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Introduction

When a business ceases operations, the fate of its intellectual property rights becomes a critical issue. Patents, trademarks, software, copyrights, and domain names do not disappear with the dissolution of the legal entity. These intangible assets retain independent value and may be sold voluntarily, transferred through judicial proceedings, or revert to their original holders where allowed by law.

Managing such rights raises substantial legal, economic, and operational issues. The presence of an insolvency practitioner or liquidator adds complexity to the transfer, valuation, or exploitation of these assets. This is further compounded by ongoing contractual commitments such as licenses, exploitation agreements, and secured creditor interests.

Inadequate preparation can result in significant value losses, including abandoned rights, expired titles, improperly designated assets, and post-transfer litigation. Understanding the applicable legal framework is therefore crucial to secure, enhance, and where appropriate, challenge transactions involving the intellectual assets of distressed companies.

Ownership of intellectual property rights upon business closure

1.1 Classification of intellectual property rights as transferable assets

Intellectual property rights are legally recognized as intangible movable assets. As such, they form part of the company’s transferable assets. Whether recorded on the balance sheet or not, they may be assigned to third parties, licensed, contributed as capital, or used as collateral. This classification confers independent patrimonial value that may be leveraged for accounting, tax, or strategic purposes. In a restructuring or acquisition context, IP rights can be vital to preserving competitiveness or continuity of business.

1.2 Methods of transfer or abandonment

Prior to insolvency, companies may organize the transfer of their IP rights through private or notarized agreements, provided these transfers are registered with the competent office (INPI, EUIPO, or EPO). Registration is essential for third-party enforceability and must be promptly completed. During liquidation, only the liquidator, under court supervision, is authorized to transfer IP rights. If fees are unpaid or actions are not taken, rights may lapse or revert to authors under certain statutory conditions.

The role of the insolvency practitioner in the management of rights

2.1 In reorganization: continuation or termination of contracts

In judicial reorganization, the insolvency practitioner may choose to continue or terminate contracts linked to IP rights, including licenses or distribution agreements. This decision is based on preserving asset value, avoiding liabilities, and facilitating a sustainable business recovery. Active, revenue-generating contracts are often maintained, while unprofitable ones may be terminated through judicial authorization.

2.2 In liquidation : identification, valuation, and sale

Following a liquidation order, the liquidator must inventory all intangible assets, appraise them, and organize their sale. The objective is twofold: satisfy creditor claims and avoid a total loss of value. Assets may be sold individually, such as a patent or domain name, or as part of a global business transfer. The success of these transactions depends on accurate identification, realistic valuation, and formal enforceability through registration with the appropriate authority.

Challenging transfers made during insolvency proceedings

3.1 Grounds for nullity or lack of enforceability

An unregistered transfer of IP rights is unenforceable against third parties. This omission may have severe consequences in disputes. Additionally, a vaguely worded contract may be invalidated due to lack of informed consent or undetermined scope. Courts consistently require clear identification of rights for a transfer to be valid.

3.2 Case law on unlisted intellectual property rights

Courts have repeatedly invalidated the transfer of IP rights not explicitly listed in deeds or court orders. For example, a patent or domain name was excluded from a transfer due to the lack of individual mention, despite being linked to the transferred business activity. Therefore, all rights intended for transfer must be listed clearly, including registration numbers and legal status. Failure to do so can result in legal disputes for the acquirer.

Creditors’ rights over intellectual property assets

4.1 Use of pledges and security interests

IP rights can be pledged to secure creditor claims. When such pledges are registered prior to the insolvency, the secured creditor has priority over sale proceeds. These guarantees must be duly recorded in the relevant national registries (patents, trademarks, designs). Unsecured creditors, however, have no specific priority and must rely on general ranking rules for asset distribution.

4.2 Special legal status of authors

Under article L.132-15 of the French Intellectual Property Code, authors may recover their rights if the contracting company fails. This mechanism protects their moral and economic rights, enabling them to re-exploit or relicense their work. In sectors like audiovisual, publishing, or music, specific rights may also grant authors a pre-emption or priority purchase option to avoid transfers without their consent.

Ensuring continuity of intellectual property use during proceedings

5.1 Maintenance of titles and payment of royalties

To maintain rights, renewal fees, office communications, and regulatory formalities must be managed. The insolvency practitioner may choose to keep certain titles if they have market potential, especially those tied to active operations or acquisition plans. Coordination with foreign agents may also be necessary for international portfolios.

