Is the filing of a trademark or a domain name in the name of a company president fraudulent?

Written by Nathalie Dreyfus05/01/2026

Introduction

In corporate life, the issue of ownership of intangible assets is far from secondary. The filing of a trademark or the registration of a domain name in the personal name of a company director, even though such signs identify the company’s business, regularly gives rise to disputes. This practice is not automatically unlawful. However, it may become fraudulent where the filing is carried out with knowledge of the company’s prior rights or use, or as part of a strategy aimed at the personal appropriation of a strategic asset. This issue was recently illustrated by a noteworthy decision of the Douai Court of Appeal dated June 12, 2025.

The stakes are significant: judicial transfer of the trademark, loss of the domain name, civil liability, and potentially unfair competition claims.

When may a director file a trademark or register a domain name in their own name?

The principle: freedom to file

Under French law, the right to file belongs to the first applicant. As a matter of principle, no provision prohibits a director from filing a trademark or registering a domain name in their personal name, including where a company is still in the process of being formed. This formal freedom explains many “anticipatory” filings, particularly prior to incorporation.

The limit: corporate interest and loyalty

This freedom nevertheless reaches its limit where the filing takes place in the context of a joint project, a company in formation, or collective exploitation of the sign. A director may not divert to their own benefit an asset intended to identify the company.

To learn more about recent case law developments relating to trademarks filed on behalf of companies in formation, we invite you to consult our previously published article.

The criteria applied by French courts

Prior use for the benefit of the company

Use of the sign prior to filing, even informal, for the benefit of the future company or its associates constitutes a strong indication of fraud where the filing is made in a personal capacity.

The context of a company in formation

Where the filing takes place while the company is in the process of being formed, and the sign has been chosen collectively, courts frequently consider that the applicant acted in the corporate interest, even if the company had not yet acquired legal personality.

The director’s subsequent conduct

Fraud is not presumed. It is based on an intentional element: the applicant’s knowledge of existing rights or prior use that they seek to neutralise or appropriate. Case law consistently recalls that fraudulent intent must be assessed in light of all the circumstances, including those arising after the filing. Fraud is often revealed by subsequent conduct, such as:

Proposing a licence agreement to the company,
Threatening to prohibit use of the sign,
Retaining control of the domain name or professional email addresses.

In a recent case, the Douai Court of Appeal ruled on this issue.

The decision of the Douai Court of Appeal, June 12, 2025, No.22/05989

Facts of the case

A founding associate, who later became president of a company in formation, personally filed several trademarks and registered a domain name corresponding to the sign intended to identify the company’s business. After his dismissal, he claimed ownership of these rights and proposed a licence agreement to the company, while retaining control over the domain name and the professional email addresses.

Decision of the Douai Court of Appeal

In its decision of 12 June 2025, the Douai Court of Appeal held that these filings constituted fraudulent filings, as they had been carried out with full knowledge of the circumstances, within the framework of a collective business creation project, and exclusively in the interest of the company in formation. The Court ordered the transfer of the trademarks and the domain name to the company, finding that the director had sought to appropriate a strategic intangible asset for personal purposes.

The Court also found the existence of acts of unfair competition and parasitism, as the former president, following his dismissal, pursued a competing activity through a newly created company while improperly exploiting the signs and identifying elements of the original company.

Scope of the decision

This decision confirms settled case law: the filing of a trademark or the registration of a domain name by a director is not unlawful per se, but becomes fraudulent where it diverts a sign intended to identify and develop the company’s business, in disregard of the collective interest and the duty of loyalty.

Trademarks and domain names: a converging legal approach

Courts apply a similar line of reasoning to domain names. Personal registration of a domain name corresponding to the corporate name or an exploited trademark may be characterised as fraud or unfair competition where it disrupts the company’s operations or diverts an element of its intangible assets.

Issues relating to identification data and access retention are also assessed in light of loyalty requirements and, where applicable, the principles recalled by the CNIL regarding the use of professional data.

Best practices to secure ownership of rights

Anticipate ownership issues from the creation phase.
Include an asset transfer clause in the articles of association or shareholders’ agreements.
File trademarks directly in the name of the company once incorporated.
Centralise domain name management at company level.
Document collective decisions relating to the choice and exploitation of distinctive signs.

Conclusion

The filing of a trademark or the registration of a domain name in the name of a director is not, in itself, fraudulent. It becomes so when the facts demonstrate a disloyal appropriation of a sign intended to identify the company’s business, to the detriment of the company and its associates.

Dreyfus & Associés assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

FAQ

1. Can a company recover a trademark filed by its director?
Yes, through an action for ownership claim where fraud is established.

2. What if the articles of association do not provide for the transfer of trademarks?
The absence of a transfer clause does not prevent legal action, but it weakens the company’s position and makes proof of fraudulent intent more complex.

3. Is an oral agreement between associates sufficient?
It is risky. A written agreement is strongly recommended.

4. Is payment of filing fees by the company decisive?
It is a strong indication, but not an exclusive one.

5. Is the registration of a domain name treated in the same way as a trademark?
The legal reasoning is largely similar, particularly where company operations are disrupted.

This publication is intended to provide general public guidance and to highlight certain issues. It is not intended to apply to specific circumstances or to constitute legal advice.

Written by Nathalie Dreyfus05/01/2026

Introduction

An M&A deal is often decided on an element that is mistakenly viewed as “technical” until the documentation is scrutinized: the trademark. Where ownership is clear, registers are properly updated and use is consistent, the trademark supports a significant portion of the valuation, reduces legal uncertainty and facilitates post-acquisition implementation.
Conversely, an unclear chain of title, rights scattered across territories, or a trademark that is challenged or vulnerable (cancellation or revocation) may lead to price renegotiation, reinforced protections, or even the termination of the transaction.

Why trademarks are a decisive asset in M&A?

A trademark is not merely a graphic sign: it is an enforceable right…or a fragile advantage

A trademark is an asset because it grants an exclusive right to use a sign for designated goods and services. It enables the owner to prevent confusing uses, structure a distribution policy, support international expansion and protect marketing investment. However, its value depends on verifiable facts: who owns the trademark, in which territories, for which goods/services, and subject to which contractual constraints?

Common situations in which trademarks weaken the transaction

• Uncertain ownership: the seller uses the sign but is not (or is no longer) the recorded proprietor. This undermines enforcement against third parties and complicates transfer. Under French law, recording transfers and changes is a key condition for opposability.
• Territorial fragmentation: the same sign is owned by different entities depending on the country, complicating a global strategy (communications, social media, distribution, parallel imports). This is common in older portfolios or those built through successive acquisitions.
• Risk of invalidity or revocation: descriptive trademark, serious prior rights, insufficient use for certain classes, overly broad specifications disconnected from actual activity, a portfolio that is “theoretical” rather than defensible.
• Contracts that dilute value: exclusive licenses, imbalanced coexistence agreements, security interests, non-challenge commitments, transfer restrictions or change-of-control clauses.

Trademark audit: the checks that protect price and completion

1) Start from the business strategy

First, identify the portfolio’s strategic marks: the main trademark, sub-trademarks, slogans, logos, country-specific marks, flagship product names, and their role in the company’s growth (line extensions, new markets, new channels). The goal is not merely to take stock, but to confirm that the portfolio truly supports the post-acquisition plan (roll-out, expansion, diversification, internationalisation).

2) Secure the chain of title and opposability

Next, the asset must be regularised before being transferred. In France, INPI sets out the recording of events affecting a trademark’s life (assignment, change of name, merger, etc.), which contributes to publicity and opposability.
Key points of attention: in France and in the European Union, an up-to-date register is a condition for a transfer that is fully opposable and practically usable; for international trademarks, changes of ownership are handled through WIPO procedures.

3) Verify the validity of the sign

A portfolio can be extensive and yet fragile. It is therefore necessary to assess the likelihood that a third party could obtain invalidation of the trademark in contentious proceedings, by examining distinctiveness, relevant prior rights and the market context. This assessment is decisive: it determines the ability to defend the trademark, to invest, and to expand the commercial strategy without paralysing disputes.

4) Verify use and the administrative regularity of the titles

A trademark must remain “alive”. This requires checking renewals, the consistency of recorded data (owner, address, goods/services) and the existence of strong evidence of use (packaging, invoices, campaigns, dated screenshots, commercial documents). Portfolios that have undergone multiple restructurings can become difficult to operate if evidence and documentation have not been centralised.

5) Review the contracts

The buyer acquires a right to use and exploit. Change-of-control provisions, exclusivity clauses, territorial limits, quality-approval obligations, or sub-licensing restrictions can reduce value, constrain strategy or trigger renegotiation. A licence misaligned with the post-acquisition strategy may, in practice, neutralise a portion of the valuation.

6) Integrate the digital perimeter

A trademark’s digital footprint is inseparable from the trademark: domain names, marketplaces, social media, content and accounts. On certain platforms, access to trademark-protection tools requires proof of ownership and consistency between the recorded proprietor and the operating entity. Any inconsistency in the register can delay critical actions (content removal, seller blocking, internal trademark-protection processes).

7) Do not overlook data

Where valuation relies on customer relationships, marketing performance and customer files, compliance becomes an economic parameter. CNIL recalls the rules applicable to the sale/transfer of customer databases (information, rights, proportionality, security, etc.).

From the audit report to transaction clauses: securing the transaction without unnecessary over-negotiation

Match each identified risk with an appropriate measure

A weakness in title or a latent dispute does not automatically require abandoning the transaction. However, it must be translated into a clear mechanism: price adjustment, price holdback, escrow, capped indemnity, or a targeted condition precedent (recording an assignment, releasing a security interest, contractual regularisation). The logic is straightforward: a specific risk calls for a specific, proportionate and verifiable response.
Organise pre- and post-completion regularisation while protecting the timetable
Regularisation takes time: recordals, multi-territory signatures, supporting documents and historical corrections. For sellers, putting IP assets “in order” ahead of time reduces negotiation fatigue and strengthens the file’s credibility. For buyers, the audit should be approached as a structuring decision: what must be resolved before completion and what can be treated afterwards, with appropriate protections and a controlled timetable.

Conclusion

In M&A, trademarks can make or break the transaction: they concentrate value, but also potentially decisive weaknesses (opposability, territorial scope, use, contracts, disputes, digital issues). A structured audit and rigorous contractual implementation turn trademarks into a tool for security and negotiation, rather than a late-stage source of uncertainty.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

Q&A

1) What does a trademark audit cover in an M&A transaction?
It involves reviewing ownership, validity, use, contracts and disputes relating to trademarks in order to secure price and completion.

