Utility models under the new Patent Act: chemicals and can openers in the same bag for the first time (V)

One of the most striking features of the new Patent Act is the extension of the scope of what may be protected as a utility model. The new definition of utility models provided in the law includes the word “composition”, thus broadening the range so as to take in practically any product or composition, including chemical preparations or substances. At the same time, however, it is stipulated that inventions relating to biological material or pharmaceutical substances and compositions are excluded.

This new facet of utility models may well give rise to some controversy in the future, given that, on the one hand, the boundaries between the products which qualify for protection in this form and those which do not are unclear in some cases  and, on the other, to set the inventive step requirement at a level suitably lower than that applicable to patents could prove problematic when the invention relates to a chemical product (as it in fact already is in the case of inventions of a mechanical nature).

So from now on we shall have to become accustomed to seeing small mechanical inventions, such as can openers, which have traditionally been the subject matter of this form of industrial property, appear side by side in the Official Gazette with chemical products, when applicants opt for this manner of protection for these.

Not all the changes are so controversial, however. For example, the relative novelty requirement, confined to Spain alone, will no longer apply and utility models will therefore be on the same footing as patents with respect to the state of the art. This means that it will be easier to determine clearly which documents may constitute prior art for the purpose of assessing the novelty and inventive step of a utility model and we may therefore see an end to the uncertainty which had existed under the former Patent Act.

Another significant development to be introduced under the new Law lies in the possibility of requesting reports on the state of the art, containing a written opinion, for utility models. These reports will be necessary for the effective enforcement of the exclusive rights obtained through registration (for example, in infringement proceedings brought against a third party).

The grant procedure does not undergo any major amendment, although with respect to opposition proceedings it is to be noted that under the new Law it will be possible to request a two-month extension of time to complete an opposition by submitting evidence and supplementing the initial arguments. Another new (and undoubtedly positive) feature is that the examination of oppositions will be conducted by a panel of three technically qualified SPTO experts and, as the case may be, of a lawyer.

So how does the future look for utility models in Spain? The extension of their scope to chemical products, the possibility of claiming an internal priority and the fact that substantive examination is to become obligatory for patents may well prompt more applicants to protect their inventions as utility models, thus reversing the downtrend observed in recent years.

It would certainly appear, at all events, that a window is going to be open to different interpretations of some aspects of the new system on the part of applicants, agents, examiners and judges and it remains to be seen how they will be resolved in the future.

Blog entries dealing with the new Patent Act:

I. A new Patent Act … In two years'time? (Antonio Castán)

II. 180º turn in Spain's system of granting patents  (Francisco J. Sáez)

III. The importance of professional advice (Francisco J. Sáez)

IV. Lawsuits under the new Patent Act (Antonio Castán)

V. Utility models under the new Patent Act (Pedro Saturio)

Author: Pedro Saturio

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The new Trade Secrets Directive: a swift microanalysis bypassing the cosmetic surgery

After a lengthy passage, the EU Trade Secrets Directive finally received the approval of the European Parliament on 15 April 2016. The proposed text stemmed from a joint initiative with the Council and it is therefore to be expected that the Council will formally adopt it in the month of May, although the term for transposition into the laws of the Member States is two years.

The approval of the Directive has not received much coverage, as it coincided with the Data Protection Regulation which appears to arouse far greater interest. Thus, although the Directive is crucial for the promotion and defence of innovation in Europe, it seems in the end to have warranted lesser attention.

And yet the poor Directive had already come in for scrutiny and criticism on the part of a range of institutions and organizations and from various social and economic quarters. I refer to the media clamour created some months ago when some sectors of the press voiced the opinion that the directive could be a means of curtailing freedom of expression, while the trade unions in turn believed that workers’ rights were in jeopardy. Governmental groups subsequently joined in, claiming reasons of state.

Thus, some issues which initially had neither prompted debate nor had appeared relevant were made crucial. So, through an operation intended to satisfy all parties, the directive underwent a kind of cosmetic surgery, entailing the legislative equivalent of Botox injections and implants, to make it more attractive.