5.2 Preservation of Technical Assets and Commercial Value

The value of intellectual property rights also depends on their exploitability. Without the source code, visual identity guidelines, databases, or associated know-how, a right may lose all commercial value. For instance, a branded domain name without an active website or customer database may lose its appeal. The identification, securing, and preservation of such elements are therefore essential, notably through a digital inventory and the temporary outsourcing of hosting or server infrastructure.

Conclusion

Managing intellectual property rights during business cessation requires legal foresight and strategic coordination. Supervision by the insolvency practitioner, accurate drafting of transfer documents, and collaboration with authors and creditors are essential to preserve these valuable intangible assets.

The firm Dreyfus et Associés, intellectual property consultants, provides support to businesses seeking to secure and enhance the value of their IP rights, especially during sensitive restructuring or winding-up phases. Our strategic and preventative approach helps clients anticipate risks to their trademarks, patents, and other creations, ensuring both legal and commercial continuity in complex proceedings.

Nathalie Dreyfus with the support of the entire Dreyfus team

FAQ

1. What happens to intellectual property rights when a company ceases its activity ?

   Patents, trademarks, software, or copyrights do not expire with the company’s closure. Depending on the legal context, they may be sold, transferred, or abandoned. In the case of voluntary cessation, the company may organize the transfer of its intangible assets before being deregistered. In insolvency proceedings (reorganization or liquidation), these rights become part of the estate and are managed by the court-appointed administrator or liquidator. Proper management preserves both legal security and economic value.

2. Can the insolvency practitioner sell a trademark or a patent ?

   Yes, during a judicial liquidation, the insolvency practitioner acts as a liquidator and may sell intellectual property rights including trademarks, patents, and software. This transaction must be approved by the supervising judge and must be formalized in a clear contract, explicitly identifying the titles being transferred. It must also be registered with the competent IP office (INPI, EUIPO, or EPO) to be enforceable against third parties.

3. Can a transfer of intellectual property rights be challenged ?

   Yes, a transfer may be disputed if it suffers from formal defects, lacks proper registration, or fails to clearly identify the rights being transferred. Courts emphasize the importance of precision and registration. If a right is not explicitly listed and registered, a third party—such as a former holder or a creditor—may challenge the transfer on legal grounds.

Bulgaria’s accession to the Unitary Patent system marks a decisive milestone in the unification of innovation protection across Europe. This newly integrated territory expands the geographical reach of the unitary system and strengthens the legal consistency offered by the Unified Patent Court (UPC).

Behind this discreet move lies a powerful signal: the Unitary Patent is emerging as a strategic tool for innovative companies particularly those in high-tech sectors. In this article, we examine the legal, economic, and strategic implications of Bulgaria’s accession, the key updates from 2025, and what this means for right holders.

 Strategic implications of Bulgaria’s accession to the unitary patent

1.1. A European step forward for patent harmonization

As of June 1, 2023, Bulgaria officially joined the group of EU Member States participating in both the Unitary Patent and the Unified Patent Court (UPC). This integration represents a meaningful expansion of the European innovation protection framework.

1.2. Territorial expansion of unitary protection

The integration of Bulgaria into the unitary patent system now allows right holders to benefit from uniform legal protection across 18 participating EU Member States, without the need for national validation procedures in that country. The unitary patent is a single title granted by the European Patent Office (EPO) that produces the same legal effects in all participating states. This system is accompanied by the exclusive jurisdiction of the Unified Patent Court (UPC), a specialized court responsible for handling infringement and revocation actions in a centralized and consistent manner across Europe. Bulgaria’s accession further strengthens the attractiveness and efficiency of this pan-European framework.

1.3. Economic and administrative benefits for filers

Bulgarian inventors and businesses now benefit from:

• A single application process
• No translation or national validation fees
• Centralised renewal management
• A specialised judiciary

This results in lower costs and increased accessibility for small and mid-sized entities.

 2025 Snapshot: Growth of the system and national adoption

2.1. Key figures – First half of 2025 (European commission)

• 48,000+ unitary patents granted
• Over 700 cases filed before the UPC, including Bulgarian-related disputes
• 57% of unitary effect requests originated from SMEs or universities

These metrics illustrate the growing adoption and success of the system among diverse stakeholders.

2.2. Capacity building and local integration

The Bulgarian patent office has strengthened collaboration with the European patent office (EPO) and invested in training judges to handle UPC-related litigation. Bulgarian parties have already appeared in both local and central divisions of the UPC, showcasing their proactive integration.