2) What documents should the seller prepare to avoid delays?Up-to-date certificates and register extracts, assignment deeds and evidence of recordal, renewal schedules, evidence of use (invoices, catalogues, packaging, campaigns), contracts (licences, distribution, coexistence, security interests) and any litigation history.

3) What are the most frequent chain-of-title issues?
Trademarks filed in a founder’s name and used by the company without recorded transfer; intra-group transfers not recorded after restructuring; errors in corporate name or address; partially executed assignments; assignments unclear as to scope (territories/classes).

4) How should a trademark owned by different entities across territories be handled?
Through a rights map and a strategy combining additional filings, coexistence agreements, licences, intra-group reorganisation, or a trademark adjustment aligned with commercial priorities.

5) What if the audit reveals a missing recordal or a missing deed?
Implement a regularisation plan (reconstituted deeds, signatures, recordals), typically through a condition precedent or a specific covenant, supplemented where necessary by a holdback or escrow.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific circumstances or to constitute legal advice.

Written by Nathalie Dreyfus30/12/2025

Introduction

French and European regulations on labelling, packaging and sorting are undergoing a major transformation with the entry into force of Regulation (EU) 2025/40, also known as the PPWR (Packaging and Packaging Waste Regulation). Published on January 22, 2025, this regulation replaces Directive 94/62/EC and establishes a harmonised and binding framework for all packaging placed on the European market, with clear objectives aimed at reducing waste and promoting the circular economy.

This represents a structural legal turning point, engaging not only environmental law, but also consumer law and trademark law, for both food and non-food packaging. Companies must now integrate these obligations into their compliance strategies and legal governance frameworks.

What is the legal framework governing labelling, packaging and sorting?

A directly applicable and strengthened European framework

Regulation (EU) 2025/40, adopted on December 19, 2024 and published on January 22, 2025, now constitutes the core European legal instrument governing packaging and packaging waste. It replaces Directive 94/62/EC and introduces binding rules on the design, durability, recyclability, labelling and management of packaging waste across all Member States.

This harmonisation aims to:

Reduce packaging waste,
Promote reuse and recycling,
Foster the circular economy throughout the internal market.

At national level, these provisions interact with the existing French regulatory framework, in particular the AGEC Law, which already imposes obligations relating to the reduction and recycling of packaging.

When do the main measures enter into force?

A progressive yet legally binding timetable

The PPWR entered into force on January 22, 2025. Its main milestones are structured as follows:

August 12, 2026: mandatory application of the new rules on packaging design, harmonised labelling and consumer information for companies and Member States.
2028: introduction of a minimum recycled content requirement for certain categories of plastic packaging, for example at least 30% recycled plastic in PET packaging.
2030: more ambitious reuse and recycling targets must be met.
2035: extension of recycling obligations to additional types of packaging, with a goal of large-scale recyclability.

What obligations apply to food and non-food packaging?

Challenges specific to food packaging

Food packaging combines environmental constraints with strict health and safety requirements.
Packaging must ensure product safety while avoiding any misleading information regarding the nature, composition or preservation of the product.

From 2026, new rules will apply, reinforcing in particular:

the clarity and legibility of sorting instructions,
consistency between the packaging and the environmental message conveyed,
traceability of the materials used.

Constraints for non-food packaging

For non-food products (cosmetics, household products, electronics, textiles, etc.), obligations will also apply from 2026, covering new standards of design and labelling. Companies will need to anticipate reuse requirements and the reduction of unnecessary packaging in product design, relying on technical data and documented evidence of compliance.

Why are sorting and recycling at the heart of the new rules?

Persistent complexity for consumers

Despite the widespread use of the Triman logo in France, studies show that consumers still have difficulty understanding sorting instructions.

The European regulation now requires a clear hierarchy of information, combined with standardised pictograms.

Companies must explain:

what can be recycled,
how to dismantle the packaging where applicable,
what must not be disposed of in recycling bins.

The central role of environmental instructions for use

Instructions for use will no longer concern solely the use of the product, but also its end of life.
This obligation directly extends the consumer law duty to provide clear and accurate information.

What impact do these rules have on trademarks and environmental claims?

The PPWR has a direct impact on the use of environmental claims on packaging. From 2026, statements such as “recyclable”, “eco-friendly” or “biodegradable” may only be used if they are based on objective and verifiable criteria. The new regulatory framework requires absolute consistency between the trademark message and the technical reality of the packaging.

The absence of technical substantiation for such claims may be considered a misleading commercial practice, engaging the company’s liability regardless of its status as a trademark owner. From 2028, enforcement is expected to intensify, particularly in the context of market surveillance and product compliance checks.

To learn more about green brands and greenwashing, we invite you to read our previously published article.

Conclusion

French and European regulations on labelling, packaging and sorting now form a structuring legal framework, with obligations progressively applicable between 2026 and 2035, aimed at strengthening recyclability, reducing waste and harmonising practices across the internal market.

Integrating these constraints into companies’ legal and operational strategies is essential to ensure compliance and to mitigate significant legal risks.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

FAQ

1. How can regulatory developments be anticipated?
To anticipate these developments and minimise legal risks, it is recommended to:

conduct packaging audits incorporating the new European obligations;
document evidence of recyclability and recycled content;
align environmental claims with certified technical data;
involve legal, CSR and marketing teams from the product design stage.

2. What sanctions apply in the event of non-compliance?
Administrative penalties, unfair competition actions, consumer litigation and reputational damage.

3. Does the Triman logo remain mandatory?
Yes, the Triman logo remains mandatory in France, but it will gradually have to be coordinated with the harmonised European pictograms provided for under the PPWR. In the medium term, companies will have to manage the coexistence of different systems, requiring particular vigilance in terms of clarity and hierarchy of information.

4. Does the regulation require a complete redesign of existing packaging?
Not systematically, but in many cases adaptation will be unavoidable, particularly for:

packaging that is not recyclable by design,
packaging using complex composite materials,
packaging containing non-compliant environmental claims.

5. Why anticipate obligations that only apply in 2028 or 2030?
Because current decisions relating to design, supplier contracts and trademark strategy commit the company for several years. Anticipation helps secure investments legally, avoid rushed redesign costs and transform regulatory compliance into a controlled competitive advantage.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific circumstances or to constitute legal advice.

Written by Nathalie Dreyfus29/12/2025

Introduction

The decision delivered by the Court of Justice of the European Union on September 2, 2025 (Case C-426/24 P) marks a decisive turning point in the management of Community Plant Variety Rights (CPVRs). By confirming the definitive cancellation of a right for non-payment of an annual fee, the CJEU forcefully reiterates that the protection of plant innovations depends as much on the legal robustness of the title as on the administrative discipline of its holder.

This ruling, with major practical implications for breeders, seed companies, and agri-industrial groups, calls for a strategic and operational reading of plant variety protection law in the era of dematerialisation.

The legal framework governing the payment of fees in plant variety protection

The fundamental principle of maintaining the right

Regulation (EC) No 2100/94, which establishes the Community system for the protection of plant varieties, is based on a clear balance: in return for an exclusive right of exploitation, the holder must pay an annual maintenance fee.

In principle, failure to pay this annual fee within the prescribed time limits results in the definitive forfeiture of the plant variety right, save for limited circumstances in which the holder demonstrates, pursuant to Article 80 of Regulation (EC) No 2100/94, that an involuntary, exceptional, and duly justified impediment prevented compliance with the deadline.

A logic comparable to other intellectual property rights

Like patents or trademarks, a plant variety right is a living right, dependent on continuous vigilance. However, the specific feature of the CPVO system lies in its European centralisation and the growing use of digital tools dedicated to relations with right holders, in particular the MyPVR electronic platform, used for the notification of official acts, deadline management, payment of annual fees, and procedural exchanges with holders.

**The Melrose case: a landmark dispute before the CJEU**

The facts giving rise to the dispute

Romagnoli Fratelli SpA, the holder of a Community plant variety right for the potato variety Melrose, failed to pay the annual fee within the prescribed time limits.

The CPVO (Community Plant Variety Office) had nevertheless issued a debit note and several reminders, all made available via the MyPVR platform, with notifications sent by email.

The attempted restitutio in integrum

The holder applied for restitutio in integrum under Article 80 of Regulation (EC) No 2100/94, arguing that it had been prevented from meeting the payment deadline due to the lack of effective receipt of the notifications and contesting the validity of MyPVR as an official means of communication.

These arguments were rejected successively by the CPVO, the General Court of the European Union, and ultimately by the Court of Justice of the European Union, which held that failure to consult electronic notifications does not constitute an involuntary impediment within the meaning of Article 80.

Validation of electronic communications via MyPVR

An explicitly recognised legal basis

The CJEU confirms that the President of the CPVO is empowered, under Regulation 2100/94, to determine the modalities of electronic notification. Accordingly, the MyPVR system is recognised as an official and legally valid channel for the service of acts.

The importance of the holder’s consent

A decisive factor lies in the fact that the holder had opted for electronic communication. This choice entails clear legal consequences: failure to consult the platform cannot invalidate the notification.

Burden of proof and the holder’s heightened responsibility

A firm position of the CJEU

The Court unequivocally states that the burden of proof lies with the holder. It was for the holder to demonstrate that the documents had not been made available in its MyPVR space or that the notification emails had not been sent. Failing such proof, the notification is presumed valid.

A heightened duty of diligence

This approach enshrines a logic of proactive responsibility: not seeing a notification does not mean it does not exist.

The CJEU thus elevates the administrative management of a CPVR portfolio to a strategic obligation, inseparable from legal protection.

Essential best practices for holders of plant variety rights

To avoid irreversible losses, we notably recommend:

Regular monitoring of MyPVR;
Continuous updating of electronic contact details;
The implementation of redundant internal alerts;
The use of a professional representative for portfolio management.

Conclusion

The CJEU decision of September 2, 2025 starkly illustrates the cost of administrative negligence in plant variety protection law. Failure to pay an annual fee, even in the absence of bad faith, may result in the definitive loss of a right of significant economic value. In a digital environment fully embraced by European institutions, vigilance is no longer optional; it is the very condition for the sustainability of rights.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

Q&A

1. Can a cancelled plant variety right be refiled at a later stage?

In practice, refiling a plant variety right is very limited, as any new protection remains subject to novelty within the meaning of Regulation (EC) No 2100/94, as well as the DUS criteria, conditions that are rarely met after prior exploitation of the variety.

2. Is appointing a professional representative mandatory?

No, but it is strongly recommended to secure effective portfolio management.

