It has been largely discussed the relationship between the unfair competition laws and the specific trademark laws when it comes to infringement of a mark. In general terms, the latter laws prevail over the former where the enforced right is a trademark registration. And normally the discussion ends here. But this case brings a new angle of this relationship, the Court declaring that the unfair business practice ends when the infringer obtains a trademark registration for the mark he has been illicitly using.  Here are the facts:

The Italian companies Master SPA and Eurotronic SRL (“claimants”) sued the Spanish companies Eurotronic SL and Distribuciones Segipack SL (“defendants”) in Spain on grounds of unfair business practices, these consisting of, among other things, distributing and selling devices under a mark identical to the one the claimants had been using in the market, to wit “Eurotronic”; and therefore causing likelihood of confusion with the claimant’s products among consumers (article 6 Unfair Competition Act 3/1991). It is remarkable that the defendants were former distributors of the claimants’ products in Spain and that such products bore the mark “Eurotronic”. The Juzgado de lo Mercantil de Barcelona (sitting as Commercial Court of Barcelona, First Instance) dismissed the claim because it considered there was not confusion in the sense described in the article 6 of the Unfair Competition Act 3/1991 given that the defendants were using a Community Trademark registration owned by one of them. It also considered that the well-known character of the claimants’ products was not demonstrated, nor a singular advantage therein that would deserve a protection. Claimants then appealed. The Appellate Court of Barcelona reversed the decision in its judgment of 5 March 2013 and considered that that there was indeed a likelihood of confusion, but only during the time the Community Trademark was not registered. It reminded that the facts relevant to the judgment were those occurring at the time the claimants instituted actions, and so the later facts –say the registration of the Community Trademark that occurred after the lawsuit was lodged- could not affect the reality ex ante.  So while that was true that the defendants obtained a registration of the conflicted mark and with this a legitimate, and unchallenged, title to use, the use of said mark before its registration amounted to unfair competition.  There wasn’t any longer a legal reason to order cessation, although the Court declared that such previous illicit use had caused damages, and claimants were entitled to them in an amount of 130,189.80 EUR.

The Supreme Court has now confirmed such decision (judgment of 3 March 2015 ROJ: STS 1089/2015), and dismissed the arguments of the defendants to revoke it. If anyone has any doubt that the right to a mark is only obtained through registration, then this case constitutes a good example. But the question that now remains is, how legitimate is a registered trademark right that has its roots in an unfair competition act?

PS. Safe travels to San Diego!