 What Bulgaria’s accession reveals about the system’s effectiveness

Bulgaria’s decision reinforces the view that the Unitary Patent system is meeting the expectations of its stakeholders.

Legal efficiency through centralised litigation

• Less legal fragmentation
• Enforceable decisions across 18 jurisdictions
• Streamlined procedures before the UPC

Attractiveness for innovation-driven sectors

• Widely adopted by companies in biotech, AI, and medical devices
• Increased certainty and value for patent portfolios

Administrative simplification for rights holders

• Fewer formalities
• Reduced translation obligations
• Competitive cost structure that benefits SMEs and research institutions

In essence, Bulgaria’s accession validates the strategic relevance and legal maturity of the Unitary Patent system.

Future perspectives for the unitary system by 2026–2030

Bulgaria’s accession can be seen as a positive signal for the potential expansion of the unitary patent system to other EU Member States that have not yet joined (such as Spain, Croatia or Ireland). The Bulgarian experience may serve as a model to overcome existing reservations by demonstrating the concrete benefits of integration: enhanced legal certainty, simplified procedures for applicants, and greater clarity in the applicable legal framework.

Moreover, the potential extension of the Unified Patent Court’s jurisdiction to cover disputes relating to licences or co-ownership could be the subject of future discussions, with a view to further centralizing litigation and harmonizing substantive patent law across Europe.

Conclusion

Bulgaria’s entry into the unitary patent system confirms the success of this landmark European reform. It enhances territorial coverage, legal predictability, and judicial coherence for both EU and international businesses.

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

Dreyfus Law firm is partnered with a global network of lawyers specializing in intellectual property.

Nathalie Dreyfus with the assistance of the entire Dreyfus team.

Overview and legal framework

Definition of spare parts under EU design law

Spare parts are components that replace or restore the appearance of complex products—vehicles, electronics, appliances. If a spare part’s appearance is “new” and presents “individual character”, it can qualify for protection under EU Design Regulation (EUDR art. 4–7), national design laws, and even copyright.

Historical legal monopolies

Historically, Original Equipment Manufacturers (OEMs)—that is, carmakers and original producers of vehicle components—have relied on design rights and copyright law to assert control over the spare parts market. Although the Independent Automotive Aftermarket (IAM) operates outside OEM networks, it remains closely tied to them from an economic standpoint, as it provides compatible or equivalent parts for the repair and maintenance of OEM-manufactured vehicles. In 2023, the IAM represented approximately 62% of the European spare parts market, amounting to €73 billion out of a total €118 billion, while OEMs retained the remaining 38% (Roland Berger – European Independent Automotive Aftermarket Panorama – 2024).

Evolution – Legislative reforms

French market liberalization (2021–2023)

With the Climate and Resilience Act of 22 August 2021, France amended its Intellectual Property Code to facilitate logo removal by OEM suppliers and opened visible vehicle spare parts to competition.

Prior to this reform, design rights granted OEMs exclusivity over the manufacture and commercialisation of these parts for a period of 25 years, severely limiting access for independent producers. The legislative amendment reduced this exclusivity in favour of increased competition, with a transitional regime ending on 1 January 2023, from which date independent suppliers were authorised to manufacture and sell parts (such as headlights, bonnets, and bumpers) without infringing registered designs, provided no logo or protected sign remained affixed.

EU Design reform package (2024–2027)

The EU has enacted a comprehensive reform via:

• EUDR 2024/2822 (applying 1 May 2025, some provisions from 1 July 2026),
• Directive 2024/2823 (to be transposed by 9 December 2027).

Modernisation and scope expansion

• Terminology modernised: “Community Design” becomes “EU Design” (symbol Ⓓ).
• Broader definitions include digital interfaces, animated elements, and multi-design filings (up to 50 per application), with harmonised deferment rules.

Repair clause and essential spare parts

• A repair clause exempts certain “essential” spare parts from design protection to foster competition and support circular economy goals.
• Example: In the landmark case Volkswagen v W + S Autoteile GmbH (Case I‑20 U 291/22), the Higher Regional Court of Düsseldorf examined whether a car key housing qualifies as a “component part of a complex product” under the EU design repair clause (Art. 110(1) CDR).
• Facts: Volkswagen held a registered Community design for its key housing 001342174-0001:

W + S marketed a visibly similar car key housing deemed to infringe the design registration:

W + S counterclaimed, invoking invalidity and arguing that the repair clause exempts the part.

