Competition law considerations for licensing agreements in Spain

Competition law issues

Are practices that potentially restrict trade prohibited or otherwise regulated in your jurisdiction?

Yes. Spanish legislation is fully harmonised with EU legislation.

EU competition law bans agreements that restrict competition and abuse of a dominant position. Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits any agreements that might affect trade between EU member states and anything that might prevent, restrict or distort competition. Agreements that create sufficient benefits to overcome effects that are contrary to competition shall be exempt from this prohibition pursuant to article 101(3) of the TFEU. The Competition Act, Law No. 15/2007 of 3 July 2007, contains the same principles, which are applicable where the conduct affects the Spanish market.

Consequently, practices that potentially restrict trade are prohibited and regulated in Spain. Among the practices that are prohibited or restricted are:

• directly or indirectly fixing purchase or selling prices or any other trading conditions;
• limiting or controlling production, markets, technical development or investment;
• sharing markets or sources of supply;
• applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
• making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject matter of such contracts.

Are there any legal restrictions in respect of the following provisions in licence agreements: duration, exclusivity, internet sales prohibitions, non-competition restrictions and grant-back provisions?

There are indeed restrictions in respect of all the provisions referred to above, should they fall within the scope of the practices referred to in question 30.

In order to assess the impact of any such restrictions, the clauses and the agreement as a whole shall be analysed.

Have courts in your jurisdiction held that certain uses (or abuses) of intellectual property rights have been anticompetitive?

Spanish courts have established the IPRs are limited by competition laws in some ways, since the granting of an exclusive right is a limitation to free competition. Some legitimate use of IPRs has been considered harmful to the market and contrary to competition law, since it restricts the normal activity of the market by creating a monopoly in a product that overrides the rules of free competition. One such use is related to selective distribution, where a trademark holder wishes to avoid the EU criteria on rights exhaustion by claiming infringement by a non-authorised reseller, and thus deter the resale of the previously marketed products. That opinion has been reflected in multiple decisions by the European Union Trademark Courts in Alicante, the most recent judgments being the ones rendered on 6 May and 22 April 2016. Regarding copyright, the Spanish Supreme Court considered, in 2008, that the Spanish Society of Authors and Publishers was carrying out contractual practices that were contrary to competition law, since they were using their monopolistic position to unilaterally establish the contracting conditions in their relations with some companies, forcing them to accept discriminatory conditions.