a) a party other than the respondent has initiated proceedings leading to the obtaining of a decision on the merits of the case; or
(b) the competent authority empowered for that purpose has taken provisional measures prolonging the suspension of the release of the goods.
9. For the purposes of paragraph 8, each Party shall provide that its customs authorities shall have the authority to extend, where appropriate, the suspension of the release of the goods for a further ten working days.
10. If proceedings leading to a decision on the merits of the case have been initiated, a review shall, at the request of the respondent, take place within a reasonable period of time. Such review shall include the right of the respondent to be heard, with a view to deciding whether such measures should be modified, revoked or confirmed.
11. Notwithstanding the provisions of paragraphs 8, 9 and 10, where the suspension of customs clearance is effected or continued pursuant to a provisional judicial measure, the provisions of paragraph 7 of article 16- 41 shall apply.
12. Each Party shall provide that its competent authorities shall have the authority to order the applicant, in accordance with paragraph 1, to pay the importer, consignee and owner of the goods adequate compensation for any damage suffered by them as a result of the wrongful detention of the goods or the detention of goods that have been released in accordance with paragraphs 8 and 9.
13. Without prejudice to the protection of confidential information, each Party shall provide that its competent authorities shall have the authority to grant:
(a) sufficient opportunity to the right holder to have any goods detained by the customs authorities inspected for the purpose of substantiating its claim; and
(b) an equivalent opportunity to the importer to have such goods inspected.
14. Where the competent authorities have given a favorable decision on the merits of the case, each Party may empower those authorities to provide the right holder with the names and addresses of the consignor, the importer and the consignee, as well as the quantity of the goods in question.
15. Where a Party requires its competent authorities to act on their own initiative and suspend customs clearance of goods in respect of which they have prima facie evidence of infringement of an intellectual property right:
(a) the competent authorities may at any time request from the right holder any information that may assist them in the exercise of that power;
(b) the importer and the right holder shall be promptly notified of the suspension by the competent authorities of the Party. Where the importer has requested a review of the suspension before the competent authorities, such suspension shall be subject, with appropriate modifications, to the provisions of paragraphs 8, 9, 10 and 11; and
(c) the Party shall exempt only public authorities and officials from liability for appropriate remedial action for acts performed or disposed of in good faith.
16. Without prejudice to other remedies available to the right holder and subject to the right of the defendant to seek review before a judicial authority, each Party shall provide that its competent authorities shall have the authority to order the destruction or disposal of infringing goods in accordance with the principles set out in paragraphs 5 and 6 of Article 16-40. With respect to counterfeit goods, the authorities shall not, except in exceptional circumstances, allow them to be re-exported in the same state or subject them to a different customs procedure.
17. Each Party may exclude from the application of paragraphs 1 through 16, small quantities of goods that are not of a commercial nature and are part of the personal baggage of travelers or are sent in small, non- repeated consignments.
18. Each Party shall use its best efforts to comply as soon as possible with the obligations set out in this Article, and shall do so within a period not exceeding three years from the date of entry into force of this Agreement.
Chapter XVII. Transparency
Article 17-01. Information Center.
1. Each Party shall designate a unit or office as an information center to facilitate communication between the Parties on any matter covered by this Agreement.
2. When a Party so requests, the information center of the other Party shall indicate the unit or official responsible for the matter and provide the support required to facilitate communication with the requesting Party.
Article 17-02. Publication.
1. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application that relate to any matter covered by this Agreement are promptly published or made available for the information of the Parties and any interested party.
2. To the extent practicable, each Party shall:
(a) publish in advance any measure it proposes to adopt; and
(b) provide reasonable opportunity for persons and the other Party to comment on the proposed measures.
Article 17-03. Notification and Provision of Information.
1. Each Party shall, to the extent possible, notify the Party with an interest in the matter of any proposed or existing measure that the Party considers may substantially affect or would substantially affect the interests of that other Party under this Agreement.
2. Each Party shall, upon request of the Party concerned, provide information and promptly respond to its questions regarding any existing or proposed measure, notwithstanding that the Party concerned has been previously notified of that measure.
3. The notification or provision of information referred to in this Article shall be without prejudice to whether or not the measure is consistent with this Agreement.
Article 17-04. Guarantees of Hearing, Legality and Due Process of Law.
1. The Parties reaffirm the guarantees of hearing, legality and due process of law enshrined in their respective legislation.
2. Each Party shall maintain tribunals and judicial or administrative procedures for the review and, where appropriate, correction of final acts related to this Agreement.
3. Each Party shall ensure that in judicial and administrative proceedings relating to the application of any measure affecting the operation of this Agreement, the essential procedural formalities are complied with and the legal cause of action is established and substantiated.
Chapter XVIII. Administration of the Treaty
Article 18-01. Administrative Commission.
1. The Parties establish the Administrative Commission, composed of the officials referred to in Annex 1 to this article or by the persons designated by them.
