Pursuant to the Mexican Industrial Property Law, intellectual property rights may be encumbered, transferred or licensed solong as the formalities of applicable Mexican laws have been met. However, in order for the license, transfer orencumbrance to take effect against third parties, the corresponding agreement or contract must be registered with theMexican Industrial Property Institute (IMPI). Such formality of Mexican intellectual property law implies that, if one seeksto license or transfer intellectual property rights without a written agreement, this may be done between the particular partiesinvolved, but such agreement will not be effective against third parties if the agreement has not been registered. Theimplication of “not being effective against third parties” means that the acquirer or licensee of intellectual property rightsmay not be able to enforce its rights against third parties, including the IMPI itself as a possible third party, and also signifiesthat the right to register and have recognized the corresponding intellectual property rights may be lost. This is because a condition to maintaining intellectual property rights in force, and avoiding the expiration of such rights, is their exploitation(in the case of patent/inventions) or use (in the case of trademarks) by either their owner or an “authorized third party”, withthe understanding that an authorized third party is the licensee of an agreement which has been registered with the IMPI.