Nowadays, Spain is one of the most important countries in the fashion industry, having traditionally been at the forefront of fashion and elegance. Cristóbal Balenciaga, Pedro del Hierro, Amaya Arzuaga, Paco Rabanne, Custo Dalmau, Ágatha Ruiz de la Prada, Adolfo Domínguez, Modesto Lomba, Victorio & Lucchino and Roberto Verino: they are just some of the representatives of the fashion industry in Spain. In this context, Spain has found its place in the fashion industry thanks to companies, popular events and designers that have conquered the international market with impressive results and success. In this sense, Spain is synonymous with competitiveness, creativity and innovation and, therefore, intellectual property is a vital tool to protect fashion products in Spain.
1 . What are the main intellectual property legal tools available to protect fashion products?
1.1. Trademarks and non-traditional trademarks
Distinctive signs (trademarks and trade names, including non-traditional trademarks, such as color marks, position marks, shape marks, black/white marks and pattern marks) are widely used in the fashion industry to display its essential functions: the indication of commercial origin of the goods, to guarantee the quality of the goods in question and those of communication, investment or advertising (see CJEU, Judgment of 18 June 2009, L’Oréal v. Bellure, C-487/07).
At EU level this form of intellectual property is regulated in Regulation (EU) 2017/1001 (EUTMR) and, at a national level, they are regulated by Spanish Trade Mark Act No. 17/2001, of 7 December 2001 (TMA). Registration is valid for a period of ten years and can be renewed indefinitely for identical periods. Trade mark registrations shall be vulnerable for non-use if they are not used by the right holder or a licensee within the five years following registration.
1.2. Design as an alternative or addition to TM registration
Registered and unregistered designs are a robust protection tool for the overall external appearance of different wearable items available in the fashion industry, including headwear, clothing, footwear and accessories such as jewellery, watches, belts, bags, and eyeglasses. Design protection may be an alternative or an addition to trade mark registration and copyright protection.
At EU level, registered and unregistered designs are protected by Council Regulation (EC) No 6/2002 (RCDR) and at national level, registered designs are protected by Spanish Act 20/2003 on the Legal Protection of Industrial Designs of 7 July 2003 (IDA). EU and Spanish registered designs are valid for five years and renewable for identical periods of time up to a maximum of 25 years. Non-registered designs are valid for three years as of the date of first disclosure.
1.3. Copyright as an alternative or addition to TM registration
Copyright protection is often used in the fashion industry and regulated by Royal Legislative Decree No. 1/1996 of 12 April 1996 approving the Revised Text of Copyright Law (SCA). As of the date of creation and without need of registration, the copyright holder is primarily provided with the exclusive rights of reproduction, transformation, communication to the public and distribution of the copyrighted work in the course of trade for a period of seventy years as of the author’s death (as a general rule). Two cumulative conditions must be satisfied for the subject matter to be classified as a work: 1) the subject matter concerned must be original in the sense that it is the author’s own intellectual creation (i.e. subjective originality); and 2) the subject matter protected by copyright must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even if that expression is not necessarily in permanent form (see Judgment of the European Court of Justice of 13 November 2018, Case C‑310/17; and Judgment of the Spanish Supreme Court of 16 February 2021).
1.4. Any other pertinent IP rights?
Patents. Those functional aspects of the wearable items pertaining to the fashion industry and their method of manufacture may be subject to patent protection as patentable inventions as long as they meet the patentability requirements of novelty, inventive step, industrial application, sufficiency of disclosure and non-unallowable added matter, for a non-extendable period of twenty years. In Spain, patents and utility models are regulated by Spanish Act 24/2015 on Patents of 24 July 2015 (SPA). Spain has been a member of the European Patent Organization since 1986, so the European Patent Convention is applicable.
Trade secrets. In Spain, trade secrets are regulated by the Spanish Act 1/2019 on Trade Secrets of 20 February 2019 (TSA), which is the outcome of the transposition of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.
For the purposes of the TSA, a ‘trade secret’ means information which meets all of the following requirements:
- it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
- it has commercial value; and
- it has been subject to reasonable steps under the circumstances, to keep it secret.
