Spanish law on saisis contrefacon actions

09 June 2006

Beatriz Diaz de Escauriaza, Ana Berenguer

This article considers a Court Order issued on 26 October 2005 by the Commercial Court of Madrid (No. 2) (AC 2006\\66) in relation to a claim filed by a pharmaceutical laboratory under the so-called “diligencias de comprobación de hechos” (similar to the French “saisis-contrefaçon”).

These types of claim are special features of the Unfair Competition Act (“UCA”), the Patents Act and the Trademarks Act in Spain. For example, in the “saisis-contrefaçon” set out in the UCA, a Claimant can ask the Court to issue a Court Order entitling him to check those facts which are in the prospective Defendant’s control provided that these facts are essential to file the claim.

The “saisis-contrefaçon” claim and its application to unfair competition proceedings

The Spanish Commercial Courts were introduced by the second paragraph of the new article 86 ter of the Judicial Power Act. The latest changes to this Act state that these Commercial Courts will have jurisdiction to deal with unfair competition claims.

Article 24 of the UCA entitles a Claimant bringing an unfair competition action in Spain to apply for a preliminary injunction in order to check the facts which are essential to bringing a full action.

The UCA provides that the procedure which must be followed is the one established under the Spanish Patents Act (“SPA”) for the “saisis-contrefaçon” claims. Crucially, this enables the Claimant to inspect the Defendant’s premises in order to provide the Court with the evidence required to support a prospective civil claim for infringement. According to the SPA, there are three preconditions to this injunctive relief:-

(i) the Claimant must be entitled to file the claim i.e. he must be the holder of the patent or the registered licensee;

(ii) there must be some evidence from which one can infer that an infringement is taking place; and

(iii) the Claimant must be prepared to provide a bond to cover any damage which may ensue to the Defendant as a result of the injunctive relief.

The Claimant then has to file the claim within two months from the date the injunction is granted if he is to be entitled to use the evidence gathered whilst the injunction is in place.

Notwithstanding the above, the reality is that the procedural requirements for Article 24 of the Spanish UCA do differ from the ones established by the SPA in that the Claimant must prove that the facts he is seeking to verify are “essential” to prepare the future claim. This is important because of the potential impact of these measures on the Defendant’s confidential data and commercial secrets. The Court Order we refer to above is a case in point. It was issued by the Commercial Court of Madrid in Italfármaco, S.A./ Farmalider, S.A.

Court Order of 26th of October, 2005 issued by the Commercial Court of Madrid (No. 2) (AC 2006\\66)

Italfármaco made an application for a preliminary injunction against Farmalider, which had developed a drug for Italfármaco (subsequently marketed under the name of “Folidoce”).

Italfármaco had become aware that Farmalider had been asked by a third party (Laboratorios Stada, S.L (“Stada”)) to develop a drug with essentially the same compounds as Folidoce save that it included iodine. Italfármaco alleged that Farmalider had taken advantage of the work done in the development of “Folidoce” in the development of a similar drug for Stada.

At the time of the application under Article 24, Italfármaco knew that Farmalider had technical knowledge of the composition of Folidoce and that Farmalider was developing a similar drug for Stada. Italfármaco was also in possession of an expert’s report concluding that it would be possible to re-use the technical knowledge of Folidoce to develop the Farmalider drug.

In its decision dated 26 October 2005, the Commercial Court rejected the “saisis-contrefaçon” claim on the grounds that it was very difficult to exclude the risk that confidential data belonging to the Defendant could be leaked and that Italfármaco knew that Farmalider was in possession of the so-called “Folidoce Technical Knowledge” and that it was developing a similar drug for Stada. Accordingly, the only fact to be verified by the Court was that Farmalider’s “Technical Knowledge” could be re-used so as to save time and money in the development of the drug for Stada. The Court concluded that this issue could not be the basis of a “saisis-contrefaçon claim” because it was not a fact necessary to enable the Claimant to file his claim: on the contrary, it was the “gordian knot” of the claim.

In conclusion, it appears that the injunctive relief provided for by the UCA will be granted solely when the Claimant cannot, without the Court’s assistance, obtain the information necessary to bring an action. The rationale is that the UCA should not operate either to protect the lazy Claimant who has not been concerned about properly documenting his claim or to enable a Claimant essentially to test the strength of his claim prior to filing it.