Dreyfus

According to the OECD and European Union Intellectual Property Office report published on April 18, 2016 on the impact of imports of counterfeit and pirated products in international trade (“Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact, imports of counterfeit goods”), the import of counterfeit goods amounts to US $461 billion, accounting for about 2.5% of imports globally. At European level, counterfeiting constitutes up to 5% of products imported into the EU territory, which equals 85 billion euros.

No category of product is free from counterfeiting

The report also points out that counterfeiting may affect any product protected by intellectual property law. Luxury goods such as watches, perfumes or leather goods are those affected the most. Business to business goods such as chemicals or spare parts, but also general commodities such as toys, medicines or cosmetics are affected by counterfeiting. Even more striking, there have been customs seizures on counterfeit goods such as strawberries, bananas and cinnamon.

 OECD countries most affected

The countries most affected by counterfeit trade are the United States (20% of counterfeit goods), Italy (15%), France (12%) and Switzerland (12%). Consequently, French trademarks are among those most affected. French Customs specifies that “France is particularly at risk due to its famous brand names and the creativity of its artistic firms.”

“Originating economies”

“The countries of origin are the producing countries and the countries which have transit points for international trade. Most counterfeit products originate in China, which is the largest counterfeit producer (more than 60% of counterfeit products in the world) and more than 20% originate from Hong Kong. China is far ahead of Turkey (3.3%), Singapore (1.9%), Thailand (1.6%) and India (1.2%). Middle-income countries and emerging economies are the main players on the international markets.

The negative impact on the e-commerce boom

Trade routes taken by counterfeiters are developing very rapidly. There are different intermediary transit points. Some, such as Hong Kong or Singapore are considered important platforms for international trade. Others, such as Syria or Afghanistan on the other hand, make use of weak governance and the presence of criminal or even terrorist networks.

Historically, means of transport used by counterfeiters included planes, boats and freight cars. Because of the increasing importance of e-commerce, delivery by post is today the primary delivery method of counterfeit goods. Selling online has considerable benefits for counterfeiters because it helps them to sell their goods in the least costly and most efficient way. Moreover, this delivery method significantly reduces the risk of being caught and getting fined.

Following long court battles between eBay and large commercial groups, LVMH and L’Oréal have decided to collaborate with the online trading company in order to “protect intellectual property rights and fight against the online sale of counterfeit products”. No sector has been spared and anti-counterfeiting remains a priority nowadays for many economic stakeholders.

Dreyfus & associés can assist you all over the world by choosing the best strategy for promoting and protecting your rights.

Read more on this topic:

WCO reports tremendous increase in counterfeit goods: trademarks and individuals take the hit

The long awaited reform of trademark law or as it is more commonly known, the “trademark package”, was finally adopted by the European Parliament on 16 December 2016. In an effort to upgrade and adapt the present European legislation with the Internet, this Directive allows Directive 2008/95/CE to be rebuilt.

A trademark is an essential component of the business strategy of a company and it should therefore be protected. The Court of Justice of the European Union recalls in a judgment of the 12 November 2012 that the essential concept of trademark use is to in fact guarantee consumers the true origin of a product or service. (CJEU 12/11/2002 Arsenal Football Club v. Matthew Reed).

Nonetheless the protection of the trademark should not interfere with principles such as the freedom to provide services.

The classic revocation of rights due to non-use

As per Article 16 of Directive 2015/2436 the proprietor of a trademark who, without good reason, has not put the trademark to genuine use in connection with the goods and services in respect of which it is registered for an uninterrupted period of five years, may find the trademark revoked for non-use. However this provision does not apply if there are good reasons for non-use of the trademark.

This is also clear from Article L. 714-5 of the French Code of Intellectual Property, which further provides that “the revocation may be sought in court by any interested person.”

The administrative procedure: an innovative Directive

The Directive (EU) 2015/2436 brings about significant developments in trademark law and revocation of rights arising from non-use. Article 45 provides that: “Without prejudice to the rights of the parties to appeal to the courts, Member States shall provide for an efficient and expeditious administrative procedure before their offices for the revocation or declaration of invalidity of a trade mark.”

