Distinctive signs, that is, trademarks and trade names, including non-traditional trademarks, such as colour marks (e.g., the Louboutin case concerning its red-soled shoes), position marks, smell marks, shape marks, black and white marks and pattern marks) are widely used in the fashion industry to display a product’s essential functions (note that to obtain registration of a smell mark, applicants must also be able to represent the product’s smell and must show it is distinctive from the product itself). Such distinctive signs indicate the commercial origin of the goods, guarantee the quality of the goods in question and of related communication, investment or advertising (see CJEU, Judgment of 18 June 2009, L’Oréal v. Bellure, C-487/07).

At the EU level, this form of intellectual property is regulated by Regulation (EU) 2017/1001 (EUTMR) and, at a national level, by Spanish Trademark Act No. 17/2001, of 7 December 2001 (TMA). Registration is valid for a period of 10 years and can be renewed indefinitely for identical periods. Trademark registrations are vulnerable to non-use if they are not used by the right holder or a licensee within five years of registration. An application for registration can be filed locally with the OEPM or by designating Spain via the Madrid Protocol. There is the possibility of filing an application with the EUIPO.

The national and EU systems are complementary, and work in parallel with each other. National level trademarks are necessary for users who do not want or need protection of their trademarks at the EU level. EU trademarks give protection in all Member States of the Union, for those who want that option.

Registered and unregistered designs are robust protection tools in relation to 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 trademark 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. There is no substantive examination at the corresponding registry, so there may be uncertainty as to whether the corresponding design could survive an attack on validity.

Unregistered designs are valid for three years from the date of first disclosure. The date of first disclosure is the date that an image of a product is made available to the public (for instance, the publication of photographs of an item of clothing); the disclosure itself entails making available to the public a design of a part of that product or a component part of a complex product, provided that the appearance of that part or component part is clearly identifiable at the time the design is made available (Judgement of the EU Court of Justice, 28 October 2021, Case C‑123/20). Companies in the fashion industry can choose what they want to protect as unregistered designs (for example, a specific new and distinct component of a jacket) and what they want to protect as registered designs.

An application for registration can be filed locally with the OEPM or by designating Spain via the Hague System. There is also the option of filing an application with the EUIPO. One European Union registration gives a registered Community design that is valid in all EU countries.

An interesting recent case concerning the protection of a registered design is the Spanish cachirulo case. The cachirulo is a traditional headscarf from the Spanish region of Aragon, and is a symbol of Aragonese folklore. In this case, the Spanish Supreme Court declared that the Spanish industrial design rights that had been granted in relation to the application of the Aragonese cachirulo pattern to a tubular garment or neck brace were invalid due to lack of novelty and individual character (No. 608/2021, 16 September 2021). The court ordered the cancellation of the design registrations with the OEPM (the invalid industrial designs were No. 514810-01 and No. 514810-02).

Copyright protection is often used in the fashion industry. The relevant legislation is 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 the need for registration, the copyright holder usually has exclusive rights to reproduce, transform, communicate to the public and distribute the copyrighted work in the course of trade for the life of the author plus 70 years after their death (as a general rule).

Copyright registration with the Spanish Copyright Registry is available in Spain, but registration is not legally required since the mere act of creation gives the creator copyright protection. The benefits of copyright registration are simply that there is a public record of ownership and a rebuttable presumption of ownership.

In any case, two 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).

It is important to note the potential relationship between copyright and so-called non-fungible tokens (NFTs) in the fashion sector, in light of the very important Decision of the Commercial Court (9) of Barcelona, of 21 October 2022 (Preliminary Injunction Proceedings, No. 468/2022) in relation to an application for an ex parte preliminary injunction against a well-known Spanish fashion company. The case focuses on whether the owner of an artistic work can convert it into an NFT for use in the corresponding metaverse. It is interesting in that, in addition to questioning the right of the above-mentioned fashion company to digitalise and convert some of the protected works it owns into NFTs, the decision requires those responsible for the OpenSea platform to transfer the NFTs to a physical wallet designated by the plaintiff until the final judgment in the proceedings on the merits were issued. The judgment (proceedings on the merits) was rendered by the Commercial Court of Barcelona on 11 January 2024. The court declared that the digitisation of the physical works constituted a harmless use such that the authorisation of the copyright holders was not required.
 

