Spain: Personal liability for contributory infringement of intellectual property rights

 
In 2014, this Law was amended by introducing a new paragraph introducing new offenses and conducts. The paragraph provides as follows:

“Any persons knowingly prompting the infringing behaviour; cooperating with it, knowing the infringing beha­viour or having reasonable indications to know it; and, any persons that, having a direct economic interest in the proceedings of the infringing behaviour, have control powers over the infringing party’s behaviour, shall all be regarded as liable for the infringement.”

With this new reform, the figure of direct infringement covers more conducts, which allows extending liability not only to whoever directly performs the infringing acts, but also to whoever performs cooperative tasks, to whoever knowingly induces the infringing conduct, to whoever has an economic interest in the result of the infringing conduct, and to whoever has a clear control capacity in the infringing conduct.

Until now, there has been no Supreme Court decision interpreting this rule. However, recently the Supreme Court in its judgment of October 26, 2022, has applied Article 138, specifically the provisions of its second para­graph, extending personal liability, for contributory infringement of intellectual property rights, to the partner and sole administrator of a website that gave access to illegal content since 2010 infringing intellectual property rights through Internet links that allowed watching live soccer matches.

This lawsuit was initiated in 2015 by a production company, which held the exclusivity to broadcast La Liga soccer matches. The production company brought an action for infringement of intellectual property rights against the partner and sole administrator, which based its defense on the fact that the website did not broad­cast, but merely developed and maintained the source code of the website, and that the partners subsequently provided the content, while denying that both plaintiffs held rights over the content provided by users.

At first instance, the claim was upheld in full, and the judgment ordered the cessation of the operation of the page, specifically the cessation of the provision of links giving access to the viewing of soccer matches and sentenced both the company and the partner and administrator of the same, jointly and severally, to the corresponding compensation for damages.

This judgment was appealed in the second instance. Two appeals were filed, one by the company in charge of managing the website, and the other by the partner and sole administrator. Only the latter was upheld, in the sense that the court of Appeal understood that it was not appropriate to apply the doctrine of piercing the corporate veil and therefore the liability of the company could not be extended to the individual.

Finally, the Supreme Court has reached a decision after a cassation appeal by production company, and has resolved by interpreting for the first time the second paragraph of Article 138, which was disregarded by the Court of Appeal.

The Supreme Court, in addition to confirming that there is an infringement of the rights that the production company held over the recordings of the soccer matches, applies the figure of contributory infringement, unlike the previous instance, and declares that such figure "allows extending liability for the infringement of intel­lec­tual property rights not only to whoever directly performs the infringing acts, but also to: 

1. who knowingly induces the infringing conduct;
2. whoever cooperates with the infringing conduct, provided that he knows about it or has reasonable grounds to know about it; and
3. whoever has a direct economic interest in the outcome of the infringement and the ability to control it."

In this case, the court understands that the action carried out falls within the third modality, since the eco­nomic interest of the partner and sole administrator of the company that manages the web page is undeniable.

Considering that the defendant is the sole shareholder of the company and that its most relevant economic yields are a consequence of the infringing conduct, the economic interest in the performance of the same is evident.

It is also decisive the defendant's capacity to control the infringing conduct, which is indisputable since he is the sole shareholder and administrator and does not have any employee under his charge, having at the same time the access codes to the computer system of the web page. These circumstances are decisive in proving that the infringing conduct was carried out by the defendant.

In view of the foregoing, the Supreme Court considers it appropriate to extend the liability for contributory infringement to the only person who manages the web page, as the economic interest and the capacity of control that he has held during the whole period of operation of the web page is proven.

In this sense, the relevance of this judgment has an impact on the possibility of suing for infringement of intellectual property rights not only the companies that carry out these conducts, but also the natural persons whose capacity of control and economic interest in the exploitation of these contents is fully accredited, and that entails as a consequence an economic benefit.