Spain focus: a torpedo of trademark change
On December 23, 2015 the final text of Directive (EU) 2015/2436 on harmonising member states’ trademark laws was published in the Official Journal of the European Union. Member states must bring into force the laws and regulations necessary to comply with the vast majority of its provisions by January 14, 2019.
The aim of the new directive is to modernise and amend outdated provisions of Directive 2008/95/EC in light of the Lisbon Treaty; to make member states’ national trademark laws and procedures more consistent with the EU trademark system; and to implement the legal basis for a better cooperation between the offices of member states and the Office for Harmonization in the Internal Market (OHIM), which will be renamed the European Union Intellectual Property Office, by promoting convergence of practices and developing common tools.
With the aim of reducing divergence within the various national trademark systems coexisting in Europe, this directive introduces a significant number of new provisions and modifications which will have a great impact on Spanish trademark legislation and practice.
Of the modifications to our national trademark system, the following could be considered the most relevant from a practical point of view.
Trademark definition
Once the directive is implemented, the Spanish Patent and Trademark Office (OEPM) should be capable of receiving trademark applications consisting of any sign, even those not graphically represented, with the sole limitation that they have to be represented in a manner that enables the office and the public to determine the precise subject of the mark.
Therefore, the application form and filing proceeding should be amended, as sound and video files, digital images, scents, etc, might be acceptable representations of a sign. Moreover, the office will need to determine how to make those signs generally accessible to the public.
Proof of use
Based on the argument that trademarks fulfil their purpose of distinguishing goods and services and allowing consumers to make informed choices only when they are actually used on the market, the directive includes a requirement to show genuine use of the opposing registration in opposition proceedings as well as invalidation proceedings. This new requirement will force an amendment to the Spanish legislation.
Among the positive practical consequences of this amendment are:
• On the one hand, it might reduce the number of oppositions in cases where it is not clear whether the opposing sign has been put to genuine use; and
• On the other, it will be easier for an application that is challenged by an earlier non-used trademark to be granted. It should be noted that the current legislation allows a trademark applicant that faces an opposition based on a trademark granted more than five years ago only to challenge the opposing registration (and therefore stay the administrative proceeding for registration) by bringing civil judicial proceedings of revocation.
It can take approximately eight months to render a decision in the first instance and obviously involves a financial cost—including legal and judicial fees and eventually expenses to confirm lack of use—that is higher than a simple request for proof of use, which is established in the reform.
Something that is missing in the wording of article 46 of the new directive is whether, in the new administrative invalidation proceedings, a lack of genuine use of the earlier trademark can only be invoked as an opposition argument to declare invalidity or also as a proper counterclaim ending in a revocation order of the earlier mark. Otherwise, the defendant may need to bring a separate revocation action and the invalidity proceeding would have to wait until a decision on the revocation is given.
"the OEPM will need to amend its internal organisation to create divisions for invalidation and revocation, as well as boards of appeal, and equip them with specialised officers."
Another relevant modification to the existing opposition system is the introduction of a minimum two-month cooling off period, which will significantly delay the short timelines the OEPM has been achieving.
Revocation and invalidity actions
The OEPM will be required to assess applications for (i) trademark invalidation (on both absolute and relative grounds); and (ii) revocation due to lack of use or misuse.
For these purposes the OEPM will need to amend its internal organisation to create divisions for invalidation and revocation, as well as boards of appeal, and equip them with specialised officers.
This measure may have a further significant practical impact with serious procedural consequences depending on how the directive is finally implemented in Spain:
a. As the decisions issued by the OEPM are considered to be administrative acts, a decision by a board of appeal in a cancellation or invalidation administrative claim should then be appealed before the contentious administrative courts. These courts are not specialised in IP rights, unlike the mercantile courts, which are currently dealing with invalidation and revocation actions and are managed by judges specialising in IP rights. Therefore this could be understood as a detrimental consequence unless the Spanish legislator offers the possibility of allowing appeals before the civil or the contentious administrative courts.
b. Currently a claimant is entitled to bring an infringement action together with an invalidation action against the allegedly infringing trademark in the same judicial complaint. Therefore, a commercial court decides on both claims at the same time, and consequently invalidation and infringement decisions are aligned and are final within three to five years maximum. Courts in Alicante currently simultaneously deal with invalidations of Spanish registrations and actions for infringement of Community trademarks (CTMs), which are being renamed European Union trademarks (EUTMs). However, under the new directive the same claimant will have to bring two separate proceedings: a judicial proceeding for the infringement action and an administrative proceeding for the invalidation.
At that point, the trademark owner will have to face the following different scenarios:
i. First, the owner could bring an infringement claim before a commercial court and simultaneously submit an invalidation action before the OEPM. The main disadvantage of this option might be that the defendant tries to request that the infringement proceeding be suspended until a final decision on the invalidation is declared (which might take around five years) on the basis that the current wording of the Spanish trademark law states that a trademark registration grants an exclusive right not only to prevent third parties from using it, but also to use it. Therefore, unless such a trademark registration is declared invalid, the defendant is legally entitled to use it and can therefore avoid a declaration of infringement and corresponding injunction.
Fortunately, since the end of 2014 this criterion was changed by the Supreme Court of Spain, which stated that infringement can be declared even without the need for a prior declaration of invalidity of the infringing trademark. Therefore, this could be invoked as an argument against a petition to stay the civil judicial proceeding of infringement. However, this option may still not avoid the chance of having a commercial court declare infringement for likelihood of confusion and a contentious administrative court dismiss the invalidation for lack of likelihood of confusion based on the same arguments.
ii. The second option would be to first bring the infringement action and once the decision is final bring the invalidation claim before the OEPM arguing that the judicial decision should be considered as relevant precedent in order to avoid divergence.
c. Depending on how it is finally implemented, the new directive may bring a further controversial practical issue equivalent to the so-called OHIM torpedo. This occurs when an alleged infringer brings an invalidation action against the infringed CTM/EUTM before the infringement judicial action is brought. In such a scenario, a subsequent judicial infringement action would be stayed for approximately eight years until the prior invalidation proceeding on the infringed CTM/EUTM becomes final. While this scenario is expressly foreseen in article 104 of (EC) No. 207/2009, if when implementing the directive the Spanish legislator does not include equivalent provisions to article 104, we may have arguments to avoid the controversial effects of a national torpedo.
d. Finally, this should also have a clear impact on the workload of judicial proceedings that are being handled by our overwhelmed national commercial courts (which also deal with bankruptcy proceedings, among other issues).
Considering all the above, the Spanish legislator and the OEPM will have to make a significant effort to meet the January 2019 deadline foreseen in the directive for implementing the above new rules. The way in which it is finally implemented will have a significant practical impact on trademark owners and Spanish practitioners.
María González Gordon is a senior associate at Gomez Acebo & Pombo Abogados. She can be contacted at: mgonzalezg@gomezacebo-pombo.com