Patents. The functional aspects of wearable fashion items and their method of manufacture may be subject to patent protection as patentable inventions for a non-extendable period of 20 years, as long as they meet the patentability requirements of novelty, inventive step, industrial application, sufficiency of disclosure and non-unallowable added subject-matter (note that a patent application may not be amended in such a way that it contains subject-matter which extends beyond the content of the application as filed). In Spain, patents and utility models are regulated by the Spanish Act 24/2015 on Patents of 24 July 2015 (SPA). Spain has been a member of the European Patent Organisation since 1986, so the European Patent Convention is applicable.

It is possible to file an application nationally with the OEPM, to file an application with the European Patent Office, or to enter the national phase through the Patent Cooperation Treaty.

Trade secrets. In Spain, trade secrets are regulated by the Spanish Act 1/2019 on Trade Secrets of 20 February 2019 (TSA), which transposes 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
• reasonable steps have been taken, in 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, and aspects of advertising campaigns, may be protected by this tool, which, under Spanish law, is not strictly 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 terms of duration and geographical coverage (subject to the existence of an identical or similar protection system in other countries). The main flaw of this form of protection is that it does not give the legitimate owner an exclusive right enforceable against any third party, but only against those who are responsible for the acts of unlawful acquisition, use and disclosure of trade secrets.

Domain names. Spanish domain name registration is regulated by Spanish Order ITC/1542/2005 of 19 May 2005 in relation to ‘.es’ domain names. Registration may be granted by an Accredited Registrar for a period of between one and 10 years, and the final grant depends on the availability of the domain name at the time of purchase. Domain name renewal can be requested. Domain names provide robust brand positioning online and avoid misappropriation by third parties. 

Licensing in the fashion sector, from the design to distribution of products, is very important and should therefore be analysed from several perspectives.

Licence agreements 

In the fashion industry, the manufacture of products is often carried out using the framework of a licence agreement, in which the rights holder and licensor grants a third party or licensee the right 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 for consideration. In this context, to make the best use of this intellectual property tool and avoid unnecessary risks, it is necessary to pay particular attention to the following key issues:

• the exclusive or non-exclusive nature of the licence;
• the definition of the categories of products included in the licence;
• the territory: licensor’s brand profile/capacity of the licensee;
• “new technology clauses” in licences that generally extend the right of exploitation to all technologies known at the time, and to be developed in the future (e.g., the relatively new and constantly evolving metaverse, which offers various types of exploitation);
• brand usage guidelines;
• permitting the licensee to make use of IP, and ensuring that there is no transfer of the IP to the licensee;
• the term of the agreement, which depends on the specific IP right, market and investment that the licensee has to make;
• authorisation/no authorisation to sub-contract;
• termination obligations (e.g., destruction of materials) and post-termination obligations (e.g., confidentiality obligations).

Non-disclosure Agreements (NDAs)

Special attention should be paid to the licensing negotiation process, which should start with an NDA. In this sense, before licence agreements are entered into between the parties, the licensor and the licensee often negotiate on term sheets and enter into NDAs setting the main terms and conditions of the licence agreements to be negotiated and entered into. When the licensed rights include or consist of trade secrets, NDAs are essential to properly identify the licensed rights and the specific duties to which the licensee commits to avoid the disclosure of the trade secrets, which would lead to the loss of the protection conferred. In this sense, the corresponding NDA could contain the specific scope of confidential information and, if applicable, a descriptive list of confidential information, the extent of the confidentiality duties, and the term of the NDA. 

Subcontract agreements with suppliers / in-house manufacturing

As stated above, one of the key issues when manufacturing fashion products is whether or not there is authorisation to sub-contract. In the case of subcontracting, special attention should be paid to certain issues, such as the duration of the work and the specific terms of manufacture and payments, as well as quality control and inspection obligations.

Apart from direct distribution by the intellectual rights holder or its licensee in a specific territory, agency and distribution agreements are common contractual forms used for the distribution of fashion items in Spain.

Agency agreement

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 purchase of the fashion items on behalf and in the name of the principal, in a specific territory and in exchange for remuneration. Unlike commercial agents, distributors acquire ownership of the fashion items and re-sell them to their own customers.

Whilst distribution agreements are not subject to specific regulation in Spain, agency contacts are regulated by the Spanish Act 12/1992 on Agency Contracts, of 27 May 1992 (ACA).

