Legislative framework and causes of action
Spain’s legislative framework for the protection of trademarks is fully aligned with the EU framework and establishes protection under both private and criminal law. Under private law the framework is based on Trademark Law 17/2001 (7 December 2001, last amended on 1 May 2019, and extending, in principle, up to 13 January 2023). The criminal law system provides protection against IP crimes, which in the specific case of trademarks is provided under Article 274 of the Penal Code (Organic Law 10/1995, 23 November 1995).
Although the Trademark Law in Spain recognises the possibility that there may be unregistered trademarks, its entire legal defence system before either the civil or criminal courts is based on the prior existence of registered trademarks.
Alternative dispute resolution
Mediation and arbitration can be used to avoid judicial IP proceedings. While both can be used to resolve disputes between parties, with arbitration the parties involved must submit to an arbitrator, who will resolve the dispute with a binding award. In mediation, an independent, impartial person (ie, the mediator) will assist the parties in dispute to find a solution, thereby avoiding a court case.
Disputes regarding matters to be freely decided pursuant to the law may be arbitrated. Mediation may therefore be applied to any dispute between parties, as in the case of labour, business, civil, family, medical or education disputes.
Litigation venue and formats
The court system and litigation venues explained
In Spain, trademarks are subject to three classes of judicial protection:
- criminal; and
Any of these channels may be used depending on the type of infringement and the type of response that is sought.
After the registration procedure has ended and all administrative appeals have been exhausted before the Spanish Patent and Trademark Office, the holder of the earlier right may still defend its interests by filing an appeal, as a last resort, within the contentious-administrative jurisdiction.
Contentious-administrative proceedings are prosecuted before the Superior Court of Justice holding territorial jurisdiction. An appeal against the judgment may be brought before the Contentious Administrative Chamber of the Supreme Court, but only in very specific and exceptional cases.
Crimes against trademarks require, in addition to the existence of infringement, the existence of mens rea, causing these crimes to merit even further proof. In such cases, the minimum intervention principle prevails, which has a double meaning – it implies that:
- criminal actions must be limited to essential matter, for the benefit of other sanctions or even tolerance of the mildest offences; and
- it should be used only when there is no other option, that is, after the failure of any other kind of protection.
Pursuant to Spanish criminal legislation, any person who, for industrial or commercial purposes, without the consent of the trademark owner and with knowledge of the registration, manufactures, produces or imports goods incorporating a trademark identical to or capable of being confused with an earlier mark, or offers, distributes or markets through wholesale and retail channels, goods incorporating a trademark that is identical or capable of being confused with an earlier mark, or stores such goods for that purpose, will be punished with a prison sentence and a fine where the goods, services or activities for which the trademark is registered are identical or similar. Street vending or peddling of those goods is also punishable with a prison sentence.
A stricter sentence will be imposed where:
- the benefit obtained is of particular economic importance;
- the facts are characterised by their severity according to the value of the objects that are unlawfully produced, distributed, marketed or offered, or the particular importance of the damage caused;
- the guilty party belongs to an organisation whose sole purpose is to infringe trademarks; or
- minors under the age of 18 are used to commit such crimes.
These crimes are subject to prosecution by operation of law, but in most cases the trademark owner’s participation is necessary because the authorities must be able to rely on the owner in order to effectively assess whether the conduct that is prosecuted constitutes a crime.
A criminal action on behalf of a party is brought by means of a complaint or lawsuit before the local pre-trial investigation court, assigned according to the rotation of cases, in the district where the crime was committed.
Criminal proceedings consist of three phases:
- preliminary inquiries or investigation;
- the intermediate stage; and
- the trial stage.
During the investigation stage, a number of actions are conducted to secure evidence and implement measures, such as preparation of the final trial.
The purpose of the intermediate stage is to verify and complete the investigation stage and to determine whether a trial should be held (or otherwise to determine whether the case should be dismissed). It spans the conclusion of the investigation until the trial is held.
During the trial, the claims of both parties are developed through the submission of the corresponding evidence. The trial stage concludes with a judgment being issued, which resolves the matter of the plaintiff’s guilt or innocence, as well as other associated claims.
