Goodbye to “protective” trade marks: a change in Spain

"Bye-bye!"

Katfriends and IP enthusiasts David Pellisé and Juan Carlos Quero (Pellisé Abogados, Barcelona) have recently been involved in some successful litigation in Spain which may not seem to exciting to those non-Spaniards who are unaware of how deeply entrenched are the national legal traditions of that country and how difficult it is to achieve a paradigm shift in the way IP is litigated (a case in point being the persistent reluctance of the Spanish courts to align themselves with the principle of EU-wide exhaustion of rights).  This is what they write:

Modification of a Spanish trade mark paradigm

The Spanish Supreme Court has recently issued decision 520/2014, which overturns an element of traditional Spanish trade mark doctrine. This concerns the balance between the ius utendi (that’s the “right of using”) and the ius prohibendi (that’s the “right of stopping others using”). In short, from now on, when two registered Spanish trade marks coexist, the holder of the earlier trade mark no longer has to seek the nullity or invalidity of the later trade mark before seeking to forbid its use.

Traditional doctrine

Historically, Spanish doctrine has considered that the owner of a registered Spanish trade mark had a right to use the trade mark, which didn’t yield even to the ius prohibendi of an earlier-registered Spanish trade mark.  So, if the owner of an earlier registered mark wanted to stop the use of the later registered mark, he would first have to seek its invalidation (even though invalidity and infringement actions could be incorporated within the same proceedings since 1986).

This traditional doctrine arose the Industrial Property Statute of 1929 (EPI) and continued to apply under the Spanish Trade Mark Act 1988 (as evidenced by Spanish Supreme Court rulings 470/1994, of 23 May 1994, 169/1995 of 6 March 1995 and 717, of 7 July 2006). Indeed, it persisted under the Spanish Trade Mark Act 2001 and we can find recent examples of its application as recently as 24 July 2013 in the decision of the Spanish Supreme  489/2013.

A new leading case

The German company Denso Holding GmbH and its Spanish subsidiary Denso Quimica brought infringement actions against their former partner and distributor Productos Denso Pla Y Cia. The defendant raised as a defence its ownership of a Spanish trade mark which had been registered after the date of the plaintiffs’ international trade mark registrations.  The plaintiffs did not seek to invalidate the defendant’s trade mark because, according to Spanish Supreme Court case law, the time limit for doing so action had already expired. Even though the plaintiffs knew that it was extremely difficult to succeed in the infringement action because of the existence of the traditional doctrine, they argued that this doctrine had to be changed in order to accommodate the requirements of Community Law.

The infringement action was dismissed because, both at first instance and on appeal, the courts in Barcelona followed the traditional doctrine and, since invalidity of the defendant’s trade mark had not been requested, the action was bound to fail. The plaintiff then appealed further to the Spanish Supreme Court, requested the modification of its traditional doctrine and supporting this request with legal and social arguments.

Among the legal arguments, it was pointed out how this doctrine was against the principle of unitary protection sought by the Directive 2008/95 to approximate the laws of the Member States relating to trade marks, according to which the owner of the later trade mark had no ius utendi which could be alleged against the owner of a previous trade mark.

The bottom line

As mentioned, the Spanish Supreme Court has now changed its doctrine: from now on, the owner of a prior registered Spanish trade mark can prohibit the use of a later registered Spanish trade mark without a mandatory obligation to request its invalidation. This decision opens a door to liability on the part of the owner of the later registered Spanish trade mark which was until now restricted.

David and Juan Carlos are of course happy to discuss the ramifications of this decision further with anyone who'd like to contact them.

The IPKat adds: readers who are familiar with Community trade mark law may recall the decision of the Court of Justice of the European Union in Case C‑561/11 Fédération Cynologique Internationale v Federación Canina Internacional de Perros de Pura Raza, a reference for a preliminary ruling from the Juzgado de lo Mercantil n° 1 de Alicante y n° 1 de Marca Comunitaria [noted on the IPKat here]. This case established a similar principle, the court ruling that

Article 9(1) of Council Regulation ... 207/2009 ... on the Community trade mark must be interpreted as meaning that the exclusive right of the proprietor of a Community trade mark to prohibit all third parties from using, in the course of trade, signs identical with or similar to its trade mark extends to a third-party proprietor of a later registered Community trade mark, without the need for that latter mark to have been declared invalid beforehand.

However, the word ‘Directive’ does not appear in this decision, which is not specifically concerned with national trade mark law, so it is now a relief for earlier trade mark owners to know that, whether their mark is of the national or Community variety, they can exercise it in Spain against the owner of a later-registered mark.

You can read the Spanish Supreme Court decision in the original Spanish here or download it here.