The administrative procedure for revocation on the grounds of non-use was already in place in a number of European Union countries. However, other countries such as France simply allowed for the bringing of an action before a court of law.

Following this reform, the National Institute of Industrial Property (NIIP) will now have jurisdiction to decide on a claim for revocation or invalidity of the trademark. Clearly the parties still have the opportunity, if they wish, to bring action before the court.

Until now, revocation for non-use could be invoked before the NIIP only by the defense in opposition proceedings under Article R. 712-17 of the French CPI. To challenge this defense, the opposing party was not required to demonstrate before the INPI that it had made genuine use of the trademark for all the goods invoked in the opposition (Article 712 R -17 para. 2 of the French CPI). It was enough to simply demonstrate genuine use during the last five years of only one of the goods.

When claiming revocation, the trademark owner will not be able to defend himself by merely demonstrating use of only one of the goods and this is due to the combination of Articles 19, 21 and 45 of Directive 2015/2436.

Moreover, Directive 2015/2436 states that the transposition by Member States of the provisions on the administrative procedure for revocation and invalidity benefits from an extensive deadline. Indeed, it is explained in the preamble of the Directive that in order to promote efficiency, “Member States should provide for an administrative procedure for revocation or declaration of invalidity within the longer transposition period of seven years.” Member States must therefore make the necessary changes before 14 January 2023.

With Regard to European trademarks, the EUIPO (formerly “OHIM”) has the jurisdiction to receive applications for revocation by the EU trademark holders. This administrative procedure has already shown its advantages such as its efficiency, speed and cost effectiveness.

Undoubtedly, this development will play a major role in the future with respect to the defense of trademarks.

See our other articles on the topic: European Union: appreciation of evidence of use in revocation proceedings of a trademark

A case of unfair competition may arise if a competitor registers the domain name of a company which it no longer uses. This is the case when the confusion was deliberately maintained by the competitor and if it causes prejudice to the former holder according to the Commercial division of the Cour de cassation on February 2, 2016 (Cass. com., 2 février 2016, n° 14-20.486, « Sté Les Vents du Nord c/ Sté Cuivres et bois »).

A company selling and restoring wind instruments which operated a store under the name, the logo and the trademark “Les Vents du Nord”, was the holder of the domain name ” lesventsdunord.fr “, a website under construction.

The company Cuivres et Bois, which was in the same business and which operated a nearby store, bought the domain name “lesventsdunord.com” the day after it settled back in the public domain.

Les Vents du Nord served a formal notice to Cuivres et Bois to stop using the sign “Les Vents du Nord” and to transfer the disputed domain name to its name.

The right to a domain name is not expressly recognized by the French Code of Intellectual Property. However, a domain name is a distinctive sign. To maintain this right, it is compulsory to pay a renewal fee to the registry, often via the registrar. The penalty for non-payment is the loss of the right of the sign.

Thus, Article 6.7 of the Naming policy of AFNIC provides that “once deleted, the domain name re-enters back into the public domain and can be registered by a new applicant”.

The effective operation of the “website under construction”

The mere registration of the domain name is not enough for its defense. Effective use is also required. It is then necessary that the website under that name be open and running. Established case law states that the protection of a domain name can only be acquired through its operation. (Cass. com., 13 December 2005, n° 04-10.143, « Locatour »).

Despite this, although the website still bears the words “website under construction” on its landing page and has limited operations, the French Supreme Court deemed, as did the appellate judges, that since the landing page included the company logo, address, telephone number, its schedules and the purpose of its activities and was inserted as a link on other websites, there existed an effective and public operation of the domain name “lesventsdunord.fr “.

Purchase of expired domain name: an obvious abuse of right

Confusion between the two companies is bound to arise in the eyes of the public if a competitor purchases the disputed domain name on the day after it settled back in the public domain Additionally, the Court noted that both companies practiced exactly the same highly specialized activities in nearby locations.

The High Court states that the acquisition of this domain name by Cuivres et bois allowed it to capture the clients of Les Vents du Nord, including through links which automatically redirect the user to the company’s website.