Both agency and distribution agreements must include IPR licensing clauses. Often, a distributor’s remuneration is the difference between the purchase and sale price, whilst a commercial agent, in the absence of any other agreement, is often 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 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 was terminated.

Depending on the circumstances of the case, Spanish courts sometimes grant this remuneration to distributors even in cases where the remuneration has not been expressly contemplated, or has even been expressly excluded, in a distribution agreement.

In any case, the potential indemnity cannot exceed the average annual amount of the remuneration received by the agent during the last five years or during the entire duration of the contract, if this is less.

Selective distribution online in high-end fashion and trademark protection

The implementation of selective distribution systems, including online, is common in connection with high-end products, and occurs in accordance with specific criteria to be set by the IPR holder/licensor.

In any case, there are certain issues to be considered when setting up selective distribution agreements for high-end products, being: selection of distributors according to qualitative criteria; prohibition of sales to third parties outside the official distribution network; the sale of products in authorised establishments only; the potential restriction of sales on third-party platforms that are not in keeping with the prestigious image of the products; and the requirement of a minimum number of sales.

These clauses should be subject to very careful review, to make sure that they meet the appropriate balance between ensuring intellectual property rights and contractual protection, and not breaching competition law.

Co-branding and co-marketing

Co-branding and co-marketing contracts are agreements where two or more companies decide to join forces to support each other and gain strength in the market by boosting the profitability and value of their trademarks. Co-branding contracts are not directly regulated in Spain. When negotiating and drafting co-branding and co-marketing contracts, it is important to:

• precisely define the purpose of the agreement;
• ensure the proper use of the owner’s brand by the other party, and include mechanisms to, among other things, preserve the prestige and reputation of the fashion company;
• set out the specific duration of the licence to be granted;
• address the issue of confidentiality clauses;
• set out the exclusive or non-exclusive nature of the agreement;
• address the potential sharing of costs;
• determine termination obligations.

Franchising and alternative sales model agreements

In addition to corner store arrangements, showrooms and pop-up store contracts, franchising agreements are the main sales model agreements used in the fashion sector. Franchising agreements are not specifically regulated in Spain. In any case, the choice of franchisee is very important to protect brand image, and attention should also be paid to: the validity of all clauses under competition law; the price recommendation or the maximum price for the product or service; rights to repurchase the stock at the conclusion of the contract; and the minimum purchase obligation.

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 as the Spanish General Act 34/1988, of 11 November 1988, on Publicity (PA) does not deal with this matter exhaustively. This must be done on a case-by-case analysis. However, fashion advertising in Spain is not only subject to the obligations set by the PA; special attention must also be paid to the Spanish Act 3/1991 on Unfair Competition of 10 January 1991 (UCA) and Royal Decree of 24 July 1889 publishing the Civil Code (SCC).

Employing fashion models

Image is one of the most important issues that arises in the fashion industry. In addition to the innovation and quality of products, their purchase is influenced by the image associated with the company’s brand. In this context, the use of images of celebrities, influencers and sports stars raises legal issues that must be taken into account when drafting contracts related to fashion advertising, in particular, sponsorship contracts.

Image rights holders have the right to authorise the use of their image, name, voice and so on by signing contracts with clauses on image uses that take into account the national rules on image and data protection (i.e., the Organic Law 1/1982 on the Civil Protection of the Right to Honor, 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 must 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;
• uses and channels authorised by virtue of the agreement (social media, press, television, cinemas and so on); and
• remuneration.

Such contracts must also include a precise data protection clause. In addition, the features of the celebrity to be exploited (for example, their image and voice) must be defined and the specific rights that are authorised must be listed. Likewise, the main purpose of the authorisation, such as marketing of the products covered by the contract, should be determined. In this context, note that advertising format is also important as audiovisual content is not the same as paper format.

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 that the celebrity must be available to attend.

Exclusivity and non-competition clauses have become increasingly important as fashion companies grow and compete in a fiercely competitive global market. These types of clauses can be drafted in relation to a general sector (for example, men’s clothing) or a specific type of product (for example, male underwear). There is a wide range of options.

