IP Owners May Be Awarded More Than Minimum Damages Based On ‘40% Rule'

• Under Article 221 bis of Industrial Property Law, damages awarded to claimant shall be no less than 40% of public sale price of infringing products
• Circuit Court recently reasoned that 40% rule seems to apply principle of punitive damages to Mexican legal system
• Therefore, courts can impose both compensatory damages for loss suffered and punitive damages based on 40% rule

A Circuit Court has recently observed that industrial property owners may be awarded actual damages plus 40% of the sale price of the infringing products as punitive damages.

Background

Article 221 bis of the Mexican Industrial Property Law provides that the damages awarded to the claimant shall be no less than 40% of the public sale price of the infringing products (the '40% rule').