On September 29, 2013, the China (Shanghai) Pilot Free Trade Zone (FTZ) was established in the Pudong New Area, covering 120.72 km². It is a regional free trade zone established by the Chinese government. By the end of 2019, in the FTZ, (i) more than 12,000 foreign-invested enterprises had been established, and (ii) more than 2,800 overseas investment projects had been completed, with Chinese investment exceeding 90 billion U.S. dollars.

Recently, on September 21, 2022, the Shanghai Pudong New Area Primary People’s Court (“Shanghai Pudong Court”) published the document “White Paper on Commercial Litigation Involving Foreign and Foreign-Invested Enterprises,” which compiles key information on commercial litigation involving foreign-related enterprises and foreign-invested enterprises since the publication of the “Opinions of the CPC Central Committee and the State Council on Supporting the High-Level Reform and Opening-Up of the Pudong New Area and Building Pudong as a Pioneer Area for Socialist Modernization” in July 2022.

From August 2021 to July 2022, the Pudong Court in Shanghai accepted 1,301 cases involving foreign-related and foreign-invested enterprises (excluding intellectual property and financial cases) and resolved 1,305. The White Paper reveals the following:

• 361 foreign entities were involved in the cases accepted by the Court that year; among them, the number of wholly foreign-owned companies (54.59%) was slightly higher than that of mixed-ownership companies (45.41%).
• The disputes involved nationals from more than 20 countries and regions, with the United States and the United Kingdom accounting for the largest number; however, there is a growing impact from the countries participating in the “Belt and Road Initiative” (or New Silk Road) and from the member states of the Regional Comprehensive Economic Partnership (RCEP).
• The three most important areas of commercial law are those relating to goods, services, and processing, which give rise, for example, to claims regarding sales contracts, service contracts, and processing contracts.
• The number of cases resolved through mediation and/or withdrawn after mediation was greater than the number of cases resolved through trial.

The cases analyzed in the White Paper reveal the following trends:

Commercial litigation involving innovative industrial sectors—such as new electric vehicles, mobile energy, semiconductor chips, and artificial intelligence-related technology—is on the rise.

There are various types of disputes concerning the internal management of companies: investments, the validity of shareholder or board of directors’ resolutions, mergers, spin-offs, and the dissolution of companies, as well as disputes among investors

Litigation over equity incentives is increasing significantly, with disputes arising over the legal nature, interpretation, application, and valuation of such incentives;

Litigation related to new business models in the digital economy is on the rise.

The digital economy has given rise to numerous innovative business models, such as digital marketing, advertising in new media, online education and training, account management services, and the promotion of customer traffic through e-commerce, among others. Since no optimized regulations have been established in this area, the Shanghai Pudong Court listed some key issues for resolving disputes in this field: determining the validity of new types of contractual clauses, such as “exclusive agent,” “exclusive media outlet,” “non-compete,” and “valuation adjustment mechanism”; converting digital output into consideration and distinguishing the actual effect of traffic in the virtual world, etc.

Along with the White Paper, seven typical cases were published that involved issues such as the application of foreign laws to determine the validity of arbitration clauses, the application of international conventions on assistance to foreign courts in the investigation and collection of evidence, and the determination of the legal attributes of pro forma invoices in cross-border trade, etc., which, on the one hand, allows the public to gain insight into foreign-related litigation accepted by the Shanghai Pudong Court, and, on the other hand, provides cases that serve as valuable references for future similar litigation.

Author: Dan Liu

Changes to the regulations governing drones through European regulations have been significant, and we must remain vigilant about the changes that will be introduced in the near future, especially when drone use goes beyond mere entertainment and becomes a professional activity.

In this regard, the basic regulation governing these activities is Regulation (EU) 2018/1139 of the European Parliament and of the Council, dated July 4, 2018, which establishes common rules in the field of civil aviation.

The general regulation gives rise to Commission Implementing Regulation (EU) 2019/947 of May 24, 2019, which establishes the rules and procedures for the operation of unmanned aircraft systems (UAS)—the technical term for what we commonly refer to as drones. The entry into force of this regulation has recently been delayed due to delays in standardization processes and activities carried out in the sector. It will take effect gradually, with a phased schedule of dates for the various legal adjustments ranging from July 1, 2022, to December 2, 2025, as the final deadline.