The French Supreme Court concludes that Cuivres et bois committed acts of unfair competition. The situation between the parties has in fact harmed the attractiveness of Les Vents du Nord’s website and led to it being downgraded by search engines. In addition, the reputation of the latter has been affected by the confusion maintained by Cuivres et bois and this decreased the attractiveness of the sign “Vents du Nord.”. The High court approves the Court of Appeal decision to have ordered Cuivres et bois to pay 15, 000 euros in damages, resulting from acts of unfair competition on its part.

There is little case law penalizing an abuse of a non-renewed domain name, which is why this judgment is important. It allows for a clarification of the circumstances under which the registration of a non-renewed domain name may or not be lawful. Furthermore, this judgment clarifies the concept of operation of a domain name, which has been given a wide interpretation in this particular decision.

On June 23rd, 2016, UK citizens will vote on whether or not to remain part of the European Union. In case of a Brexit, the United Kingdom will have to leave the European Union within the next two years.

Whilst we are currently witnessing a harmonization of European patents and trademarks,  a Brexit would have a significant impact on intellectual property law in Europe. If ever there were to be a  “Brexit”, both British and European intellectual property title holders would suffer alike.

What are the implications for trademark owners?

The new EU Regulation No 2015/2424 regarding Community trade marks, which entered into force on March 23rd this year, brought about certain amendments; in particular, it changed the term “Community trade mark” to “European Union trade mark”. The European Union trademark, the only one of its kind in existence for the protection or trademarks across 28 member States of the European Union, will be significantly affected if a Brexit were to occur. In fact, the Regulation will no longer have any legal effect in the United kingdom.

The current holders of European Union trademarks would lose their rights to a trademark in the United Kingdom. Entities wishing to register a European Union trademark would not benefit from the automatic protection of their trademark in the United Kingdom. Consequently, they would need to file two trademark applications: one for the European Union trademark before the EUIPO and a specific application in the United Kingdom before the IPO. An application therefore may be a domestic one but can also be made on the basis of an international trademark.

In order to appease potential case law divergence, Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trademark (CTM), imposed an obligation on each Member State to designate courts at both first and second instance who would have jurisdiction in cases of community trademark infringement. In the event of  aBrexit, the European Union trademark courts in Britain would no longer have that jurisdiction.

What are the consequences for patents?

On the one hand, if Britain were to eventually leave the EU, the European patent with unitary effect would no longer apply to the United Kingdom given that one of the conditions of the effect, is to be a Member State.

Despite this, there are two possible scenarios for the Unified Patent Court (UPC) if the British vote in favor of a Brexit. The first, is the setting up of the UPC without the United Kingdom being part of it. The second and less likely scenario, is that the United Kingdom’s exit from the European Union in turn, prevents the implementation of the JUB.

For the UPC to be set up, the agreement signed by 25 countries had to be ratified by at least 13 countries and mandatorily by France, Germany and the United Kingdom. Italy would therefore replace the United Kingdom since it is the country with the highest number of valid European patents in 2012 after Germany, France and the United Kingdom. An addendum to the agreement will therefore be required. Even where the United Kingdom did leave the EU, it is unlikely that this would prevent the setting up of the UPC: rather, its entry into force would be simply delayed throughout the EU.

What are the consequences for trademark and patent licenses?

The jurisdiction covered by licenses for intellectual property rights will also be affected if the United Kingdom leaves the EU. This is an issue of contract interpretation. Parties should ensure that licenses still cover the same territory and thus include the United Kingdom. This also applies to co-existence or franchise agreements.

A change to the principle of the exhaustion of rights

Moreover, we must not forget that if the United Kingdom leaves the EU, the scope of the exhaustion rule would also be amended. According to the exhaustion doctrine, goods can freely move across the territory of the EU or the EEA after an initial trading in the market made by the rights holder or with his consent. Consequently, the owner of a trademark or patent would not be able to oppose the use of any patent or trademark for goods which have been traded for the first time in the EU or EEA with his consent. If the UK were to leave the EU as well as the EEA, trademark and patent owners could prohibit the export of UK goods to Europe and vice versa.

Transitional Mechanisms for European trademarks

In order to ensure the protection of existing EU trademarks, the implementation of transitional mechanisms is essential. In light of the uncertain legal consequences, certain companies will register trademarks both on a domestic and European level so as to ensure maximum protection.

