Court considers exploitation rights in animated character

On April 4 2013 the Commercial Court Number 9 of Barcelona dismissed claims filed by Pasozebra Producciones SL and Mr Daniel Díez Rodríguez against Nutrexpa SA in relation to the animated character Benito.

The facts of the case are as follows. In 2003 Sos Cuétara (now Deoleo, the intervening party in the proceedings) commissioned an animated character to relaunch its range of products under the marks FLAKES and CHOCOFLAKES. The result was the creation by Mr Díez (partner and manager of Pasozebra) of an animated character called Benito.

By contract dated November 21 2003, Pasozebra (to which Mr Díez transferred the exploitation rights of the character) assigned to Cuétara all the rights to use the character, unlimitedly and exclusively, for the entire range of Flakes and Chocoflakes cookies.

Between 2003 and 2004, Cuétara applied for, and obtained, various trademark registrations for the character.

On December 14 2008 Cuétara sold its cookie business to Nutrexpa, which involved the transfer to Nutrexpa of the rights to exploit the character. On March 24 2009 Cuétara informed Pasozebra of the transfer of the business and requested authorisation for the subrogation of the rights in the character. Pasozebra failed to provide written authorisation, but continued to work for Nutrexpa in connection with the character.

Between December 2009 and July 2010, Nutrexpa (the assignee of the trademarks for the character registered by Cuétara) applied for, and obtained, other trademark registrations related to the character. In June 2010 Pasozebra requested authorisation from Nutrexpa to make a film about the character.

Nutrexpa’s refusal to authorise the project led to disagreements between the parties and, subsequently, to the filing of a lawsuit by Pasozebra and Mr Díez based on the following grounds:

1. Infringement of exploitation rights:

1.1 There had been no transfer of exploitation rights from Cuétara to Nutrexpa because:

1.1.1 The contract between Pasozebra and Cuétara was not in force when Cuétara sold its cookie business to Nutrexpa. The contract did not stipulate the specific duration of the agreement and, therefore, in accordance with Article 43.3 of the Spanish IP Law, it expired after five years.

1.1.2 Alternatively, the transfer from Cuétara to Nutrexpa of the exploitation rights was invalid due to Pasozebra’s lack of express consent.

1.2 In the event that these claims were not accepted, Pasozebra and Mr Díez argued that Nutrexpa was making unauthorised use of the character by using it not only for the product ranges specified in the contract, but also for other products.

2. Infringement of Mr Díez’s moral rights for not mentioning his name on the product packaging on which the character appears.



3. Invalidity of the trademarks due to the fact that they had been filed in bad faith and the lack of authorisation from Mr Díez to register the character as a trademark.

With respect to the claim of infringement of the exploitation rights in the character, the court held as follows:

• The contract was in force at the time when Cuétara sold the business to Nutrexpa because it expressly provided for an indefinite duration. Therefore, the five-year time limit did not apply.
• Nutrexpa did not need the express consent of Pasozebra to subrogate the contract because, in accordance with Article 49.3 of the IP Law (which should be interpreted broadly), such consent is not necessary where the assignment occurs during the winding-up, or following a change in the ownership, of the corporate assignee. In any event, actions by Pasozebra indicated that it had given its express (albeit unwritten) consent.
• Nutrexpa had not used the character for any products other than those authorised under the contract. The products at issue were merely a variation on, or a different range of, the contractually authorised products.

The court also stated that, although the plaintiffs were aware of such use, they had never objected to it and had even collaborated with Nutrexpa in adapting the character to be used in connection with those products.

With regard to the claim of infringement of moral rights, it was Mr Díez who had authorised the anonymous disclosure of the character. In accordance with Article 12.4 of the IP Law, his moral rights were exhausted after this first disclosure. In subsequent disclosures, it was the owner of the exploitation rights who had to decide how it wanted to communicate and disseminate the work. Therefore, the lack of mention of the author on the product packaging did not infringe the moral rights of Mr Díez.

With regard to the alleged invalidity of the marks, the court held that the plaintiffs had failed to prove the existence of bad faith at the time of the application or that the registration of the character as a trademark infringed the IP rights of the author. Therefore, neither the absolute grounds nor the relative grounds for invalidity applied.

In addition, the character in question was a work commissioned by Cuétara to identify one of its product ranges, which clearly meant that it was to be used as a distinctive sign. Cuétara, as the holder of the exploitation rights, had the right to register the character as a trademark under the contract.

Consequently, the court dismissed the plaintiffs’ claims in their entirety.

Antonia Torrente, Grau & Angulo, Barcelona