• Court’s Reasoning: The Court confirmed that the key housing is a complex product in its own right, not a component physically attached to the car. The informed user does not perceive it as a functional part of the vehicle. Moreover, W + S failed to demonstrate that its product would only be used for repair purposes, a strict requirement under Art. 110(1).
• Legal Outcome: The repair clause did not apply. The key housing is an accessory, not a “component part” of the car, hence fully subject to design protection. This decision clarifies that to benefit from the repair clause, a spare part must:

a) be physically integrable into the complex product;
b) be used solely for repair;
c) be perceived by an “informed user” as part of the complex product.

It underscores the narrow interpretation of “component part”, limiting the clause to parts that are physically assembled—unlike accessories or electronic devices.

Accessory manufacturers must now carefully assess whether their products genuinely fall within the repair clause or remain vulnerable to design infringement claims.

Impact on manufacturers, repairers, consumers

Market competition and repair rights

The progressive liberalisation of the spare parts market has removed long-standing legal and economic barriers for independent repairers and aftermarket suppliers. By limiting the scope of design protection over visible spare parts, national and EU reforms have fostered greater market competition, enabling alternative players to offer compatible components without fear of infringing intellectual property rights.

The EU “repair clause” plays a central role in this balance. It seeks to reconcile the legitimate interest of IP holders in protecting the aesthetic value of their products with the need to ensure the availability of essential replacement parts. This provision helps safeguard the consumer’s right to repair, supports the circular economy, and addresses anti-competitive practices by limiting the ability of OEMs to assert exclusivity over parts necessary to restore the original appearance of a product.

Quality, litigation, and enforcement

The opening of the spare parts market also brings significant implications for product quality and legal liability. OEMs have voiced concerns over the proliferation of substandard parts, prompting them to strengthen their licensing regimes, impose technical specifications, and require indemnity clauses in their agreements with third-party suppliers. This is particularly relevant in safety-critical applications such as lighting systems, mirrors, or bodywork components subject to crash regulations.

From an enforcement perspective, intellectual property tools remain essential for OEMs to monitor and act against unauthorised use:

• Customs seizures under Regulation (EU) 608/2013 continue to provide a frontline mechanism for intercepting infringing goods at borders.
• Preliminary injunctions and expedited proceedings are regularly sought before national courts, especially in cases where parts are mislabelled or do not fall within the narrow exception of the repair clause.

Independent repairers and IAM producers must therefore carefully assess whether a part qualifies as “essential” under the repair clause, and whether its reproduction is limited to what is strictly necessary to restore the original appearance. In cases of legal uncertainty, they increasingly rely on the clarification and relief mechanisms introduced by the 2024 EU Design Package, including improved invalidity proceedings, clearer guidance on component parts, and harmonised interpretation across Member States.

Conclusion

In summary, historical OEM control over spare parts through design law has been significantly challenged by French and EU reforms. The repair clause, amended IP frameworks and procedural clarity shift the balance toward competition and consumer protection, while preserving IP incentives.

We invite you to subscribe to our newsletter and follow us on LinkedIn for up‑to‑date legal insights on IP and spare parts.

Dreyfus Law Firm is partnered with a global network of IP experts.

Nathalie Dreyfus with the assistance of the entire Dreyfus team

FAQ

1. What qualifies as an “essential” spare part under the repair clause?
   Essential parts are those that restore the product’s appearance; non‑essential functional covers remain protected.
2. Does the repair clause apply automatically across the EU?
   Yes—as of 1 May 2025 under EUDR, harmonized in national laws by December 2027.
3. What if an independent repairer removes OEM logos?
   In France, logo removal is allowed since Jan 2023 under amended CPI, provided functional integrity is preserved.
4. Are renewal fees higher under the EU reform?
   Yes—renewal fees increase significantly: e.g., €150 (1st) → €700 (4th) per design.
5. How can a firm verify if a part infringes a registered design?
   Conduct prior‑art searches, assess design versus essentiality, and consider quality standards to mitigate infringement risks.

Executive Summary of ICANN 83 Prague (June 9–12, 2025)

The ICANN 83 (Internet Corporation for Assigned Names and Numbers) hybrid meeting took place at the Prague Congress Centre and brought together global stakeholders to advance internet naming policy, data governance, and cross-community collaboration.  The entire meeting reports can be found on the official publications. The article summarises the GAC communiqué (Governmental Advisory Committee), GNSO Council minutes (Generic Names Supporting Organisation), and ICANN Policy Reports—to synthesize authoritative insights for professionals.