At present, it is possible to convert the registration of a European trademark to a domestic one (Articles 112-114 of Council Regulation (EC) No 207/2009) but the above requires a reconsideration of the application process and payment of taxes.

Additional legal consequences

Other legal consequences, going beyond intellectual property can be expected.

By leaving the European Union, the United Kingdom would no longer have a representative in the European Parliament nor in the European Council, and there would no longer be a British judge in the Court of Justice of the European Union (CJEU).  EU legislation and the CJEU’s cases would inevitably be affected by a Brexit.

While this is an extreme scenario, alternative arrangements can of course be considered, such as the negotiation of special arrangements through the European Economic Area (EEA), the European Free Trade Association (EFTA) or the World Trade Organisation (WTO).

Dreyfus & associés is proud to announce that founder, Nathalie Dreyfus has been named Trademark Attorney of the Year (France) by Lawyer Monthly’s Women in Law Awards 2016.

A full-page article covering her and her team’s expertise and active role in various international IP organisations and associations has been published online and can be viewed here.

http://www.lawyer-monthly.com/wp-content/uploads/2016/04/LMWILA16_17.pdf

To view all the winners, please click on the following link

http://womeninlawawards.lawyer-monthly.com/2016-winners/

Margot Frohlinger, Principal Director for Patent Law and Multilateral Affairs at the European Patent Office (EPO) has announced that the Unified Patent Court (UPC) could finally be operative in the spring of 2017.

The Agreement on the Unified Patent Court was signed by 25 Member States of the European Union on 19 February 2013. However, it needs to be ratified by at least 13 states, including France, Germany and the United Kingdom, to enter into force.

A Simplified Process

The advantage of the European patent with unitary effect is that only one application will have to be filed, leading to a single patent being obtained and thus to the payment of a single annual fee. This patent will initially be valid in thirteen countries before being applicable to all European Union countries.

The Unified Patent Court will have exclusive jurisdiction for litigation relating to European patents and European patents with unitary effect. It will be possible for the holders of European patents to opt-out for a transitional period (of up to seven years), thus allowing them to continue to benefit from the current system. This is subject to one condition: no action should have been brought before the unified court.

The UPC will comprise a Court of First Instance, composed of a central division (with seat in Paris and two sections in London and Munich) and local and regional divisions in each Member State as well as a Court of Appeal and a Registry.

Eight ratifications so far

So far, the agreement has been signed by France and eight other states. The ratification of Germany and the United Kingdom is still amiss. The United Kingdom is clearly committed to ratifying the agreement in the summer of 2016. The German parliament meanwhile could ratify the agreement at the end of 2016 according to Mrs Frohlinger. The European patent with unitary effect and the UPC could therefore be born in the spring of 2017.

Preservation of national sovereignty

The adoption of the European patent with unitary effect and the Unified Patent Court is a step forward in the harmonization process of intellectual property law.

Although the trend is towards growing harmonization, Member States will always retain some of their sovereignty. Indeed, the substantive law as well as the procedure relating to the European patent with unitary effect will be harmonized while all issues relating to ownership and taxation would still depend on national legislation.

“Brexit”: what will the consequences be for the UPC?

Should the UK decide to leave the European Union, this would not be without consequence since membership to the European Union is one of the requirements to be part of the UPC. If the English vote to leave the EU in June 2016, two scenarios are possible:

• Either the European patent and the UPC will come into effect without the United Kingdom being included,
• Or the UK’s exit from the EU will prevent the European patent with unitary effect and the UPC to come into effect.

Ms. Frohlinger assured that the consequences of a possible “Brexit” would not be as dramatic as that as because of the UK’s significant involvement in the development of the UPC, ratification of the agreement should not be a problem.

As for Benoit Battistelli, EPO President, he appears confident and considers that “we are now ready from a legal, technical and operational point of view, to issue unitary patents. The only remaining steps are the setting up of the unified patent court and the finalisation of the ratification process at national level”.

Following a notification from the Intellectual Property department of the Ministry of Science and Technology, the Lao People’s Democratic Republic establishes the filing of multi-class trademarks.

A trademark could not be filed in several classes until recently in Laos, such that it was required to file several different trademarks.

