The European Trademark (EUTM) Reform, which is intended to harmonize European Union Member States' trademark laws, requires European Union Member States to implement portions of the 2015 directive, (EU) 2015/2436 (the "Directive"), and sets respective deadlines of January 14, 2019 and January 14, 2023 for such implementation.[1]
Spain recently moved forward in the process of revising its current Trademark Act, No. 17/2001, ("Trademark Act") to be in line with the Directive.[2] The Spanish Ministry of Industry, Energy and Tourism and the Spanish Patent and Trademark Office (SPTO) issued a Draft Bill ("Anteproyecto de Ley de Modificación Parcial de la Ley 17/2001 de 7 de Diciembre de Marcas"), which partially amends the Trademark Act to implement the Directive in Spain.[3]
Various changes are imposed by the European harmonization process, from both a substantive and procedural point of view. Below are some of the most relevant amendments included in the Draft Bill:
Article 8 of the Trademark Act regulating Reputed Trade Marks (and Trade Names), is subject to a noteworthy revision.
The traditional distinction existing in Spain between "notorious trademarks" ("marcas notorias"),which are well-known marks in connection with the goods/services covered by the registration, and "famous trademarks" ("marcas renombradas"), which are marks well-known to the public in general, regardless of the pertinent sector of the covered goods/services, is addressed Pursuant to the Draft Bill, the two different types of marks, defined by the current Trademark Act as notoriety ("notoriedad") and fame ("renombre"), according to a lower or higher level of repute enjoyed by the trademark, are combined in one single concept of "reputed trademarks".
From an enforcement perspective, the new treatment of such marks will void the varying legal presumptions attributed to these two types of trademarks in contentious proceedings. Currently, the protection of notorious trademarks is available only for the relevant market sector relating to the goods/services covered by the registration and related goods/services, and the protection of famous trademarks is considered extended to all market sectors, regardless of the relatedness to the goods/services of the registration.
This amendment may impact Spanish contentious practice significantly if the criteria applied to the assessment of reputation is too stringent, and only trademarks enjoying "fame" under the current standard will qualify under revised SPTO requirements. Accordingly, "notorious" trademarks will be excluded.
Further, the new language of the Draft Bill no longer contains - as the current Trademark Act currently does - any reference to the pertinent market sector in the definition of "reputation", but merely refers to a generalized kind of trademark having a reputation in Spain (if it is a Spanish registration) or in the European Union (if it is a EUTM). This may be detrimental to trademark owners if, as a matter of fact, the enhanced protection of reputed trademarks is restricted only to cases wherein the highest level of "fame" is acknowledged. Enforcing such protection for "notorious" trademarks may be more difficult or even no longer possible.
Additionally, the new definition provided by the Draft Bill refers not only to reputation of a trademark in Spain - as per the current language of Article 8 of the Trademark Act - but also in the European Union. Currently, proof of notoriety or fame is only required in Spain; however, the revised text may create legal uncertainty with respect to the territorial extension of the evidence to be filed in the event of enforcement of a EUTM in Spanish contentious proceedings. Particularly, in relation to the European Union, new criteria should be established to determine if evidence is necessary for the entire European Union or only select Member States. While the European Union Intellectual Property Office ("EUIPO") case law could be of guidance, it should be noted that the SPTO generally operates according to its own practice and local rules, which may differ from the EUIPO practice.
Notably, SPTO practice guidelines are not included in the Draft Bill.
It is important to note that the current distinction between notoriety and fame is sometimes debatable, particularly when the differences associated to these definitions are not clearly applied by the SPTO or Spanish courts. In this regard, the consolidation is welcome as, in addition to being in line with the Directive and new EUTM Regulation, it should be helpful to avoid ambiguity when enforced. Specifically, it may limit trademark owners in Spain from claiming notoriety or fame improperly, which is common practice in Spain.
Article 21 of the Trademark Act, concerning provisional refusals of trademark applications based on oppositions, is integrated by new paragraphs 3, 4, 5 and 6 of the Draft Bill and finally introduces the right of applicants to require proof of use in connection with opposing trademarks registered for five years or more.
This is noteworthy in Spain due to the fact that opponents have never before had their registrations subject to use requirements during opposition proceedings. It will dramatically decrease the chances for registrants to prevail in oppositions based on trademarks registered for five years or more, which have previously been indiscriminately used to prevent others from registering new applications, irrespective of whether the earlier trademarks were used or not.
The new requirement, similar to use requirements in other countries, is introduced in an effort to facilitate trademark registration by means of eliminating artificial obstacles constituted by registered trademarks no longer or never used by registrants. It could also lead to abandonment of non-used registrations due for renewal which, if expired, would also further the removal of registrations without use from the trademark register.