3. Can the loss of a plant variety right affect a company’s valuation?

Absolutely. Plant variety rights are often strategic intangible assets. Their cancellation may impact financial valuation, acquisition audits, fundraising operations, or mergers and acquisitions.

4. Can failure to pay a CPVO fee trigger internal liability within a company?

Yes. In structured groups, forfeiture resulting from non-payment may give rise to contractual or disciplinary liability of the department or service provider responsible for portfolio management, particularly where economic harm can be demonstrated.

5. Does forfeiture of a plant variety right affect ongoing licence agreements?

Yes. Cancellation of the right generally removes the legal basis for licences, with potentially significant contractual consequences, particularly regarding royalties, warranties, and liability vis-à-vis licensees.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific situations nor to constitute legal advice.

Written by Nathalie Dreyfus29/12/2025

In the luxury industry, perfume is far more than just a fragrance: it is a complex intangible asset composed of multiple layers of creation. For effective protection, it is imperative to dissect the product into its four major components: the scent (the juice), the formula (the recipe), the packaging (the bottle/box), and the name (the trademark).

Each of these elements falls under a distinct legal regime. Dreyfus Law Firm offers this expert guide to navigating between Copyright, Trademark Law, Designs & Models, and Trade Secrets.

The scent (The Fragrance): The challenge of the intangible

This is the soul of the perfume, yet it remains the most difficult element to protect legally in France today. This is a subject we monitor closely, and one we have already addressed particularly in our article entitled Fragrance and Intellectual Property: which protection?.

Why copyright does not (yet) apply to scent

Unlike music or literature, current French case law refuses to consider the fragrance (the perceived scent) as a “work of the mind” (œuvre de l’esprit) protected by copyright.

The Judicial Position: The French Cour de cassation considers that a fragrance proceeds from the implementation of technical know-how, rather than from a purely creative artistic endeavor identifiable with sufficient precision.
The Consequence: One cannot sue for “copyright infringement” for the reproduction of a scent alone.

The solution: Acting on grounds of unfair competition

While the scent is not a “work,” servile imitation remains punishable. To protect a scent against “dupes” or copies, we take action based on unfair competition (concurrence déloyale) or free-riding (parasitisme).

The Legal Argument: The goal is to prove that the competitor sought to appropriate the wake (sillage) of your perfume to benefit from your investments without cost, creating a risk of confusion or undue value capture.

The formula (the recipe): The realm of secrecy

If the scent is the result, the formula is the technical process (the list of chemical ingredients and their dosage) used to achieve it.

Trade secrets rather than patents

Patent filing is rare in perfumery because it requires disclosing the formula to the public (which enters the public domain after 20 years). The preferred strategy is that of Trade Secrets (Secret des affaires).

The Principle: The formula must remain confidential information, known only to a very restricted number of people (the “nose,” the laboratory).
Legal Protection: This relies on the implementation of reasonable protection measures (physical and digital) to prevent the theft of the formula.

Contractualization as a shield

For the secret to hold, it must be legally secured by contracts:

Non-Disclosure Agreements (NDAs): Essential with laboratories, raw material suppliers, and employees.
Non-Compete Clauses: To prevent a perfumer from joining a competitor with your formulas in mind.

Packaging (bottle and box): The alliance of design and trademark

The bottle is the first visual point of contact with the consumer. It is an industrial art object that benefits from powerful cumulative protections.

Designs & models and copyright

Designs & Models: This is the premier protection for the aesthetic appearance of the bottle (its shape, lines). Filing must be done before the product is disclosed to guarantee its novelty.
Copyright: If the bottle is original and bears the imprint of its author’s personality, it is protected by copyright from the moment of its creation, without formal registration (although a probatory deposit is recommended).

The three-dimensional trademark

In exceptional cases, the shape of the bottle itself can be registered as a trademark (3D trademark) if it is sufficiently distinctive for the consumer to recognize the origin of the product by its shape alone (e.g., the iconic Jean Paul Gaultier torso bottle).

The name: The trademark monopoly

The name is the most valuable asset in the long term. Once the scent has evaporated, the name remains.

Word mark registration

The perfume name (e.g., “N°5”) and the House name must be registered as word marks.

Filing Classes: It is crucial to target Class 3 (cosmetics, perfumes) but also Class 35 (advertising, business management) for retail and distribution.
Availability: An in-depth clearance search is indispensable to ensure the name is not already taken.

Protection against cybersquatting

The name must also be protected online. Reserving domain names (.com, .fr, and new extensions like .luxury) must be synchronized with trademark filing, as we explain in our article on Domain Names and New gTLDs.

Litigation expertise of Nathalie Dreyfus

Protecting these four elements requires a global strategy, but also the ability to defend one’s rights in court when counterfeiting occurs.

Dreyfus Law Firm stands out through the specialized expertise of its founder, Nathalie Dreyfus. As a French and European Trademark Attorney, she possesses recognized experience not only in strategic consulting but also in handling complex litigation.

Her expertise is regularly sought in high-stakes cases, requiring perfect mastery of case law from the French Cour de Cassation and Courts of Appeal regarding intellectual property. This fine-tuned knowledge of judicial decisions allows for the anticipation of legal risks linked to scent or shape protection and the construction of solid defense cases for perfume houses.

You can view our founder’s full profile here: Nathalie Dreyfus.

FAQ: Frequently asked questions

Can you patent a scent?
No. A scent cannot be patented. Only the technical manufacturing process (the chemical formula) could theoretically be patented, but this requires publication, which contradicts the industry’s secrecy strategy.

How do I prove my scent was copied?
Proof is generally established via chromatography analysis (chemical analysis) comparing the original juice and the copy, combined with olfactory tests by experts, to demonstrate economic parasitism.

Should my perfume name be descriptive?
Absolutely not. A trademark must be distinctive. Naming a perfume “Rose Scent” may be refused registration because the term describes the product. It is recommended to choose an arbitrary or fanciful name.

What is the difference between a “dupe” and a counterfeit?
Counterfeiting copies a registered right (the name, the logo, the bottle shape). A “dupe” often imitates the scent (not protected by copyright) and the vibe, while changing the name. Against a dupe, we act on grounds of unfair competition; against a counterfeit, we act for trademark or design infringement.

Dreyfus Law Firm is your strategic partner for securing your intangible assets. Contact us to audit the protection of your olfactory creations.

Written by Nathalie Dreyfus26/12/2025

Introduction

In an economic environment characterised by intensified competition, the digitalisation of exchanges and the rapid circulation of content, trademarks have become a key strategic asset. They embody economic value, reputation and consumer trust. Yet many companies still underestimate the technical complexity of trademark law and intervene too late, when the legal risk has already materialised.
Knowing when to seek the assistance of a trademark law expert is not a matter of legal comfort, but a strategic decision. Whether it involves creating a distinctive sign, preventing an infringement action or deploying an effective defence strategy, the involvement of a specialist makes it possible to anticipate, secure and, above all, arbitrate risks.

Understanding distinctive signs and the challenges of their protection

What is a distinctive sign under trademark law?

A distinctive sign is a sign capable of identifying the commercial origin of goods or services and distinguishing them from those of competitors. It may take various forms: a word trademark, logo, slogan, shape, colour, or even a sound or animation in certain cases.
However, not all signs are eligible for protection. Trademark law excludes, in particular, descriptive, generic or customary signs, as well as those contrary to public policy. Assessing distinctiveness requires a refined legal analysis, which is often underestimated at the filing stage. Independently of these absolute grounds for refusal, a sign may also be legally unavailable due to prior rights held by third parties, such as registered trademarks, company names, trade names or domain names, even if it is distinctive in itself.

Why is distinctiveness a critical point of attention?

A trademark that is weakened from the outset exposes its owner to significant risks: refusal of registration, third-party oppositions, or subsequent invalidity or revocation. A trademark law expert plays a key role in securing the choice of the sign, taking into account the relevant sector of activity, the target public and applicable case law.
Example: the French Supreme Court (Cour de cassation) set aside an appellate decision that had considered the trademark “Silhouette” to be distinctive on the grounds that the goods concerned were slimming-related substances, from which it followed that the sign could designate a characteristic of those goods (Cass. Com., July 12, 2005, No. 04-12.146).

When does trademark law expertise become essential?

Upstream: creation, filing and protection strategy

The first reflex must be anticipation. Before any commercial launch, the expert conducts in-depth prior rights searches and designs a coherent filing strategy, both at national and international levels. This approach helps avoid marketing investments in a sign that is legally unavailable.
Companies can file their trademarks with INPI for protection in France, with the EUIPO for a European Union trademark, or use the Madrid System managed by WIPO for streamlined international protection.

During use: monitoring and risk management

A registered trademark is not automatically protected in practice. Monitoring trademark registers, domain names, marketplaces and social networks is essential. The expert identifies potential infringements and recommends proportionate actions, ranging from cease-and-desist letters to litigation.

In crisis situations: opposition, disputes or litigation

Once a conflict has arisen, the intervention of a specialist becomes decisive. Opposition proceedings before the INPI or the EUIPO, infringement actions, settlement negotiations: each decision is based on a precise legal and strategic assessment, taking into account evidence, deadlines and economic stakes.

Trademark infringement: identifying, qualifying and acting effectively

How can a situation of infringement be identified?

Trademark infringement involves the unauthorised use of an identical or similar sign for identical or similar goods or services, creating a likelihood of confusion. The analysis is not limited to a visual comparison; it also incorporates phonetic, conceptual and contextual criteria.

Why is acting quickly essential?

Inaction weakens the trademark owner’s position and may be interpreted as acquiescence. A trademark law expert assesses the urgency, the seriousness of the infringement and the most appropriate course of action, whether judicial or extrajudicial.

Example: a company discovers the exploitation of its trademark through a fraudulent domain name used for online sales. A strategy combining a cease-and-desist letter, a UDRP procedure and platform takedown notices allows the risk to be neutralised swiftly. The firm has recognised expertise in domain name matters.

Building a defence and trademark valorisation strategy

Legal defence and overall consistency

Defending a trademark is not limited to reacting to infringements. It forms part of a broader strategy, aligned with the company’s commercial objectives and communication policy. The expert supports decision-making by assessing the cost/risk/opportunity balance.

Valorisation and securing intangible assets

Beyond litigation, trademark law is a powerful tool for valorisation: licensing, assignments, partnerships and fundraising. A legally robust trademark strengthens a company’s credibility with investors and business partners.