Extended protection across the Asian market

Laos finally adopted the multi-class filing system on 1 February 2016, in order to comply with the practice of most of the other countries.

It should be kept in mind that the multi-class system provides many advantages.

As such, this system particularly provides:

• Declining rates with regards to the taxes of additional classes
• Simplified management and administration of filing of trademarks
• Reduced analysing period for the filing of trademarks
• Easy follow-up and renewal procedures of trademarks

Through their membership to the multi-class system, worldwide trademark owners may extend their protection to the significant Asian market by means of simplified and inexpensive proceedings.

Dreyfus & associés can assist you in any filing procedure for trademark registration while ensuring the best enforcement strategy and protection of your rights.

The use of a trademark within a family of trademarks cannot be invoked as a basis for justifying the use of another trademark belonging to the same family.

The company Otech, registrant of the French trademarks “Micro Rain” and “Big Rain”, having been made aware of the use of the signs “Micro Rain” and “Big Rain”, has served a formal notice to the companies Ocmis and Irtec to cease the use of these signs. The latter companies have then brought an action against the company Otech for the forfeiture of its rights on its two French trademarks and all relating products, in accordance with Article L714-5 of the French Code of Intellectual Property (Code de la Propriété Intellectuelle) which provides that “The owner of a trademark who, without good reason, has not made genuine use of his trademark in connection with the products and services covered by the registration for an uninterrupted period of five years may see his trademark cancelled”.

The Court of Appeal of Pau (Cour d’Appel de Pau), in a decision of January 2014 (CA Pau, 31 January 2014, No. 14/439), declared the forfeiture of the rights of the company Otech on its French trademark “Micro Rain” for all the products for which it was registered.

The company Otech, considering that the genuine use of a trademark of the French territory can be established by the use of its varied form, itself registered as a trademark, as long as its initial distinctive character is not altered, filed an appeal with the French Supreme Court (Cour de Cassation). Indeed, the company Otech argued that the use of its trademark “Mini Rain”, which only differed from the contested trademark “Micro Rain” by elements which did not alter its distinctive character, stood as evidence of the use of the said trademark “Micro Rain”.

Confirmation of appeal decision declaring cancellation

The French Supreme Court (Cour de Cassation) was then faced with the question of whether the use of a trademark, in the particular context of a trademark family, justified the use of another trademark belonging to the same family.

The French Supreme Court (Cour de Cassation), in its decision of 19 January 2016, applying the principles set out by the Rintisch decision of the Court of Justice of the European Union, confirmed the judgement of the Court of Appeal of Pau (Cour d’Appel de Pau) regarding the decision to cancel the rights of the company Otech.

Application of the European case law “Rintisch”

Indeed, the Court of Justice of the European Union, interpreting Article 10, paragraph 2, subsection a), of the Council directive 89/104/CEE of 21 December 1988 while reconciling the national laws of the Member States regarding trademarks, has emphasised that in the particular context of a family or series of trademarks, the use of a trademark cannot be invoked as a basis for justifying the use of another trademark (C-553/11, Rintisch, 25 October 2012, ground 29). It should be noted that this solution has not always prevailed and that the case law has often fluctuated on this matter.

In the judgement in question, the company Otech argued that the trademark « Micro Rain » belonged to a family of sixteen trademarks, all of them constructed around the term « Rain » used as a suffix or prefix. However, it could not, in order to avoid the cancellation of its rights over the trademark « Micro Rain », invoke the use of the trademark « Mini Rain », even if these trademark marques would belong to the same family or series. On this strict legal ground, the dismissal of the appeal is legally justified.

See also our articles :

Composite mark: is use through another composite mark sufficient?

European Union: appreciation of evidence of use in revocation proceedings of a mark

The cross-border nature of domain names raises the issue of the determination of the jurisdictionally competent court in cases of infringements caused by the registration or use of these signs.

How to appreciate the destination of a website? Use of the circumstantial leads method

According to the theory about the focalisation, the French judge is competent where the website in question is targeted to the French public, not merely when it is accessible from France (Com. 11 January 2005). This solution has been restated many times (Com. 29 March 2011; Com. 3 May 2012). The method takes into consideration several leads, such as the extension of the domain name, the language of the website or even the destination of deliveries. However, these criteria taken separately are not relevant.