As a consequence, we should expect opposition proceedings in Spain to become more complex and drawn out as an additional examination process relating evidence of use will need to be implemented.
The implementation of this change may be a step toward the process of reducing value of trademark registrations not supported by use in Spain. In instances where owners have not established use, a registration by itself will be of less value, both for enforcement and as an asset to the company. The current Spanish trademark system is based on a registration, regardless of use being the fundamental basis for protection.
Article 37 is the Trademark Act provision that lists the exceptional limitations imposed by the law, namely, those specific instances in which trademark owners will not be able to enforce their registered rights against use by third parties.
Such exceptional limitations which trademark registrations are subject to refer to: use of another individual's name or address (Art. 37 paragraph 1-a); use of generic or descriptive terms (Art. 37 paragraph 1-b); and use of the trademark registration when necessary to describe the purposes of a third party's goods or services, particularly if these are accessories or spare parts thereof (Art. 37 paragraph 1-c).
The Draft Bill introduces a final paragraph into this provision establishing one further limitation to rights holders that consolidates a very important case law development, specifically, judgment 520/2014 of October 14, 2014 of the Spanish Supreme Court.[4]
This decision changed the conventional doctrine on trademark rights conferred to the owner or registrant of a Spanish trademark, redefining the relationship between the right of using (ius utendi) and the right of preventing others from using the trademark (ius prohibendi) attributed to trademark registrations in Spain. Historically, Spanish case law dictated that a trademark registration conferred a right to use the trademark, which is not affected by the right of a prior registrant.
Pursuant to the new principles now clarified by this judgment, in the event of two conflicting Spanish trademark registrations, the proprietor of the later trademark will no longer be protected by the "shell" of its registration against the right of the owner of a prior registration to prohibit such use. This is a departure from past case law,
23 as the owner of the prior registration can now claim trademark infringement against the use by the proprietor of a later trademark registration, without the need to first file an action to cancel the trademark based upon prior rights.
The new limitation contained in Art. 37 paragraph 3 is in line with the above provision and is aimed at preventing a claim of trademark infringement by a registrant that obtained a registration after the true owner of the mark. Specifically, the new paragraph provides that a trademark registration cannot be invoked by the registrant in the event that the alleged infringement predates the registrant's filing date. Therefore, it is now acknowledged by the Spanish trademark law - and supported by recent case law - that trademark proprietors do not need to pursue a nullity action prior to a claim for infringement when their rights predate that of the later registrant.
In the Spanish practice, this change is welcome and particularly helpful for taking action against "squatters" and unauthorized entities that have secured trademark registrations as a tool for protecting their infringing activities. Given the significant costs of contentious proceedings, removing the need for first nullifying a trademark registration in order to file a trademark infringement action will simplify this process in terms of time and costs.
Last, but not least, amendments in the Draft Bill to Articles 51 to 61 regulating Trademark Nullity and Revocation Actions will also have a big impact in the Spanish practice, since said actions, aimed at cancelling a trademark registration, will now be filed with the SPTO rather than with the courts.
The possibility of bringing a cancellation action with the SPTO will provide trademark owners a more expeditious and cost-effective procedure than current judicial proceedings in Spain, which are presently quite complex, long and costly. The current complexities and cost in the case of judicial proceedings are often a deterrent for proprietors with good cause to file cancelation actions against third-party trademark registrations due to non-use. The current situations lends to unfair situations where in only large entities are generally able to invest the necessary time and economic efforts into court proceedings.
The new administrative nullity and revocation proceedings with the SPTO will be more simple and agile than the present court proceedings. Additionally, the Spanish courts will continue to have jurisdiction to hear trademark nullity and revocation claims when these actions are submitted via cross-claims to an infringement action. Such partial jurisdiction still assigned to judges will certainly help to avoid potential interference between the courts and SPTO proceedings (such as lis pendens, res judicata effects, etc.).
It should be noted that this amendment will not enter into force until January 14, 2023, so there is still room for discussion of the impact and possible advantages/disadvantages relating to this future amendment.
[1] Directive 2015/2436, of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (L 336/1).
[2] See Law No.17/2001 of December 7,2001 on Trademarks (Consolidated text including the Amendments made by Law No. 20/2003 of July 7, 2003), on Legal Protection of Industrial Designs), available at https://wipolex.wipo.int/en/text/126736 (English translation).
[3] Anteproyecto de Ley de Modificación Parcial de la Ley 17/2001 de 7 de Diciembre de Marcas, available at http://www.oepm.es/export/sites/oepm/comun/documentos_relacionados/Propiedad_Industrial/Normativa/AnteproyectoLeyModificacionParcialLey172001_7dic_Marcas.pdf ("Draft Bill").
[4] T.S., Oct. 14, 2014 (No. 520/2014) (Spain), available at https://supremo.vlex.es/vid/551912710.