Main Policy Developments & Regulatory Advances

2.1 WHOIS / Registration Data Framework & RDS Evolution

• Disclosure mechanisms: The GAC spotlighted the SSAD (System for Standardized Access/Disclosure) / RDRS (Registration Data Request Service) pilot and urgent disclosure mechanisms, aligning with GDPR. Emphasis was placed on balancing registrant privacy with regulatory access, and on enhancing data accuracy controls for future phases.
• Next steps: GAC urged ICANN to refine policy language in collaboration with  the GNSO. Legal experts should track forthcoming accuracy assessment metrics.

2.2 New gTLD Program Progress & Next Round

• Applicant Guidebook update: GAC reviewed the latest draft, particularly GAC Early Warnings, PICs/RVCs (Registry Voluntary Commitments), and geoTLD safeguards and contention sets.
• What that means: Domain registries should prepare for stricter geographic protection tools, more robust applicant vetting, and evolving GAC objection procedures.

2.3 WSIS+20 and Internet Governance Initiatives

• Framework alignment: As part of WSIS +20 (World Summit on the Information Society) review, ICANN reaffirmed its contribution to global Internet Governance commitments, enhancing openness, inclusivity, and stakeholder engagement.
• Outreach strategy: Plans previewed for strengthening ICANN’s role in multi-stakeholder governance, with opportunities for IP practitioners to contribute across regional IGFs and policy dialogues.

GAC Communiqué & GNSO/GAC Collaboration

• GAC Communiqué draft: Intensive drafting sessions focused on articulating shared expectations—recommendations on WHOIS accuracy, RDS pilot progress, gTLD bottlenecks.
• Inter-committee coordination: In joint GAC/GNSO meetings, parties agreed on timelines for WHOIS next phase policy development, with cross council liaison coaching the process.

Practical Impacts for IP Professionals & Businesses

1. For trademark owners, domain registries, registrars, and counsel:

• Domain monitoring: anticipate more stringent WHOIS accuracy obligations and improved access systems.
• gTLD strategy: heightened compliance with GAC early warnings and geographical restrictions for new domain expansions.
• Regulatory readiness: adapt operations to evolving SSAD/RDRS standards—important for dispute resolution.

Conclusion 

ICANN 83 reinforced the importance of collaborative policymaking in a rapidly evolving digital ecosystem. With significant progress on WHOIS data frameworks, the new gTLD round, and multi-stakeholder governance, IP professionals and domain stakeholders must stay attuned to regulatory shifts that directly impact rights enforcement and digital brand strategies. As ICANN refines its tools for data disclosure, applicant oversight, and geographical safeguards, proactive engagement and legal foresight will be essential for maintaining compliance and influence within global internet governance structures.

Dreyfus Law firm assists its clients in managing complex intellectual property cases, offering personalised advice and comprehensive operational support for the full protection of intellectual property.

At the intersection of internet governance and IP protection, we stand ready to assist you in navigating WHOIS reforms, domain strategy, new gTLD compliance, UDRPs and RDS implementation.

Want more cutting-edge updates on domain law, naming policies, or ICANN developments? Subscribe to our newsletter and follow Dreyfus Law Firm on LinkedIn and Twitter for real-time analysis.

Nathalie Dreyfus with the assistance of the entire Dreyfus team.

FAQ

Introduction

A domain name is the web address that allows a user to access a website. It represents the first element of a company’s digital identity on the internet, typically consisting of two parts: the name itself (e.g., “yourcompany”) and the extension (such as “.com”, “.fr”, or “.org”). This extension, also called a Top-Level Domain (TLD), categorizes the site into a specific group or country.

Types of Domain Names
Domain names are categorized by different extensions:

• gTLDs (Generic Top-Level Domains), such as .com, .org, and .net, are the most common and non-geographical.

• ccTLDs (Country Code Top-Level Domains), like .fr (for France) or .de (for Germany), identify a specific country or region.

• nTLDs (New Top-Level Domains) are recently introduced extensions, like .tech, .shop, or more recently, .brand.

For eligibility, a domain name must be tied to an official and well-known trademark, meaning it must be recognized by a relevant audience.

The .Brand domain extension, also known as “dot brand,” represents a major evolution in the management of digital identities for businesses. Introduced by ICANN in 2012 , these extensions allow brands to create their own top-level domain (TLD), providing complete control over their online presence. This strategic move raises key questions regarding its objectives, scope of use, and the management of associated legal risks. Additionally, ICANN has announced the opening of a series of new TLDs for 2026, allowing trademark holders to create their personalized internet extension and optimize their digital presence in a unique and secure way.

