Mexico and the 2026 Special 301 Report: Progress, Persistent Challenges, and the Road Ahead

By Goodrich Riquelme y Asociados

The 2026 edition of the United States Trade Representative (USTR) Special 301 Report marked a significant shift in the intellectual property relationship between the United States and Mexico. After years on the Priority Watch List, Mexico was moved to the Watch List, reflecting what the report described as “a number of steps forward” in patent protection, pharmaceutical IP regulation, and enforcement coordination.

The report also emphasized that “many concerns remain,” especially regarding piracy, counterfeit goods, criminal enforcement, and implementation of obligations under the United States-Mexico-Canada Agreement (USMCA).

The Special 301 Report is an annual review mandated by the U.S. Congress that evaluates the global state of intellectual property protection and enforcement. The review seeks to encourage and maintain enabling environments for innovation, including effective IP protection and enforcement, in markets worldwide. The document identifies issues ranging from copyright piracy and counterfeiting to trade secret misappropriation and barriers to market access.

Mexico’s Removal from the Priority Watch List

One of the most notable developments in the 2026 report is Mexico’s movement from the Priority Watch List to the Watch List. This downgrade in concern reflects progress made during intensified bilateral engagement between the United States and Mexico ahead of the USMCA Joint Review.

The report states that both countries increased cooperation in 2025 and that the United States expects Mexico to fully implement the USMCA and to address long-standing concerns. These concerns include:

• Enforcement against counterfeiting and piracy
• Protection of pharmaceutical-related intellectual property
• Pre-established damages for copyright infringement and trademark counterfeiting
• Plant variety protection
• Digital enforcement of IP rights

The report also notes that the United States continues monitoring Mexico’s “outstanding USMCA commitments,” particularly those whose transition periods expired in 2024 and 2025.

Advances in Patent and Pharmaceutical Protection

Mexico’s most significant advances came in the area of patents and pharmaceutical intellectual property.

In October 2025, Mexico began including use patents in the Industrial Property Gazette. According to the report, this reform partially addressed concerns about “the lack of an effective system for the early resolution of potential pharmaceutical disputes.”

Further progress came in April 2026, when Mexico amended regulations to strengthen protections for undisclosed pharmaceutical and agricultural chemical test data. The report explains that the amendments established safeguards against the unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval.

Importantly, these reforms also created “a system to provide patent term extensions for unreasonable marketing approval delays,” aligning Mexico more closely with international pharmaceutical IP standards.

Enforcement Efforts and Institutional Coordination

The report highlights several positive developments in enforcement.

The Mexican government worked on proposed amendments to the Federal Copyright Law concerning internet service providers (ISPs) to clarify secondary liability for copyright infringement. Authorities also considered reforms to the Federal Criminal Code to eliminate the requirement of proving “a direct economic benefit to the infringer,” a standard criticized for making prosecutions difficult.

Institutionally, the Mexican Institute of Industrial Property (IMPI) and the National Customs Agency of Mexico (ANAM) signed a cooperation agreement aimed at improving border enforcement coordination. This step seeks to address concerns over the lack of ex officio authority among border officials.

Mexico also announced commitments to:

• Increase administrative and criminal enforcement
• Create a bilateral working group with the United States on criminal enforcement
• Hold stakeholder consultations on IP issues

Persistent Piracy and Counterfeiting Problems

Despite these reforms, the report paints a troubling picture of the enforcement landscape in Mexico.

According to the report, Mexico continues to suffer from very high rates of copyright piracy, including:

• Online streaming piracy
• Peer-to-peer file sharing
• Direct downloads
• Stream-ripping
• Illicit streaming devices and applications
• Circumvention devices for video games and consoles
• Physical pirated media

Counterfeiting also remains widespread. The report states that Mexico experiences extensive “importation, manufacture, sales, distribution, re-export, and transshipment of counterfeit goods.”

Particular attention is given to notorious physical markets. Although authorities conducted enforcement operations through Operación Limpieza, markets such as El Santuario, Mercado San Juan De Dios, and Tepito — all identified in the 2025 Review of Notorious Markets for Counterfeiting and Piracy — “continue to flourish.”

The report additionally warns that administrative enforcement through IMPI has become constrained due to “budget cuts and staffing reductions.”

 

Copyright, TPMs, and Digital Enforcement

The report also addresses developments in copyright law and digital enforcement.

In 2024, the Mexican Supreme Court upheld the constitutionality of USMCA-related copyright legislation, including provisions concerning criminal penalties for the circumvention of technological protection measures (TPMs) and notice-and-takedown systems.

However, the report emphasizes that there is no indication that Mexican authorities are applying the provisions that criminalize circumvention of TPMs. Stakeholders similarly continue reporting failures to enforce certain copyright law provisions.

This disconnect between legislative reform and practical enforcement remains a central theme throughout the report.