Industrial Law and Competition Regime
Item 4: Industrial Law and the Legal Regime of Competition
Patents
Patents are special property rights granted to registrants (not necessarily inventors) for innovations. They provide exclusive exploitation rights for a period defined by law.
Requirements:
- Novelty: The invention must not have been publicly disclosed in Spain or abroad.
- Inventive Step: The innovation must be a result of research conducted by the inventor.
- Industrial Application: The invention must be a product or process that can be manufactured or used in industry, including agriculture.
Non-Patentable Items:
Discoveries, scientific theories, mathematical methods, computer programs, artistic or literary works, plans, rules, or methods for intellectual activities, and methods of presenting information are not considered patentable.
Prohibited Patents:
The law prohibits patenting inventions contrary to public order or morality, new plant varieties eligible for protection, biological processes, and the human body.
Patent Holder’s Obligations:
- Export the patent.
- Pay annual fees.
- Maintain secrecy if the patent is declared secret.
Patent Expiration:
Patents are temporary and typically expire after 20 years from the application date. Other reasons for expiration include invalidation, revocation due to non-payment of fees, lack of exploitation within two years of grant, or waiver by the patent holder.
Trademarks
A trademark is any sign capable of graphic representation that distinguishes goods or services of one undertaking from others in the market. They fulfill three main economic functions:
- Attributing product quality.
- Condensing business goodwill.
- Advertising.
Types of Trademarks:
- Word Marks: Composed of words or combinations thereof.
- Graphic Marks: Composed of images, figures, symbols, or graphics.
- Three-Dimensional Marks: Composed of the product’s packaging.
- Mixed Marks: Combinations of elements from word, graphic, and three-dimensional marks.
- Sound Marks: Sounds that can be graphically represented.
Content and Prohibitions:
Trademarks grant exclusive use rights for specific goods or services. They can be composed of words, letters, numbers, illustrations, charts, volumes, etc. While there is freedom in choosing a sign, it is recommended to be easy to pronounce, aesthetically pleasing, and memorable.
Prohibitions include:
- Signs lacking distinctiveness.
- Signs that could mislead the public.
- Signs contrary to exclusive use (e.g., flags, emblems, medals).
- Signs identical or similar to earlier trademarks that could cause confusion.
- Signs contrary to law.
Individuals can register their names as trademarks, but the right is revoked if there is identity or similarity with existing trademarks or trade names. Designations of origin and brands for individual holders cannot be registered.
Trademark Acquisition:
Trademarks are acquired through registration with the Spanish Patent and Trademark Office (OEPM) and are granted for 10 years, renewable indefinitely.
Rights:
- Exclusive right to use in trade.
- Right to prohibit third-party conduct that infringes on the right to use.
- Right to renew the trademark.
Obligations:
- Obligation of use.
- Payment of fees.
- Renewal obligation.
Defense of Competition: Prohibited Practices
Competitive practices that prevent, distort, or restrict free competition or constitute an abuse of a dominant market position are prohibited. These practices are categorized as:
- Concerted Practices or Agreements: Agreements, decisions, or recommendations intended to prevent, restrict, or distort competition.
- Abusive Practices: Exploiting a dominant market position.
Expressly Prohibited Practices:
The Spanish Competition Act (LCD) expressly prohibits price fixing, limiting production, market sharing, discriminatory practices, tied contracts, and obtaining or attempting to obtain more favorable trade conditions through threats.
Sanctions:
- Civil liability for damages.
- Administrative fines imposed by the National Competition Commission (TDC) up to €300,000.
Authorized Conduct:
Practices authorized by law or regulations are exempt from prohibitions.
Authorized Channels:
Certain prohibited behaviors may be authorized by administrative bodies for reasons of economic interest or minimal economic impact.
Economic Merger Control:
Business mergers involving changes in the control structure of participating companies must be reported to the TDC if:
- The market share of the product or service exceeds 25%.
- The joint turnover of the companies exceeds €240,000.
Competition Authorities:
- National Competition Commission (TDC)
- Competition Defense Service (SDC)
- Competition Resolution Court (RDC)
Unfair Competition
The LCD prohibits any unfair act. The general clause forbids any act contrary to honest practices in industrial or commercial matters.
Specific Acts of Unfair Competition:
- Confusion
- Deceit
- Denigration
- Imitation and exploitation of others’ reputation
- Violation of secrets (espionage)
- Inducing breach of contract
- Violation of rules
- Discrimination
- Predatory pricing
- Tied contracts