2. The Commission shall have the following functions:
(a) to ensure compliance with and the correct application of the provisions of this Agreement;
(b) to evaluate the results achieved in the implementation of this Agreement and to monitor its development;
(c) to resolve disputes arising with respect to its interpretation or application;
(d) supervise the work of all working groups established under this Agreement and included in Annex 2 to this Article; and
(e) to consider any other matter that may affect the operation of this Agreement, or any other matter entrusted to it by the Parties.
3. The Commission may:
(a) establish and delegate responsibilities to ad hoc or permanent working groups and expert groups;
(b) seek the advice of individuals or groups with no governmental connection; and
(c) if agreed by the Parties, take any other action for the exercise of its functions.
4. The Commission shall establish its rules and procedures and all its decisions shall be taken unanimously.
5. The Commission shall meet at least once a year. The meetings shall be chaired successively by each Party.
Article 18-02. The Secretariat.
1. The Commission shall establish and supervise a Secretariat composed of national sections. 2. Each Party shall:
(a) establish the permanent office of its national section;
(b) shall be responsible for:
(i) the operation and costs of its section; and
(ii) the remuneration and expenses payable to arbitrators and experts appointed pursuant to this Agreement, as provided in the Annex to this Article;
(c) designate the Secretary of its national section, who shall be the officer responsible for its administration; and
(d) notify the Commission of the address of its national section.
3. The Secretariat shall have the following functions:
(a) to provide assistance to the Commission;
(b) to provide administrative support to the arbitral tribunals;
(c) on instructions from the Commission, to support the work of the working groups established under this Treaty; and
(d) such other functions as may be entrusted to it by the Commission.
Annex 1 to Article 18-01. Officers of the Administrative Commission
The officials referred to in article 18-01 are:
(a) for the case of Bolivia, the Minister of Foreign Affairs and Worship or his successor; and.
(b) in the case of Mexico, the Secretary of Commerce and Industrial Development or his successor.
Annex 1 to Article 18-02. Working groups
Working Groups
- Working Group on Agricultural Technical and Marketing Standards (article 4-07) - Working Group on Agricultural Trade (article 4-08)
- Working Group on Animal Health and Phytosanitary Measures (article 4-20)
- Working Group on Rules of Origin (article 5-18)
- Working Group on Customs Procedures (article 6-11)
- Working Group on Temporary Entry (article 11-06)
- Working Group on Financial Services (article 12-11)
- Working Group on Standardization Measures (article 13-17)
- Working Group on Micro, Small and Medium-Sized Industry (article 14-21)
Sub-Working Groups
- Sub-Working Group on Standardization Measures on Labeling, Packaging, Packing and Consumer Information (article 13-17)
- Sub-Working Group on Standardization Measures in the Field of Health (article 13-17)
- Sub-Working Group on Telecommunications (Article 13-17)
Annex to Article 18-02. Remuneration and payment of expenses
1. The Commission shall fix the amounts of remuneration and expenses to be paid to arbitrators and experts.
2. The remuneration of the arbitrators, experts and their assistants, their transportation and accommodation expenses, and all general expenses of the arbitral tribunals shall be covered in equal portions by the Parties.
3. Each arbitrator and expert shall keep a record and render a final account of his time and expenses, and the arbitral tribunal shall keep a similar record and render a final account of all general expenses.
Chapter XIX. Settlement of Disputes
Article 19-01. Cooperation.
The Parties shall always endeavor to reach agreement on the interpretation and application of this Agreement through cooperation and consultations, and shall endeavor to reach a mutually satisfactory solution to any matter that may affect its operation.
Article 19-02. Scope of Application.
Except as otherwise provided in this Agreement, the procedure of this Chapter shall apply:
(a) to the prevention or settlement of all disputes between the Parties relating to the application or interpretation of this Agreement; and
(b) where a Party considers that an existing or proposed measure of another Party is inconsistent with the obligations of this Agreement or would cause nullification or impairment within the meaning of the Annex to this Article.
Article 19-03. Dispute Settlement Under the GATT.
1. Disputes arising under the provisions of this Agreement, the GATT, and the agreements negotiated thereunder, may be settled in either forum at the option of the complaining Party.
2. Once a dispute settlement proceeding has been initiated under Article 19-05 or under the GATT, the forum selected shall be exclusive of any other forum.
3. For purposes of this Article, dispute settlement proceedings under the GATT shall be deemed to have been initiated when a Party requests:
(a) the establishment of a panel in accordance with Article XXIII:2 of the GATT 1947; or
(b) an investigation by a committee, as would be the case under Article 20.1 of the Customs Valuation Code.
Article 19-04. Consultations.
1. Any Party may request in writing consultations with respect to a measure adopted or proposed, or with respect to any other matter that it considers may affect the application of this Agreement.
2. The Party initiating consultations pursuant to paragraph 1 shall deliver the request to its national section of the Secretariat and to the other Party.