What is a .Brand TLD?

Definition and Characteristics

A .Brand TLD is a customized domain extension exclusively assigned to a registered brand. For example, Apple, wishing to strengthen its digital identity, could obtain the “.apple” extension to create addresses like “iphone.apple” or “support.apple.” This opportunity is offered by ICANN as part of its new generic top-level domain (gTLD) program.

Process of obtaining a .Brand TLD

Acquiring a .brand TLD requires a complex and costly process. Companies must submit a detailed application to ICANN, demonstrating their ability to manage such a domain and comply with associated obligations, such as adherence to GDPR, managing the DNS system, domain registrations, and ensuring data security. Additionally, the brand must demonstrate its official registration and reputation, meaning its recognition among a relevant audience, in order to be eligible.

Strategic objectives of adopting a .Brand TLD

Strengthening digital identity

One of the primary objectives of a .Brand TLD is to enhance the company’s digital identity. By fully controlling their extension, brands can create coherent and representative addresses, making it easier for users to recognize and engage with them.

Securing online presence

Another major advantage is the securing of online presence. By owning their own TLD, companies reduce the risks of cybersquatting (the registration of domain names identical or similar to well-known brands to resell them at high prices) and phishing (fraud techniques aiming to obtain sensitive information by pretending to be a trusted entity), as they have exclusive control over domain registrations associated with their brand. This also allows them to better protect users from fraudulent sites impersonating the brand.

Innovation and differentiation

.Brand TLDs also offer innovation opportunities that allow for differentiation. Companies can create original marketing campaigns, personalized user experiences, and unique online services, thereby strengthening their competitive position.

Scope of Use for .Brand Domains

Geographical and linguistic limits

It’s important to note that the use of a .Brand TLD might be subject to geographical or linguistic restrictions. For example, a company primarily operating in France may choose to use “.fr” or “.paris” in addition to its .Brand TLD to better target its local audience.

Managing Legal Risks

Compliance with regulations

Companies must ensure that their use of the .Brand TLD complies with current regulations, particularly regarding personal data protection (GDPR) and intellectual property. It is essential to define clear policies concerning domain registration and usage.

Surveillance and enforcement

Continuous monitoring is necessary to detect any unauthorized or abusive use of the .brand TLD. Enforcement mechanisms, such as implementing dispute resolution procedures (for example, the Syreli procedure in France), can be considered to protect the brand’s rights. Dreyfus Law firm offers domain name monitoring services to secure and protect your digital identity.Collaboration with specialized service providers.

Collaboration with specialized service providers.

For effective management, businesses can collaborate with service providers specializing in managing .Brand TLDs. These experts can assist in the acquisition process, technical implementation, and day-to-day management of the extension. For optimal management, Dreyfus Law firm offers its expertise in intellectual property and domain name management. Contact us to discover how we can help you fully leverage this strategic opportunity.

Conclusion

.Brand domain extensions offer companies a unique opportunity to strengthen their digital identity, secure their online presence, and innovate in their communication. However, this approach requires careful preparation, proactive management of legal risks, and collaboration with specialized professionals. By adopting a well-defined strategy, brands can fully benefit from the advantages offered by .Brand TLDs.

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

Dreyfus Law firm is partnered with a global network of lawyers specializing in intellectual property.

Nathalie Dreyfus with the assistance of the entire Dreyfus team.

FAQ

Reviving an old trademark can be a brilliant marketing move—or a costly legal misstep. Known as “zombie trademarks,” these defunct yet familiar brands occupy a grey zone between nostalgia and unfair competition. Are they fair game, or should residual goodwill shield them from third-party appropriation? Let’s examine how legal systems across jurisdictions treat these revived marks and what this means for brand owners, investors, and IP practitioners.

I – What is a zombie trademark?

A zombie trademark is a mark that has been legally abandoned—due to expiration or non-use—but still retains consumer recognition. Revived by unrelated third parties, these marks aim to capitalize on nostalgia, consumer loyalty, or the historical identity of a brand.

To qualify as a zombie trademark:

• The original registration has lapsed or been revoked;
• The mark is no longer used by the initial owner;
• The public continues to associate the sign with its former source.

Examples include legacy car brands, vintage cosmetics, or forgotten retail chains, now resurfacing in digital or retail campaigns.