In the case of Spain—and as the State Aviation Safety Agency (AESA) was quick to point out—the Implementing Regulation conflicts with the provisions of Royal Decree 1036/2017, which is the applicable national regulation regarding training. It is therefore likely that the regulatory escalation we mentioned earlier will be accompanied by national regulations that align European and national regulations.

In addition, any user who wishes to fly a drone must meet certain minimum requirements:

• Register as an operator on the AESA online portal and obtain an operator number in accordance with European regulations (except for the open category).
• Pilot training and licensing: In the open category, no license is required for Class 0 drones or drones weighing less than 250 grams. The training required for subcategories A1 and A3 is available free of charge on the AESA website.
• Mandatory civil liability insurance: In the open category, it is not required for Class 0 drones or drones weighing less than 250 grams.
• Flight rules: These depend on the drone's weight, the presence of other people, and proximity to buildings.
• Geographic Areas: In addition to the “flight rules,” there are restrictions on drone operations due to the presence of military zones, environmental protection, critical infrastructure protection, etc.

Even if the device is purchased solely for recreational purposes, users must comply with the regulations, as failure to do so may result in fines, which can be very high.

There’s no doubt that flying a drone can be an exciting activity, but we must pay attention to the law and, above all, to the changes that national regulations in this area are likely to undergo—whether we plan to pursue this professionally or simply as a hobby. As we’ve seen, ignoring this issue could end up costing us dearly.

Authors: Jaime Contreras & Mabel Klimt. Media & Entertainment

This article first appeared in Legal Industry magazine (Sept. 2022).https://www.flipsnack.com/cejchile/the-legal-industry-reviews-espa-a-vol-5-septiembre-2022/full-view.html.

[Background]

In July 2012, Dongfang Mingri (Jinjiang) Import & Export Co. (“Dongfang Mingri”) filed an application to register the word mark “奔富酒园” in Chinese characters (in English: BEN FU WINERY, No. 11157214), which was granted in December 2015, designating, among other things, goods such as “wine, brandy” in Class 33. Following registration, Dongfang Mingri began using the trademark for wine products in the Chinese market.

Southcorp Brands Pty Limited (a subsidiary of Treasury Wine Estates, “Southcorp”) filed an application to invalidate the registration of the contested trademark “奔富酒园” in March 2016, on the grounds that the contested trademark was similar to a sign (“奔富” (pronounced: BEN FU)) that had already been used by certain Southcorp distributors and enjoyed substantial influence, in addition to the fact that the owner of the contested trademark had registered a large number of trademarks that were reproductions, imitations, or translations of well-known third-party trademarks, which was contrary to the principle of good faith.

The Trademark Review and Adjudication Board decided to invalidate the registration of the contested trademark, finding that there was a clear intent to take unfair advantage of the reputation of well-known trademarks, engage in unfair competition, and seek illegal profits, thereby violating the principle of good faith and disrupting the proper administration of the trademark registry and fair and orderly market competition. Dongfang Mingri’s activities were found to constitute“acquisition of a registration by other improper means,”as set forth in Article 44(1) of the Trademark Law of 2014 (unchanged in the 2019 Amendment to the Trademark Law).

The Beijing Intellectual Property Court rejected Dongfang Mingri's appeal, which had been remanded by the Beijing High Court.

The case is finally referred to the Supreme Court of the People's Republic of China.

[Decision]

The Supreme Court first summarized the key issue in the case, which was to determine whether the contested trademark “奔富酒园” had been registered through other improper means, such as those prohibited under Article 44(1) of the Trademark Law of 2014.

At the outset, the Court confirmed that the most relevant element of the contested trademark is the first two Chinese characters, “奔富 (BEN FU)”; the combination of the remaining two Chinese characters, “酒园,” means “winery,” which can only be treated as a common description in the relevant industry.

Southcorp provided sufficient evidence to support its argument that the sign “奔富” was first used by some of Southcorp’s distributors in the 1990s to refer to the “Penfolds” wine brand, a Southcorp product. Furthermore, from the perspective of the relevant public, long before the filing of the contested trademark application, the Chinese characters “奔富 (BEN FU)” had been regarded as a transliteration of “Penfolds” and, as a result, established a strong association with it.

