Supreme Court delimits scope of protection under Article 8 of Paris Convention

On April 13 2012 the Supreme Court issued a decision which confirmed the interpretation under Spanish law of Article 8 of the Paris Convention for the Protection of Industrial Property, which states that "a trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark".

Kemika SpA is an Italian company that manufactures and markets cleaning and hygiene products under the trade name Kemika. It previously sold its products in Spain through the company Madelim SA. Kemika came to an agreement with Madelim to establish the company Kemika Productos de Limpieza SL in order to produce and commercialise cleaning and hygiene products in Spain. Soon after, problems concerning non-payment arose and a few years later the contractual relationship ended.

Consequently, Kemika on various occasions requested that Kemika Productos de Limpieza change its company name in order to avoid confusion.

Since Kemika Productos de Limpieza ignored its claims, Kemika, as the owner of an earlier non-registered trade name, filed suit against the Spanish company. It claimed the application of Article 8 of the Paris Convention, together with Articles 41, 44, 90 and Additional Provision 17 of the Spanish Trademark Act, and sought, among other things:

• a declaration that Kemika Productos de Limpiezas' company name was null and void;
• an order to change the company name;
• an order to refrain from using the name Kemika or similar for chemical and cleaning products; and
• an order to pay €16,190.28 in outstanding debts resulting from the prior contractual relationship. 

The court of first instance ordered the defendant to pay Kemika the outstanding debts as requested. With regard to the trade name, it examined the case under Article 9.1(d) of the Trademark Act (which had not been invoked by the plaintiff). Article 9.1(d) envisages the protection of foreign non-registered trade names but, unlike Article 8 of the Paris Convention, it requires the concurrence of certain conditions:

• The prior trade name invoked must be used or well known in the national territory; and
• Likelihood of confusion must exist among the public between the prior trade name and the subsequent identical or similar distinctive sign that is the object of the invalidity action.

The court considered that the conditions required for a declaration of invalidity were not satisfied and therefore dismissed the action. Kemika appealed.

The court of appeal also found Article 9.1(d) of the Trademarks Act applicable and considered that the use or well-known character of the trade name in Spain had not been proven. It dismissed the appeal and confirmed the first instance judgment. Dissatisfied with this result, Kemika appealed to the Supreme Court, arguing infringement of Article 8 of the Paris Convention in connection with Article 9.1(d) of the Trademark Act. Kemika argued that Article 8 does not make protection conditional on any additional requirements.

The Supreme Court ruled as follows:

• The articles of the Trademark Act that Kemika invoked in the lawsuit in order to try to invalidate the company name Kemika Productos de Limpieza were not appropriate for the invalidity action. Thus, the court of first instance and the court of appeal had erred in applying Article 9.1(d) of the Trademark Act and in considering that Kemika had brought an invalidity action. In fact, Kemika had exercised an action to try to invalidate a company name on the legal basis of an infringement action which, moreover, is envisaged in the Trademark Act for the owners of registered signs (which Kemika was not).
• The case law concerning Article 8 of the Paris Convention (influenced by the choices made by the Spanish legislature when drafting the Trademark Act) has evolved throughout the years, and has delimited its interpretation for the purposes of not granting wider protection to foreign non-registered trade names than to Spanish names, and limiting protection to compliance with certain requirements. In this sense, the Supreme Court indicated that the protection granted to a foreign non-registered trade name allows the owner to bring an action for the invalidation of subsequent signs only if the conditions required by the Trademark Act are met (ie, the risk of confusion and use in Spain or well-known character). Otherwise, protection should be sought under the remedies envisaged in the Unfair Competition Act (Law 3/1991 of January 10), provided that the necessary requirements for its application are satisfied.

The Supreme Court concluded that non-registered trade names are protected under Article 8 of the Paris Convention as follows:

• If there is incompatibility with a subsequent registered trade name or trademark, the owner may bring an invalidity action against these registrations; and
• If there is no registration, the owner may bring actions to prevent a third party from using the non-registered trade name by means of the actions envisaged by the Unfair Competition Act.

Teresa de Sicart, Grau & Angulo, Barcelona