Conclusion

Seeking the assistance of a trademark law expert is a structuring step at every stage of a trademark’s life cycle: creation, use, defence and valorisation. In a context where infringements are multiplying and becoming increasingly complex, legal expertise makes it possible to turn risk into a competitive advantage.
Dreyfus & Associés assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.
Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.
Nathalie Dreyfus with the support of the entire Dreyfus team

Q&A

1. When should a trademark law expert be consulted?
As early as the reflection phase on the choice of a name or logo, and before any filing or commercial launch.
2. Is an expert indispensable to file a trademark?
Filing is possible without an expert, but professional support significantly reduces legal risks.
3. What are the risks of a poorly drafted trademark filing?
An imprecise or overly broad specification may weaken the trademark, limit its enforcement or expose it to invalidity or revocation actions.
4. Is an unused trademark protected?
The absence of genuine use may lead to revocation of trademark rights.
5. Is trademark monitoring mandatory?
It is not legally mandatory, but it is essential in practice to preserve trademark rights.
6. What is the difference between opposition and infringement?
Opposition arises during the trademark application phase, whereas infringement sanctions the unauthorised use of a protected sign.
7. Can a company defend itself alone against an infringement claim?
In practice, this entails significant risks. Incorrect legal qualification or an inappropriate response may aggravate the situation. Expert support helps structure a coherent and proportionate defence.

This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice.

Written by Nathalie Dreyfus16/12/2025

Brexit has profoundly changed the legal landscape for international franchises. Since June 1^st, 2022, the European Union and the United Kingdom have applied separate exemption regimes for vertical agreements, creating new complexity for franchisors operating on both sides of the Channel. This guide details the applicable rules, the key differences between the two systems and the compliance strategies to secure your international development.

The legal framework for franchises in Europe

A franchise agreement constitutes a vertical agreement under competition law: it links two undertakings operating at different levels of the production or distribution chain. The franchisor grants the franchisee the right to exploit its brand, know-how and business methods, in return for a royalty and compliance with defined standards.

This contractual relationship is governed by competition rules that prohibit agreements likely to restrict competition. In the European Union, Article 101 of the Treaty on the Functioning of the European Union (TFEU) sets out this principle. In the United Kingdom, Chapter I of the Competition Act 1998 serves an equivalent function.

However, certain vertical agreements may benefit from a block exemption when they generate efficiency gains from which consumers benefit. This is precisely the purpose of block exemption regulations, which create a “safe harbour” for agreements meeting certain conditions.

The legacy of the Pronuptia ruling

European franchise law has its roots in the Pronuptia de Paris v Schillgalis ruling delivered by the Court of Justice of the European Communities in 1986. This landmark decision recognized that certain contractual restrictions are inherent to the very nature of franchising and do not constitute restrictions of competition. These include clauses aimed at protecting the identity and reputation of the network, as well as the confidentiality of the know-how transferred.

This “Pronuptia test” remains relevant today: restrictions genuinely necessary to protect know-how and brand image fall outside the scope of the prohibition on anti-competitive agreements.

Regulation 2022/720: the EU exemption regime

Regulation (EU) 2022/720 on the application of Article 101(3) TFEU to categories of vertical agreements entered into force on June 1^st, 2022. It replaces the 2010 Regulation and will be in force until May 31^st, 2034.

This Regulation is accompanied by the Vertical Guidelines, which provide a detailed interpretation of its provisions. Together, they constitute the reference framework for assessing the compliance of franchise agreements with EU competition law.

Conditions for applying the exemption

To benefit from the block exemption, a franchise agreement must meet several cumulative conditions:

Market share threshold: both the franchisor and the franchisee must each hold a market share not exceeding 30% on their respective relevant markets. For the franchisor, this is the market on which it sells the contract goods or services. For the franchisee, it is the purchasing market that is considered.

Absence of hardcore restrictions: the agreement must not contain any of the “hardcore” restrictions listed in Article 4 of the Regulation, which cause the entire agreement to lose the benefit of the exemption.

Absence of excluded restrictions: certain clauses, although not hardcore restrictions, are excluded from the benefit of the exemption without contaminating the rest of the agreement. They must be assessed individually.

Key changes in the Regulation 2022

The 2022 Regulation provides important clarifications on several points that had been debated under the previous text:

Dual distribution: the exemption now expressly covers situations where the franchisor also sells at the same levels as its franchisees (retail, wholesale, import), provided that the agreement is non-reciprocal and the parties do not compete at the upstream level.

Information exchange: in the context of dual distribution, the exchange of information between franchisor and franchisee is subject to specific rules to avoid the risks of horizontal coordination.

Shared exclusivity: the franchisor may now designate up to five exclusive distributors per territory, compared to only one previously.

Online sales: the Regulation clarifies the permissible restrictions regarding the use of the Internet and online sales platforms.

VABEO: the UK post-Brexit regime

The United Kingdom adopted its own exemption regime with the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022, commonly known as the VABEO. Entering into force on June 1^st, 2022, it will expire on June 1^st, 2028, six years before the EU Regulation.

The Competition and Markets Authority (CMA), the UK competition authority, has published guidance accompanying the VABEO. This guidance diverges from the European Commission’s guidelines on certain points.

Structure of the VABEO

The VABEO broadly follows the structure of the Regulation with the same 30% market share threshold and a similar list of hardcore restrictions. However, several notable differences reflect UK competition law enforcement priorities and CMA experience.

Shorter duration: expiry in 2028 will allow the UK to adapt its regulations more quickly to market developments, but also creates uncertainty for long-term agreements.

Investigation powers: the VABEO gives the CMA a statutory power to request information from parties about their vertical agreements, strengthening its monitoring capabilities.

Key differences between the Regulation and the VABEO

Although the two regimes share a common basis, several significant divergences require separate analysis for networks operating on both sides of the Channel.

Parity clauses (MFN)

This is probably the most important difference between the two regimes.

In the UK: all wide retail parity clauses (“wide retail MFN”) constitute hardcore restrictions. A wide parity clause prohibits the franchisee from offering its products or services on better terms through any other sales channel, whether online or offline. The inclusion of such a clause causes the entire agreement to lose the benefit of the exemption.

In the EU: only wide parity clauses imposed by online intermediation services providers are excluded from the exemption, and this is an exclusion (affecting only the clause concerned) rather than a hardcore restriction (which would affect the entire agreement).

Dual distribution and information exchange

In the EU: the Regulation imposes specific conditions for information exchange between parties in a dual distribution situation to benefit from the exemption. The exchange must be directly related to the implementation of the vertical agreement and necessary to improve the production or distribution of the contract goods.

In the UK: the VABEO does not impose these formal conditions. Information exchange is exempt if it does not restrict competition by object and is “genuinely vertical”, i.e. necessary for the implementation of the vertical agreement.

Shared territorial exclusivity

In the EU: the maximum number of exclusive distributors per territory is set at five.

In the UK: the VABEO does not prescribe a maximum number but requires the number to be “determined in proportion to the territory/customer group in such a way as to secure a certain volume of business that preserves the investment efforts” of the distributors.

Post-term non-compete

Both regimes allow post-term non-compete clauses of a maximum duration of one year, limited to the premises where the franchisee operated. However:

In the EU: an additional condition requires that the clause be “indispensable for the protection of know-how”.

In the UK: the VABEO adds that the clause must “relate to goods or services which compete with the contract goods or services”.

Summary table of differences

Criterion	Regulation (EU)	VABEO (UK)
Expiry date	31 May 2034	1 June 2028
Wide retail MFN clauses	Excluded only for online intermediation platforms	Hardcore restrictions for all
Information exchange (dual distribution)	Formal conditions required	More flexible approach
Shared exclusivity	Maximum 5 distributors	Number proportionate to territory
Post-term non-compete	Indispensable for know-how protection	Must relate to competing goods/services

Essential franchise agreement clauses

An international franchise agreement must be carefully drafted to benefit from the exemption in both jurisdictions. Here are the main clauses to consider.

Protection of know-how

Both regimes recognize the legitimacy of clauses aimed at protecting the franchisor’s know-how. The guidelines list the types of restrictions generally considered inherent to franchising:

Confidentiality obligation regarding the know-how transferred
Obligation not to acquire financial interests in a competitor
.
Obligation to communicate improvements to the system to the franchisor
Obligation to use the know-how solely for the purpose of operating the franchise

Non-compete clauses

Non-compete clauses are permitted under certain conditions:

During the term of the contract: the maximum duration is 5 years. Clauses that are tacitly renewable beyond this period are deemed to be concluded for an indefinite duration and do not benefit from the exemption.

After termination of the contract: the maximum duration is 1 year, and the clause must be geographically limited to the premises and land from which the franchisee operated during the term of the contract.

Territorial and customer restrictions

The franchisor may impose certain restrictions on the franchisee’s sales, including:

Restrictions on active sales into territories or to customer groups reserved exclusively to other network members
Obligation to operate only from an authorized place of establishment
Restrictions on active sales into territories reserved to the franchisor

However, restrictions on passive sales (responses to unsolicited customer enquiries) are generally considered hardcore restrictions.

Exclusive sourcing

The franchisor may impose an exclusive sourcing obligation (purchasing more than 80% of requirements from the franchisor or designated suppliers) provided that this obligation does not exceed 5 years.

Hardcore restrictions to avoid

Certain clauses constitute hardcore restrictions which cause the entire agreement to lose the benefit of the block exemption. These restrictions are presumed to restrict competition by object.

Resale price maintenance (RPM)

The imposition of a fixed or minimum resale price is the most serious restriction. This includes indirect mechanisms such as:

Fixed or maximum margins
Discounts or reimbursements conditional on compliance with a price level
Threats, intimidation or penalties related to pricing policy
Minimum advertised prices (MAP) that function in practice as fixed prices

However, recommended resale prices and maximum prices are permitted, provided they do not function in practice as fixed prices.

Absolute territorial restrictions

Restrictions that completely prevent a franchisee from selling in certain territories or to certain categories of customers are prohibited. This particularly targets the partitioning of the EU internal market.

Passive sales restrictions

Restrictions on passive sales, i.e. sales resulting from unsolicited customer enquiries, constitute hardcore restrictions, with limited exceptions (notably in selective distribution systems).

Prohibition of online sales

A complete ban on the use of the Internet as a sales channel is a hardcore restriction. The franchisee must be able to sell online, even if qualitative restrictions may be imposed.

UK-specific restrictions

In the UK only, wide retail parity clauses also constitute hardcore restrictions. This stricter treatment than in the EU requires particular care when drafting contracts covering the UK market.

