CCN MEXICO REPORT

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Issue #
113
 – 
June 2013

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When Should a Copyright on an Authorial Work Be Registered?

June 10, 2013

In order to claim exclusive rights regarding a symbol or invention, whether a brand, advertisement, patent or industrial design, prior issuance of a registration certificate from the corresponding government office, such as the Mexican Institute of Industrial Property (IMPI), is required. Such registration is a formal and somewhat complex procedure. By contrast, a copyright on a work is automatically legally protected because copyright protection exists from the moment the work is created. Also, the creator of such work has the option of registering such creative work with the Mexican National Copyright Institute. Such copyright registration is simply to confirm copyright protection; however, by no means is registration required in order for the corresponding rights to be enforceable. At times, it is advisable to register the copyrighted work in order to have evidence of the date the work was created because many times authors do not maintain evidence of the date they created their authorial work. Additionally, it is noteworthy that copyright protections are not confined to a particular territory. Thanks to various international treaties, such as the Berne Convention, copyright protection reaches beyond the borders of the country where the work was created. In Mexico, as in most countries, it has been determined that computer programs (software) are protected as copyrighted works. However, in some countries this type of protection may be recognized only by means of a patent registration. Thus, in order to determine the advisability of registering a work for copyright or not, the following, among others, should be considered: 1. - Knowing that once a copyright is published, it is likely to be used by third parties; therefore, those who know about it may benefit from such knowledge, because the only thing being prohibited is its reproduction. If the author desires to maintain the work for him/herself (such as a recipe, or a business model, etc.), then it should not be registered, so as to prevent its publication and so that it may be maintained as a secret; and 2) if not enough evidence exists to prove in the future that the work was created by the author on a particular date (for example the creation of a computer program), it is worth registering such in order to have verifiable evidence of the time of its creation. Conversely, if such clear evidence does exist (published literary works), then it may not be necessary to obtain a copyright registration.

Termination of Employment Relationships (Part Two)

June 10, 2013

Continuing with the topic of the Termination of Employment Relationships in Mexico that began in an article published last month, below is a discussion of the termination of the employment relationship and individual employment contract by: (i) the signing of a resignation and settlement by the employee, and (ii) the mutual consent of the parties, by means of entering into an agreement before the applicable Labor Board of Conciliation and Arbitration.1.- Termination of the relationship and individual employment contract, by the signing of a resignation and settlement by the employee. This type of termination of the employment relationship is used in the following situations: (i) when a worker or an employee notifies the company that he/she desires to voluntarily terminate his/her employment relationship, or (ii) in the event the company desires to voluntarily terminate the employment relationship with an employee, and does not have sufficient cause to terminate without liability to the company. In such cases, the employer typically makes a proposal to the worker or employee to terminate the employment relationship in this manner. In order to carry out this type of termination, it is necessary for both parties to discuss and agree in advance any amount of severance to be paid to the employee. Having done this, the worker or employee must sign a resignation letter, acknowledging that the company has always paid all wages and benefits to which he/she was entitled throughout the duration of the employment relationship, and that, therefore, he/she reserves no right to exercise any action against the company, granting to the company the broadest release allowable by law. Additionally, the worker or employee should also sign a settlement and release agreement for the benefit of the company, stating the total net amount paid as a result of the voluntary termination of his/her employment relationship and individual employment contracts. It is recommended that such settlement describes in detail all of the general working conditions and specify each item to be paid (salaries, benefits, bonuses, etc.) and each item to be deducted (taxes, loans, fees social security, etc.).2.- Termination by mutual consent of the parties by entering into an agreement before the applicable Labor Board of Conciliation and Arbitration. In order to utilize this strategy, in which there is no voluntary resignation by the worker or employee, it is also necessary for the parties to agree upon the terms of the termination in advance. In this case, the Federal Labor Law provides that in order for any agreement or settlement to be valid, it must be in writing and contain a description of the facts that lead to it, the rights that are included in it and it must be ratified before the applicable Labor Board of Conciliation and Arbitration. Such board will approve it provided that it does not contain a waiver of the worker's or employee's rights. As such, if the company decides to terminate the employment relationship with a worker or employee by means of an agreement, the agreement must be in writing and contain, among other things, the following: (i) the desire of both parties to terminate the relationship and individual employment contract that bound them, (ii) the breakdown of each and every amount to be paid to the worker, including applicable deductions for taxes, fees to Mexican Social Security, debts, etc., (iii) the agreement of the worker or employee to receive the net total amount to be paid and therefore, declare not to reserve any action or right to be exercised against the company, thereafter, granting the, broadest release allowable by law, and (iv) the request to the Labor Board of Conciliation and Arbitration for the approval of the agreement, attesting to and certifying the delivery and receipt of the amount due in order to terminate the relationship of the parties. Once the parties agree to the terms of the agreement, they must appear before the applicable Labor Board of Conciliation and Arbitration in order to sign the same and ratify its contents, for which the aforementioned labor authorities shall create a written record which evidences that the agreement terminated the employment relationship between the parties, attesting to the amount to be paid to the worker or employee, and ordering that the file that was opened along with the agreement be considered completely resolved. It is important to note that if the parties enter into a private agreement which is not ratified by the applicable Labor Board of Conciliation and Arbitration, such private agreement will not be enforceable. In such case, if the worker or employee files a labor lawsuit against the company, a risk exists that the company may be ordered to pay additional amounts over and above what was already been paid to the worker or employee under the private agreement.

