Wednesday 28 October 2015

Reduction of the statute of limitations for Spanish actions

Up till now Spanish plaintiffs benefitted from a more than generous fifteen year general statute of limitations for most actions in personam. In a major reform of the Spanish Civil Procedure Act and the Civil Code which entered into force last Wednesday, October 7, this has now been reduced to five years.
This affects many of the most common contract based actions such as breach, non-payment, supply of defective goods, rent review and all claims relating to a contract of sale. The new legislation seeks to strike a better balance between the creditor’s interest in preserving his claim and the need to ensure that there is a reasonable time-limit. Fifteen years was held by most operators to be excessive.  The system has now been brought into line with that of other European countries which have a five year limit.     

With a previous time limit of fifteen years, transitional provisions are obviously of great importance. As one might expect, the new limit will only apply to obligations arising after the entry into force of the reform. Those arising prior to 7 October 2000 are already statute-barred due to the expiry of the old fifteen year limit. Those arising between that date and 7 October 2005 remain subject to the old limit. Those arising after that date and before 7 October 2015 will be statute-barred on 7 October 2020, i.e. they will be given the benefit of five years from the date of entry. Thus an obligation arising on 7 October 2010 will now be barred in 2020 and not in 2025, a full five years earlier.

In view of the above, clients are advised to urgently review any outstanding claims arising after 7 October 2000We remain at your disposal should you require any further information with respect to the above. 

Author: Alba Mª López

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Friday 9 October 2015

180º turn in Spain's system of granting patents (II)

The different stages in the prosecution of Spanish patent applications have up to now started with an initial examination as to certain formal aspects along with certain technical features and clarity of the invention as claimed, followed by a search of the potentially anticipatory prior art preceding the filing date of the application, which is carried out by the Spanish Patent Examiner.

Spain's current Patent Act already prescribes that to be patentable an invention should be new and inventive (i.e., non-obvious) over all the prior art available up to the application's priority date.

This prior art search, called, in English translation, the "report on the state of the art", encompasses all documents disclosed by the Spanish Examiner which, in his or her opinion, could pose an obstacle to the patentability of the invention as claimed, either by reason of lack of novelty or because the invention is obvious in view of the prior art.

Paradoxically, however, as things currently stand, unless the applicant specifically requests the Patent Office to carry out an optional patentability examination, the application will automatically proceed to grant even if the Spanish Examiner has misgivings about an invention's patentability or, indeed, directly finds the invention to be unpatentable.

The resulting patent will, of course, be at risk of possible nullity proceedings in the Spanish courts at the request of any interested third party, and if the court agrees with the Examiner's opinion, the patent will most likely be ruled to be null and void, i.e., never to have had effect at all. This entails costs for the applicant, for third parties, and for society as a whole, and this situation could be mitigated if patents were granted only if they successfully passed a substantive patentability examination by the Spanish Patent Office, currently only optional.

Requesting a patentability examination was introduced as an option for Spanish patent applications in the early 2000's in the hope that it would gradually become common for applicants to request examination, particularly where the search report had been negative, in an endeavour to persuade the Examiner to reconsider the initially adverse opinion. Things have not, however, gone as intended, and today the patentability examination is requested for fewer than 10 % of patent applications, even where the search report is unambiguously unfavourable. This means that the validity of more than 90 % of the patents currently in force is potentially suspect.

Wednesday 7 October 2015

No Safe Harbour: Sailing in the tempest (Case Maximillian Schrems v Data Protection Commissioner)

The long-awaited decision in Case C-362/14 Maximillian Schrems v Data Protection Commissioner was finally issued on 6 October 2015. Controversial in its findings, this preliminary ruling sheds new light on the ongoing debate regarding the collection, transfer and processing of EU citizens’ data by US companies, and the processing of that data by US intelligence agencies within the framework of the PRISM program.

Background information

Mr. Schrems, an Austrian citizen, has been a Facebook user since 2008. In the case of all users residing in the EU, some or all of the data with which they provide Facebook is transferred from Facebook’s Irish subsidiary to servers located in the United States, where it is processed.

Mr. Schrems lodged a complaint with the Irish supervisory authority (the Data Protection Commissioner) on the grounds that, in light of the revelations made by Edward Snowden in 2013 concerning the activities of the United States intelligence services (in particular, the NSA), the law and practice in force in the United States did not offer sufficient protection against surveillance by the public authorities of data transferred to that country. The Irish supervisory authority rejected the complaint on the basis of the decision of 26 July 2000, which considered that under the “safe harbour scheme” the United States ensured an adequate level of protection of the personal data transferred (known as the Safe Harbour Decision).

Mr. Schrems then filed an appeal with the High Court of Ireland, which considered that the issue prompting his action was closely related to EU law since, according to that High Court, the Safe Harbour Decision did not comply with the principles set forth in the judgments in C-293/12 and C-594/12, EU:C:2014:238.

Preliminary questions submitted to the CJEU

On 17 July 2014, the High Court of Ireland, before which the case had been brought, submitted the following questions to the Court of Justice for a preliminary ruling:

(1)  Whether in the course of determining a complaint which has been made to an independent office holder who has been vested by statute with the functions of administering and enforcing data protection legislation that personal data is being transferred to another third country (in this case, the United States of America) the laws and practices of which, it is claimed, do not contain adequate protections for the data subject, that office holder is absolutely bound by the Community finding to the contrary contained in [Decision 2000/520] having regard to Article 7, Article 8 and Article 47 of [the Charter], the provisions of Article 25(6) of Directive [95/46] notwithstanding?

(2)  Or, alternatively, may and/or must the office holder conduct his or her own investigation of the matter in the light of factual developments in the meantime since that Commission decision was first published?

The Advocate General’s Opinion of 23 September 2015

According to the Opinion of the Advocate General (Yves Bot), a company, by merely having a Safe Harbour certification, would not automatically comply with the European data directive on export requirements.

This argument had already been made in Communication COM(2013) 846 and Communication COM(2013) 847.

As was to be expected, the CJEU followed the arguments put forward by the Advocate General.

Friday 2 October 2015

Impact of counterfeiting in Spain's sporting goods sector third-highest in the EU

Spain ranks third among EU countries in which counterfeiting has the greatest impact on the sporting goods sector, at 15.7 % of sales, more than twice the EU average (6.5 % of sales), behind only Lithuania and Latvia. Nevertheless, in absolute terms the greatest impact is in France and Spain, these two countries accounting for one-third of lost sales due to counterfeiting in the EU, amounting to a total of 492 million euros.

These are the main conclusions with regard to Spain in the recent report entitled "The Economic Cost of IPR Infringement on Sports Goods", issued jointly by the OHIM's European Observatory on Infringements of Intellectual Property Rights and the European Patent Office. According to the report, total consumption of sporting goods in the EU in 2012 was estimated at 7,500 million euros, with 4,271 companies manufacturing products of this kind, employing 43,000 workers in the EU.

In addition to the direct repercussions of counterfeiting in the form of lost sales by lawful companies in the sporting goods sector, other economic sectors are also indirectly affected, suffering losses of 361 million euros. Government revenues are also impacted, with lost taxes (VAT, income taxes, corporate taxes, and social security contributions) estimated at 150 million euros. The direct and indirect impact of counterfeiting in this sector on the EU economy is estimated at around 850 million euros and 5,800 lost jobs.

The report takes into account only manufacturing of sporting goods and equipment as such (e.g., golf clubs, tennis rackets and balls, skis, etc.), excluding sports apparel and footwear, so the economic costs associated with the counterfeiting of sporting goods are in fact higher than those estimated by the report.

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