In May 2004 the Directive EC/2004/48 on the Enforcement of Intellectual Property Rights came into force in response to the need to increase the fight against counterfeiting and piracy in the Internal Market and to harmonize the legislative systems of the Member States regarding the means of enforcing Intellectual Property rights.
The transposition of this Directive will require some changes to the Laws of Member States.
In Spain such a transposition will mean the incorporation of some changes to the current Procedural Law, the Copyrights Law, the Patents Law, the Trademarks Law and the Industrial Designs Law. At present, the Ministry Counsel has adopted a draft Proposal for the transposition of the Directive EC/2004/48, which is now under consultation. Once the text is made into a proposal it will be discussed by the Spanish parliament.
Let us take a brief look at some of the measures, procedures and remedies regulated by the mentioned Directive and the main changes Spanish Laws will undergo:
1. Evidence-protection measures:
Article 7 of the Directive states that "Member States shall ensure that, even before the commencement of proceedings on the merits of the case, the competent judicial authorities may, on application by a party which has reasonably presented available evidence to support its claims that its IP right has been infringed or is about to be infringed, order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information. Such measures may include detailed description, with or without the taking of samples, or the physical seizure of the infringing goods, and, in appropriate cases, the materials and implements used in the production and/or distribution of these goods and the documents relating thereto. These measures shall be taken, if necessary, without the other party having been heard, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed".
As yet, specific measures for preserving evidence under judicial control to support a claim that an IP right has been infringed as set out in Article 7 of the Directive are not available in Spain. The usual way to preserve such evidence (not always efficient) is to obtain it before a Public Notary and then bring it forward in proceedings.
However, the current Procedural Law regulates an ex parte inspection called "diligencias de comprobación de hechos" (steps to verify the facts). Although this is not exactly a measure to preserve evidence, it is an ex parte inspection during which the Court compels a party to show samples and other evidence necessary to verify the infringement of an IP right. This inspection (very useful in pharmaceutical patent infringement cases) can only be granted if the infringement is to be presumed and the applicant may not accede to such evidence by any other means.
The verification is made by the Judge, assisted by experts if necessary (the applicant cannot intervene). Normally, it is done in the companies’ premises and without previous notification.
It must be emphasised that if these "diligencias de comprobación de hechos" are granted, the applicant must pay a bond to face up to possible damages (this is something that article 7, paragraph 2 of the Directive EC/2004/48 also regulates). Further, if a lawsuit is not submitted in the term of 2 months from the inspection, said inspection will have no effect and the evidence obtained will remain secret, i.e. the applicant will not be entitled to use it in other proceedings.
Despite the above, the Spanish draft proposal for the transposition of Directive EC/2004/48 expressly regulates some measures for preserving evidence to support a claim that an IP right has been infringed before the commencement of proceedings and without the need to hear the other party. This entitles the right holder to request that the Court order the detailed description or the seizure of the infringing goods and the materials and implements used in the production or distribution of these goods and the documents relating thereto.
Following what is set out in article 7.3 of the Directive, the draft proposal establishes that if the evidence-protection measures have been adopted before the commencement of proceedings, the measures will remain without effect if the applicant does not submit a lawsuit within the term of 20 days from their adoption. Further, if the mentioned measures have been adopted without hearing the other party, the supporting party may lodge an opposition writ within the term of 20 days.
2. The right of information
Art. 8 of the Directive sets out that "Member States shall ensure that, in the context of proceedings concerning an infringement of an intellectual property right and in response to a justified and proportionate request of the claimant, the competent judicial authorities may order that information on the origin and distribution networks of the goods or services which infringe an intellectual property right be provided by the infringer and/or any other person who (i) was found in possession of the infringing goods on a commercial scale; (ii) was found to be using the infringing services on a commercial scale; (iii) was found to be providing on a commercial scale services used in infringing activities; or (iv) was indicated by the person referred to in point (i), (ii) or (iii) as being involved in the production, manufacture or distribution of the goods or the provision of the services".
This right may apply from the beginning of proceedings. Even so, it must be taken into account that it only affects infringers of IP rights "on a commercial scale", i.e. acts carried out for direct or indirect economic or commercial advantage; this would normally exclude acts carried out by end consumers acting in good faith.
It must be emphasised that the right of information is merely presented as an option in Article 47 of the TRIPS Agreement.