In the fashion industry, specific elements such as sketches of different wearables, materials used for their manufacture, the identity of specific suppliers or the terms and conditions applicable to the supply of goods, aspects related to advertising campaigns, may be protected through this tool, which, under Spanish law, is not stricto sensu an intellectual property right. The main strength of this form of protection is that as long as the information is kept secret, the protection conferred by the TSA is unlimited in time and also geographically (subject to the existence of an identical or similar protection system in other countries). The main vulnerability of this form of protection is that it does not confer the legitimate owner with an exclusive right enforceable vis-à-vis any third party, but only against those who are responsible for acts of unlawful acquisition, use and disclosure of trade secrets.
Domain names. Domain name registration is regulated by Spanish Order ITC/1542/2005 of 19 May 2005 on the ".es " domain names. Registration may be effected by an Accredited Registrar for a period of between one and ten years. Renewals of the domain names can be requested. Domain names provide a robust brand positioning online and avoids misappropriation by third parties.
1.5. Summary of additional IPRs
2 . Beyond intellectual property: what contractual arrangements are useful in manufacturing, distributing and advertising fashion products?
2.1. Manufacturing fashion products
In the fashion industry, often the manufacture of products is carried out in the framework of a license agreement in which the rights holder and licensor grants a third party or licensee the right (exclusive or not) to manufacture or have manufactured, in a specific territory, a particular category of goods or parts thereof, using specific forms of intellectual property rights or trade secrets, in exchange of a consideration.
Before the license agreements are entered into between the parties, often the licensor and the licensee negotiate on terms sheets and enter into non-disclosure agreements (NDAs) setting the main terms and conditions of the license agreements to be negotiated and entered into. When the licensed rights include or consist of trade secrets, NDAs are essential in order to properly identify the licensed rights and the specific duties to which the licensee commits in order to avoid the disclosure of the trade secrets, which would lead to the loss of the protection conferred.
2.2. Distributing fashion products
Apart from direct distribution by the intellectual rights holder or its licensee in a specific territory, agency and distribution agreements are the common contractual forms used for the distribution of fashion items in Spain.
Agency contracts are those entered into between a principal (often, the intellectual property rights holder or its licensee) and a self-employed intermediary who is granted the authority to negotiate and conclude the sale or the purchase of the fashion items on behalf and in the name of the principal, in a specific territory and in exchange of a remuneration. Unlike the commercial agents, distributors acquire the ownership of the fashion items and re-sell them to their own customers.
Whilst distribution agreements are not subject to a specific regulation in Spain, agency contacts are regulated by the Spanish Act 12/1992 on Agency Contracts, of 27 May 1992 (ACA), which transposed Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States related to self-employed commercial agents.
Both agency and distribution agreements must include intellectual property rights licensing clauses. Often, the source of remuneration of a distributor is the difference between the purchase and sale price, whilst a commercial agent’s remuneration, in the absence of any other agreement, often is entitled to a commission on the commercial transactions concluded. In addition, when the agency agreement is terminated, commercial agents are entitled to a commission on commercial transactions concluded after termination of the agency agreement if:
- the transaction is mainly attributable to the commercial agent’s efforts during the period covered by the agency contract and if the transaction was entered into within a reasonable period after that contact terminated; or
- the order of the third party reached the principal or commercial agent before the agency contract terminated.
Depending on the circumstances of the case, sometimes, Spanish courts apply this source of remuneration to distributors even in cases in which this source of remuneration has not been expressly contemplated, or even has been expressly excluded in a distribution agreement.
The implementation of selective distribution systems, including online, is common in connection with high-end products under specific criteria to be set by the intellectual property rights holder/licensor. These clauses should be subject to a very careful review, in order to make sure that they meet the appropriate balance between intellectual property rights and contractual protection and competition law.
2.3. Advertising fashion products
Fashion advertising is essential, as it is a key aspect of a company’s business strategy. In Spain, there are different types of contracts related to advertising such as the so-called “advertising contract”, “advertising-creation contract”, “advertising broadcasting contract”, “sponsorship contract”, and “merchandising contract”.
The common feature of all these contracts is that they must specify in detail, among other issues, the parties, the term, the territorial scope and, above all, the subject-matter of the contractual relationship since the Spanish General Act 34/1988, of 11 November 1988, on Publicity (PA) is not exhaustive about the latter. In any case, it is a case-by-case analysis. However, fashion advertising in Spain is not only subject to the obligations set forth by the PA, but special attention must also be paid to the Spanish Act 3/1991 on Unfair Competition of 10 January 1991 (UCA) and the Royal Decree of 24 July 1889 publishing the Civil Code (SCC).