Prior to the case at hand, there had been numerous disputes involving trademark infringement and unfair competition between Southcorp and Dongfang Mingri. Previous rulings had found that Dongfang Mingri and its subsidiaries had intentionally misled the public by using promotional materials for the “Penfolds” wine brand in the media, which constituted unfair competition as well as an infringement of the “PENFOLDS” trademark.

Based on the foregoing analysis, the Court concluded that, by filing the application to register the contested trademark “奔富酒园,” Dongfang Mingri intends to capitalize on the reputation of the “Penfolds” wine producer and gain an unfair advantage over it.

Furthermore, the Court found that the fact that Dongfang Mingri and its subsidiaries had registered a large number (more than 250) of trademarks copied from other well-known trademarks—such as “宾利 (BIN LI, a transliteration of BENTLEY)”—for goods and services in classes 33 and 35 went far beyond what is necessary for a normal business.

[Comments]

From the filing of the petition to invalidate the trademark registration to the issuance of the judgment of invalidity, this case has come to an end after six years.

In the appeal proceedings before the Beijing High Court, the TRAB’s decision and the Beijing Intellectual Property Court’s judgment invalidating the contested trademark were based, among other things, on the fact that the contested trademark had been used in commerce by the owner after registration.

Contrary to the opinion of the Beijing High Court, the Supreme Court clarified the concept of“obtaining registration by fraudulent or other improper means”in Art. 44(1) of the 2014 Trademark Law (there are no changes in the 2019 Amendment to the Trademark Law), holding that it should be interpreted as referring to the means employed when filing the application for registration, rather than the purpose of the registration, which is in itself improper.

Therefore, the fact that the contested trademark was put into use after registration—regardless of the level of advertising investment or the effectiveness of the advertising—cannot negate the “improper” nature of the means used to obtain the registration and, consequently, cannot justify the registration of the trademark.

The ruling reflects the Court’s tendency to protect best practices in trademark registration, in a manner consistent with the CNIPA, which has continued to vigorously combat malicious trademark registration in recent years.

Author: Dan Liu

In recent years, trademark and patent law has become a realthorn in theside of the legal system. Yesterday’s issue of the Official State Gazette (BOE), dated July 28, right at the close of the judicial year, provides us with a new example of this peculiar phenomenon.

Organic Law 7/2022, passed by Parliament, stems, for our purposes, from a previous reform: the most recent amendment to the Trademark Law (2019), which announced the removal of trademark invalidity and revocation actions—currently handled by the Commercial Courts—from the judicial system and their conversion into an administrative proceeding before the Spanish Patent and Trademark Office (OEPM). This far-reaching change will not take effect until January 14, 2023.

Now the legislature, aware of the reservations that thisrevolutionhad sparked among some quarters—and almost as a form ofcompensation—is turning the tables once again with this new organic amendment: alldecisions by the Spanish Patent and Trademark Office, whether or not they relate to trademark invalidity and revocation proceedings, will be subject to review through civil courts rather than through the traditional contentious-administrative appeal.

As surprising as it may seem, jurisdiction over this new civil procedure for judicial review of SPTO decisions is assigned to the provincial courts, which thus see their scope of action expanded and will face procedural scenarios that had long been forgotten. An appeal against judgments issued by commercial courts is not the same as a single-instance proceeding arising from prior action by an administrative body.

As you might expect, this change is timed to coincide with the previous one and will not take effect until January of next year. And this is not a transitional period to be taken lightly.

Indeed, the hiatus that will last until January will require professional firms to take time to reflect, because the professionals who traditionally represent clients before the Spanish Patent and Trademark Office (OEPM) are industrial property agents, while those who appear before the provincial court are attorneys. Those hybrid firms that employ both types of professionals are poised to gain a competitive advantage in this new landscape.

But at the same time—and more importantly—the reform requires companies to take a strategic, case-by-case approach to determine to what extent it is preferable to ensure that an action for the invalidation or revocation of a trademark is handled through court proceedings rather than administrative proceedings, by filing such an action before the law takes effect. The fact is that, depending on the circumstances, this procedure before the Spanish Patent and Trademark Office (OEPM) can have as many advantages as it does disadvantages.

