- BRINGING LEGAL ACTION
1.- With respect to infringements of protected rights
The most frequent conflicts were traditionally cases of imitation.
A third party puts a product (or service) on the market, which includes a patent, or brand, or the intellectual property of another company, or it imitates this product in an unfair way.
Given these cases, the Spanish laws accord certain actions to the injured parties.
In the case of inventions, Art. 63 of the Spanish Patent Law allow the injured company to ask the Court to order: the infringer to stop imitating; an embargo on the copied objects (or those with which the patent has been infringed); or that the title of ownership be awarded for the offended products.
In the case of creations and Software, Art. 139 of the Spanish Intellectual Property Law allows the person, whose rights have been infringed, to ask for: suspending the sale of the copied product; withdrawing it; or destroying it.
Art. 53 of the Spanish Design Law allows the holder to obtain the ceasing of actions which violate his right.
Art. 41 of the Spanish Trademark Law allows the suspension of offended action to be obtained, the withdrawal of the product or its destruction.
2.- Faced with intention to destroy a company
The Spanish Unfair Competition Law not only prohibits unfair imitations. It goes further than that. It has other actions to defend the offended company, which are currently playing a bigger part then forbid violation of secrets and inducement of contractual infringement.
Hence, the rights included in the Spanish Unfair Competition Law are more varied and complete. They try to return to a previous more complex situation than the specific imitation of intangible assets, products or services. So, the activity can be declared unfair and its suspension ordered, but it also allows the Judge to prohibit it (before it is produced) or remove its effects, or modify it.
3.-Compensation
3.1. – Damages
Spanish laws allow the injured party to be awarded compensation for damages and losses that the unlawful activities have caused. Damages include investments made and the loss of income, the latter is usually much more important (and more difficult to value).
3.2.- Calculating the harm suffered. Open questions on loss of profit.
In Spanish practice, calculating the damage is always an open question; Spanish Courts do not always use the same system, for example, calculating the amount of compensation.
The applicable laws (Art. 140 of the Intellectual Property Law, Art. 66 of the Patent Law and Art. 43 of the Trademark Law) coincide in giving three possible choices to calculate compensation for lost of profits: loss of profit by the victim, unlawful income obtained by the offender, or the price of a possible license.
These three systems need to be taken into account before requesting one or the other.
Lost profit, sometimes, is not seen in practice because the victim usually has a good product and therefore his sales have not decreased.
Offender´s unlawful income is, more often, difficult to see because it is usually ‘black’ and, therefore, is not reflected in his accounts.
The price of a license is usually a difficult figure to calculate and even more so for the judges, because do not know the specific market sector.
One option is to do it through a specialist’s report when making the claim. The problem is that the lost profits may still not be known: for example, because there is no access to the offender’s accounts.
Another system is to only fix the base of calculation and leave the exact amount to be calculated during court proceedings. But, it is difficult to fix the amount during the process if the plaintiff refuses to collaborate.
An alternative is to fix the in the “execution” procedure. But they normally request that basis of the calculation be fixed. Other judges have a less open position: they consider that damages do not necessarily follow the unfair activities and you should prove the amounts due.
3.2.- Other compensations
Apart from these general concepts, each law establishes specific compensation, for concrete cases. Therefore, the Intellectual Property Law talks about indemnity for moral damage, the Patent Law about loss of reputation, the Trademark Law says that compensation should be, at least, 1% of the offender’s total revenue.
- ASSURANCE OF A RESULT
The Spanish civil judicial proceedings to protect intangible goods are usually slow: one or two years in the Court of the First Instance, one year in Appeal before Provincial Courts and three to five years in Appeal before the High Court of Justice. This delay can make a conviction useless. The process can also be useless if the proof disappears or the defendant hides the offending goods.
To avoid this, Spanish laws have created mechanisms to assure a result.
1.- Preliminary/ Evidence
1.1.- Preliminary Proceedings
The Spanish Code of Civil Procedure allows a lawsuit to be prepared. Claimant can request that the future defendant shows the ‘property’ or documents which he has in his possession or through any necessary investigations to protect his rights (for industrial/intellectual property). It should be proven that the measures are adequate for the final purpose and that there is a legitimate interest, and offer bail. The future defendant can object, and then the Judge decides: on the measures and the bail.
Arts. 129 and sequence of the Spanish Patent Law also allows the patent holder to ask the facts to be substantiated. If the Judge considers the violation of the patent ‘predictable’, he will fix bail and agree an examination by an expert. Once infringement has been determined, the documentation obtained can be used as a basis for the claim.
Art. 24 of the Unfair Competition Law allows the same procedure; that the essential facts are checked so as to prepare the lawsuit.
1.2.- Anticipated Proof
The Spanish Code of Civil Procedure also allows the future claimant to ask the Judge, before presenting a claim, to obtain evidence which cannot be carried out at the opportune procedural moment. Justification of this step forward is necessary and the other party will have right to intervene in the outcome of the proof.
The Spanish Code of Civil Procedure also allows the person filing proceedings to ask , before starting the process, for means of evidence from the future defendant or a third party to avoid destruction or alteration of objects or state of things. It can ask for: conservation of things or situations, or the ascertaining of facts.
2.- Precautionary Measures
Furthermore, the Spanish Code of Civil Procedure and the particular laws quoted allow the judges to adopt ‘cautionary measures’ at the request of either party. These can be requested before the lawsuit or at the same time or at the start of the process. They are all aimed at avoiding that the slow process makes the conviction void.
Spanish Precautionary measures vary, from one law to another. But they all have a lot in common. Essentially in brief: anticipation of the result of the final Court decision on the merits with the assurance that the Decision has practical effects. Normally a hearing will take place, where the defendant will be heard (but not always); and claimant will have to bust a bail which guarantees paying the defendant’s damages which the measures may produce.
For example, the Spanish Intellectual Property Law allows: the seizure of income obtained through infringement of the law, suspension of reproduction, distribution and /or public communication, the seizure of imitative examples, or the embargo of machinery used to manufacture copies. The Spanish Patent Law and, by referral, the Trademark Law, allow: ordering the cessation of the infringement/imitation, retaining and depositing the offending products; and seizing monies. The Spanish Unfair Competition Law allows the Judge to order the cessation or adopt measures which he deems pertinent.
- COMPETENT JUDGES
1.- Torts
The laws which we have quoted allow the victim of the infringement to present his claims as civil actions before Civil Courts. These questions are decided by specialized Commercial Judges.
2.-Penal Actions
Intangible assets are also protected by Spanish Penal Code.
An infringement of IP rights can also be a crime if penal misconduct exists, it is if the offender wanted/was aware of to not comply with penal prohibition of imitation.
In practice, it is more efficient to start civil/commercial proceedings. Spanish Penal Judges are usually very strict, demanding proof of penal intent: they usually demand an express wish to deceive the consumer. Whether this is correct or not, criminal convictions are very difficult to achieve in connection with IP infringements. On the other hand, civil proceedings demand only that the actions have been carried out or are unlawful: this is an objective definition, with no real need to blame the offender; this makes civil claims to be normally more effective.
Santiago Nadal & Aurora Grieco
