On April 4 2013 Barcelona Commercial Court No 9 issued a non-final judgment, dismissing a claim of IP rights infringement, trademark invalidity and compensation for damages filed by Pasozebra Producciones SL and Daniel Díez Rodríguez against Nutrexpa SA in relation to animated character 'Benito'.
In 2003 SOS Cuetara, a leading Spanish food company (now operating under the name Deoleo, the intervening party in the process), commissioned the creation of an animated character to relaunch its product range under its FLAKES and CHOCOFLAKES trademarks.
The result was the creation of an animated character called 'Benito' by Daniel Díez, partner and manager of animation studio Pasozebra.
By way of a contract executed on November 21 2003, Pasozebra (to which Díez had transferred exploitation rights to the character) assigned Cuetara the rights to use the character unlimitedly and exclusively for its entire range of cookies under the FLAKES and CHOCOFLAKES marks.
Between 2003 and 2004 Cuetara applied for and obtained various trademark registrations for the Benito character.
On December 14 2008 Cuetara sold its cookie business to Nutrexpa, which included the transfer to Nutrexpa of exploitation rights to the Benito character.
On March 24 2009 Deoleo informed Pasozebra of the transfer of the business and requested authorisation for Nutrexpa's subrogation in the exploitation rights to the character.
Pasozebra failed to provide written authorisation, but continued working for Nutrexpa in connection with the character.
Between December 2009 and July 2010, Nutrexpa (assignee of the trademarks to the character registered by Cuetara) applied for and obtained additional trademark registrations related to the character.
In June 2010 Pasozebra requested authorisation and collaboration from Nutrexpa to make a film based on the Benito character. Nutrexpa's refusal to authorise the project led to disagreements between the parties and the subsequent filing of a lawsuit by Pasozebra and Díez, founded on infringement of exploitation rights.
Pasozebra and Díez argued that there had been no transfer of exploitation rights from Cuetara to Nutrexpa because:
- the contract between Pasozebra and Cuetara had not been in force when Cuetara sold its cookie business to Nutrexpa. They claimed that the contract did not stipulate a specific duration and therefore, in accordance with Article 43.3 of the IP Law, had expired after five years; and
- subsidiarily, the transfer of the exploitation rights from Cuetara to Nutrexpa was invalid due to Pasozebra's lack of express consent.
In the event that these arguments were rejected, they further argued that Nutrexpa would be making unauthorised use of the character by using it for product ranges other than those specified in the contract.
They also argued that:
- the animator's moral rights had been infringed, as his name was not mentioned on the product packaging where the character appeared; and
- the trademarks were invalid due to concurrence of bad faith at the time of their application and lack of authorisation from Díez to register the Benito character as a trademark.
The court dismissed the plaintiffs' claims.
With respect to the infringement of exploitation rights action, it held as follows:
- The contract was in force at the time that Cuetara sold the business to Nutrexpa because it expressly provided for indefinite duration, so the five-year time limit in Article 43.3 of the IP Law did not apply;
- Nutrexpa did not need Pasozebra's express consent to subrogate the contract because, in accordance with Article 49.3 of the IP Law (which should be interpreted broadly), consent is not required where the assignment occurs during the course of winding-up or a change in ownership of the corporate assignee. In any event, the court considered that conclusive acts by Pasozebra had been proven, which in themselves indicated the concurrence of (albeit unwritten) express consent; and
- Nutrexpa had not used the character for any products other than those authorised. Products that combined Flakes and Chocoflakes cookies with Nocilla (a chocolate spread) or milkshakes were simply a variety of the contractually authorised products. The court further stated that the plaintiffs had been aware of this use, had not objected to it and had collaborated with Nutrexpa in adapting the character to be used in connection with such products.
As regards infringement of moral rights, it was Díez who had authorised disclosure of the character anonymously and in accordance with Article 12.4 of the IP Law; thus, his moral rights had been exhausted after this first disclosure. In subsequent disclosures, it is the owner of the exploitation rights that must decide how it wants to communicate and disseminate the work. Therefore, the lack of mention of Díez's name on the product packaging did not constitute infringement of his moral rights.
With regard to the trademark invalidity actions, neither the existence of bad faith in its application nor the fact that the registration of the character as a trademark infringed the animator's IP rights had been proven, so neither the absolute nor relative nullity of those trademarks could be accorded.
In addition, the character in question was a work commissioned by Cuetara to identify one of its product ranges, which clearly meant that it was to be used as a distinctive sign which would confer on Cuetara – as holder of the exploitation rights – the right to register the character as a trademark, according to the nature of the contract.
Therefore, the court dismissed the plaintiffs' claims.
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