Trademark law has long recognized the principle of specialty, which signifies that the owner of a trademark has a monopoly on its sign only for the goods and services that the sign designates. However, application of this principle needs a further consideration in cases related to alcoholic beverages.
Article L713-3 of the French Intellectual Property Code states that “The following are prohibited, unless authorized by the owner, if this may result in a risk of confusion on the part of the public: a) The reproduction, use or affixing of a trademark, as well as the use of a reproduced trademark, for goods or services similar to those designated in the registration“.
Thus, according to the principle of specialty, two identical or similar signs may coexist as long as they do not designate the same goods and services. However, such a reasoning is challenged in cases when the French public health law is involved (Evin Law n° 91-32 of January 10, 1991).
According to Evin Law, a registered trademark designating alcoholic beverage products can be subject to a cancellation action by owners of prior trademarks even when their trademarks do not designate alcoholic beverages in the specification.
Indeed, the Evin Law prohibits propaganda and indirect advertising of alcoholic beverages. The coexistence of a “new” trademark designating alcoholic beverage and prior trademarks would be considered as a form of propaganda and indirect advertising of identical or similar trademarks designating alcoholic beverages.
In other words, if a company wishes to register an alcoholic beverage related trademark that is already in use by a prior trademark for goods other than alcoholic beverage products, it may face a conciliation procedure.
Article L.3323-3 of the French Public Health Code, a legal tool with a wide application range
The article L.3323-3 of the French Public Health Code states that: “Propaganda or indirect advertising is considered to be propaganda or advertising in favour of an organisation, service, activity, product or article other than an alcoholic beverage which, by its graphic design, presentation, use of a name, brand, advertising emblem or other distinctive sign, recalls an alcoholic beverage“.
It is on this legal ground that owners of prior trademarks designating goods and services other than alcoholic beverages may file an action in order to obtain cancellation of identical or similar post-trademarks designating alcoholic beverages.
The company named DYPTIQUE used this legal ground to obtain the cancellation of the trademark “Diptyque” registered by the company HENESSY.
The company named DIPTYQUE is the owner of two prior trademarks “Diptyque” – a French trademark designating classes 3, 14, 18, 21, 24 and 25, and a European Union trademark designating classes 3, 14 and 35.
DIPTYQUE manufactures and markets candles and scented water.
The company initiated a cancellation action against a trademark “Diptyque” registered by HENNESSY, a French cognac manufacturer, designating alcoholic products in class 33. According to Article L.3323-3 of the French Public Health Code any advertising made by DIPTYQUE is considered as indirect advertising of the products designated by the “Diptyque” trademark, which belongs to HENNESY, and is therefore prohibited
The existence of the cognac related trademark represents a real obstacle to DYPTIQUE’s business activities and makes it impossible to use its prior trademarks.
The French Court de Cassation, in its decision from November 20, 2012, ruled that “the registration of the Diptyque trademark by HENNESSY and the marketing of products under it create an obstacle to the free use of the first trademark“.
Article L.3323-3 of the French Public Health Code is therefore widely interpreted by the judges of the Court de Cassation. They do not take into consideration the fact that DIPTYQUE’s trademarks do not designate alcoholic beverage products in class 33 and do not in principle constitute prior right. This analysis leads to the conclusion that the provisions of the French Public Health Code prevails over the principle of specialty in trademark law.
This reasoning held by the High Court provides a real advantage for owners of prior trademarks that do not designate alcoholic beverages in protection of their trademark rights. However, such reasoning has recently been challenged by the Tribunal de Grande Instance de Paris in the “Cache-Cache” case.
Article L.3323-3 of the Public Health French Code, a legal tool with a narrow application range
CACHE-CACHE is a major player in the ready-made clothing market. The company owns two prior “Cache-Cache” trademarks – a French trademark and a European Union trademark. The company turned to the Court of First Instance of Paris to obtain cancellation of an application for registration of a trademark “Cache-Cache” filed in classes 31, 32 and 33 to designate alcoholic beverages.
The Court of First Instance of Paris, in its decision dated from November 3, 2017 dismissed the CACHE-CACHE case that was based on Diptyque case law. The judges ruled on favour of the defendant’s argument and decided that despite public health considerations, an in-depth analysis and an overall assessment of the situation was required.
Thus, the court concluded that CACHE-CACHE did not demonstrate “how the exploitation of its brands for women’s clothing and accessories in its eponymous boutiques and on the Internet via its websites cachecache.fr and cachecache.com could be considered as indirect advertising in favour of alcoholic beverages“. Consequently, the mere identity or similarity of the trademarks involved cannot be sufficient to serve as indirect advertising for alcoholic beverages as prohibited by Article L.3323-3 of the Public Health Code.
In other words, the second trademark designating alcoholic beverages cannot ipso facto infringe the first trademark designating other goods and services.
Thus, in order to obtain cancellation of an identical or similar subsequent trademark, it is no longer possible to rely solely on provisions of the French Public Health Code. It is necessary to demonstrate that there is actually indirect advertising that hinders the influence of the original trademark. Potential trademark’s damages can be demonstrated by proving that consumers can establish a link between the companies’ respective brands.
This decision narrows down a very broad application of article L.3323-3 of the French Public Health Code. While the restrictions contained in the article are limited in their scope, the principle of specialty and Article L.713-3 of the Intellectual Property Code are fully applicable again.
The new case law provides an opportunity for companies to register trademarks that are identical or similar to prior trademarks that do not designate alcoholic beverage products without facing a cancellation action with regard to their registration.
Subsequently, the owners of identical or similar prior trademarks that do not designate alcoholic beverage products will not be able to claim prior rights in an absolute manner on the grounds that the coexistence of trademarks would hinder their business activity, and, in particular, their advertising strategy with regard to the provisions of Evin law.
It is still unclear whether the judges of the Appeal Court and the Court de cassation will follow the reasoning of the Court of First Instance of Paris, or whether they will give a decision in line with the “Dyptique” case law of the Cour de Cassation.
We will follow the development of the case