Background of the case

In January 2015 it was found that in the defendant ´s premises, the company SARA BAG SL, was selling bags reproducing prints from DESIGUAL products which are protected under intellectual and industrial property rights. Subsequently, a criminal complaint was filed and the infringing goods were seized following Preliminary Proceedings in the Instruction Court 4 of Fuenlabrada.

Afterwards, the defendant applied for the industrial design nº 509.989, which replicates the DESIGUAL products, which were the subject matter of the previous claim. In view of this facts, the plaintiffs, INTS IT IS NOT THE SAME GmbH and ABASICS SL, filed a lawsuit claiming for the invalidity of the design.

In March 2016, after verifying that the products were still in the marketplace, the criminal complaint was extended, leading to another police intervention and the opening of new Preliminary Proceedings.

As a last step, INTS IT IS NOT THE SAME GmbH and ABASICS SL brought an ordinary lawsuit against SARA BAG seeking partial invalidity of design 520.989 variants 1.1, 2.1, 3.1, 4.1 and 10.1; asking for damages; and a request for the defendant to pay the costs.

On 21 March 2019, Madrid Commercial Court No. 11 decided by Order to partially uphold the claim, as the defendant SARA BAG SL partially acquiesced the declaratory action, thus declaring the partial nullity of design 520,989 and ordering the defendant to pay the costs. The defendant SARA BAG SL lodged an appeal against the order of Commercial Court No. 11.

Decision of the Madrid Provincial Court 28th Section

Against the defendant’s allegations in the appeal, the Provincial Court of Madrid accepts the arguments given by the Commercial Court nº 11 of Madrid, insofar as a conviction for costs is imposed on the grounds of bad faith (the defendant).

Article 395 of the LEC establishes that in cases of acquiescence before the answer to the claim, the defendant will not be ordered to pay costs unless the Court finds bad faith, and it must be duly reasoned. Bad faith must be understood to exist when, prior to the filing of the claim, a reliable request for payment has been made or if a claim for conciliation has been filed. However, the Madrid Provincial Court establishes that in order to assess the bad faith of the defendant, it is not necessary for the aforementioned requirements to be met, and bad faith may exist in other situations, leaving it to the Court’s assessment.

In this case, there are two prior criminal proceedings which show that the defendant was aware of the existence of the plaintiffs’ intellectual property rights. Therefore, the industrial design application filed, obeys the defendant’s strategy of trying to create a false appearance of legality when facing future complaints in which it can allege ignorance of such prior rights.

Judgement 161/2020 from the Madrid Provincial Court 28th Section of 5th October 2020