E-commerce and online sales

The rise of e-commerce was one of the main drivers of the revision of the exemption regulations. The new rules provide important clarifications for franchise networks.

Principle of free access to the Internet

The franchisee must be free to use the Internet to promote and sell the contract products or services. Any restriction aimed at preventing the effective use of the Internet as a sales channel constitutes a hardcore restriction.

Permitted restrictions

Certain restrictions on online sales are nevertheless permitted:

Dual pricing: the franchisor may set different wholesale prices for products intended to be sold online and those intended for in-store sales, provided that this difference is related to the different costs of each channel.

Qualitative criteria: in a selective distribution system, the franchisor may impose different criteria for online and offline sales, provided they pursue the same objectives and achieve comparable results.

Marketplace restrictions: the franchisor may prohibit the franchisee from selling via third-party marketplaces (Amazon, eBay, etc.), provided that all online presence is not prohibited.

Online intermediation platforms

The rules on online intermediation services have been strengthened. In the EU, wide parity clauses imposed by these platforms are excluded from the exemption. In the UK, the treatment is even stricter as all wide retail parity clauses are hardcore restrictions.

International compliance strategies

Franchisors operating in both the EU and the UK face an increased compliance challenge since Brexit. Several strategies may be considered.

Option 1: single contract aligned with the strictest regime

This approach involves adopting a single template contract that simultaneously meets the requirements of both the Regulation and the VABEO. Clauses are drafted according to the most restrictive standard, generally that of the UK for MFN clauses.

Advantages: simplicity of management, network consistency, reduced administrative costs.

Disadvantages: potential loss of flexibility in the EU where certain clauses would be permitted.

Option 2: separate contracts by jurisdiction

This approach involves using different contracts for franchisees established in the EU and those established in the UK, each optimized for its applicable regime.

Advantages: optimal use of the possibilities offered by each regime.

Disadvantages: management complexity, higher drafting and monitoring costs, risk of inconsistency within the network.

Option 3: modular approach

An intermediate solution involves using a common framework agreement with annexes or addenda specific to each jurisdiction. Sensitive clauses (MFN, information exchange, etc.) are addressed in these ancillary documents.

Compliance audit

Whatever option is chosen, a regular contract audit is essential. Key checkpoints include:

Verification of market share thresholds (to be updated regularly)
Review of non-compete clauses and their duration
Analysis of clauses relating to online sales
Examination of pricing mechanisms
Review of parity and MFN clauses
Verification of territorial restrictions

Dreyfus support for your franchise network

Dreyfus & Associés supports franchisors and franchisees in securing the legal foundations of their networks in France, the European Union and the United Kingdom.

Our expertise

Our team assists at all stages of your network development:

Audit and compliance: analysis of your existing contracts against Regulation and VABEO rules, identification of risk clauses, modification recommendations.

Contract drafting: preparation of franchise agreements compliant with both regimes, with necessary adaptations for each market. Our contracts incorporate best practices in know-how protection, intellectual property rights and competition compliance.

Brand protection: registration and monitoring of your trademarks in the EU and UK, management of opposition proceedings, anti-counterfeiting actions. The opposition procedure effectively protects your network’s identity.

Litigation: defense of your interests in disputes with franchisees, competitors or competition authorities.

Why choose Dreyfus?

Our firm stands out through:

Recognized expertise in intellectual property law and competition law
In-depth knowledge of the specific features of the franchise sector
International practice with a network of correspondents in key European markets
Nathalie Dreyfus’s accreditation as a judicial expert with the French Supreme Court and WIPO

Frequently asked questions

What is the difference between the EU Regulation and the UK VABEO?
The VBER (Regulation 2022/720) applies in the EU until 2034, while the UK VABEO expires in 2028. The main differences concern MFN (Most Favoured Nation) clauses, the treatment of dual distribution and certain hardcore restrictions. In the UK, all wide retail parity clauses are hardcore restrictions, whereas the EU only treats those imposed by online intermediation services as such.

What clauses are prohibited in an EU/UK franchise agreement?
Hardcore restrictions common to both regimes include resale price maintenance (RPM), absolute territorial restrictions, restrictions on passive sales and a complete ban on online sales. In the UK only, wide retail parity clauses are also hardcore restrictions, requiring particular care.

What is the maximum duration of a non-compete clause?
The maximum duration of an in-term non-compete clause is 5 years. Clauses that are tacitly renewable beyond 5 years are deemed to be concluded for an indefinite duration and do not benefit from the exemption. Post-term clauses are limited to 1 year and must be geographically restricted to the franchisee’s premises.

What is the market share threshold to benefit from the exemption?
To benefit from the Regulation or VABEO exemption, both the franchisor and the franchisee must each hold a market share of 30% or less on their respective relevant markets. If this threshold is exceeded, the agreement must be individually assessed under competition law.

How to manage a franchise network covering the EU and the UK?
International franchisors must now carry out a dual compliance analysis. Two main options are available: adopting a single contract that complies with the stricter rules of both regimes, or using separate contracts adapted to each jurisdiction. A modular approach with jurisdiction-specific annexes often provides a good compromise. Regular audits and guidance from a specialised law firm are strongly recommended.

Can I prohibit my franchisees from selling on Amazon or other marketplaces?
Yes, under certain conditions. The franchisor may prohibit the franchisee from selling via third-party marketplaces (Amazon, eBay, etc.), provided that all online presence is not prohibited. The franchisee must retain the ability to sell through their own website. This restriction is permitted under both the EU and UK regimes.

What happens if my contract contains a hardcore restriction?
If your contract contains a hardcore restriction, it loses the benefit of the block exemption as a whole. The agreement must then be individually assessed to determine whether it infringes competition law. In the event of a proven infringement, the clause concerned is void and you face sanctions from competition authorities as well as damages claims from injured parties.

Can I impose resale prices on my franchisees?
No, fixing minimum or fixed resale prices (RPM – Resale Price Maintenance) constitutes a hardcore restriction under both regimes. However, you may communicate recommended prices or set maximum prices, provided they do not function in practice as fixed or minimum prices. Pressure, threats or monitoring systems aimed at enforcing compliance with these prices are also prohibited.

How long are the Regulation and VABEO exemptions valid?
The EU VBER is valid until May 31^st 2034, while the UK VABEO expires on June 1^st 2028. This six-year difference creates uncertainty for long-term contracts covering the UK. It is advisable to anticipate UK regulatory developments and include adaptation clauses in your contracts.

How do I calculate my market share to know if I benefit from the exemption?
For the franchisor, market share is calculated on the market where it sells the contract goods or services. For the franchisee, it is the purchasing market that is considered. The calculation must be performed annually based on turnover or, failing that, volumes. If the market share exceeds 30% but remains below 35%, the exemption may continue to apply for two additional years (only one year if it exceeds 35%).

Are online sales restrictions permitted?
A complete ban on online sales is a hardcore restriction. However, certain qualitative restrictions are permitted: website quality requirements, prohibition on selling through third-party marketplaces (while allowing a website of one’s own), or price differentiation between online and offline channels if it reflects different costs. The franchisee must always retain an effective ability to sell online.

What is dual distribution and what are its implications?
Dual distribution refers to the situation where the franchisor also sells directly to the same customers as its franchisees. This configuration is common in franchise networks. Since 2022, it has explicitly benefited from the exemption, but requires particular precautions regarding information exchange between franchisor and franchisees to avoid any risk of horizontal anti-competitive coordination.

Are post-term non-compete clauses valid?
Yes, but under strict conditions. The maximum duration is 1 year after termination of the contract. The clause must be geographically limited to the premises and land from which the franchisee operated. It must be indispensable for the protection of know-how (EU) and relate to competing goods/services (UK). A broader or longer clause does not benefit from the exemption.

Does my franchise agreement need to be notified to competition authorities?
No, there is no prior notification system. The block exemption applies automatically if the conditions are met. However, competition authorities (European Commission, CMA, national authorities) may at any time investigate an agreement and withdraw the benefit of the exemption if they find anti-competitive effects. A preventive audit by a specialized law firm is therefore recommended.

Key takeaways

Dual regime: since Brexit, two separate systems apply (Regulation in the EU, VABEO in the UK)
30% threshold: the market shares of both franchisor and franchisee must not exceed this level
Non-compete: maximum 5 years during the contract, 1 year after termination
MFN clauses: stricter treatment in the UK (hardcore restriction)
Online sales: cannot be completely prohibited
Different expiry dates: VABEO expires in 2028, Regulation in 2034

Legal references

Written by Nathalie Dreyfus11/12/2025

Introduction

Filing a trademark in the United States is an essential step for any business seeking to secure its growth in the world’s largest market. However, the U.S. system differs significantly from the French or European model: in the United States, trademark rights are fundamentally based on actual use in commerce. Unlike in the European Union, where registration alone creates a right, U.S. law requires that the trademark be genuinely used in interstate commercial activity.

For a foreign entrepreneur who has not yet launched products or services in the United States, this requirement may constitute a major obstacle. It is precisely to address this need that the USPTO created the Intent-to-Use (ITU) mechanism. This system allows a trademark to be filed even before it is used, provided that the applicant has a bona fide intention to use it in the near future. It is a particularly strategic tool, offering the ability to secure a sign, obtain a priority date, and prepare for an orderly entry into the U.S. market.

In this article, we present a rigorous and detailed explanation of the mechanics, steps, advantages and risks associated with this framework. Our aim is to support French and European companies in building a robust trademark strategy that complies with U.S. requirements.

Understanding the “intent-to-use” basis in the United States

The Intent-to-Use system is built on a simple yet decisive principle: allowing an applicant to reserve a trademark that has not yet been used, while maintaining the historical connection between use and protection. Unlike filings made in France before the INPI or before the EUIPO, the USPTO does not immediately register a trademark filed under an ITU basis. It will only be registered once use is demonstrated.

This approach aims to prevent speculative filings while allowing foreign companies to anticipate their market entry. In other words, the U.S. legislator seeks to encourage genuine, well-founded projects and discourage filings made for convenience. For this reason, the declaration of intent must be specific, sincere, and well-founded: a purely theoretical intention is insufficient.

The filing bases available before the USPTO include use in commerce (Section 1(a)), intent to use (Section 1(b)), and filings based on foreign rights. For foreign companies preparing entry into the U.S. market, the ITU basis remains the most commonly used mechanism.

The full process of an Intent-to-Use application

Initial filing

The applicant submits its trademark application to the USPTO under Section 1(b). At this stage, no proof of use is required, but the applicant must declare under oath that it has a real and bona fide intention to launch its products or services in the United States in the short or medium term. This declaration carries legal consequences.