Social media, influencers and brand ambassadors/celebrities

Many contracts signed by influencers or brand ambassadors/celebrities may entail an intuitu personae agreement, that is, a personal services contract where the person of one of the contracting parties is an essential or the main aspect of the contract. 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. Further, to preserve the prestige and reputation of the fashion company, a moral rights clause should be incorporated into the contract (e.g., to refrain from criticising the company or for the person to keep their physical image in good condition). Indeed, under Spanish law, legal entities have moral rights (see the Judgment of the Spanish Supreme Court, of 20 February 2002, No. 127/2002).

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 organisation in Spain, and the Spanish Association of Advertisers (AEA).

Advertising standards, relevant authorities, and advertising practice

As noted above, there are no general advertising standards or associations that directly regulate the fashion industry in Spain. However, there are associations of fashion experts that have an important impact on the sector, particularly the Confederation of Fashion Companies of Spain.

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 Defense 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, conditions relating to their validity and effectiveness, and the system of penalties applicable to information society service providers. The second of these laws applies to any relationship between consumers or users and entrepreneurs.

See above for the relevant legislation, to the extent its objective is the protection of consumers and recipients of services so that they can enjoy sufficient guarantees when entering into contracts for services or goods over the internet.

Store layout and online stores are protectable in Spain. In essence, they can be protected by copyright law, as the list of protectable works set out in Article 10.1 of the SCA is not exhaustive (that is, it is a numerus apertus or open list). In this context, they can be protected if they comply with the originality requirement, with due regard to unfair competition ex post protection (i.e. once the unfair competition tort occurs) under the UCA (see Question 4).

The UCA gives economic operators within the fashion industry a robust set of substantive and procedural norms in relation to obtaining preliminary and permanent injunctions, the recall of specific products, rectification of false statements, compensation for losses and damages suffered, and the publication of judgements at the defendant’s cost, against any third parties who are responsible for or cooperate in any act of commerce that is not compatible with honest commercial practices, even when the aggrieved party does not have an exclusive right of assertion against the defendant. Acts that may be banned by the UCA include: commercial blockage or hampering, passing off, free-riding, denigration, dumping, etc.

Spanish regulation on labelling and certification is closely related to consumer protection and safety. Under Article 18 of the DCUA, the labelling and presentation of goods and services must not 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 things. Failure to comply with the mandatory labelling requirements can result in administrative penalties being imposed.

Companies involved in the manufacture, import and marketing of textile products must also comply with Royal Decree 928/1987 on the labelling of the composition of textile products of 5 June 1987 (LTPA), which contains obligations specific to the sector.

In relation to the labelling of “sustainable” fashion, the European Union Ecolabel is a label of environmental excellence that is awarded to products and services that meet high environmental standards throughout their life cycle. 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 legislature has mainly focused on the regulation of those elements that could have a direct effect on consumers; see Act 17/1985 of 1 July 1985 (PMA) and Royal Decree 197/1988 of 22 February 1988 (RPM), approving the Regulation of the Law on objects made of precious metals. Manufacturers of objects made of precious metals must offer due guarantees as to the quality of their products.

In some sectors of the fashion industry, it is common for companies to obtain certain ISO certifications that demonstrate their compliance with the requisite quality standards

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 suspected of being counterfeit, where the owners of that merchandise are seeking its release so that it can be freely circulated in the EU market through Spanish airports and harbours.

To make use of this helpful IPR protection tool, the rights holder must complete and file a form with the customs authorities, identifying the relevant intellectual property rights and giving 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 merchandise that potentially infringes the rights holder’s IPRs, the rights holder can inspect the merchandise and, if it confirms that it is a counterfeit product, file either a criminal or a civil infringement action against the importer (whose identity will be disclosed by the customs authority to the rights holder). Once court proceedings are begun, the seized merchandise will not be released for free circulation unless a judge decides otherwise.

Is dual protection for copyright and registered designs available in Spain?

Yes. If certain aspects of the registered design are original and the work is identifiable with sufficient precision and objectivity, a product can be protected by both the law on copyright and registered designs.

Can a potential defendant file a protective letter in relation to a fashion matter in Spain?

Yes, with respect to all intellectual property rights, including copyright.

Will use in the metaverse by a fashion brand constitute genuine use of a trademark in its core classes, or will new filings be required?

Yes, although it would be advisable for a stakeholder to review the protection afforded by their trademark portfolio in the EU and assess whether the relevant products and services are covered, and whether sufficient protection is afforded to a trademark in the metaverse. That said, renowned trademarks will benefit from wider protection, which includes the metaverse.