A new challenge for all of us in this process of jurisdictional deconstruction of industrial property, to which we have already become accustomed.

Author: Enrique Armijo Chávarri

This article first appeared in Cinco Días (JUL/2022). https://cincodias.elpais.com/cincodias/2022/07/28/legal/1659010274_560496.html

In just a few months, early next year, a significant legislative reform affecting the procedures for the invalidation and revocation of Spanish trademarks will take effect in Spain: these procedures, which have traditionally been handled by civil courts, will now be managed by the Spanish Patent and Trademark Office (OEPM). This will bring them in line with their EU counterparts—trademark invalidation and revocation proceedings in the EU, which are handled by the European Union Intellectual Property Office (EUIPO) rather than through the courts. However, Spanish civil courts will continue to have jurisdiction over trademark invalidity and revocation actions filed as counterclaims in civil proceedings initiated by a trademark infringement lawsuit.

The reform was approved several years ago, in 2019, as part of the transposition into Spanish law of a 2015 EU directive on trademarks, but due to its significance, its entry into force was postponed until January 14, 2023.

Legal professionals and some academics expressed their reservations about the new judicial system at the time. Among other issues, the criticism focused on the significant evidentiary component that some trademark invalidity and revocation proceedings may involve (for example, in cases of invalidity based on a petition filed in “bad faith”), for the examination and assessment of which the Spanish Patent and Trademark Office (OEPM) lacked the extensive experience and detailed regulatory framework possessed by the courts and judicial proceedings.

The aforementioned criticisms must have had some effect on Spanish lawmakers, given the recent legislative reform (approved in late July 2022), which grants civil courts (specifically, the specialized divisions of the Courts of Appeal) jurisdiction to hear appeals against all final decisions of the Spanish Patent and Trademark Office (SPTO) (including, therefore, those concerning the invalidity and expiration of trademarks). This reform will also take effect on January 14, 2023.

This new situation will require the specialized divisions of the Courts of Appeals to begin adapting to ruling on appeals not only against judgments handed down by the Commercial Courts, but also against decisions issued by an administrative body (the OEPM) in the context of administrative proceedings whose procedural rules and particularities have, until now, remained outside the purview of the civil courts.

The Spanish legislature has justified this new distribution of jurisdiction based on the “high level of expertise in industrial property matters” possessed by the specialized divisions of the Courts of Appeal, as well as “the desirability of avoiding differing jurisprudential standards in this area, given that two branches of the judiciary—the contentious-administrative and the civil—have jurisdiction, thereby promoting the principle of legal certainty.”

Beyond the doubts that this reform of the jurisdictional framework for industrial property proceedings may raise regarding the suitability of the OEPM, on the one hand, and the civil courts, on the other, to hear such proceedings and appeals, the usefulness of concentrating appeals against all OEPM decisions in the specialized divisions of the Courts of Appeal seems indisputable: this will unify the case law criteria regarding industrial property law in Spain, eliminating the previously possible divergent interpretations of the same or similar issues by civil courts and administrative courts (including the corresponding civil and administrative chambers of the Supreme Court).

Author: María Cadarso

The Business Creation and Growth Act, which has just been approved by the Congress of Deputies and will be sent to the Senate for consideration, has the following main objectives:

• Improve the business climate to promote business creation and growth by adopting measures to streamline the process of starting a business.
• Improve regulation and remove barriers to economic activity.
• Reduction in commercial delinquency.
• Improve access to financing.

To achieve these objectives, the legislation introduces a series of new provisions, which are detailed below.

Incorporation and Digitization of Companies 

The legal minimum of 3,000 euros required to form a limited liability company is now1 euro, but the following must be taken into account:

• An amount equal to at least 20 percent of the profitmust be allocated to thecompany's legal reserveuntil that reserve, together with the share capital, reaches 3,000 euros.
• In the event of liquidation, if the company’s assets are insufficient to cover its obligations,the partners shall be jointly and severally liablefor the difference between 3,000 euros and the amount of the subscribed capital.