Examination and publication

Once filed, the application undergoes the standard examination process: assessment of distinctiveness, analysis of potential conflicts, and review of the goods and services description. If no objections are raised, the application is published in the USPTO’s Official Gazette. Third parties then have an opposition period during which they may challenge the registration on the basis of prior rights or likelihood of confusion.

Notice of Allowance (NOA)

After publication and in the absence of opposition, the USPTO issues a Notice of Allowance. This step confirms that the trademark may proceed to registration once proof of use is provided. The trademark is therefore not yet registered, but it is accepted in principle.

Statement of Use (SOU)

The applicant has an initial six-month period to file a Statement of Use, accompanied by a specimen demonstrating commercial use. This proof may take the form of a photograph of the product, a screenshot of an online sales page, packaging, invoices, or any document showing actual use in interstate commerce.

If use began before issuance of the NOA, it is possible to submit an Amendment to Allege Use, allowing the registration process to be accelerated.

Extensions of time

If the company has not yet begun use, it may request up to five successive six-month extensions. In total, the applicant has a maximum of three years from the NOA to submit proof of use. Otherwise, the application will be abandoned and the priority date lost.

Strategic considerations for French and European companies

The Intent-to-Use mechanism is a major strategic tool. It allows applicants to secure a crucial priority date in sectors where filings proliferate, such as cosmetics, fashion, technology or wellness. For a European company in an expansion phase, an ITU filing provides the necessary time to plan a commercial launch without risking being overtaken by a local competitor.

However, this flexibility requires strict discipline. An undocumented intention to use may be challenged, particularly in the context of an opposition or a cancellation action. Likewise, insufficient or weakly substantiated use may result in invalidation of the registration.

We strongly recommend retaining documents that demonstrate preparation for use: market studies, exchanges with U.S. distributors, prototypes, pre-orders, or advertising developments. These elements reinforce the credibility of the original intention.

Finally, once the trademark is registered, the obligation to use it continues. The owner must file periodic maintenance declarations to preserve its rights, failing which the registration may be cancelled.

Conclusion

The Intent-to-Use system offers a particularly valuable strategic framework for foreign companies, provided it is used with rigor and caution. This mechanism enables applicants to secure priority, anticipate entry into the U.S. market, and prepare for a commercial launch in optimal conditions. However, it also imposes strict deadlines, close monitoring of use, and ongoing vigilance.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

Q&A

1. Does an Intent-to-Use filing provide immediate protection against counterfeiting?

It grants a priority date, but full protection arises only upon registration.

2. Is the U.S. system compatible with a European filing?

Yes. Coordinating both strategies is recommended to harmonise priority claims and use requirements.

3. What types of documents constitute valid proof of use?

Product photographs, packaging, sales pages, invoices, screenshots, or labels.

4. Is a simple publication on a website sufficient?

No. Use must occur in interstate or international commerce.

5. Can the goods and services be amended after filing?

Substantive modifications are prohibited; only clarifications of the wording are allowed.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific situations nor to constitute legal advice.

Written by Nathalie Dreyfus10/12/2025

Legal definition, recent case law, litigation procedures, evidence methods and protection strategies — everything you need to know to protect your confidential information.

In an economy built on intangibles, a company’s value often lies in what it doesn’t disclose. Customer databases, algorithms, business strategies or technical know-how: these critical assets are not always patentable, and this is where trade secret protection comes into play.

Since the French law of July 30, 2018, transposing EU Directive 2016/943, France has had a powerful but demanding protective framework. The 2024-2025 case law has significantly clarified the relationship between trade secrets, the right to evidence and GDPR. This reference guide provides everything you need to understand, protect and defend your confidential information.

This guide covers:

The legal definition and 3 cumulative protection criteria
The 2024-2025 case law review and its practical implications
Litigation procedures: taking legal action, timelines, costs
Methods for proving the prior existence of your secret
Industry case studies (pharma, tech, food & beverage)
Coordination with other intellectual property rights
The international dimension of protection

Evolution of the Legal Framework

June 8, 2016	Adoption of EU Directive 2016/943 on trade secret protection
July 30, 2018	Transposition into French law (Law No. 2018-670)
December 22, 2023	Cass.Ass: admission of unfairly obtained evidence under conditions (No. 20-20.648)
June 5, 2024	Cass. Com.: first articulation between right to evidence / trade secrets (No. 23-10.954)
February 5, 2025	Cass. Com.: confirmation of the “indispensable” requirement (No. 23-10.953)
February 27, 2025	CJEU: GDPR prevails over trade secrets for automated decisions (C-203/22)

1. Fundamentals: What is a Trade Secret?

Unlike traditional intellectual property (patents, trademarks) which relies on a public title, trade secret law protects information by virtue of it remaining secret. This protection arose from a simple observation: some strategic information cannot or should not be patented.

The Legal Definition (Article L.151-1 of the French Commercial Code)

To be protected by law, information must cumulatively meet three strict criteria:

The 3 Cumulative Conditions

Secrecy
The information is not generally known or readily accessible to persons within circles that normally deal with this type of information. This is the “non-obviousness” criterion: the information must not be commonplace in the relevant sector.
Commercial Value
The information has commercial value (actual or potential) precisely because it is secret. This value can be direct (competitive advantage) or indirect (cost avoidance).
Reasonable Protection Measures
The information is subject to concrete protection measures by its holder to maintain its secrecy. This is often the determining criterion in litigation.

Essential Point

If you don’t actively protect your information (confidentiality clauses, passwords, document classification), courts will consider there is no trade secret. This is the criterion most often neglected by companies.

What Does Trade Secret Law Cover?

The scope is very broad. The concept of “information” is interpreted extensively and includes:

Technical know-how: manufacturing processes, recipes, chemical formulas, production methods, optimization parameters, technical drawings.

Commercial information: customer and prospect lists, pricing policies, supplier terms, product margins, internal market shares.

Strategic data: M&A projects, development plans, proprietary market studies, business plans, financial projections.

Organizational information: strategic organization charts, management methods, optimized internal processes.

Algorithms and data: source code, scoring models, proprietary databases, software architectures.

What Trade Secret Law Does NOT Protect

Understanding the limits of this protection is essential:

Independent discovery: if a competitor independently develops the same information, you cannot sue them.

Lawful reverse engineering: analyzing a product placed on the market to understand how it works is legal (unless contractually prohibited).

Information becoming public: once a secret is disclosed (voluntarily or not), protection is lost definitively.

General employee skills: the know-how acquired by an employee (their “experience”) belongs to them and can be used with a new employer.

2. 2024-2025 Case Law Review

Recent judicial developments have been marked by an ongoing tension between two imperatives: protecting business secrets and the right to evidence (a party’s need to obtain documents to assert their rights in court).

The Landmark Ruling: Cass. Com., February 5, 2025 (No. 23-10.953)

This was the major turning point. In a case between the franchise networks Speed Rabbit Pizza and Domino’s Pizza, the French Cour de Cassation established a structuring principle for balancing these rights.

The Legal Principle

“The right to evidence may justify the production of elements covered by trade secrets, provided that such production is indispensable to its exercise and that the infringement is strictly proportionate to the aim pursued.”

Practical implications:

For a judge to order production of a document covered by trade secrets, it must be indispensable to resolve the dispute, not merely “necessary” or “useful”. The term “indispensable” is intentionally restrictive: it excludes “fishing expedition” requests (exploratory evidence gathering).

The judge must conduct a proportionality assessment between the competing rights. This involves verifying that no less intrusive means of proof exists, and that the requested document is truly decisive for the outcome of the case.

Managing Seizures (Seizure-Infringement and Article 145 CPC)

When a company is subject to an ex parte seizure on its premises, how can it prevent its secrets from ending up with a competitor?

Case law requires strict application of provisional sequestration:

Documents seized that may violate trade secrets are placed in escrow with a third party (usually the bailiff). A period of one month is granted to the seized party to contest disclosure. The judge rules on whether documents can be communicated before any transmission to the seizing party, applying the proportionality test.

The Preparatory Ruling: Cass. Com., June 5, 2024 (No. 23-10.954)

This decision laid the groundwork for the balance, recognizing for the first time that the right to evidence could justify an infringement of trade secrets, while requiring strict judicial oversight.

Unfairly Obtained Evidence: Cass.Ass, December 22, 2023 (No. 20-20.648)

The French Cour de cassation ruled that evidence obtained unfairly (secret recordings, stolen documents) may be admitted in court if two conditions are met: production is indispensable to exercising the right to evidence, and the infringement of the opposing party’s rights is proportionate to the aim pursued.

3. Trade Secrets vs GDPR: The CJEU Ruling of February 27, 2025

At the European level, the Court of Justice (CJEU, C-203/22, Dun & Bradstreet Austria) issued a major decision on the relationship between trade secrets and individual rights.

The Facts

An Austrian consumer was denied a mobile phone contract on the grounds of insufficient creditworthiness. This refusal was based on an automated assessment (credit scoring) conducted by Dun & Bradstreet. She requested an explanation of the “underlying logic” of this decision, invoking Article 15 of the GDPR (right of access). The company refused, citing trade secret protection of its algorithm.

The CJEU Decision

Principle Established by the CJEU

GDPR prevails over trade secrets regarding the right of access to personal data and information about automated decisions. The data controller must provide “meaningful information about the logic involved” in a manner that is “concise, transparent, intelligible and easily accessible”.

What this means for businesses:

Simply providing an algorithm or complex mathematical formula is not sufficient to fulfill the information obligation. The explanation must be understandable to a non-specialist.

The company must enable the individual to understand what data was used and how it influenced the decision. This doesn’t mean disclosing the complete algorithm, but explaining the determining criteria.

In case of dispute, allegedly protected information must be communicated to the judge who will balance the competing rights.

Sector Impact

This decision directly affects sectors using automated scoring: banks and credit institutions, insurance (personalized pricing), recruitment (automated CV screening), real estate rental (tenant creditworthiness), and more generally any automated decision-making process with significant effects on individuals.

4. Protection Strategies: “Reasonable Measures”

To benefit from legal protection, a company must prove it has implemented concrete measures. The term “reasonable” means appropriate to the nature of the information, the size of the company and the economic context. A SME doesn’t have the same resources as a Fortune 500 company, and courts take this into account.

