Why the Mexican government is redistributing counterfeit goods

President Andres Manuel Lopez Obrador has surprised the IP world with plans for a flea market called Tianguis del Bienestar, which can be translated as ‘wellness bazars/markets’, which would distribute goods seized by Customs to people of low-income backgrounds.

The president has claimed that the seized goods, which are usually stored in warehouses and sometimes destroyed or burned, will now be distributed to the poorest people in the country. The federal government claims that these markets will deliver around 1.85 million confiscated items to more than 850,000 people.

The market will also save the federal government from paying rental fees for the warehouses in which confiscated goods are usually stored.

According to the initiative, people will be able to obtain all kinds of goods – including clothing, tools, shoes, toys and homeware. These products are new, as they were seized by Customs upon entry into Mexico and will be given away free of charge.

The current plan is for these markets to be divided into circuits, depending on the kind of item being offered, in which each person will have 20 minutes to select what they require. A record will be kept of which individuals take what items.

Most of the goods seized, sequestered and/or confiscated by federal government agencies were previously guarded by the Property Management and Disposal Service (SAE). This managed and administered said goods and even sold those that were suitable via public auctions.

Under the new government, the SAE changed its name to Instituto para Devolverle al Pueblo lo Robado (INDEP), loosely translated as the institute for returning to people what was stolen. This agency has the same responsibilities that the SAE did in the past, but with some new initiatives, such as making as much profit as possible from the sale of goods in its custody.

Despite this there was widespread surprise when INDEP recently offered a wide array of merchandise for sale on its website, including pieces of apparently counterfeit HERMÈS, LOUIS VUITTON and SALVATORE FERRAGAMO products, on which any interested person could bid.

This not only infringes IP rights but also violates Mexican law and international treaties. For many years, Mexican lawyers, hand in hand with rights holders, have made considerable efforts to safeguard IP rights, attempting to eradicate the crime of counterfeiting, which not only affects rights holders, but also the country’s economy and security.

Many national associations, including the Mexican chapter of the International Association for the Protection of Intellectual Property and the Mexican Association for the Protection of Intellectual Property have warned that encouraging the circulation of fakes will promote criminal behaviour and poses a risk to companies and consumers. If these goods have been seized, they should not be put into commercial circulation under any circumstances.

The sale of confiscated counterfeits is prohibited in Mexico, with the new free trade agreement signed between Mexico, the United States and Canada, expressly setting out rules for the destruction of seized goods. In other words, these types of markets and auctions flagrantly violate, not only the rights of trademark owners, but also international treaties.

If Mexico is not committed to protecting intellectual property, it could qualify for international sanctions. It is therefore vital that the government urgently reconsider these policies.

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight

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