II – Legal approaches to abandonment and revival

United States (Lanham Act, §45)
A trademark is considered abandoned if not used for three consecutive years—with no intent to resume. However, even minimal commercial activity (e.g., token sales or licensing) can rebut the presumption of abandonment.

European Union (EUTMR, Art. 58(1)(a) & 7(1)(g))
An European trademark is vulnerable to revocation after five years of non-use. Further, registration may be refused if it is deceptive or exploits goodwill in a way likely to mislead consumers.

France (French Intellectual Property Code, Art. L.714-5 & L.711-3(c))
A French trademark is deemed abandoned after five years without use or intent to resume. A revived mark may be refused or cancelled if it creates confusion or constitutes unfair competition (e.g., parasitism per Article 1240 of the French Civil Code).

III – Landmark cases: From Macy’s to Nehera

In the US, Macy’s Inc. v. Strategic Marks LLC, No. 3:2011cv06198 (2011 – 2016) confirmed that even limited use (T-shirts bearing legacy logos) was sufficient to maintain rights. Similarly, USFL v. Fox Sports No 2:2022cv01350 (2022) ruled in favor of trademark owners who had sporadically licensed their brand.

In Europe, the Nehera case (T-250/21) clarified that mere historical knowledge is not enough. The court required current consumer recognition to establish bad faith. Conversely, in Simca (T-327/12), Peugeot succeeded in proving bad faith due to the applicant’s intent to monetize the brand without any genuine use.

IV – Residual goodwill: A legal dilemma

Residual goodwill refers to the lingering brand recognition after a mark’s use has ceased. Courts vary in their treatment:

• In Ferrari v. Roberts, 6th Cir. 1991, continued public association justified legal protection.
• In Peter Luger v. Silver Star, Civil Action No. 97-273, 1999 WL 151873 (W.D. Pa. Jan. 21, 1999), sales impact and confusion were key evidence of ongoing goodwill.

Yet in Europe, as seen in Nehera, residual goodwill is not presumed. The claimant must show contemporary recognition, not just historic fame.

This divergence reflects broader policy tensions: should we protect consumer memory or allow market entrants to rejuvenate dormant marks?

V – Strategic takeaways for IP professionals

For original owners:

• Preserve rights through token use, licensing, or rebranding.
• Monitor applications to detect third-party revivals.
• Link historic goodwill to new IP assets.

For zombie trademark filers:

• Avoid consumer deception: use disclaimers and quality consistency.
• Rebuild goodwill transparently through legitimate use.
• Be aware of possible litigation under unfair competition or false advertising.

Conclusion

Zombie trademarks sit at the crossroads of legal ambiguity and market opportunity. Whether they represent opportunism or innovation depends on the context of revival, the presence of residual goodwill, and how consumers interpret the brand.

For businesses considering a revival strategy—or defending legacy IP—legal advice is crucial. Our firm helps navigate the risks and optimize brand strategies while ensuring compliance with national and cross-border trademark regulations.

Dreyfus Law Firm is a proud partner of a global network of Intellectual Property attorneys.

Nathalie Dreyfus with the support of the Dreyfus Law Firm

FAQ

Digital trust has become a strategic imperative for businesses. Yet fake reviews continue to proliferate on online platforms, distorting consumer perceptions and undermining fair competition. Whether commercially driven or discreetly commissioned, these deceptive practices are no longer tolerated. The European authorities, following the example of France, and outside the European Union like the United Kingdom, are strengthening their arsenal to put an end to these practices, and a new standard of vigilance is being imposed on companies.

Reputation manipulation: practices and risks associated with fake reviews

The expression “fake reviews” refers to a range of unfair commercial practices involving various forms of fraud, including:

• The posting of seemingly genuine reviews based on fictitious experiences.
• Covert incentivised reviews, where users receive discounts or gifts in exchange for positive feedback without proper disclosure.
• Misleading review presentation, such as deleting or hiding negative comments, promoting only positive ones, using biased aggregate scores (e.g., stars, likes), or “review hijacking” – repurposing reviews from one product for another.
• Facilitation services offering tools to bypass detection systems or automatically generate fake reviews.

In France, the DGCCRF (Directorate General for Competition Policy, Consumer Affairs and Fraud Control) estimates that 55% of websites audited present irregularities in the collection, moderation, or publication of online reviews. Such practices mislead consumers and compromise fair market functioning.

