Centros de Depilación Láser Ideal SL, is an authorised licensee of the registered trade mark ‘CNLI Ideal Centros de Depilación Láser’, with the faculty to sub-license.  This entity, on 27 October 2015, held a business franchise contract with a private individual, which included the assignment of the rights to use the registered trademark for the development of its beauty business in premises located in a shopping centre. The contract ended on 5 March 2020 as a result of a communication from the franchisee.

However, after the end of the contract, the entity ANGAPRI SL is currently carrying out, in the same establishment, an identical activity as the one which had previously been provided. The beauty and depilation services are provided under the same commercial signs, advertisements, and documentation which incorporates the registered trade mark, the use of which had only been granted to the previous licensee.

Centros de Depilación Láser Ideal SL, decided to sue Angapri SL for trademark infringement, requesting the cease and desist of the sign and a compensation for the damages caused. In addition it filed an action for disloyal competition and for taking advantage of its reputation and causing a risk of confusion.

At first instance, the lawsuit was upheld in its entirety. Therefore, the defendant was ordered to pay the plaintiff damages of 2,500 euros per month from 8 June 2020 until the date of effective ceasing of the improper use of the trademark, in addition to a sum of 30,000 euros. This quantity was calculated taking into account the hypothetical royalties for a franchise contract.

In view of all the above, ANGAPARI SL appealed against the said judgment, requesting its total revocation, as it considered that the judgment was inconsistent as it failed to assess the impossibility of removing the signs from the establishment, due to the lack of authorisation from the owner of the leased establishment. In this case, the shopping centre does not allow the image of the establishment to be modified due to a lease agreement which requires the image of the establishment to remain in place for a period of 9 years.

In this regard, the appellant argues the impossibility of trademark infringement due to the absence of will to infringe this right, as the signs cannot be removed from the establishment, claiming that it does not wish to infringe or even use the conflicted trademark. Therefore, ANGAPRI SL argues that the decision requiring the removal of the signs and the cease and desist of use is unenforceable, as it does not depend on itself, but on the authorisation of the owner of the shopping centre.

Lastly, the appellant argues that the payment of damages imposed on him is disproportionate because the price of the damages is established on the basis of the hypothetical royalty for a full franchise contract, when this was already paid at the beginning of the activity in those premises. Furthermore, the monthly sum added does not take into consideration the impossibility of removing the distinctive signs from the establishment. Moreover the appellant points out that the laser hair removal equipment used in his business is not and has nothing to do with that provided through the disputed franchise.

The Court, after assessing the arguments presented, concludes that it does not find any omission in the previous decision because the judgment responds to all the claims put forward by the parties. Undoubtedly, a trademark infringement is taking place since the business activity conducted by ANGAPRI SL is carried out with full and complete knowledge of the presence of the distinctive signs located in the establishment and of its lack of contractual and legal coverage to use them. In order to avoid trade mark infringement, it would be sufficient to refrain from engaging in that commercial activity in that specific establishment. However, even though it is aware of the prohibition to remove the trade mark signs, it continues to develop the business activity in the mentioned establishment, under the protected signs. As for the impossibilities or difficulties of the enforcement procedure, the Court states that it is not its competence to issue a decision on them.

At last, the court examines the issue of disproportionality of the compensation for the damages. In the previous judgment, the compensation was calculated by assessing a hypothetical royalty price for a full franchise agreement. However, The Court considers that the franchise contract is wider than the infringed right of use. In this case, the defendant company is only using the image of the trade mark. However, as it has been stated, it does not concern the transfer of business know-how or management assistance.

In view of the foregoing, the court partially upheld the appeal and reduced the compensation to an amount of 6,000€, plus 500€ per month from 8 June 2020 until the effective cessation of the improper use of the mark.

Judgment of the Madrid Provincial Court 14792/2024 of 17 October.