Court rules in favor of Google in intellectual property dispute

On December 20, 2021, the Mercantile Court nº 16 of Madrid (“the Court”) dismissed a claim by the Spanish Center for Reprographic Rights (“CEDRO”) alleging that content excerpts appearing on Google Discover warranted payment of compensation.

CEDRO had filed a complaint claiming compensation for Google’s use, in its Google Discover service (“Discover”), of content whose rights fall under CEDRO’s mandate, based on Article 32.2 of Spain’s Intellectual Property Law (“LPI”). Compass Lexecon experts Miguel de la Mano and Nadine Watson were instructed by Google to prepare an expert report for the Court evaluating CEDRO’s claim (“Claim”) from an economic perspective, with Dr. de la Mano also providing evidence in front of the Court. The Compass Lexecon report and testimony demonstrated how the tariff that CEDRO used to calculate the claimed compensation was based on several unfounded and incorrect assumptions and how its estimate of affected traffic was not methodologically sound.

The Court agreed that the content shown in Discover does not qualify as a “non-significant fragment” of journalistic work, which Art. 32.2 LPI intends to protect. Instead, the content displayed was classified as “single words” more akin to online search results, considering its minimal length and revealing of content. Favorably citing the opinions of the Compass Lexecon report, the Court found issues with the Claim’s compensation calculations, both because of the tariff applied and because of the calculation methodology put forward by CEDRO.

Miguel de la Mano and Nadine Watson were supported by a team that included Angelos Stenimachitis, Sofía Galán and Salvador Bertomeu with the assistance of Alessia Paulicelli, Alina Rymar, Ronak Jain, Zsolt Hegyesi, Ziyue Yang and Andrea Rodriguez Nieto. We worked closely with Google’s legal advisers of Garrigues led by Carolina Pina and Ricardo López.