Without prejudice to the foregoing, it should be borne in mind that image is one of the most important issues in the fashion field. In this sense, in addition to the innovation and quality of the products, their purchase is influenced by the image associated with the company’s brand. In this context, the use of the image of celebrities, influencers and sport stars entails legal issues that must be taken into account when drafting contracts related to fashion advertising, in particular, sponsorship contracts.
This being the case, image rights holders have the right to authorize the use of their image, name, voice, etc. by signing contracts with clauses on image uses with due regard for the national rules on image and data protection; i.e. the Organic Law 1/1982 on the Civil Protection of the Right to Honour, Personal and Family Privacy and Image of 5 May 1982 (SIA), and the Organic Law 3/2018 on the Protection of Personal Data and Guarantee of Digital Rights of 5 December 2018 (“SDPA”).
The contract shall clearly and fully identify:
- the party assigning the rights;
- territorial and temporal scope to avoid the use of the image in the market in several campaigns simultaneously;
- the uses and channels authorized by virtue of the agreement (social media; press; television; cinemas, and so on);
- the remuneration; and
- provisions on the applicable law and competent courts.
In any case, these contracts must also include a precise data protection clause in which the possibility to exercise rights to information, access, rectification, erasure, restriction of processing, data portability, object and avoid automated decision-making must be contemplated.
The transfer of the modalities that are to be exploited (for example, the image and the voice) must be delimited and the specific rights that are authorized must be listed such as, reproduction and public communication of the image. In addition, the main purpose of the authorization (such as marketing of the products covered by the contract) should be determined. In this context, advertising format is also important as audiovisual content is not the same as paper format.
Furthermore, the contract may also regulate the services to be provided for the advertising promotion of the products. For example, the contract could regulate the events in which the celebrity must be available.
Likewise, the exclusivity and non-competition clauses are important since fashion companies grow and compete in a fiercely competitive global market. This clause can be drafted in relation to a general sector (for example, men's clothing) or to a specific sector of products (for example, male underwear). There is a wide range of options.
Finally, it has to be noted that many contracts signed by influencers or brand ambassadors/celebrities could entail an intuitu personae agreement, that is, a personal services contract where the person of one of the contracting parties is an essential term of the contract. Therefore, among other issues, the parties should agree not to transfer the rights and obligations incumbent upon them in whole or in part by virtue of the agreement without prior written agreement from the other party. Moreover, in order to preserve the prestige and reputation of the fashion company, a moral rights clause should be incorporated into the contracts (e.g. to not make critical judgement on the company or to maintain the physical image in good condition). Indeed, under Spanish legislation, legal entities have moral rights (see the Judgment of the Spanish Supreme Court, of 20 February 2002, No. 127/2002).
As regards influencers, it should be noted that, on 1 January 2021, a Spanish Code of Conduct entered into force and established guidelines governing the relationship between social media and advertising by influencers. This Code of Conduct was developed by AUTOCONTROL, the main independent advertising self-regulatory organization in Spain, and the Spanish Association of Advertisers (AEA).
3 . What regulations govern online marketing and how are the rules enforced?
With regard to the Spanish regulation of online marketing, the Spanish Act 34/2002 on Information Society Services and Electronic Commerce of 11 July 2002 (ECA) and the Royal Legislative Decree 1/2007 approving the revised text of the General Law for the Defence of Consumers and Users and other complementary laws of 16 November 2007 (DCUA) are applicable. The purpose of the former is to regulate the obligations of service providers, including those who act as intermediaries in the transmission of content over telecommunication networks, commercial communications by electronic means, information prior and subsequent to the conclusion of electronic contracts, the conditions relating to their validity and effectiveness, and the system of penalties applicable to information society service providers. The second of these applies to any relationship between consumers or users and entrepreneurs.
In any case, the Proposal for a regulation of the European Parliament and of the Council on a single market for digital services (Digital Services Act) updates the rules defining the responsibilities and obligations of digital service providers, and in particular online platforms. This Regulation will replace Articles 12 to 15 of Directive 2000/31/EC (e-commerce Directive) and the national legislation transposing it (ECA). On the other hand, the Royal Decree-Law 7/2021 of 27 April 2021 transposes - among others - Directive 2019/770 on contracts for the supply of digital content and services and Directive 2019/771 on contracts for the sale of goods, both of 20 May 2019. These Directives aim to harmonize certain aspects of these contracts in order to achieve a true digital single market, strengthen legal certainty, and reduce transaction costs.