Civil proceedings are often the most appropriate and comprehensive channel for defending trademarks, for the type of infringement committed and for obtaining the response that the owner desires. Further, other actions may be included that are also the object of infringement by the conduct of a third party, such as actions on the grounds of unfair competition.
The duration of the proceedings of a civil action will vary depending on the court and its workload. However, it usually takes between one year and 18 months. At present, due to the covid-19 pandemic, the terms are even longer.
In relation to trademark infringement, like in any IP matter, there is a single jurisdiction legally predetermined by the Spanish rules of procedure that do not allow for choosing the court. Accordingly, courts previously designated by the law will have jurisdiction to hear these cases. It is impossible to choose a court of convenience, even though there is legal and political decentralisation in Spain affecting issues other than the legal protection of trademarks and of intellectual property as a whole.
The judgment issued by any of the courts (eg, civil, criminal or contentious administrative) is exclusive and effective anywhere in the national territory.
Jury versus bench
In IP matters (eg, trademark infringement), all cases are handled solely and exclusively by professional courts. There is no jury, except for cases involving certain types of crime previously established for criminal cases.
Damages and remedies
The owner of a registered trademark whose right is injured may claim compensation for damages sustained through civil proceedings. The law establishes circumstances of strict liability, where the trademark owner is not required to prove the existence of fault of the defendant.
Those who, without the consent of the trademark owner, commit the following actions will be held liable for damages caused, namely:
- placing the sign on goods or packaging, and where there is a risk that the packaging, label, labelling designs, security elements or authenticity devices or other places where the trademark is used may be relative to other goods or services, and such use constitutes a violation of the trademark owner’s rights; and
- marketing of the unlawfully marked goods and services.
Those who perform any act of infringement of the registered trademark will be obliged to pay compensation if they were duly notified by the trademark owner or, where appropriate, by the person authorised to bring the action regarding the existence of such trademark and its infringement, with the requirement to cease such action, or where through their actions there was fault or negligence or the trademark in question is a reputed mark.
Calculation of compensation for damages
The action for compensation comprises the consequential damage (eg, losses sustained due to the infringing party’s activity) and loss of profit (eg, earnings not obtained due to said infringement).
Lawmakers have established criteria for strict compensation in case of trademark infringement and have introduced concepts such as coercive compensation, compensation due to damage caused to the reputation of the trademark, and minimum compensation of 1% of the infringing party’s turnover, among other things.
The owner of a trademark registration may also request compensation for damage caused to the reputation of the trademark by the infringing party.
To establish compensation for damages, the following will be considered at the discretion of the injured party:
- the negative economic consequences – the profits that the owner would have obtained by means of the use of the trademark if the infringement had not taken place or, alternatively, the profits that the infringing party obtained as a consequence of the infringement; and
- a lump-sum amount comprising at least the amount that the infringing party would have paid to the trademark owner for the grant of a licence that would have allowed them to use the trademark according to the law.
Evidencing the case
In the claim, the facts, legal grounds and what is sought are set forth, enclosing the relevant documents.
During the pre-trial hearing, an attempt is made for the parties to come to an agreement, then the object and issues of the process are established, and finally evidence is submitted. Such evidence may consist of the examination of the parties, public documents, private documents, expert reports, surveys and testimonies. Expert testimony is extremely important, especially in the case of the compensation for damages.
In the trial, the evidence that is admitted is heard and conclusions are submitted. At the end of the trial, the proceeding is ready for judgment.
An owner whose trademark is infringed may request precautionary measures to secure the effectiveness of the lawsuit. Possible precautionary measures include:
- the cessation or prohibition of those acts that infringe the right of the petitioner where there are reasonable indications to assume that said acts are imminent;
- the withholding and warehousing of the goods allegedly infringing the holder’s rights;
- the provision of a guarantee for any possible compensation for damages; and
- the corresponding notations in the registry (ie, provision notations of a claim and judgment, as well as, where appropriate, preventive notations of seizure).
The precautionary measures must be exclusively directed to enable the effectiveness of judicial protection that may arise if a judgment allowing the claim is issued and that cannot be replaced by other measures that are likewise effective but less burdensome or injurious for the defendant.
