Defendant cannot rely on 'cover registration' to justify infringement

Spain

By judgment of March 6 2012, Section 8 of the Barcelona Court of Appeal has upheld a December 1 2011 decision of the Trial Court Number 23 of Barcelona in a case involving the importation of thousands of garments bearing imitations of the GIORGIO ARMANI SPA marks.

This matter is of interest in that the importer provided a ‘cover registration’ in an attempt to justify the legality of its actions. This is an increasingly widespread practice among infringers, who are becoming more professional and sophisticated.

A cover registration is a registered trademark that is not identical to an earlier well-known mark (so as not to raise the alarm during the registration process), but does bear some resemblance to the earlier mark. The trademark owner does not intend to use the mark as registered, but to use it differently so that the mark becomes more similar to the well-known mark. Such registration thus attempts to legally justify a malicious act of imitation.

Once the infringer has obtained a cover registration, it can manufacture, import or market products which do not bear this trademark, but a sign which imitates the earlier well-known mark. If the customs authorities or the police try to stop the goods, the mark owner can show its cover registration to prevent the seizure of the goods; unfortunately, this tactic has proved to be successful in some cases, as it gives the appearance of legitimacy.

If, despite the existence of a cover registration, the goods are seized and a criminal procedure is initiated, the infringer will then provide the Criminal Court with the registration for the same purposes, as occurred in the present case. Given that, under Article 34 of the Trademark Act, the holder of a Spanish registered trademark has the right to use its mark in trade, infringers take refuge in this ius utendi to justify their behaviour. Infringers can also argue that the owner of the earlier well-known mark did not object to the registration of the later mark during the administrative procedure, and did not request the cancellation of the registration once it had been granted.

By using this strategy, infringers hope that they can divert the discussion from the actual infringement and that the Criminal Courts will conduct only a cursory review of the case. However, the object of this type of proceedings is not to examine the cover registration (which is not the one that is actually in use), but to prosecute an infringement claim (the sign used by the infringer is not actually registered as a trademark and, at the same time, is an imitation of a well-known trademark that was registered long before the sign).

In its judgment, the Barcelona Court of Appeal made it clear that the defendant could not rely on “the appearance of being protected by one’s own registered trademark” or argue that its trademark “had not been contested by the holder of the [earlier well-known mark]”. Moreover, the court held that the subjective requirement of the crime at issue was met:

from the very moment the decision was made to register a distinctive sign that was similar [to a well-known trademark] - as a preparatory act – in order to later import on a large scale products that were protected under the umbrella of the registered trademark.

Jordi Camó, Grau & Angulo, Barcelona

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