Introduction
Facts
Decision


Introduction

On 19 September 2022, Barcelona Trial Court No. 11 held that the owner of a wholesale establishment had infringed Chanel's IP rights and imposed the following penalties:

  • one year in prison;
  • a 12-month fine;
  • compensation to Chanel;
  • payment of legal costs; and
  • other accessory penalties.

The company of which the defendant was an administrator also had to bear subsidiary civil liability. The seized handbags and wallets displayed a metal logo comprising two interlocking circles that were almost cut off on one of the ends and easy to manipulate (Figure 1). Removing the two marked sides turned the circles into Chanel's registered logo and trademark (Figure 2).

Figure 1: metallic logo found on the seized handbags and wallets

Figure 2: Chanel's registered logo and trademark

Facts

On 3 July 2019, the Spanish Civil Guard carried out a raid on a wholesale establishment and warehouse in Badalona. The raid resulted in the seizure of 788 handbags and 346 wallets that reproduced Chanel's logos. The products featured two interlocking circles that could be easily manipulated – removing two notches turned the circles into Chanel's logo, which corresponds to its international trademark.(1) The defendant did not have authorisation from Chanel to sell the products.

Decision

The Court held that the defendant was the administrator of the establishment and warehouse, and had been present during the police operation. The defendant had acquired the products with the intent of selling them to third parties and thereby obtaining an economic profit.

According to the Court, the defendant's unauthorised reproduction of the registered trademark constituted IP right infringement in accordance with article 274.1 of the Spanish Criminal Code. As stated in the ruling, the majority and consolidated jurisprudence from the Spanish Supreme Court and the various courts of appeal establishes that the protected legal right is the exclusive right to use and exploit the trade of the products, services, activities or establishments protected by the corresponding IP right. In this case, Chanel was the rights holder.

During the trial, the defendant confirmed that he was the owner of the establishment and that he had indeed been present during the police raid, when the Spanish Civil Guard had seized the handbags and wallets in question. The products had been marketed at a much lower price than the originals. The defendant had worked in the wholesale of handbags and leather goods for 10 years and had purchased the products in question from a supplier that he did not identify. He alleged ignorance regarding the possibility of manipulating the logo. The defendant admitted, however, to being aware of the Chanel brand.

In their statements, the Spanish Civil Guard agents highlighted that the logo on the seized handbags and wallets had two circles that were almost cut off at one end, making it possible to remove two notches from both sides. This turned the logo into Chanel's logo and registered trademark. After the expert evidence had been carried out and the report was ratified by agents of the Catalan police force, it was confirmed that the handbags and wallets were counterfeit owing to their similarity with the original logo and the fact that they had been prepared such that the logo could be easily manipulated into the logo of the Chanel brand, featuring the intertwined letters.

As the Civil Guard agents pointed out, the interlocking circles had been marked such that the notches on the sides could be removed with a finger, pliers or scissors. The notches were not attached or sewn on, so removing them would leave no mark on the product. Article 274 of the Spanish Criminal Code describes the use of a distinctive sign that may be mistaken for a registered trademark as unlawful conduct – it is irrelevant whether the counterfeiting of the product is crude. The determining element is that a protected trademark (in this case, the interlocking letters that constitute Chanel's logo) has been used without authorisation from its owner or assignee.

Regarding the defendant's knowledge of the falsehood, Chanel is a brand with a renowned presence in the market – the defendant admitted to being aware of it. In the Court's view, it had been proven that the defendant had acted for commercial or industrial purposes and without Chanel's consent as owner of the trademarks, with knowledge of its trademark registration. The defendant had introduced handbags and wallets protected by such rights into the Spanish market, selling them wholesale and working in the sector for 10 years.

The Court considered that the objective and subjective elements of the criminal offence had been accredited. The prosecution evidence carried out in the trial sufficed to undermine the principle of presumption of innocence.

The defendant has appealed the judgment.

For further information on this topic please contact Maria Girbau at Grau & Angulo by telephone (+34 93 202 34 56) or email ([email protected]). The Grau & Angulo website can be accessed at www.ga-ip.com.

Endnotes

(1) No. 1189929.