Protection Measures Checklist

Legal Measures

☐ Non-disclosure agreements (NDAs): systematic before any discussion with a partner, service provider or investor
☐ Enhanced confidentiality clauses: in employment contracts and commercial agreements
☐ Non-compete clauses: for strategic positions, within legal limits
☐ IT charter: explicitly mentioning confidentiality duties and signed by all employees
☐ Internal regulations: incorporating confidentiality obligations

Technical Measures

☐ Access management: “need-to-know” principle
☐ Traceability: access logs for sensitive documents
☐ Encryption: of sensitive data at rest and in transit
☐ Strong authentication: MFA for access to critical systems
☐ DLP (Data Loss Prevention): data leak prevention tools

Organizational Measures

☐ Document marking: “CONFIDENTIAL — TRADE SECRET” label on sensitive documents
☐ Information classification: confidentiality level system (C1, C2, C3…)
☐ Staff training: awareness of social engineering risks and information leaks
☐ Exit procedures: reminder interview about obligations, retrieval of access and documents
☐ Physical security: secured premises for sensitive paper documents
☐ Secret inventory: regular mapping of the company’s confidential information

Practical Tip

“CONFIDENTIAL” marking of documents is the simplest and most effective measure to prove in court. An unmarked document will be difficult to consider as a trade secret. Also invest in traceability: being able to demonstrate who accessed what information and when is invaluable in litigation.

5. Proving Your Secret: Timestamping Methods

In case of dispute, you will need to prove that you held the information before the alleged infringement. A computer file’s creation date is not sufficient proof (it can be modified). You need to establish a certain date.

The Soleau Envelope (INPI)

The best-known and most economical solution for SMEs and individual inventors.

Principle: You send a document in two identical copies to INPI (French Patent Office). One copy is kept by INPI, the other is returned to you with an official stamp certifying the date.

Cost: €15 for 5-year protection, renewable once (10 years maximum).

Advantages: Simplicity, low cost, established judicial recognition.

Limitations: Limited size (7 pages maximum per compartment), not suitable for frequent updates, no direct international validity.

Website: INPI – Soleau Envelope

Deposit with a Bailiff or Notary

Traditional solution offering maximum evidentiary weight under French law.

Principle: A ministerial officer certifies the content of a document on a given date and stores it.

Cost: Variable depending on volume, generally €100 to €500 for a simple deposit.

Advantages: Uncontestable evidentiary weight, universal acceptance by French courts, ability to deposit digital media.

Limitations: Higher cost, less agile procedure for frequent updates.

Blockchain Timestamping

Modern solution, particularly suited for tech companies and frequent updates.

Principle: A digital fingerprint (hash) of your document is recorded in a public blockchain (usually Bitcoin or Ethereum). This record is immutable and timestamped.

Cost: A few euros per timestamp via specialized services, or integratable into your internal processes.

Advantages: Automatable, suitable for software development pipelines (CI/CD), low marginal cost, traceability of each version.

Limitations: Judicial recognition still emerging in France (but growing), need to keep the original document corresponding to the hash.

Providers: Woleet, OriginStamp, KeeSign, or solutions integrated into document management platforms.

APP Deposit (Software)

For source code and software, the French Agency for Program Protection offers a specialized deposit service.

Principle: Secure deposit of source code with certain date, recognized as proof of prior possession.

Cost: From €120 excluding VAT for 5 years.

Website: APP – Agency for Program Protection

Evidence Methods Comparison Table

Method	Cost	Evidentiary Weight	Ideal for
Soleau Envelope	€15 / 5 years	★★★★☆	SMEs, inventors, stable documents
Bailiff / Notary	€100-500	★★★★★	Strategic deposits, foreseeable disputes
Blockchain	€1-10 / hash	★★★☆☆	Tech, source code, multiple versions
APP Deposit	€120 / 5 years	★★★★☆	Software, source code

6. Taking Legal Action: Procedures, Timelines and Costs

When a trade secret infringement is identified, several courses of action are available to the secret holder. The choice depends on urgency, severity of the infringement and objectives pursued.

Competent Jurisdiction

Civil Court (Tribunal judiciaire): competent for civil actions in trade secret matters. This is the general jurisdiction court.

Commercial Court (Tribunal de commerce): competent if the dispute is between two merchants or commercial companies and relates to commercial acts.

Labor Court (Conseil de prud’hommes): competent if the infringement is committed by an employee within the employment relationship (but action may be brought before the civil court for non-employment aspects).

Available Procedures

Interim Relief (Référé)

Fast-track procedure for obtaining provisional measures. Conditions: urgency and absence of serious dispute, or existence of imminent harm. Hearing timeline: generally 2 to 4 weeks after service. The judge can order provisional prohibition on use or disclosure of the secret, protective seizure of disputed products or documents, and penalty payments to ensure compliance.

Proceedings on the Merits

Full procedure for obtaining a definitive decision. Average duration: 12 to 24 months at first instance depending on complexity. Allows for final damages, permanent injunction and publication of the judgment.

Adapted Seizure-Infringement (Article L.152-3 of the Commercial Code)

Ex parte procedure (without the opposing party being notified) to establish an infringement and seize evidence. Application to the president of the civil court. Execution by bailiff at the presumed infringer’s premises. Sequestration of sensitive documents pending decision on their disclosure.

Limitation Period

Limitation Period: 5 Years

Civil action in trade secret matters is time-barred after 5 years from the day the trade secret holder knew or should have known the last fact enabling them to exercise their action (Article L.152-2 of the Commercial Code). This period can be interrupted by a formal notice or legal proceedings.

Cost Estimates

Procedure	Attorney Fees (estimate)	Ancillary Costs
Formal Notice	€500 – €1,500	—
Simple Interim Relief	€3,000 – €8,000	Bailiff: €200-500
Seizure-Infringement	€5,000 – €15,000	Bailiff: €1,000-3,000
Proceedings on Merits (1st instance)	€10,000 – €50,000+	Court expert: variable

These estimates are indicative and vary according to case complexity, firm reputation and geographic area.

Elements to Gather Before Taking Action

Before initiating proceedings, ensure you have the following elements:

Proof of prior possession: Soleau envelope, notarial deposit, blockchain timestamp.

Proof of protection measures: signed NDAs, IT charters, access logs, document classification.

Proof of infringement: disclosed documents, infringing products, witness statements, correspondence.

Damage assessment: loss of revenue, lost R&D investments, reputational harm.

7. Remedies and Sanctions

In case of theft, misappropriation or unlawful disclosure, the law provides for extensive civil sanctions. Criminal liability remains limited to related offenses such as theft, breach of trust or receiving stolen goods.

What the Court Can Order

Prohibition orders: prohibition on using, manufacturing, marketing or disclosing the protected information. This prohibition may be accompanied by penalty payments for non-compliance.

Recall and destruction measures: product recall from the market, destruction of documents, files or products incorporating the secret (“infringing goods”).

Publication of the decision: at the infringer’s expense, in newspapers or on websites, to repair reputational harm.

Damages: calculated taking into account negative economic consequences (loss of earnings, lost opportunity), moral damage, and profits made by the infringer through the infringement.

Legal Exceptions (Article L.151-8 of the Commercial Code)

Trade secrets cannot be invoked in certain situations of overriding interest:

Exercise of the right to information: freedom of expression and freedom of the press, particularly to reveal information in the public interest.

Whistleblowers: disclosure of illegal activity or wrongdoing to protect the public interest (enhanced protection under the 2022 Waserman law).

Protection of a legitimate interest: particularly the right to evidence, subject to proportionality conditions established by 2025 case law.

Employee representatives: in the exercise of their functions (works council, union delegates).

8. Industry Case Studies

Trade secret protection is implemented differently across industries. Here are concrete examples illustrating the stakes and best practices.

Pharmaceutical and Biotechnology Industry

Typical Case: Protection of Development Data

A laboratory develops a new molecule. Before filing a patent (which requires disclosure), all R&D data constitutes critical trade secrets: preclinical trial results, tested formulations, observed side effects, synthesis processes.

Issue: A leak could allow a competitor to file a “blocking” patent or develop a similar molecule.

Recommended specific measures:

Strict compartmentalization of R&D teams (each team only has access to their part of the project). Laboratory notebooks timestamped and signed daily. Enhanced NDAs with CROs (Contract Research Organizations). Clean room procedures for license negotiations.

Technology Sector (Startups, Software Publishers)

Typical Case: Protection of Algorithms and Source Code

A startup develops a recommendation algorithm that constitutes its competitive advantage. The source code and model training parameters are trade secrets.

Issue: A developer leaving for a competitor could recreate a similar solution.

Recommended specific measures:

Technical architecture limiting access to complete code (microservices, module-based access). Systematic blockchain timestamping of commits. Specific confidentiality clauses in developer employment contracts. Monitoring of code repositories (GitHub, GitLab) to detect leaks. Formalized exit interviews with reminder of obligations.

Food and Beverage Industry

Typical Case: Protection of Recipes and Processes

A food manufacturer holds a unique recipe (sauce, beverage, processed product) whose secrecy is key to its market positioning. The most famous example is Coca-Cola, whose formula has been kept secret since 1886.

Issue: Disclosure would allow immediate copying by competitors or private labels.

Recommended specific measures:

Fragmentation of the recipe (different people know different parts). Coding of ingredients (internal codes instead of actual names). Restricted physical access to sensitive production areas. Regular audits of key ingredient suppliers.

Consulting and Professional Services

Typical Case: Protection of Methodologies and Client Data

A consulting firm develops proprietary methodologies and holds strategic data about its clients. These elements constitute major intangible assets.

Issue: A consultant leaving for a competitor takes their “address book” and methods.

Recommended specific measures:

Formal documentation of methodologies marked “trade secret”. Strict policy on use of client data (no export, anonymization). Client non-solicitation clauses. Team training on the distinction between personal skills and company assets.

9. Coordination with Other IP Rights

Trade secrets are not intellectual property rights in the strict sense, but they interact with other available protections. An effective protection strategy often combines several regimes.

Trade Secrets and Copyright

Cumulation possible: Software source code can simultaneously benefit from copyright (which protects the original form of expression) and trade secret protection (which protects the underlying algorithms and business logic).

Key differences:

Criterion	Copyright	Trade Secret
Formality	None (automatic protection)	Protection measures required
What is protected	The original form	The information itself
Duration	70 years post mortem	As long as secrecy is maintained

Trade Secrets and Patents

Strategic choice: To patent or keep secret? This choice is fundamental and irreversible.

Patenting is preferable when: The invention is easily identifiable through reverse engineering. You want to monetize the invention (licenses, assignments). The commercial lifespan is less than 20 years. You need a title enforceable against all (including independent discoverers).

