ELZABURU Blog - Industrial and Intellectual Property

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It is essential, now more than ever, to have a plan for management of trade secrets

The imminent Spanish Trade Secret Act, driven by Directive 2016/943 on the protection of undisclosed technical know-how and business information, will represent a major step forward in Spain regarding  the protection of trade secrets (in the same way as the respective national laws in Europe), placing it at the same level as intellectual and industrial property rights (patents, trademarks, designs and copyrights) by affording similar protection.

However, even a minimum standard of diligence concerning this issue calls for a plan for management of trade secrets for their protection and defence, for the reasons we shall explain.

It is important to note that not all confidential information is considered a trade secret. It is essential that it meets the requirements established by the Act (secret information, of real or potential business value and subject to reasonable measures to maintain its secrecy) in order for the information to be considered a trade secret since, whenever an attempt is made to assert this vis-a-vis a third party, the latter will argue that it is not a trade secret, obliging the owner to furnish evidence to the contrary.

Not only will those liable for prior acts of unlawful acquisition, use and disclosure be considered infringers but the Act also establishes objective liability for those who were aware or, under such circumstances, should have been aware about the unlawful origin. Even an “ultra-objective” liability is established since bona fide intermediaries (manufacturers, importers or sellers) are also liable when performing their activities and the product or service infringes the trade secret of a third party. All this places emphasis on the need to carry out business due diligence processes and to sign agreements passing on to suppliers the liabilities deriving from the infringement of trade secrets.

In the above context, it can be stated that this Act protects the owners of trade secrets, providing sufficient legal certainty for their activities in the marketplace. Therefore, by complying with the new Act, companies managing trade secrets correctly will have various legal mechanisms to prevent third parties from infringing their trade secrets.

Finally, we must stress the fact that correct trade secret management reduces the risk of trade secrets leaking through employees and third parties, providing added value to the sales or licencing processes.

Authors: Javier Fernández-Lasquetty y Cristina Espín

Visit our website: http://www.elzaburu.es/en

Criminal conviction for storage for commercial purposes of goods infringing copyright, even in storage facilities separate from the place of sale

Source: Pixabay

The judgment of the CJUE (Case C-572/17) of 19 December was issued within the context of a request for a preliminary ruling from the Swedish Supreme Court in criminal proceedings brought by the Public Prosecutor’s Office of this Court against Mr. Imran Syed concerning the infringement of trade marks and infringements of copyright in literary and artistic works. 

Mr Syed ran a retail shop in Stockholm (Sweden) in which he sold clothes and accessories with rock music motifs. In addition to offering the items for sale in that shop, Mr Syed stored such goods in a storage facility adjacent to the shop and in another storage facility located in Bandhagen, a suburb of Stockholm. It is established that Mr Syed’s shop was regularly restocked with merchandise from those storage facilities.

The issue arising was whether goods stored by someone in a warehouse and bearing a protected motif could be considered as being on sale whenever there are identical goods on sale in a retail establishment run by such person.

In this judgment the CJUE recalls that such an act can constitute an infringement of the exclusive distribution right (Article 4(1) of Directive 2001/29) even if that act is not followed by the transfer of ownership to a purchaser of the protected work or a copy thereof (expressly citing its judgment of 13 May 2015, Dimensione Direct Sales and Labianca, C‑516/13). Therefore, an act prior to the actual sale of a work or a copy thereof protected by copyright, which takes place without the rightholder’s consent and with the objective of making such a sale, may infringe the distribution right. Although carrying out the sale is not a necessary element for the purpose of establishing an infringement of the right of distribution, it must nonetheless be proven that the goods concerned are actually intended to be distributed to the public without the rightholder’s consent, inter alia by their being offered for sale in a Member State where the work at issue is protected.

The fact that a person, selling goods bearing copyrighted motifs in a shop without the rightholder’s authorisation, stores identical goods, may be an indication that the stored goods are also intended to be sold in that shop and that, accordingly, that storage may constitute an act prior to a sale being made, which is liable to infringe that rightholder’s distribution right.

Although the distance between the storage facility and the place of sale may constitute evidence that can be used in seeking to establish that the goods concerned are intended to be sold in that place of sale, that evidence cannot, on its own, be decisive. It may, on the other hand, be taken into account in a concrete analysis of all the factors likely to be relevant, such as, for example, the regular restocking of the shop with goods from the storage facilities at issue, accounting elements, the volume of sales and orders as compared with the volume of stored goods, or current contracts of sale.

The judgment finally rules that the storage by a retailer of goods bearing a motif protected by copyright on the territory of the Member State where the goods are stored may constitute an infringement of the exclusive distribution right when that retailer offers for sale, in a shop without the authorisation of the copyright holder, goods identical to those which he is storing, provided that the stored goods are actually intended for sale on the territory of the Member State in which that motif is protected. The distance between the place of storage and the place of sale cannot, on its own, be a decisive element in determining whether the stored goods are intended for sale in the territory of that Member State.

Once more, with this judgment the CJUE imposes order regarding the problem of copyright-infringing acts or means, prior to the sale of goods, that regrettably and painfully affect creators far too frequently.

  Author: Juan José Caselles

Visit our website: http://www.elzaburu.es/en

The court hotline has been set up for MOBILE WORLD CONGRESS 2019 in Barcelona

The Mercantile Courts of Barcelona have now disclosed the Duty Service and Fast-Action Protocol adopted on 13 December for MOBILE WORLD CONGRESS 2019. This is the fifth year running the Courts of Barcelona provide coverage for this important international forum, enabling the adoption of preliminary injunctions and the handling of preventive briefs under the most urgent conditions. The Protocol brings several important developments with it this year.

