mardi, juillet 06, 2010

Spain: Changes to the criminal prosecution of parallel imports

Changes to the criminal prosecution of parallel imports

Contributed by Grau & Angulo


On June 23 2010 Act 5/2010, which amends the Criminal Code, was published in the Official State Gazette.

Among other relevant amendments, this act revises Article 274 of the Criminal Code (which defines trademark infringements as a crime) by excluding from its scope of application unathorized imports of genuine products from outside the European Union.

Since October 1 2004, parallel imports have constituted a criminal offence in Spain. Indeed, since the reform instituted by Act 15/2003, Article 274 of the Criminal Code was amended (among other amendments) in the following terms:

"Likewise, in the same penalties (from 6 months to 2 years of prison and from 12 months to 24 months of fine) shall incur on those who intentionally import these products (products which according to the previous paragraph -reproduce, imitate, modify or in any other way use- a trademark identical or confusingly similar with a registered one) without said consent (referring to the trademark holder's consent) both these products have a licit or illicit origin in their country of origin; notwithstanding the foregoing, the import of these products from an EU State will not be punishable when products have been purchased directly from the holder of the trademark in that state or with his consent."

As a result of the latest reforms, the above paragraph has been removed from Article 274, which has been reduced to the following sentence: "Likewise, in the same penalties (from 6 months to 2 years of prison and from 12 months to 24 months of fine) shall incur on those who import these products".

Consequently, only the import of counterfeit products will be considered a criminal offence.

This relevant amendment will come into force on December 23 2010.

In the years during which imports of grey products constituted a criminal offence, the Spanish appellate courts issued few rulings on the subject, and those decisions which were issued were contradictory.

The most recent, issued by Section 7 of the Madrid Court of Appeal, stated that imports of genuine products from outside the European Union without the trademark holder's consent did not constitute a criminal offence under the Criminal Code. It found that the amendment introduced by Act 15/2003, holding that the import of grey products constituted a criminal offence, infringed the principle of legality which underpins criminal law.

The court considered that the act of import necessarily refers to products which bear a mark that unlawfully reproduces, imitates, modifies or is confusingly similar to a registered trademark. Consequently, if products are genuine (ie, if no such unlawful act has been committed since the products have been manufactured by the trademark holder or with its consent), no criminal offence has been committed.

The court held that a contrary interpretation - which was the position taken by trademark holders and other IP practitioners - was not possible. If the legislature had wanted to include a new criminal offence in Article 274 of the Criminal Code and criminalize these kinds of activity, this would have been expressly stated in the preliminary recitals of Act 15/2003. It was thus not possible to interpret Article 274 as having broader applicable scope.

This argument drew some interest, given that the preliminary recitals of Act15/2003 Act indeed included no clear provisions on imports of grey products. The sole provision in the preliminary recitals on the amendments to the articles on IP crimes was this general consideration:

"the penalties for these crimes are aggravated and the description of the activities which constitutes a criminal offence is technically improved according to the social reality and its impact on economic and social life. Because of that, there is no necessity for a complaint by the offended trademark holder to be filed."

Notwithstanding the above, another section of the Madrid Court of Appeal (Section 17) ruled in November 2005 that the import of genuine products from outside the European Union without the trademark holder's consent constituted a criminal offence. It reached this conclusion after taking into consideration precisely the preliminary recitals of Act 15/2003.

In the preliminary recitals of Act 5/2010, nothing is said in relation to the exclusion from the Criminal Code of parallel imports as a criminal offence. However, the new wording of Article 274 introduced by this new act excludes such activities without any room for doubt.

Another ruling issued on the topic was that of the Murcia Court of Appeal, which agreed with Section 7 of the Madrid Court of Appeal that parallel imports did not constitute a criminal offence. The court stated that when products turn out to be genuine, criminal law must not be applied; other, non-criminal laws (eg, the civil laws) are the only legislation to prevent such activity, which jeopardizes the industrial property rights of trademark holders.

In 2003 several opinions were voiced considering that Spain had gone too far by making these commercial activities a criminal offence, and political parties came under pressure to reform the Criminal Code in order to exclude parallel imports from its scope. Unfortunately, these lobbyists have succeeded.

These amendments do not affect the provisions contained in other non-criminal Spanish laws which allow trademark holders to prevent the import of genuine products from outside the European Union without the trademark holder's consent.

Surprisingly, the changes which Act 5/2010 has introduced apply only to Article 274 of the Criminal Code, which concerns trademark; the act makes no mention of copyright and thus does not exclude from the scope of the code imports of genuine products from outside the European Union without the copyright holder's consent. As a result, a paradox will exist in Spanish law whereby the import from outside the European Union of genuine trademarked products without the rights holder's consent will not constitute a criminal offence, but the import from outside the European Union of genuine copyright-protected products without the rights holder's consent will constitute a criminal offence.

For further information on this topic please contact Jordi Camó at Grau & Angulo by telephone (+34 93 202 34 56), fax (+34 93 240 53 83) or email (j.camo@gba-ip.com).