Spain is currently the second most affected country in Europe regarding the spread of the new coronavirus known as SARS-CoV-2, which causes the disease COVID-19. As of March 142020, and by way of Royal Decree 463/2020 (“Royal Decree”), the Spanish Government declared a ‘state of alarm’ throughout Spain to manage the health crisis caused by the coronavirus and adopted a series of exceptional measures aimed at containing the transmission and spread of the virus. No corner of professional or personal life seems untouched in some way by this virus and the intellectual property world is no different.
In line with the agreement adopted by the Permanent Commission of the General Council of the Judiciary, in an extraordinary session held on March 14, the Royal Decree regulates the effects of the state of alarm agreeing to suspend all the scheduled procedural acts, hearings and procedural deadlines until the state of alarm, or any of its extensions, is lifted. There is, however, a numerus clausus list of matters that would not be affected by the suspension; they include cases involving minors, domestic violence or urgent proceedings in the area of prison surveillance.
The potential deadlines concerning IP that would not be suspended by the Royal Decree would be those in IP proceedings that may be necessary to prevent “irreparable harm to the legitimate rights and interests of the parties” (i.e. precautionary measures in certain specific cases, particularly pharmaceutical patents).
In abstract, proceedings concerning this type of infringement may be included among those in which the delayed handling of the case could cause serious harm, considering that the injury suffered by the IP owner due to the infringement cannot be entirely recovered through an economic compensation. However, in practice, these exceptions are being applied under “restrictive” criteria that do not leave much room for handling even urgent IP cases (i.e. standard trade mark precautionary measures). In any case, the period of suspension due to the state of alarm will not adversely affect any future consideration of periculum in mora.
For the time being, unlike other countries such as the United Kingdom, in Spain there is no official possibility to conduct any court proceedings by videoconference nor by telephone or any other technological means, without anyone being present in an actual courtroom. When it comes to IP litigation, the Spanish system mostly remains in the analogue world.
The General Council of the Judiciary is already working on an emergency plan to be implemented as soon as the state of alarm is lifted. The plan will include measures for rescheduling hearings and court activities as well as eventual procedural law amendments in order to avoid a judicial collapse once procedural activities resume.
Nonetheless, new civil complaints may be lodged through LexNET (an online platform for the secure exchange of information and legal documents with the Spanish courts) even though, on March 18, the National Judicial Council urged lawyers to only file urgent briefs that duly meet the urgency requirement laid down in the Royal Decree.
Preventive briefs may also be filed in urgent cases (if necessary to avoid irreparable harm to the legitimate rights and interests of the parties), but since time limits are suspended and no hearings may be held, it is uncertain when and how quickly they will be processed. On the other hand, the deadlines for contentious administrative appeals against the decisions of the Spanish Patent and Trademark Office (“SPTO”) have been suspended.
As of March 16, the SPTO announced that the Office’s administrative procedures are suspended as long as the state of alarm is maintained in Spain. Nevertheless, as the SPTO´s director has clarified by a resolution dated March 25, the suspension of terms and the interruption of administrative deadlines do not necessarily imply a programmed suspension of all procedures. In fact, the SPTO has continued with all procedures that do not require prior action by the interested parties or those in which the interested parties have agreed to continue.
The SPTO also highlighted that its online services will remain available at all times and will be remotely accessible. All types of applications are accepted through the SPTO´s platform (Sede Electronica), and therefore IP owners should pay attention to avoid overlooking the deadlines.
Unlike China, where a heavy fine was imposed for the malicious filing of trade marks related to coronavirus, it remains to be seen how the SPTO will deal with such filings, but fines are not available under the law.
The SPTO this month issued the first provisional refusal concerning this matter arguing, precisely, that the trade mark application “CORONAVIRUS” (No. 4.059.398) for alcoholic beverages is subject to the prohibition established in Article 5.1.f of the Spanish Trademark Act No. 17/2001. The decision is not final, but it may give us some clues as to how the SPTO is likely to deal with such other similar applications.
For the time being, the Spanish government has not modified any IP law or regulation nor announced plans to do so. However, nothing prevents the Spanish government from changing any relevant legislation, if it becomes necessary.
Unlike some other countries, the government has not officially taken steps to issue compulsory licences for patents protecting medicinal products, but they have the tools to do so if the situation demands it. The Patents Act envisages that the government may issue a decree for compulsory licences for reasons of public interest and in such case directly establish the terms and conditions of the licence and royalty. Therefore, patentees and licensees in the relevant healthcare sector should consider their IP strategy, e.g. voluntary licensing, to avoid being subject to a potential compulsory licensing order.
There are certain regulatory and IP infringement risks that manufacturers (companies or individuals) in Spain should be aware of:
(a) Additive manufacturing: 3D printing technology has provided a great opportunity to rapidly produce vital and affordable medical equipment (e.g. ventilators, masks, oxygen concentrators, etc.) to deal with hospital shortages. However, this manufacturing technique can expose the manufacturer to IP infringement risks. The additive manufacturing of the such products, without the rightholders’ consent, could theoretically trigger claims patent infringement (Articles 59 – 60 Patent Act, No. 24/2015 of July 24); design and trade mark infringement (art. 45 Legal Protection of Industrial Design Act, No. 20/2003, of July 7 and art. 34 of the Trademark Act); and copyright infringement (art. 17 of the Legislative Royal Decree 1/1996 of April 12). Although, given the sensitivity of the pandemic, the reputational damage for such claims must be assessed.
On the other hand, certain manufacturers have freely made available their digital designs and authorized their use in additive manufacturing process in order to help fill the medical devices supply gap. Good faith and fair industrial and commercial practices are currently helping to drive these partnerships forward during this pandemic. However, these IP owners should plan for how to look after their IP when the pandemic is over.
From a regulatory perspective, having medical products manufactured by companies or individuals other than the rightsholders involves a delicate balancing act. In fact, the Ministry of Public Health has suspended the distribution of certain 3D-printed masks and ventilators until they are checked and approved for medical use.
(b) Counterfeiting: An increase in the production and distribution of counterfeit medicines and protective equipment may also be expected. In fact, both the European Medicines Agency (EMA) as well as the Spanish Agency for Medication and Healthcare Products (AEMPS) have already reported a dramatic rise in the online sale of fake medical products. Counterfeiting medicines is a crime under the Spanish Criminal Code, with a sentence of up to a maximum of four years in prison. It is also an administrative infringement under the Medicines Act, punishable with fines ranging from EUR 90,000 to EUR 1,000,000.
As COVID-19 spreads, it is more likely that further measures will have to be taken to deal with it. Therefore, it is important for IP holders and users to monitor developments and take legal advice on the implications of certain measures.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.
Eduardo Castillo San Martín
(Partner and Head of Digital Law)
Jaime Bello Ayala (Associate)
Isabel Bandín Barreiro (Junior Associate)