This first measure aims to promote the creation of businesses by lowering their incorporation costs (both registration and notary fees), expanding the options available to founding partners regarding share capital in accordance with their needs and preferences, and reducing any incentives to establish businesses in other countries with lower incorporation costs.

In addition, reforms are being introduced to facilitate and promote the formation of companies in afast, streamlined, and electronic manner through the Information Center and Business Creation Network (CIRCE) and by using the Single Electronic Document (DUE), thereby reducing registration and notary fees.

Measures to Combat Commercial Delinquency

Excessive payment delays are common in our country, with small businesses having the highest rates of late payments and defaults because they lack the economic and financial strength of large companies.

To foster a change in corporate culture, the government will first establish the NationalDelinquency Observatory, which will be responsible for monitoring trends in payment data and promoting best practices.

Second, sinceelectronic invoicing is a useful tool for reducing transaction costs and facilitating access to information on payment terms, its scope of use will be expanded; as a result, it will be mandatory for all companies and self-employed individuals to issue and send electronic invoices in their business transactions.

It is important to note that, today and for several years now, the use of electronic invoices has been widespread among businesses and individuals. In fact, since January 2015, electronic invoices (e-invoices) have been mandatory for all businesses that have commercial relationships with public administrations and whose transactions exceed 5,000 euros.

Consequently, the legislature’s intent is to make its use mandatory inallcommercial transactions between companies and self-employed individuals in our country, with a 3-year transition period for the implementation of electronic invoicing for smaller companies.

Third, grant programs are being proposed to facilitate the acquisition and implementation of digitalization solutions, notably theDigital ToolkitProgram, which has been allocated more than 3,000 million euros in grants.

Finally, an average payment period (60 days, as establishedin Article 4.3 of Law 3/2004, which establishes measures to combat late payment in commercial transactions) is included as a requirement for accessinggrantsand as grounds for termination and a criminal offense in public procurement.

Therefore, companies and self-employed individuals seeking grants exceeding 30,000 euros will only be eligible for such assistance if they meet the payment deadlines, which are 60 days for business-to-business transactions; compliance must be demonstrated by submitting a sworn statement.

Crowdfunding platforms

A new legal framework is being introduced for this type of platform, which seeks to raise funds from a variety of sources for the purpose of financing a specific project, based on Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020, on European providers of crowdfunding services for businesses.

 The main change introduced by the law is that these types of organizations will be able to provide their services freely without having to obtain a separate authorization in each Member State.

In other words, these platforms will have to apply to the competent authority of the Member State in which they are established for authorization to operate as a crowdfunding service provider. They will then be required to notify the European Securities and Markets Authority (ESMA) so that they may operate throughout the European Union.

In addition, some of the main changes introduced by the regulation regarding the obligations of these types of operators are as follows:

• Portfolio Management: The crowdfunding service provider will be permitted to invest funds on behalf of the investor.
• Per-investor limit:A single individual investment limit per project is established for retail investors, set at the higher of 1,000 euros or 5% of their net worth (excluding real estate and pension funds).

It is important to note that this concept of “wealth” is an ambiguous term that does not actually specify its true scope, so it will need to be clarified before the law takes effect. Even so, we understand that it is similar to the concept of “net worth.” There is no problem with investing beyond these limits, but investors will be warned of the risks.

• Total limit: Previously, the maximum amount of funds that could be raised per project could not exceed 2,000,000 euros within a 12-month period. With the entry into force of the aforementioned European Regulation and, consequently, of this Act, that limit is raised to 5,000,000 euros, provided that investments exceeding that amount will require the issuance of a specific prospectus, the requirements for which are succinctly set forth in Regulation 2017/1129 on the prospectus to be published in the event of a public offering or admission to trading of securities on a regulated market
• These types of platforms may establish and group investors into a limited liability company whose corporate purpose will be to hold shares in the company in which it invests.

Collective Investment and Venture Capital

On this point, a series of reforms is being introduced that aim to promote and improve collective investment and venture capital in Spain—a sector that needs regulations enabling it to contribute even more to overall economic activity and to protect investors, particularly individual investors.