3.1. Consumer protection regulations
See above for the relevant legislation, insofar as its objective is the protection of consumers and recipients of services, so that they can enjoy sufficient guarantees when contracting services or goods over the Internet.
3.2. Physical store and online store layout
The store layout and online stores are protectable in Spain. On the one hand, they could be protected by copyright law, since the list of protectable works set out in Article 10.1 of the SCA is not exhaustive, that is, it is a numerus apertus (open) list. In this context, the shop layout or online stores could be protected if they complied with the originality requirement, with due regard to unfair competition ex post protection under the UCA.
4 . What are the most relevant unfair competition rules for fashion businesses and how do the Courts interpret and enforce these rules?
The UCA provides economic operators within the fashion industry with a robust set of substantive and procedural norms seeking to obtain preliminary and permanent injunctions, the recall of specific products, rectification of false statements, the compensation for losses and damages suffered and the publication of the judgement at the defendant’s costs, against any third parties who are responsible for or cooperate to any act of commerce which is not compatible to the honest commercial practices, even when the aggrieved party does not have an exclusive right to assert against the defendant. The acts that may be banned under the UCA are an open list which include acts of commercial blockage or hampering, acts of passing off, free-riding, acts of denigration, dumping, etc.
5 . Is there any regulation specifically addressing sustainability or ESG (Environmental, Social and Governance) in the fashion industry?
The Spanish regulation on labelling and certification is closely related to consumer protection and safety. In this sense, according to the Article 18 of the DCUA, the labelling and presentation of goods and services must be such as not to mislead the consumer. Likewise, all goods and services made available to consumers must incorporate the name and address of the producer, the nature of the product and its quality, among other matters. Consequently, labelling and the determination of certain data set forth by the Spanish legal system is mandatory. Failure to comply with the labelling requirements could constitute administrative sanctions.
Companies involved in the manufacture, import and marketing of textile products must also comply with the Royal Decree 928/1987 on the labelling of the composition of textile products of 5 June 1987 (LTPA), which contains specific obligations in the sector.
The labelling of “sustainable” fashion must also be taken into account. For example, the European Union Ecolabel is a label of environmental excellence that is awarded to products and services meeting high environmental standards throughout their life-cycle. On the other hand, there are also social responsibility labels, which, among other things, guarantee the observance of universal workers' rights and respect for the Universal Declaration of Human Rights.
In the field of jewellery, the Spanish legislator has mainly focused on the regulation of those elements that could have a direct effect on consumers. In this sense, see the Act 17/1985 on objects made of precious metals of 1 July 1985 (PMA) and the Royal Decree 197/1988, approving the Regulation of the Law on objects made of precious metals of 22 February 1988 (RPM). Therefore, manufacturers of objects made of precious metals must offer due guarantees as to the quality of their products.
ISO certification. In some sectors of the fashion industry it is common for companies to obtain certain certifications that demonstrate their compliance with the required quality standards. These include the following:
- Textiles: ISO/TC 38 Textiles; ISO/TC 72 Textile machinery and accessories and ISO/TC 133 Clothing sizing systems.
- Jewellery: ISO 9001:2015; ISO 14001:2015 and ISO 22001:2015
- Eyewear: ISO 12312-2:2015 and ISO 9001:2015
6 . Customs monitoring: do any special import and export rules apply to fashion products?
Brand and design owners within the fashion industry often use Regulation (EU) No 608/2013 of 12 June 2013 concerning customs enforcement of intellectual property rights (REIP) as a tool to inspect and seize merchandise which are suspected to be counterfeit products and seek its release to free circulation in the EU market through the Spanish airports and harbours.
This helpful intellectual property rights protection tool is triggered by a simple form to be completed by the right holder. The above-mentioned form is filed with the customs authorities identifying the relevant intellectual property rights and giving the customs officers’ guidelines to identify counterfeit products. Protection is granted for one year, renewable for identical periods. Once the application is filed by the rights holder and the customs authorities identify a merchandise seeking to be released to free circulation which is suspected of infringing the right holder’s intellectual property rights, the rights-holder is offered the possibility to inspect the merchandise and, if it confirms that it is a counterfeit product, to prove the filing of either a criminal or a civil infringement action against the importer, the identity of which will be disclosed by the customs authority to the rights holder. Once the court proceedings are instituted, the seized merchandise shall not be released to free circulation, unless a judge decides to lift the seizure.
7 . Frequently Asked Questions