Modifications to Foreign Trade Rules

June 10, 2013

On June 6, 2013, the Mexican Department of the Economy published in the Official Journal of the Federation the "Agreement modifying the prior agreement by means of which the Mexican Department of the Economy ("SECON") issued general rules and criteria on Foreign Trade" (the "Agreement"). The Agreement constitutes the first modification to the rules published by SECON on December 31, 2012 and contains the following modifications:

1. The "recovery of materials" concept is specified for purposes of permitted activities that are considered industrial processes for preparation and transformation under IMMEX and PROSEC programs (Rules 3.2.1 and 3.4.4);2. Origin criteria is standardized in accordance with that under the North American Free Trade Agreement as to goods originating from the disassembly, recovery of materials and remanufacturing (Rule 3.2.26);3. Requirements for the processing of new IMMEX programs through the Mexican Digital Window on Foreign Trade (Rule 5.3.1, Section E, Numeral 1);4. A reciprocal quota on powdered milk is implemented substituting preferential tariff treatment subject to obtaining a prior permit established in the Mexico - Uruguay Free Trade Agreement (Exhibit 2.2.1, numeral 4, section II and Exhibit 2.2.2, numeral 4, section II);5. Adjustments are made given changes in the names of administrative units of the Mexican Department of Finance and Public Credit from which the Mexican Department of the Economy requests information for prior permits for importation and exportation of petroleum. (Tax Revenue Policy Unit and General Department of Industrial Transformation of Hydrocarbons; Exhibit 2.2.2, numeral I of Table 1 and numeral 1 of Table 6);6. Measures are adopted to assure adherence of gross diamond shipments to the Kimberly Process Certification System as a result of the admission of Cambodia, Panama and Kazakhstan as new participants to such system (Exhibit 2.2.13);7. The inclusion of new tariff classification for mezcal subject to compliance with NOM-070-SCFI-1994 for its production and domestic origin (Prior section 2208.90.99, new section 2208.90.05, in relation to Exhibit 2.4.1 numerals 1 and 4);8. Procedures for compliance with NOM-151-SCT1-1999 and NOM-121-SCT1-2009 for commercial companies on the northern border (Exhibit 2.4.1, numeral 5) are simplified; and9. Nomenclature is updated in accordance with the update of the Official Mexican Norms (Numerals 1, 3, 4 and 10 of Exhibit 2.4.1).