The Supreme Court of Spain ruled that trademark counterfeiters must compensate for the moral damage caused, given that the mere offer for sale of fake products creates reputational damage.
The brands involved in the case are Bimba y Lola, Michael Kors, Chanel, Yves Saint Laurent, Carolina Herrera and Hello Kitty, which will receive compensation of 25% of the total value of the more than ten thousand counterfeits intervened.
To justify its decision, the Supreme Court cites the Liffers case of the Court of Justice of the European Union, which determines that the greater the prestige of a brand, the greater the level of protection that that sign deserves to obtain from the courts.
The importance of the case lies in the fact that until now there was no agreement among the provincial courts regarding whether the moral damage - that is, the damage beyond the economic loss - should also be compensated. In this particular case, referred by the provincial court of Valencia, the counterfeit products had not been sold, but only displayed, so there was no actual economic damage. The Supreme Court has decided that in this type of situation there is still a moral damage, which in addition to having to be compensated, is implicit and does not have to be proven.
This decision will be very beneficial for brands since proving reputational damage - the deterioration of the brand image in the consumer's mind - is extremely difficult. Additionally, it is very welcome since it will foreseeably make a dent on counterfeiters impunity.