For the first time, the Protocol is agreed jointly by the Mercantile Court of Barcelona and the European Union Trade Mark Court in Alicante. In this way, the Protocol will not only be effective regarding patent infringements, but also for cases of infringement of European Union Trade Marks and Designs. Any preliminary injunction adopted by the Court of Alicante within this context may be enforced by the Courts of Barcelona while the Congress is being held.

The Protocol will be in force throughout February, in particular during the days the event is held (25-28 February). The commitment of the courts is to process and decide on the petitions for urgent preliminary injunctions within a period of 2 days (without a hearing for the defendant) or of 10 days (with a previous hearing being held) in terms of whether a preventive brief was previously filed.

Furthermore, the Protocol also proposes a guideline is followed to evaluate the risk factor that justifies measures are taken without a hearing for the defendant. For such purpose, both the previous behaviour of the complainant and the reaction speed to any knowledge on an eventual infringement will be decisive. The Protocol places emphasis on the fact that “it will be important to have submitted a petition for urgent preliminary injunctions sufficiently in advance for this, in good faith, not to reasonably prevent a hearing for the defendant, whenever the owner of the allegedly infringed right knew about the possible infringement beforehand and was able to file his petition in good time”.

These provisions of the Protocol encourage companies participating in MWC to weigh out and put in place as soon as possible their defensive or preventive strategies to guarantee their position. It should be borne in mind that 35 actions were carried out by judges in Barcelona regarding MWC 2018, 7 of these consisting of preliminary injunctions without a hearing for the defendants that were aimed at removing products on exhibition in the stands.

Author: Enrique Armijo

Visit our website: http://www.elzaburu.es/en

Nine basic issues concerning the new Data Protection Act (II)

Digital rights

Besides dealing with the field of data protection, Title X of the Act lays down a controversial series of provisions dealing with digital rights, such as Internet neutrality, universal access, promotion in education, and extension of the right to be forgotten to social media, that are highly contentious among people in the field.

Labour-related

In the field of labour relations, the Act provides broad protection for employees while placing squarely on employers the need to adjust internal policies to such new factors as:

  1. a) Protection of privacy in the use of digital devices and metered access to content.
  2. b) Digital disconnection, to ensure respect for free time off work.
  3. c) Greater regulation of the conditions of valid video surveillance and audio recording.
  4. d) Employees’ right to privacy in respect of geolocation systems.

 Digital inheritance

Barring a will stipulating otherwise, the heirs, persons related to the deceased, and/or persons designated by the deceased may access the deceased’s content on social media and digital platforms and give service providers instructions as to its use, modification, destination, and removal.

Access to the first part of this post here

Authors: Ruth Benito y Fernando Díaz

Visit our website: http://www.elzaburu.es/en

Nine basic issues concerning the new Data Protection Act (I)

On 6 December the BOE [Official Spanish Government Gazette] published Organic Personal Data Protection and Guarantee of Digital Rights Act, Act No. 3/2018 of 5 December 2018, approved by plenary session of the Senate this past 21 November.

The General Data Protection Regulation (GDPR) does not leave EU Member States much room for manoeuvre, and for that reason the new Act makes constant reference to the Regulation, but it nonetheless contains certain novel provisions discussed here in this post.

Data Protection Officer

In addition to the provisions already set out in the General Data Protection Regulation (GDPR) in this respect, the Act specifies a total of 16 cases in which designation of a DPO is mandatory.

Advertising firms that carry out profiling, operators that offer online gaming, insurance companies, schools, investment service firms that do business in securities markets, financial institutions, and certain energy companies, along with other companies, are all affected by this provision.

Transparency and information

Article 11 of the Act takes what had until now been a recommendation by Spain’s Data Protection Agency and the former Article 29 Data Protection Working Party concerning the layered approach to information and turns it into a mandatory standard.

Accordingly, under this layered information approach, the first layer must necessarily contain, at minimum, the features required in Article 11:

  1. The identity of the data controller and its representative, if any.
  2. The purpose of the processing.
  3. The option of exercising data protection rights.
  4. Where the data are not obtained directly from the owner, the type of data and their source.

Minors

The Act keeps the age limit at 14 years and introduces measures aimed at defending minors and their interactions with the digital sphere, for instance, the possibility of intervention by the Public Prosecutor’s Office in cases when images and personal information of minors are disseminated on social networks if doing so represents an unlawful intrusion on their fundamental rights.

Legitimate interest and public interest

The Act expressly sets out certain instances of data processing in which the data controller is presumed to have a legitimate interest or the processing is presumed to be carried out in the public interest.

The former case includes credit information systems, changes to corporate structure or the sale of companies, and contact details of individual business owners and members of the liberal professions, provided that the processing of location and contact data is restricted wholly to the business sphere in relation to providing specialised services.

As far as the public interest is concerned, the Act addresses video surveillance, files regarding advertising opt-outs, and whistleblowing.

The controversy regarding political parties

The final provisions of the new Personal Data Protection and Guarantee of Digital Rights Act amends the Elections Act to allow political parties to gather and use data collected from websites and other publicly accessible sources, including by electronic means, stipulating that election advertising is not to be considered a commercial communication.

Technically, the implicit consideration of websites as being publicly accessible is an important feature, since heretofore the Internet has not enjoyed this status.

System of sanctions

The Act specifies and classifies infringements of data protection categories into the conventional categories of (i) minor, (ii) serious, and (iii) very serious, while maintaining the fines laid down in the GDPR, ranging from a minimum of €10,000,000 or 2 % of total worldwide annual turnover to a maximum of €20,000,000 or 4 % of total worldwide annual turnover.

Access to the second part of this post here

Authors: Ruth Benito y Fernando Díaz

Visit our website: http://www.elzaburu.es/en

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