By way of example only—and this list is not exhaustive—we highlight the following:

• The introduction of a type of vehicle derived from European legislation knownas “European Long-Term Investment Funds (ELTIFs),” which is designed to give retail investors access to investments in unlisted small and medium-sized enterprises, allowing them to invest in asset classes (such as syndicated loans and private debt) that have, until now, been available only to institutional investors.
• Recognition of“debt funds,”which, in the context of economic recovery, can help alleviate companies’ debt burdens and facilitate their growth; additional obligations and requirements are established for their formation.

In other words, the range of options for closed-end funds is being expanded to include structures that have a long track record in other countries in our region.

Economic Activities

The legislation expands on cooperation and mutual trust among the various public administrations and strengthens the channels through which companies can file complaints when they believe that public administrations are not adhering to the principles of sound economic regulation.

In addition, thelist of economic activities exemptfrom licensing requirements is being expanded, helping to reduce bureaucracy. Activities that have been deemed harmless by at least one autonomous community are being added to the national list.

To this end, numerous articles of Law 20/2013, on Guaranteeing Market Unity, are amended, as well as Article 7 of Law 29/1998, Regulating Contentious-Administrative Jurisdiction, and Article 8 of Law 12/2012 on Urgent Measures to Liberalize Trade and Certain Services.

In conclusion, it is important to note that the proposed bill must be sent to the Senate and then back to Parliament, so adjustments and conceptual clarifications can still be made regarding aspects that are not yet entirely clear in the current version.

In any case, this law aims to promote the creation of businesses and facilitate their growth and expansion, viewing this as an essential step toward business growth and as one of the most important reforms of the government’s Recovery, Transformation, and Resilience Plan, all with the goal of increasing productivity, improving job quality, and fostering internationalization.

Bibliography

• [1]Preliminary Draft Bill on Business Creation and Growth
• [2]https://portal.mineco.gob.es/es-es/ministerio/participacionpublica/audienciapublica/Paginas/Anteproyecto_Ley_Creaci%C3%B3n_y_Crecimiento_Empresarial.aspx
• [3] Law 15/2010, of July 5, amending Law 3/2004, of December 29, which establishes measures to combat late payment in commercial transactions.
• [4]https://www.boe.es/doue/2017/168/L00012-00082.pdf 
• [5] https://www.boe.es/buscar/doc.php?id=DOUE-L-2020-81532

AUTHOR: Jorge Parada

It will soon be four years since the General Data Protection Regulation (GDPR or the Regulation) has been fully in effect. Specifically, on May 25, 2022. This will certainly be a good time for companies to assess their progress and their actual compliance status, if they have not already done so over the past few years.

But that date also marks the end of a grace period that, according to some interpretations, was granted to us by our Organic Law 3/2018 on the Protection of Personal Data and the Guarantee of Digital Rights (LOPD GDD). And I say it was granted to us because, unlike the Regulation itself—which says nothing expressly on the matter— Transitional Provision 5 of our national law established that data processor agreements entered into prior to the GDPR’s entry into force—in accordance with the requirements of the previous Organic Law on Data Protection—could remain in effect for the term agreed upon therein and, if entered into for an indefinite term, until May 25, 2022.

Since the Regulation took effect, any of these contracts that are newly signed—or that renew the provision of services—must include, at a minimum, the commitments that Article 28 of the GDPR requires to be included in them. These commitments are more stringent than those required by our previous Data Protection Act (LOPD) and, in practice, have resulted in longer contracts. Contracts that had already been signed prior to the Regulation’s entry into force had to be brought into compliance with it, and this is where the deadline comes into play—a deadline that, for open-ended or indefinite-term contracts, is about to expire.

Consequently, any contract entered into for an indefinite term with a vendor that will process personal data as a data processor must be fully compliant with the GDPR by May 25 at the latest.

To determine this, it is best to analyze each case individually. It is not strictly necessary to enter into a new service agreement—or master agreement—if the existing one remains in effect and is not to be amended. A new engagement agreement may not even be entirely necessary; in some cases, it may be sufficient to add an addendum—either to the master agreement or to the engagement agreement, as appropriate—containing the necessary provisions in accordance with the Regulation.