The application of precautionary measures may be presented together with the main claim. They may also be presented before that time, provided that reasons of urgency or need are proven.
The competent judicial authority is the same as in the main action.
Enquiries to substantiate facts
The plaintiff may also request from the court an inquiry for substantiation where the law has presumptively been violated. The purpose of these inquiries is to substantiate the facts that may constitute violation of the exclusive right, provided that, in addition to the violation being presumable, it is impossible to substantiate the reality of such violation without resorting to this procedural channel.
The owner of a registered trademark may bring the corresponding civil actions before the courts against anyone who injures its rights and may request the necessary measures to safeguard those rights.
The civil actions that may be brought by a trademark owner include:
- the cessation of those acts that violate the owner’s rights;
- the compensation for damages sustained;
- the adoption of the measures necessary to prevent such violation from continuing and, in particular, for the goods, packages, wrappers, advertising material, labels or other documents where the violation of a trademark right is materialised to be removed from the course of trade, as well as the seizure or destruction of those means primarily intended for committing the infringement – these measures will be executed at the expense of the infringing party, unless reasonable causes are alleged;
- the destruction or assignment for humanitarian purposes, if possible, to be chosen by the plaintiff, and always at the expense of the guilty party, of the goods unlawfully identified with the trademark in possession of the infringing party, unless the nature of the product allows for the elimination of the distinctive sign without affecting the product or the destruction of the product causes disproportionate damage to the infringing party or owner, according to the specific circumstances of each case assessed by the court;
- the assignment of ownership of the seized goods, materials and means under the provisions of paragraph 3 (above), whenever possible, in which case the value of the goods in question will be subtracted from the compensation for damages – if the value mentioned exceeds the amount of compensation granted, the trademark owner’s right must compensate the other party for such excess; and
- the publication of the judgment at the expense of the guilty party by means of announcements and notifications to those persons affected.
Regarding the competent judicial authority, commercial courts specialised in trademarks have been created in Spain, where only a few such courts in the cities where the Superior Court of Justice of the different autonomous regions are located hold jurisdiction.
The specialised commercial court corresponding to the residence of the defendant or, by default, the place of residence of the representative authorised in Spain to act on behalf of the owner if, in this case, there are specialised commercial courts in the autonomous region of their residence, will hold territorial jurisdiction. Otherwise, any commercial court, at the discretion of the plaintiff, that hears trademark cases will be regarded as competent.
Action on the grounds of infringement
The most common is action on the grounds of infringement, which is brought when a third party uses, without the owner’s consent, an identical or similar trademark for identical or similar goods, where there is a likelihood of confusion or of association among consumers.
Action for recovery of possession
Where the registration of a trademark was requested under fraud of third-party rights or it violated a legal or contractual obligation, the injured party may claim ownership of the trademark before the courts if it brings the corresponding action for recovery prior to the date of registration or within five years after the publication of such registration or from the moment at which the use of the registered trademark commenced.
Action for invalidation
Grounds for invalidation include where a trademark:
- lacks distinctive character, is generic or descriptive;
- is in violation of the law, public policy or morality;
- reproduces or imitates the coat of arms, the flag, the insignias and other emblems of Spain;
- shows the bad faith of the applicant at the time of filing; and
- is identical or similar to a trademark that protects identical or similar goods or services.
Action for lapse
This type of action is filed where a trademark has not been used for five years after its grant, and it is the responsibility of the owner to prove that its has used it or that there are causes justifying the lack of use.
The commercial courts hold jurisdiction to hear grounds for invalidation and lapse of trademarks, but after 14 January 2023 only the Spanish Patent and Trademark Office will be regarded as competent to hear such cases.
The procedural channel for civil claims relating to trademarks is the ordinary proceeding, regardless of the amount of the claim.
A civil action consists of three stages:
- pre-trial hearing; and
An appeal may be filed against the first-instance judicial decision before the corresponding regional court and, in turn, a further appeal may be filed before the Supreme Court, but only in very specific cases.
The authors would like to thank Jorge Pumariega for his contribution to this chapter.