Use of infringing domain name not punishable under Unfair Competition Act

The Spanish Supreme Court has again considered the relationship between the Trademarks Act and the Unfair Competition Act (March 2 2009).
The Supreme Court has held on several occasions that if an action can be based on industrial property rights, the Unfair Competition Act should not be invoked (eg, see "Unfair competition law cannot be invoked to resolve trademark disputes"). In particular, the court stated that the Unfair Competition Act does not substitute the Trademarks Act, but rather complements it.
In the present case, the Supreme Court has applied this approach to a domain name dispute for the first time.
Lladró Comercial SA owns several registrations for the sign LLADRÓ for porcelain figures. Lladró sued Comercial Rosa María Lladró SL for using:
  • the mark DUQUE DE LLADRÓ for wines;
  • the domain name ''; and
  • the corporate name Comercial Rosa María Lladró SL.
Lladró sought a declaration that:
  • use of the mark DUQUE DE LLADRÓ by Rosa María infringed Lladró's trademark and trade name; and
  • use of the corporate name Comercial Rosa María Lladró SL and of the domain name '' constituted trademark infringement and unfair competition.  
The Valencia Court of First Instance Number 11 dismissed the action.  Lladró appealed.
The Court of Appeal of Valencia partially allowed the appeal. The court upheld all of Lladró's claims, except that with regard to the use of the corporate name Comercial Rosa María Lladró SL. The court found that such use did not infringe Lladró's industrial property rights and did not constitute unfair competition.
Rosa María filed a cassation appeal before the Supreme Court, arguing, among other things, that it had not engaged in unfair competition.
The Supreme Court held that although use of the domain name '' amounted to trademark infringement, it did not constitute unfair competition. The court pointed out that in the present case, the protection conferred by the Trademarks Act prevailed over that conferred by the Unfair Competition Act.
In light of this decision and previous case law on the relationship between trademark rights and unfair competition law, it is clear that in cases involving only trademark infringement issues, claimants should not consolidate trademark and unfair competition claims. The Unfair Competition Act should be invoked only in those cases where the plaintiff does not hold any IP rights or where the dispute goes beyond the scope of protection of the Trademarks Act. 
Ives Jadraque, Grau & Angulo, Barcelona

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