Secrecy is preferable when: The information doesn’t meet patentability criteria. The secret can be maintained long-term (no reverse engineering possible). The commercial lifespan exceeds 20 years. You want to avoid patent costs and disclosure.

Warning: Patents Destroy Secrecy

Filing a patent requires publication of the invention (18 months after filing). This disclosure is definitive: if the patent is invalidated or expires, the information remains in the public domain. The secret is lost forever.

Trade Secrets and Trademarks

Coordination: Trademarks protect a distinctive sign (public by nature), while trade secrets can protect brand strategy, positioning studies, launch projects before public announcement.

Trade Secrets and Designs

Coordination: Before launching a new design, plans and prototypes are trade secrets. Once the product is marketed, protection shifts to design rights (registered or unregistered for the EU).

Trade Secrets and Know-How in Contracts

In know-how license agreements or franchises, trade secrets are often the basis of the transferred value. Confidentiality clauses must be particularly carefully drafted, with a precise definition of the know-how scope, protection obligations for the licensee, and control mechanisms.

10. International Dimension

In a globalized economy, your trade secrets cross borders. Understanding the international protection framework is essential.

The Harmonized European Framework

EU Directive 2016/943 has harmonized protection across the 27 member states. This means the definition of trade secrets and available remedies are similar throughout the European Union, facilitating cross-border protection.

The TRIPS Agreement (WTO)

Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires the 164 WTO members to protect “undisclosed information”. This is the minimum ground of international protection.

International Comparison

Jurisdiction	Protection Level	Particularities
United States	★★★★★	Defend Trade Secrets Act (DTSA, 2016). Federal action available. Punitive damages up to 2x. Ex parte seizures.
European Union	★★★★☆	Harmonized Directive 2016/943. Civil protection. No harmonized criminal component.
United Kingdom	★★★★☆	Common law + directive transposition (retained post-Brexit). Breach of confidence.
China	★★★☆☆	Revised Anti-Unfair Competition Law (2019). Improved protection but variable enforcement.
Japan	★★★★☆	Unfair Competition Prevention Act. Criminal provisions. Effective protection.

Best Practices for International Protection

Adapt your NDAs to applicable law: An NDA governed by French law won’t have the same effectiveness before an American or Chinese court. Include choice of law and jurisdiction clauses.

Map your information flows: Identify where your secrets transit (subsidiaries, subcontractors, cloud). Each jurisdiction crossed requires a protection analysis.

Strengthen clauses with foreign partners: In some countries with weaker protection, stricter contractual clauses (penalties, bank guarantees) can compensate.

Consider international arbitration: For cross-border disputes, arbitration (ICC, LCIA) can offer faster proceedings and facilitated enforcement in many countries (New York Convention).

11. Patent vs Trade Secret: Comparison Table

Criterion	Patent	Trade Secret
Nature	Public industrial property title	Protection through confidentiality
Duration	20 years maximum (with annuity payments)	Unlimited as long as secrecy is maintained
Condition	Public disclosure required	Maintenance of secrecy required
Protection against	All exploitation, including independent creation	Unlawful acquisition only (not lawful reverse engineering)
Initial cost	High (drafting, filing, examination: €5,000-15,000)	Low (internal organizational measures)
Recurring cost	Increasing annuities + international extensions	Security measure maintenance
Main risk	Design-around by different conception	Leak or independent discovery
Monetization	Easily monetizable (license, assignment, collateral)	More complex monetization (due diligence required)
Ideal for	Patentable technical inventions, monetization/licensing	Know-how, commercial data, non-patentable information

Combined Strategy

The two protections are not mutually exclusive. An optimal strategy can combine: patenting key innovations (strong, monetizable protection) and keeping complementary information secret (manufacturing processes, optimization parameters, implementation know-how).

12. Q&A: Your Questions About Trade Secrets

What is the difference between a patent and a trade secret?
A patent grants a 20-year monopoly in exchange for public disclosure of the invention. A trade secret protects information as long as it remains secret (unlimited duration), but does not protect against independent discovery by a competitor (lawful reverse engineering). A patent is enforceable against everyone; a trade secret only protects against unlawful acquisition.

Can an employee use their knowledge with a new employer?
Yes, acquired know-how (“experience”) belongs to the employee. The line is crossed if they take documents, client files or use specific technical secrets identified as confidential by their former employer. The distinction lies in the nature of the information: general skills (usable) vs. protected information (prohibited).

What constitutes a “reasonable protection measure”?
There is no official list, but case law recognizes: “Confidential” marking of documents, restricted computer access, signed confidentiality clauses, physical security of premises and staff training. Complete absence of such measures prevents legal protection. “Reasonable” is assessed according to company size and nature of the information.

Do trade secrets override whistleblower protections?
No. The law provides clear exceptions (Article L.151-8 of the Commercial Code). Trade secrets cannot be invoked to prevent disclosure of illegal activity or wrongdoing aimed at protecting the public interest (right to alert). The 2022 Waserman law strengthened this protection.

How long does protection last?
It is potentially perpetual. It lasts as long as the three conditions (secrecy, value, protection) are met. If the information becomes public — through disclosure, leak or independent discovery — protection is immediately and definitively lost. The example of Coca-Cola’s formula (kept secret since 1886) illustrates this potentially unlimited duration.

Can trade secrets yield to the right to evidence?
Yes, since the French Cour de cassation’s ruling of February 5, 2025 (No. 23-10.953). The judge must verify whether production of the document is “indispensable” to prove the alleged facts and whether the infringement of secrecy is “strictly proportionate” to the aim pursued. This is a case-by-case assessment that excludes exploratory requests.

Must I explain my algorithms to affected individuals?
Since the CJEU ruling of February 27, 2025 (C-203/22), yes for automated decisions with significant effects (scoring, profiling). You must provide “meaningful information about the logic involved” in an understandable manner. This doesn’t mean disclosing the complete algorithm, but explaining the criteria used and their influence on the decision.

What is the limitation period for legal action?
Civil action is time-barred after 5 years from the day the trade secret holder knew or should have known the last fact enabling them to exercise their action (Article L.152-2 of the Commercial Code). This period can be interrupted by a formal notice or legal proceedings.

How can I prove I held the information before the infringement?
Several methods establish a certain date: the Soleau envelope (INPI, €15 for 5 years), deposit with a bailiff or notary, blockchain timestamping, or APP deposit for software. A computer file’s creation date is not sufficient proof as it can be modified.

Can source code be protected by both copyright and trade secrets?
Yes, these two protections can be combined. Copyright protects the original form of the code (automatically, without formalities), while trade secret law protects the underlying algorithms and business logic (provided the 3 legal criteria are met and confidentiality is maintained).

Legal References

Definition and criteria: Article L.151-1 of the French Commercial Code
Lawful and unlawful acquisition: Articles L.151-3 to L.151-6 of the French Commercial Code
Exceptions: Articles L.151-7 and L.151-8 of the French Commercial Code
Limitation period: Article L.152-2 of the French Commercial Code
European Directive: Directive (EU) 2016/943 of June 8, 2016
2025 case law: Cass. Com., February 5, 2025, No. 23-10.953 | CJEU, February 27, 2025, C-203/22
Soleau Envelope: INPI – Soleau Envelope

Need to Audit Your Protection or Take Legal Action?

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Written by Nathalie Dreyfus08/12/2025

Introduction

With the rise of online shopping, not only are buying habits changing, but so are methods of fraud. Return fraud, which involves sending back a counterfeit item instead of an authentic product, is now one of the most serious types of fraud.

This mechanism introduces counterfeits directly into legal distribution channels and undermines the integrity of inventories. As a result, companies can no longer rely on simple visual checks: sustainable trademark protection requires enhanced traceability and authentication tools, in line with best practices recommended by French and European authorities.

How return fraud works?

Return fraud is based on a simple but discreet strategy. The fraudster orders a genuine product, keeps the original, and returns a carefully reproduced imitation. This type of fraud thrives due to several factors:

Very permissive return policies on e-commerce platforms,
Increasing sophistication of counterfeits,
Logistical pressure linked to large volumes,
Lack of thorough checks upon receipt.

In warehouses, processing times are short and teams do not always have the expertise to identify high-quality fakes.

Why is return fraud rising in e-commerce?

Historically, counterfeit goods entered the market through parallel channels. Today, return fraud creates an internal entry point: counterfeit goods enter directly through the trademark‘s official channel. As a result:

Warehouses receive counterfeits without their knowledge;
Some counterfeits perfectly imitate the characteristics of the authentic product;
Counterfeits may be mistakenly shipped to other consumers.

This confusion blurs the lines between authentic and counterfeit, complicating overall control of the supply chain.

Legal, financial, and reputational impacts

Return fraud has three major consequences:

An immediate financial cost

The company loses the original item and is left with a counterfeit that cannot be sold. On a large scale, the losses add up.

Significant reputational risk

If a counterfeit item is accidentally returned to a customer, trust is eroded, which can lead to complaints, doubts about quality, and damage to the company’s image.

Significant legal consequences

The presence of counterfeits in the supply chain complicates infringement actions, as the break in traceability alters the evidence. This raises questions about civil liability, as well as the company’s ability to enforce its intellectual property rights.

Strengthening authentication and traceability

To limit this risk, companies must adopt enhanced technical mechanisms:

Unique digital identifiers for each item,
Discreet markings applied during manufacturing,
Authentication technologies integrated into the product,
Digital tracking of the item’s life cycle until its eventual return.

Internal procedures must allow for rapid and confidential verification of authenticity upon receipt.

A sustainable protection strategy

Return fraud evolves with online commerce practices. Companies must therefore secure the entire chain:

Production,
Transport,
Distribution,
Returns.

But the strategy must also be based on:

Robust internal procedures,
Regular updates to the legal framework,
Ongoing training for teams,
Constant risk analysis to anticipate new methods.

Conclusion

Return fraud is now a major challenge for businesses. It is essential to implement robust authentication systems and strengthen return controls. Companies that invest in these measures protect their reputation, the value of their assets, and public trust in the long term.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team

FAQ

1. What is return fraud?
The purchase of an authentic product followed by the return of a counterfeit or different product.

2. Why is this phenomenon rising?
Due to flexible return policies, the increasing quality of counterfeits, and the rise in return volumes.

3. What are the risks for businesses?
Risk of financial loss, damage to reputation, and legal difficulties related to the presence of counterfeits in the supply chain.

4. How can you protect yourself?
Through unique identifiers, authentication technologies, digital tracking, and strict internal procedures.

5. Is it possible to completely eliminate return fraud?
No, but consistent measures can greatly reduce the risk.