At some other time, perhaps, we may discuss the need for that operation, but at present I consider it more interesting to focus on the key aspects from the standpoint of the protection of innovative efforts. Thus, briefly, the salient points of the Directive are the following:

U.S. improves Federal Trade Secrets Act, while in Europe …

On 4 April 2016 the U.S. Senate gave its unanimous (yes, unanimous) approval to the Defend Trade Secrets Act (DTSA), amending the Economic Espionage Act (EEA), the aim of which is to strengthen the position of the holders of trade secrets by granting them protection, through federal legislation, comparable to that afforded under trademarks, patents and copyright. The bill now has to go through Congress, where surprises are not to be expected as it would appear that opinion, including that of the White House, is undivided on the question that this is an issue which has a bearing on the economy of the nation and warrants the closest attention.

This new law represents one further advance along the long road that the U.S. has already traveled in the protection of trade secrets. Once case law, with roots in the eighteenth century, set about defining and circumscribing the concept, the States of the Union began adopting laws for the protection of these intangible assets. More case law has been generated unceasingly through to the present day, but the various state laws were subsequently supplemented with a federal law, the Economic Espionage Act, which further harmonized the concept and the fundamental elements in the protection of trade secrets. However, the Economic Espionage Act had certain limitations, as it was only applicable in cases of criminal infringements committed by foreigners. Furthermore, the protection provided did not extend to various aspects of misappropriation of trade secrets.

Under the system laid down in the DTSA, complaints relating to local goods or services will be lodged with a state court, but cases relating to interstate or international commerce may instead be litigated in federal courts. The DTSA sets uniform rules as regards the definition of a trade secret, what is to be considered unlawful, damages and injunctions. It also stipulates that the term for commencing the action shall be three years from the time that the infringement of the rights became known.

In Europe, meanwhile, the Trade Secrets Directive, which was proposed back in 2013 and aroused criticism of a not entirely comprehensible nature in certain quarters, was finally approved by the European Parliament on 14 April 2016, although two more years will still have to go by before it is actually implemented in the legislation of all the Member States.

The comparison between the initiatives taken on the one side of the Atlantic and on the other should lead us to reflect, in this particular matter and in others, on how legislation contributes to the prosperity of nations.

The protection of trade secrets is of major importance for technological development and affects not only companies but also state research institutions. The new directive should provide us with a better legal framework than that hitherto offered by each state individually and should harmonize the protection afforded. However, it will also oblige us to tackle many issues, for the appropriate protection and defence of trade secrets, even before it is transposed into Spanish law. I hope to have the opportunity to speak of that on another occasion in the relatively near future.

Author: Javier Fernández-Lasquetty

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Thursday, 14 April marked the 125th anniversary of the Madrid International Trademark System

Since it was first adopted in Madrid in 1891 with the aim of facilitating the internationalization of trademarks in a world that had already embarked on the path of globalization, the system has continued to adapt and grow.

The system currently covers 113 countries, which gives an idea as to its scale, since it is possible to file trademarks using this system in around half of the world’s jurisdictions.

The system has seen changes and improvements, and it has been made more flexible in order to pursue its commitment to internationalization.

Among other milestones, in the past few decades and through the Madrid Protocol, English and Spanish have been added to French as official languages. We have seen greater flexibility in the setting of time limits, the payment of fees and in the conditions of accession, and we have also seen filings admitted on the basis of trademark applications rather than registrations.

Thus, a great many countries, some of major economic, commercial and strategic importance and also important culturally and in terms of population size, have been able to benefit from the advantages the system holds for their country as well as for domestic and foreign investors. We may cite examples such as the USA, Mexico or Colombia, but there are of course other countries from different geographic, economic and cultural spheres, including countries in Europe, that have been able to find their place in the Madrid International Trademark System through the Protocol.

The administration of the system by WIPO, which has itself continuously sought to adapt and improve, has without doubt contributed to the system’s progress.

There are certainly challenges ahead for the system, such as its increased expansion to Latin American countries and to countries in other regions of the world, but throughout the past 125 years it has shown a capacity to adapt in a period in which the world has seen the biggest changes in its history, and therefore that capacity augurs a bright future.

Elzaburu would like to offer its congratulations to an international system which, we are proud to say, was born in Spain, itself a symbol of universality. Our congratulations naturally extend to WIPO, without whose continuous efforts the system would not have consolidated and grown as it continues to do.