In any case, let us remember that the GDPR requires the data controller to select only data processors that provide guarantees that they will respect the rights and freedoms of data subjects in the processing of personal data. In other words, companies must evaluate those of their suppliers who will process personal data under their responsibility. Furthermore, as the Spanish Data Protection Agency has already indicated in some of its rulings, this evaluation cannot be limited to the time of contracting but must be repeated periodically. Neither the Regulation nor our national legislation specifies the frequency with which this assessment must be conducted, and an organization may very well assess its data processors at different intervals, depending on the risk associated with the processing, the risk associated with the data processor, or other reasons or criteria.

In any case, now is a good time to evaluate those data processors with whom contracts dating from before May 25, 2018, are still in effect, if this has not been done during this entire period. Ideally, this should be done using a system or procedure that is as objective as possible and that is embedded within the supplier approval process—if the organization has such a process in place (data protection by design and by default)—but which, at the same time, for the reasons stated, can be activated independently to carry out the relevant periodic reviews.

Furthermore, if the data processor—or any of its entities involved in data processing—is located outside the European Economic Area (EEA) in a jurisdiction that has not been designated a safe haven through an appropriate adequacy decision by the European Commission, the risk associated with this international data transfer must be assessed. This is done through assessments known as TIA (transfer impact assessment), in which the ideal approach is to analyze the risk associated with four elements: the data exporter, the characteristics of the transfer itself, the legal framework of the data’s destination, and the data importer or recipient.

Finally, it is important to remember that the obligation to enter into a data processing agreement—or to include equivalent provisions in the main contract itself—rests with both the data controller and the data processor, and that such an agreement or legal instrument must be in writing, whether in physical or digital format.

Bonus track: For the purposes of both interpreting the contract and providing evidence in the event of potential claims and/or disputes between the parties, it is very useful to include, as annexes to the data processing agreement, the questionnaire that the data processor was required to complete for evaluation and, where applicable, to assess the risk of an international data transfer, as well as—if not included in said questionnaire— the specific security measures that the processor declares to have implemented in connection with the data processing it will carry out on behalf of the data controller.

By Ruth Benito 

The preliminary draft bill transposing the Whistleblowing Directive establishes the requirement that all companies with more than 50 employees appoint a Data Protection Officer

On March 4, the Preliminary Draft Bill regulating the protection of individuals who report regulatory violations and combat corruption was approved, transposing Directive 2019/1937—known as the Whistleblowing Directive—into Spanish law. One of the transposed obligations is to implement an internal reporting system, or whistleblowing channel, which will be mandatory for all companies with more than 50 employees. This obligation has raised a significant issue that goes beyond the scope of criminal compliance and affects compliance with data protection regulations.

The Role of the Data Protection Officer

Article 34 of the Draft Bill establishes that all companies required to have a whistleblower channel will also be required to appoint a Data Protection Officer (or DPO, for short). Thus,all companies with more than 50 employees will be required to appoint a DPO, unless they were already required to do so under applicable data protection regulations. The DPO will, of course, perform their duties with respect to all data processing carried out by the organization, not just the processing of data arising from a whistleblower channel.

The Data Protection Officer is a professional role established under both European (GDPR) and national (LOPD GDD) legislation. This role may be filled by a natural person or a legal entity, either internal or external to the company, but must always be independent.

Its functions include, among others:

• provide information, offer guidance, and monitor compliance with data protection regulations.
• serve as the point of contact for the supervisory authority—in the case of Spain, the Spanish Data Protection Agency.

New Requirements for Medium-Sized Businesses

If this new draft bill is approved, the number of companies that would be required to appoint a Data Protection Officer (DPO) would be immense, causing a surge in demand for these types of services from companies, which are not always prepared to handle these functions internally due to the high level of specialized knowledge required of a DPO.

In the coming months, it will be crucial to pay close attention to the development of this draft bill in order to identify potential changes and—if it is approved as currently drafted—to ensure that all medium-sized companies are properly prepared to assume these new obligations and have a Data Protection Officer in place.

Author: Eduardo Oliveros

MWC 2022 will take place in just two weeks, from February 28 to March 3, in Barcelona.

This will undoubtedly be an important year for the trade show, which—following the unexpected cancellation of MWC 2020 due to the pandemic and the “hybrid” (in-person/digital) format of the next edition of the conference in 2021—is returning to a primarily in-person format at the Fira de Barcelona venue.