This circumstantial leads method has been used by the Court of Justice of the European Union, in a decision of 12 July 2011, where it interpreted on a case-by-case basis several relevant leads in order to determine the target of a website.

Foreign ccTLDs and competent jurisdiction

However, the issue arises in case of foreign ccTLDs, which are national extension (<.ch> for China, <.de> for Germany, etc.). The determination of the target is therefore more complex, evidence as to the targeting of the French public must be set forth. In its judgment of 14 January 2016, the TGI (Tribunal de Grande Instance) of Paris held that an Italian website offering a French translation of its contents, as well as the contact details of one of its distributors located in France targeted a French public, with which it shared a significant and sufficient link. The court based its decision on Article 5-3 of the Community Regulation n° 4/2001 which provides that “A person residing on the jurisdiction of a Member State can be sued in another Member State : […] 3) Regarding unlawful or quasi-unlawful matters, before the local tribunal where the offence was committed or may be committed”.  In the present case, the TGI (Tribunal de Grande Instance) of Paris is therefore competent in cases relating to the use of the trademark of a French company on a .it website.

A contrario, the Court of Appeal of Nancy (Cour d’Appel de Nancy), had, on 13 December 2010 refused to recognise the competence of French jurisdictions in a case concerning the website <carbone.nl> on the grounds that it was not in French language and did not offer products for sale in France.

It is therefore necessary to be careful and take into account all possible leads in order to identify the target of an Internet website, and thus the competent jurisdiction in case of dispute.

Read the decision here

The Paris Court of Appeal (Cour d’appel de Paris), in its decision of 5 February 2016, held that the trademark Colink’In did not constitute an infringement to the trademark LinkedIn. The court sentenced the companies LinkedIn France and LinkedIn Ireland to pay 15 000 € to the company Colink’In in respect of its legal costs incurred. LinkedIn alleged an infringement by reproduction of the verbal and complex Community trademarks LinkedIn with regards to the filing, the registration and the use of the trademark CoLink’In, as well as the corporate name, trade name and the eponymous brand.

Trademark infringement’s appreciation: regarding the overall similarities

The Commercial Chamber of the French Supreme Court (Cour de cassation), by a decision of 25 March 2014, had previously had the opportunity to state the principle according to which an infringement should be construed with regards to overall similarities. The French Supreme Court (Cour de cassation) had stated the criteria for the determination of the infringement of a trademark in terms of a potential risk of confusion in the mind of the consumer. In this decision, the French Supreme Court (Cour de cassation) had restated the principle for the general interpretation of the risk of confusion and outlined: with regards to intellectual property, any infringement is construed from overall similarities and not from small differences (Cass. Com., 4 Jan 1982, Ann. propr. ind., p.244).

Furthermore, the Court of Justice of the European Communities, which had set its case law through three fundamental decisions, held that the infringement of a trademark is construed with regards to the overall idea given by a brand sign (CJCE, 11 Nov. 1997, aff. C-251/95, Sabel ; 29 Sept. 1998, aff. Canon ; 22 June 1999, aff. C-342/97, Lloyd). Therefore, not only should the trial judges set out the differences, but they must also find out whether the existing similarities do not create a risk of confusion.

In the present case, the Paris Court of Appeal (Cour d’appel de Paris) held that a consumer could not mistake the nature of the products and services offered by each party, after having analysed the construction, pronunciation and perception of the opposed brand signs. The pronunciation of the term Linkedin did not lead to a risk of confusion between the two brand signs and phonetical similarities seemed trivial. Indeed, in France “it cannot be certain whether the targeted public would pronounce the said trademark as Lin[k]din instead of Link[eu]din or Link[é]din”.

Finally, while the court concedes that LinkedIn is a reputed trademark, it does not recognise, however, “that the contested brand sign had negatively affected the identity of the trademark resulting in a decline in its market value, nor that it caused any tarnishing or blurring”. It therefore rejected LinkedIn’s claims for damages on these grounds against the respondent company.

Read the decision here

Read also our article : France: In abstracto assessment of the likelihood of confusion between two trademarks is reaffirmed ?