Legal framework in France and the European Union

France has implemented the EU Directive 2019/2161 (the “Omnibus Directive”) through Ordinance No. 2021-1734, establishing enhanced transparency obligations for professionals. Article L.121-4 of the French Consumer Code explicitly prohibits the dissemination of fake reviews, categorising them as misleading commercial practices. Article L.132-2 provides for penalties of up to two years’ imprisonment and a €300,000 fine, or up to 10% of average annual turnover in proportion to the profits gained from the offence.

To support enforcement, the DGCCRF has developed an algorithmic detection tool called “Polygraphe,” capable of analysing linguistic patterns, posting frequency, and geographic data to identify coordinated campaigns of review manipulation.

At the EU level, the Omnibus Directive imposes transparency obligations concerning the verification of online reviews, aligned with ISO 20488 standards. These standards require robust procedures for reliability, traceability, and moderation. In addition, the Digital Services Act (Regulation 2022/2065), which entered into force in 2024, reinforces these requirements by mandating illegal content removal and active cooperation from major platforms, particularly GAFAM companies.

French case law confirms the judiciary’s strict stance on digital denigration. In a March 14, 2025 ruling (Court of Appeal of Paris, No. 22/16356), involving competing coding academies “La Loco and Le Wagon v. La Capsule,” the Court sanctioned the posting of anonymous fake negative reviews intended to disparage La Capsule’s training services. The reviews were authored by individuals who had never used the services and lacked author identification, disseminated false information, and concealed their commercial intent.

The Court relied on several legal grounds, including Articles L.121-1 to L.121-3 of the Consumer Code (on misleading commercial practices), specifically Article L.121-2(3°), which deems deceptive any practice carried out on behalf of an unidentified person, and on the Law for Confidence in the Digital Economy (LCEN), which mandates clear identification of online content editors. The victim company was awarded compensation for economic and moral damages, including a 40% customer loss and reputational harm.

This judgment reflects the increasingly rigorous approach of French courts to online denigration, particularly when anonymity is used as a cover for malicious competitive strategies. This position is not new: in a decision dated March 19, 2008 (No. 07/2506), the Paris Court of Appeal had already heavily sanctioned the company DDI for publishing negative reviews against its competitor L&S, followed by a public note indicating they were removed at L&S’s request – both deemed acts of unfair denigration.

The United Kingdom and the new DMCCA: a more constraining regime

On April 6, 2025, the United Kingdom enacted the Digital Markets, Competition and Consumers Act (DMCCA) – a landmark regulation that not only prohibits fake reviews but also bans undisclosed incentivised reviews and the import of reviews from unrelated product pages.

Under the DMCCA, the Competition and Markets Authority (CMA) may impose direct fines of up to £300,000 or 10% of annual turnover, in line with the French regime. The Act further requires large platforms to implement robust verification systems, conduct regular internal audits, and publish their moderation policies. This legislation enshrines a proactive compliance model, placing accountability at the core of digital strategy.

Mitigating legal risks and managing online reputation

Businesses now face a dual imperative: First, to avoid involvement in fake review dissemination, which may trigger criminal or administrative liability;
Second, to actively defend against malicious or defamatory content likely to harm their online reputation.

To this end, companies must develop structured internal governance focused on two pillars.
From a compliance perspective, it is essential to adopt a formal, transparent customer review policy aligned with ISO 20488. This includes clear procedures for collection, verification, moderation, and archiving. Sponsored or incentivised reviews must be explicitly disclosed. Any corporate involvement – direct or indirect – in the creation or publication of reviews must be fully documented.

Reputation management also requires vigilant monitoring. Companies must detect and address fake negative reviews, coordinated smear campaigns, or digital impersonation attempts. Legal remedies include issuing takedown notices to platforms, initiating delisting procedures, sending cease-and-desist letters, or bringing legal action for reputational harm.

This holistic approach cannot be effective without tailored training for all relevant teams – marketing, customer relations, content managers, and legal departments. These teams must be educated on the regulatory obligations under the Omnibus Directive, the DSA, national French law, and for international operations, the UK’s DMCCA.

It is no longer simply a matter of formal compliance, but of fostering an internal culture of transparency, traceability, and digital risk control. In today’s heightened regulatory environment, where consumers, authorities, and competitors closely scrutinise digital communications, such a preventive stance is critical to brand credibility.

Conclusion

The regulation of fake online reviews has reached a level of legal maturity. France and the European Union now offer a robust legislative and technological framework. Meanwhile, the UK has taken a decisive step forward with the DMCCA, introducing a comprehensive and stringent approach to combating fraudulent content.

For companies, compliance is no longer a strategic option but an operational necessity – given the significant reputational, competitive, and legal risks involved.

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