Since there have been no significant withdrawals among the participating companies, this year’s event is expected to return to (or at least come close to) the level of activity and impact that this major conference had in the years leading up to the pandemic.

It is likely that this “return” to the MWC as we knew it will also bring with it a resurgence of legal disputes between companies regarding potential infringements of industrial property rights (which saw a notable decline last year, undoubtedly due to the significant absence of conference participants and the “watered-down” format in which it was held). In anticipation of these disputes, and as it has been doing for years, the Commercial Court of Barcelona (together with the EU Trademark Court in Alicante) has approved a“Protocol for On-Call Service and Rapid Response”to ensure that requests for injunctions and preliminary proceedings regarding infringements of industrial property rights in the context of the conference are processed expeditiously. Thus, among other things, the Court has made the following key commitments:

• Resolve, on the same day they are filed (within 24 hours), requests forpreliminary ordersintended to prevent the issuance of injunctions without a hearing for the defendant company.
• And to rule within two days (48 hours)on requests forpreliminary proceedings, fact-finding proceedings, and injunctive relief(in the latter case, provided that the request does not require a hearing with the defendant and the defendant has not filed a preliminary brief; in such a case, a hearing would be scheduled within 10 days).

ELZABURU has accompanied its clients to recent editions of MWC and has extensive experience in handling legal disputes arising during the event (in fact, for example, of the 18 cases filed in court during the 2021 MWC, 15 were handled by ELZABURU).

Once again this year, the Firm stands ready to advise, assist, and defend its clients in connection with any disputes that may arise in the context of MWC 2022 regarding the infringement of industrial property rights.

Author: Maria Cadarso Diaz de Entre-Sotos

We live in a society that is constantly changing and evolving, and as such, on December 29, 2021, the Council of Ministers approved the preliminary draft bill amending Law 23/2011, of June 29, on legal deposit, to enable more effective preservation of national publications and optimize the management of preservation centers.

Before we begin, it is important to note that the Legal Deposit system is the regulation that requires copies of all types of published works—whether in physical or online format—to be submitted to the preservation centers of the Autonomous Communities and to the National Library of Spain. Both of these institutions are responsible for preserving Spain’s bibliographic and documentary heritage, as well as its digital heritage, including online publications, websites, and electronic books and journals.

The draft bill includes the following new provisions: First, publishers will be able to submit digital files prior to digitization, in addition to or in lieu of printed files, provided that the materials in question are books, newspapers, and/or magazines. This is intended to facilitate the preservation of and access to these documents, thereby avoiding the need to digitize these copies in the future.

In addition, the possibility of requesting prints on demand—a service that was previously unavailable—has been added, and both the Spanish Film Archive and the film archives of the autonomous communities are now recognized as centers for the preservation of Spain’s film heritage, with the objectives of recovering, researching, and preserving Spain’s film heritage, as well as promoting it.

Similarly, new types of documents are included, such as video games, commercial catalogs from bookstores, publishers, and auction houses, as well as bookmarks, among others. With regard to video games, it is worth noting that this represents a major change, since under the previous legislation they were classified as audiovisual documents, whereas now they will have their own section to ensure the deposit of the complete edition of this type of document.

Finally, among the amendments is the elimination of microforms—which are no longer published—as well as all types of advertising publications, which, as noted in the preliminary draft, lack heritage value. Additionally, the responsibility for high-level inspection—which, in accordance with the doctrine of the Constitutional Court, had previously fallen to the National Library of Spain— is also eliminated.

This text also incorporates the changes resulting from Royal Decree 635/2015, dated July 10, which regulates the legal deposit of online publications and facilitates the preservation of digital heritage.

Finally, it should be noted that this project was developed in collaboration with the autonomous communities, the Federation of Spanish Publishers’ Associations, the Spanish Video Game Association (AEVI), and the Spanish Reproduction Rights Center (CEDRO), with the aim of adapting to changes in the publishing sector, as well as enabling more effective compliance with the preservation of the national publishing heritage and the optimization of the management of preservation centers.

Authors: Mabel Klimt and Paula Bellés