Author: Juan Miguel Sainz de Marles

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The CJEU gives wings to compensation for moral damages

Compensation for moral damages in intellectual property infringement cases has, in the past, had to break through significant barriers and overcome considerable prejudice.  Some of those barriers are due to the very nature of the damages: it is always easier to argue that economic detriment has been suffered (when we are talking about trademarks, designs, patents or intellectual creations) than damage to the intangible or spiritual realm of the author or rightholder. Yet it is sad to think that reservations towards compensation for moral damages might also have come about as a result of a legislative deficiency.  

Directive 2004/48/EC, extending the means of protecting intellectual property rights, slotted moral damages into the context of negative economic consequences of infringement, just another aspect alongside lost profit suffered by the injured party and unfair profit made by the infringer (Art. 13.1 a).  Alternatively, the Directive provided for compensation based on a hypothetical royalty, i.e., the lump sum that would have been due if the infringer had requested the pertinent authorisation (Art. 13.1 b).

This gave the impression that if the plaintiff opted for this alternative criterion for assessing the value of the damages, i.e., the hypothetical royalty, moral damages could not enter into the equation. The Spanish lawmaker had followed this legislative anomaly to the letter, thanks to Act 19/2006, and applied it to all forms of intellectual property: the Trademark Act, the Patent Act, the National Designs Act and the consolidated wording of the Spanish Copyright Act.

It was the Court of Justice, in its judgment of 17 March 2016 in case C-99/15, which ultimately put things in their place. That judgment stemmed from a reference for a preliminary ruling made by the Spanish Supreme Court concerning the regulation of moral damages in copyright. The plaintiff (the director, screenwriter and producer of an audiovisual work) had sued the producer of a documentary that included passages of his work for infringement of his rights. The plaintiff had selected the compensatory criterion of the fee for unauthorised use of his work but also requested 10,000 Euros for moral damages. The Supreme Court wanted to know whether moral damages could additionally be requested in such cases. 

In its judgment, the Court of Justice clarified that a provision of EU law must be interpreted not just in terms of its wording, but also in terms of its context and the objectives that it pursues; that compensation for damages must seek to ensure full compensation for the prejudice actually suffered; and that hypothetical royalties only cover “material” damage. There is therefore nothing to prevent the rightholder from also being able to claim compensation for any “moral” damages suffered.  

This judgment is extremely significant due to its side effects: its clarifying scope extends to trademark, patent and design law. However, if the judgment gives wings to moral damages, we should not try to fly too high. There are rules governing moral damages too, and, just like Icarus, we could end up falling into the sea with our wings burned for flying too close to the sun, and this time a legislative deficiency would not be to blame!    

Author: Antonio Castán

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Goodbye OHIM, hello EUIPO

On Wednesday 23 March 2016 a large part of the changes provided for in the Amending Regulation took effect. Thus, what was formerly the Community trade mark (CTM) is now called the European Union trade mark (EUTM), while OHIM has similarly changed its name to the European Union Intellectual Property Office (EUIPO). 

However, while we may therefore bid OHIM rest in peace and wish long life to the EUIPO, the amendments to the EU trade mark system are not merely cosmetic.

As may be seen from this circular.

The Spanish Supreme Court applies CJEU doctrine in respect of use of third parties’ trademarks as search engine keywords

Judgment 105/2016, rendered by the Civil Chamber of the Spanish Supreme Court on 29 February, establishes the criteria pursuant to which the use of a third-party trademark as a search engine keyword must be examined in order to determine whether it infringes the trademark holder’s exclusive rights.     

To that end, the Supreme Court has followed in the footsteps of Alicante Court of Appeal and applied the doctrine established by the Court of Justice of the European Union in its judgments of 23 March 2010 (joined cases C-236/08 -Google France v Louis Vuitton-, C-237/08 -Google France v Viaticum- and C-238/08 - Google France v Centre National de Recherche en Relations Humaines), 12 July 2011 (C-324/09, L'Oréal SA v eBay International AG) and 22 September 2011 (C-323/09, Interflora Inc. v Marks & Spencer plc).

According to that doctrine, the use of third parties’ trademarks as keywords in principle infringes the trademark holder’s rights.  Nevertheless, since exclusive trademark rights are not absolute, under certain circumstances such use will not be considered as infringing.  Those circumstances are as follows: 

i) where the use of the trademark is not liable to affect the ‘product origin indicating’, advertising or investment functions of the trademark; and 
ii) where it is clear to the average Internet user that the goods or services advertised do not come from the trademark holder or from an undertaking economically connected to it.