Currently, Spanish Law does not expressly regulate a right of information as set out in article 8 of the Directive. Nevertheless, the draft proposal for the transposition of said Directive establishes the possibility of including a new preliminary diligence in the Procedural Law, consisting of the right of the IP owner to urge a Civil Court to order the person who a) the applicant considers to be the infringer, b) had used services or had been in possession of goods which may imply an infringement of an IP right or c) had been indicated by the person referred to in point a), b) or c) as being involved in the production, manufacture or distribution of the goods or the provision of the services, to inform on the origin and distribution networks of the goods or services which infringe the holder’s IP right. This measure, as in the Directive, will be limited to infringements committed on a commercial scale.
The draft proposal includes also a new preliminary diligence consisting in the right of the person whose IP rights have been infringed on a commercial scale to require the Court to order the infringing party to exhibit banking, financial or commercial documents before proceedings.
3. Ex parte injunctions:
Art. 9 of the Directive regulates some ex parte provisional measures that Member States shall ensure to be issued by Judicial Authorities in special circumstances, such as interlocutory injunctions to prevent impending infringements of IP rights or to forbid the continuation of the infringement, and the seizure or delivery of the goods suspected of infringing an IP right. In the case of an infringement committed on a commercial scale, this mentioned rule means that the precautionary seizure of the movable and immovable property of the infringer can be requested, including blocking of bank accounts and other assets.
It must be emphasized that the Directive allows the competent relevant authorities to address not only the infringer but also to intermediaries whose services are being used by a third party to infringe an IP right.
Spanish Laws already regulate different kinds of ex parte injunctions, i.e. provisional cease, provisional retention and storage of goods which may imply an infringement of an IP right, annotations in the Registries, payment of a surety for possible damages, etc. In addition, the Spanish draft proposal for the transposition of the Directive EC/2004/48 enlarges the injunctions aimed at protecting IP rights. Among other things, it includes a modification in the Spanish Patents Law as regards the seizure of the means to use a patented process. Thus, while the current Patents Law refers to the seizure of the means "exclusively" intended to use the patented process, the draft proposal refers to the means "principally" intended to use the mentioned process.
Likewise, the draft proposal includes a new ex parte injunction for which the right holder may request the Court to forbid a third person to commit an act when there are indications that this act will imply an infringement of an IP right.
4. Corrective measures
Art. 10 of the Directive sets out that "Member States shall ensure that the competent judicial authorities may order, at the request of the applicant, that appropriate measures be taken with regard to goods that they have found to be infringing an IPR and, in appropriate cases, with regard to materials and implements principally used in the creation or manufacture of these goods. Such measures shall include: (i) recall from the channels of commerce, (ii) definitive removal from the channels of commerce, and (iii) destruction".
These corrective measures are already available in Spain and, in principle, there would be no substantial changes in the Spanish Law in connection with this. However, the above mentioned draft proposal does provide a new corrective measure in the context of trademarks and industrial designs infringements consisting of the right of the holder to request the Court to order the seizure of the means principally intended to commit an infringement.
Article 13 of the Directive refers to the need for Member States to ensure the right of the injured party to request an appropriate compensation for the damages caused by a third person who knowingly, or with reasonable grounds to know, is engaged in an infringing activity. Thus, said rule establishes: "when the judicial authorities set the damages, they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the right holder by the infringement".
As an alternative, article 13 also sets out that "judicial authorities may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the IP right".
It may be underlined that before being amended by the European Parliament, the proposal for said Directive stated that for an infringer who has acted intentionally, damages may be either double the royalties or fees which would have been due if the infringer had requested authorisation to use the IP right, or compensation due to the actual damages (including lost profits). Therefore, the amount of damages could be substantially higher in this case than in the current one, because the infringer would thus have been punished more (double the hypothetical royalty) and the dissuasive effect would have increased.
Finally, paragraph 2 of the current version states that "in cases where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity, Member States may lay down that the judicial authorities may order the recovery of profits or the payment of damages, which may be pre-established".
Generally speaking, the transposition of the Enforcement Directive will not include anything new with regard to the damages caused by an IP infringement. Currently, the protection afforded by the Directive is less than what is covered in the Spanish Law, as this does not establish the limit of good faith referred to in article 13.2 of the Directive.
In conclusion, we may state that although the transposition of the Directive will mean the incorporation of some changes to Spanish Laws, most of the measures referred to in the Directive are already regulated in Spanish Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.